Annual Report and
Financial Statements
for the Year ended 31 December 2022
for
ContourGlobal Limited
(formerly ContourGlobal plc)
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
2
Contents of the Annual Report and Financial Statements
for the Year ended 31 December 2022
TABLE OF CONTENTS
Strategic Report
4
Directors Report
29
Auditors Report
33
Consolidated Financial Statements
42
Company Financial Statements
137
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
3
Company Information
for the Year ended 31 December 2022
DIRECTORS:
Joseph Brandt
Laurent Hullo (appointed 31 January 2023)
REGISTERED OFFICE:
55 Baker Street
5th Floor
London
W1U8EW
United Kingdom
REGISTERED NUMBER:
10982736
AUDITORS:
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
United Kingdom
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
4
Strategic Report
for the Year ended 31 December 2022
The directors present their strategic report for the year ended 31 December 2022.
Principal Activities and Future Developments
The principal activity of the Group is to develop, acquire, own and operate power generation assets
around the world, producing reliable energy responsibly. ContourGlobal operates 129 thermal and
renewable power generation assets in 20 countries across Europe, Latin America, North America and
Africa, with a total installed capacity of over 6.1 GW. We add value through best-in-class operations
both in our existing portfolio and in the new assets we develop or acquire.
The future performance of the business will depend on a number of factors, such as the supply and
demand dynamics of energy markets, decarbonisation and the timing and mix of generation sources
from the energy transition. Inherent in these factors are a number of risks and opportunities which we
believe the business is well placed to approach.
Acquisition of ContourGlobal plc by KKR
The recommended cash acquisition (the "Transaction") of ContourGlobal plc by Cretaceous Bidco
Limited (a newly formed company indirectly owned by funds advised by Kohlberg Kravis Roberts &
Co. L.P. and its affiliates) ("KKR") announced on 17 May 2022 was approved by the required majority
of shareholders at the Court and General meeting of shareholders held on 6 July 2022. The scheme of
arrangement became effective on 20 December 2022 resulting in KKR taking ownership of 100% of
the shareholding of ContourGlobal plc and following this the Company was delisted from the London
Stock Exchange on 21 December 2022.
Business Model
Our purpose is to create economic and social value through developing, acquiring, and operating
electricity generation businesses worldwide. In this regard, our strategy is built on operational
excellence, high growth and financial strength throughout our business.
We supply electricity principally in the wholesale market, mainly selling it under long-term contracts
to clients, or ‘offtakers’, who transmit and sell it to retail customers. These contracts are typically:
•
Power Purchase Agreements (PPAs) by which the power plant gets remunerated to be
available to generate electricity; and
•
Regulated tariffs or other regulated mechanisms, by which we agree a price per unit of
electricity output.
Because the vast majority of our revenues are derived from long-term contracts or long-term
regulated tariffs with creditworthy counterparties, cash flows are typically predictable and risk is
reduced. This gives us good visibility of long-term, de-risked cash flows, which allows us to manage
our capital in an effective manner.
Our customers include national grids and utilities that supply these grids, as well as commercial and
industrial customers that receive electricity, steam, water, or CO2 directly from on-site facilities.
Our portfolio is diversified across different technologies, and geographies. At the end of 2022, we
owned and operated 129 thermal and renewable power generation assets in Europe, Latin America,
North America and Africa, with a total installed capacity of 6.1 GW.
Our purpose and strategy are underpinned by three strategic pillars, our four sustainable business
principles and five values as set out below.
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
5
Four sustainability principles and five company values underpin everything we do:
Our Sustainable Business Principles
Operate safely and
efficiently and
minimize
environmental
impacts
Grow well
Manage our
business
responsibly
Enhance our
operating
environment
By running our power
plants efficiently, we
maximize electricity
output, minimize
environmental impacts,
and reduce costs. We
seek to promote health,
safety, and well-being
throughout the
organization: safety is
our number one
priority.
By growing well, we help
meet energy needs
through a cleaner energy
model that reduces
climate impacts. We
promote energy and
economic security and
increase energy access,
creating economic wealth
for investors, our
employees, and,
indirectly, our
communities.
We are committed to
maintaining the
highest ethical and
legal standards
wherever we operate.
We seek to attract,
develop, and retain a
workforce that reflects
the diversity of the
communities in which
we operate.
We share our expertise
and improve quality of
life through long-term
sustainable
improvement of the
electricity sector, civil
society, and local
communities.
Operational Excellence
High Growth
Financial Strength
Striving to achieve operational
excellence, which includes health
and safety, lies at the heart of all we
do.
We have a Target Zero commitment
in respect of health and safety –
that is, a target of zero Lost Time
Incident (LTIs).
Ensuring a safe working
environment is also one of our core
sustainable business principles.
We monitor key operational metrics
across our plants every week,
checking how these measure up
against internal targets. We then
undertake an analytical review,
seeking to improve performance by
learning from what has worked well
and what has not gone according to
plan.
Our deep expertise and experience
allow us to improve our operational
performance and create economic
value. This operational approach is
applied to all plants, developments
and acquisitions.
To achieve high growth, we adopt
four core investment approaches
focused on contracted or regulated
wholesale power generation,
fostering low- and no-carbon
technologies:
1.
Greenfield development: when
we can take advantage of cyclical
under-supply of capital and
create opportunities for higher
returns
2. Strategic acquisitions: when we
can improve operations and have
a clear competitive advantage
based on, for example,
complexity of process, geography
or technology
3. Development of customized
projects: in partnership with
governments, utilities and
corporations in regions where
there is a need for a reliable
supply of power but insufficient
expertise or capital
4. Platform expansion: leveraging
existing stakeholder
relationships and replicating the
same technology and structure.
This approach tends to result in
lower risk and high returns due
to cost synergies.
Strong operational performance
combined with an efficient capital
structure have allowed us to deliver
superior returns at asset level.
Our business model is based on
contracted or regulated revenue
streams combined with operational
excellence, which results in stable
and predictable cash flow
generation. This in turn allows us to
fund new growth projects.
We seek to maintain a highly
efficient capital structure to support
our business, using a two-tier
financing structure:
•
Majority non-recourse project
level debt for power plants; and
•
Attractive bond financing to
maximize financial flexibility
for the parent company.
Our Strategy
Our overall strategy to achieve our purpose is built on three pillars:
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
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Our overall strategy is supported by our values:
Our Values
1
2
3
4
5
We care about
our people’s
health, safety,
well-being, and
development
We expect,
embrace, and
enable excellence
and continuous
learning through
humility and the
knowledge that
we will fail – but
when we do, we
will learn
We act
transparently and
with moral
integrity
We honour the
commitments of
those who have
placed their trust
in us
We work hard
and without
boundaries as a
multinational,
integrated team
We operate assets using both Thermal and Renewable technology in the following geographies:
Thermal
Renewable
Location
Technology
Capacity
Location
Technology
Capacity
Marista, Bulgaria
Coal
908 MW
Vorotan complex,
Armenia
Hydro
404 MW
Arrubal, Spain
Natural gas
800MW
CSP, Spain
Solar
250 MW
Lea Power, United States
Natural gas
604 MW
Chapada I, Brazil
Wind
205 MW
TermoemCali, Colombia*
Natural gas
240 MW
Chapada II, Brazil
Wind
172 MW
Five Brothers (Redwood),
United States
Natural gas
230 MW
Asa Branca, Brazil
Wind
160 MW
Trinity, Trinidad & Tobago
Natural gas
225 MW
Austria Wind, Austria
Wind
140 MW
Sochagota, Colombia**
Coal
165 MW
Inka, Peru
Wind
114 MW
Three Sisters (Redwood),
United States
Natural gas
141 MW
Solar Italy, Italy
Solar
95 MW
Togo, Togo
Natural gas
100 MW
Chapada III, Brazil
Wind
59 MW
Cap des Biches I & II, Senegal
Liquid fuels
86 MW
Solar Slovakia,
Slovakia
Solar
35 MW
Waterside, United States
Liquid fuels
72 MW
Bonaire wind, Dutch
Antilles
Wind
11 MW
Bonaire Engines, Dutch
Antilles
Liquid fuels
27 MW
Solar Romania,
Romania
Solar
7 MW
KivuWatt, Rwanda
Biogas
26 MW
Saint Martin, French Territory
Liquid fuels
14 MW
High Efficiency Cogen
Mexico CHP, Mexico
Natural gas
518 MW
Solutions Ikeja, Nigeria
Natural gas
7 MW
Borger, United States
Natural gas
230 MW
Solutions Ploiesti,
Romania
Natural gas
6 MW
Solutions Brazil, Brazil
Natural gas
59 MW
Solutions Oricola, Italy
Natural gas
3 MW
Solutions Knockmore Hill,
Northern Ireland
Natural gas
15 MW
Solutions Benin, Nigeria
Natural gas
10 MW
Solutions Nogara, Italy
Natural gas
9 MW
*Investment in Associate (49%) which is not operated by ContourGlobal
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
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** In 2022, our partner in the Sochagota asset sought to exit their 51% shareholding. Following assessment of the
offers to acquire the business from external parties (including ContourGlobal’s shareholding) the Group
concluded that there was considerably more value in the Group acquiring our partners shareholding than
disposing, resulting in the acquisition of our partner’s stake in December 2022. This includes the opportunity to
be an active participant in the energy transition in the local market and provides the Group with control of the
asset which will enable us to improve efficiency and emissions, as well use Sochagota as a platform to develop
renewables, in particular PV plants, on the existing land and on the plots nearby. The group continues to evaluate
options for participation in the energy transition in Colombia in particular by building a pipeline of PV assets in
either early stage or ready-to-build status. The Group does not intend to maintain its stake in the coal plant on
the long term.
Financial Results
$ million
2022
2021
Var
% Var
Revenue
2,828.3
2,151.9
676.4
31.4%
Adjusted Revenue1 2 3
2,209.0
1,724.8
484.2
28.1%
Income from Operations 3
576.0
370.1
205.9
55.6%
Adjusted EBITDA 2 3
900.5
841.5
59.0
7.0%
Proportionate Adjusted EBITDA 2 3
759.6
692.3
67.3
9.7%
Cash flow from Operations
785.0
810.3
(25.3)
(3.1)%
Non current assets
4,517.1
4,749.5
(232.4)
(4.9)%
Borrowings
3,824.4
4,176.1
(351.7)
(8.4)%
Net consolidated leverage ratio 2 3
3.7
4.6
-
-
1 of which 13.2% relates to coal fired power generation assets
2 Non-IFRS metric, defined and reconciled below
3 Financial Key Performance Indicator
Revenue and Adjusted Revenue
Revenue grew in 2022 to reach $2,828.3 million ($676.4 million or 31.4%) attributed to (i) increased
revenue from our Maritsa plant ($314.5 million) primarily driven by higher CO2 emission cost
recharges and higher generation, (ii) Arrubal ($263.5 million) benefiting from high dispatch, higher
power prices and an optimized commercial strategy in the post PPA period from August 2021, (iii) the
full year impact of the acquisition of the Western Generation assets in the United States and Trinidad
and Tobago (“Western Generation”) which were acquired in February 2021 ($120.6 million), (iv)
Mexico CHP ($98.3 million) due to new interconnected load points and higher gas pass through, (v)
Austria Wind ($19.3 million) due to higher electricity prices and (vi) Cap des Biches ($18.9 million)
higher fuel revenue. These increases were partially offset by the sale of our Brazil Hydro assets mid
2022 reducing revenue in 2022 by $27.5 million. In addition, Group revenue was negatively impacted
by year over year foreign exchange movements by $207.4 million primarily driven by a lower average
level of USD / Euro foreign exchange rate.
During 2022 adjusted revenue was $2,209.0 million ($484.2 million, 28%) primarily driven by the
Western Generation acquisition, high dispatch and power prices at Arrubal, new customer
interconnections and higher pass throughs in Mexico and higher generation in Maritsa. The three
most significant proportionate contributors to Adjusted Revenue are Arrubal, Mexico CHP and
Maritsa contributing 21.7%, 17.9%, and 13.2% respectively in 2022 (15.4%, 17.1% and 16.7%
respectively in 2021). The reconciliation of Adjusted Revenue to statutory Revenue is as follows:
In $ million
2022
2021
Revenue
2,828.3
2,151.9
CO2 passthrough revenue
619.3
427.1
Adjusted Revenue
2,209.0
1,724.8
Adjusted Revenue excludes CO2 emission cost recharges from IFRS revenue and is a key metric as it
provides a more comparable basis for assessing revenue generating capabilities across the portfolio.
The metric is relevant due to the significant increase in carbon pricing which has resulted in CO2 pass
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
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throughs (i.e. costs to acquire carbon credits that are incurred by the Group and are passed on with no
margin to customers) distorting IFRS Revenue.
Income from Operations
IFO is a measure taken from the IFRS audited consolidated statement of income. IFO increased in
2022 by $205.9 million or 55.6% to reach $576.0 million as compared to $370.1 million in 2021,
mainly as a result of the following effects:
•
Gain on disposal of the Brazilian Hydro business ($121.2 million gain in IFO)
•
Increase in gross margin in 2022 by $88.3 million to reach $509.7 million as compared to
$421.4 million in 2021, driven by the increase in Revenue of $676.4 million partially offset by
the increase in Cost of sales of $588.1 million. The increase in gross margin is primarily
driven by the strong performance of our merchant plants (Arrubal and Redwood assets), with
Arrubal achieving higher margins from merchant operations in volatility of energy markets as
compared to operating under PPA for seven months of the prior year, high gas prices which
results in higher heat rate adjustments from our assets under PPA and inflation increases in
PPA tariffs in excess of inflationary impact on operating costs.
•
Other operating expenses, Selling, general and administration and acquisition and other
transaction related items increased from $58.1 million in 2021 to $90.6 million. The increase
was primarily due to transaction related costs corresponding to the KKR transaction and
delisting costs ($39.9 million).
Adjusted EBITDA
Adjusted EBITDA performance saw an increase of 7% to $900.5 million.
Thermal Adjusted EBITDA increased by $58.5 million, or 11%, to $599.8 million from $541.3 million
for the previous year. The growth in Thermal Adjusted EBITDA is mainly driven by:
•
Strong commercial performance contributing $64.5 million, due to Arrubal ($27.0 million)
with higher margin from merchant operations, Mexico CHP ($20.4 million) with increased
customer connections and higher customer consumption and Maritsa ($8.4 million) due to
compensation for dispatch in excess of PPA requirements, efficiencies achieved in optimal
plant operation, and higher tariff escalation.
•
An increase of $28.6 million in the US assets and Trinidad portfolio which was acquired in the
second half of February 2021, mainly due to better dispatch and higher capacity payments in
Redwood and the additional contribution from the assets from being consolidated in the full
12 months of 2022 ($12.7 million).
•
Partially offset by negative FX impact of $32.6 million
Renewable Adjusted EBITDA amounted to $332.6 million for the year ended 31 December 2022, as
compared to $334.7 million for the year ended 31st December 2021. Renewable Adjusted EBITDA was
impacted by:
•
$17.0 million positive impact in Austria Wind mainly due to improved performance following
wind park repowering project completion ($9.4 million) and higher pool prices ($13.4
million), partially offset by lower wind resources ($4.4 million).
•
The additional contribution from the Italy Solar Greenhunter assets which were acquired in
November 2021 being consolidated for the full 12 months of 2022 ($10.2 million).
•
$7.9 million positive impact in our Peru wind due to higher wind resource and indexation of
PPA price
•
Partially offset by negative FX impact of $16.6 million and sale of our Brazilian Hydro
business in June 2022 ($22.4 million)
In terms of financial metrics, we believe that the presentation of Adjusted EBITDA enhances the
understanding of ContourGlobal’s financial performance, in regards to understanding our ability to
generate stable and predictable cash flows from operations. ‘Adjusted EBITDA’ is defined as profit for
the period from continuing operations before income taxes, net finance costs, depreciation and
amortization, acquisition, disposal and other transaction related items, gains/losses on disposal of
power generating plants, plus, if applicable, net cash gain or loss on sell down transactions (in
addition to the entire full period profit from continuing operations for the business the sell down
transaction relates to) and specific items which have been identified and material items where the
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
9
accounting diverges from the cash flow and therefore does not reflect the ability of the assets to
generate stable and predictable cash flows in a given period, less the Group's share of profit from non-
consolidated entities accounted under the equity method, plus the Group's pro rata portion of
Adjusted EBITDA for such entities.
In determining whether a new event or transaction is adjusted, ContourGlobal’s management
considers quantitative as well as qualitative factors such as the frequency or predictability of
occurrence. Adjusted EBITDA is not a measurement of financial performance under IFRS.
The reconciliation of Adjusted EBITDA and Proportionate Adjusted EBITDA to statutory measures is
as follows:
Adj. EBITDA to IFRS Net Profit bridge (US$ million)
Dec-22
Dec-21
Proportionate Adjusted EBITDA
759.6
692.3
Minority interests
140.9
149.2
Adjusted EBITDA
900.5
841.5
Share of adjusted EBITDA in associates
(25.6)
(27.0)
Share of profit in associates
16.3
16.2
Acquisition, disposal and other transactions related items
(49.2)
(14.2)
Gain on Brazil Hydro sale
121.2
-
Gain on Sochagota acquisition
16.8
-
Mexican CHP fixed margin swap
2.9
5.5
Brazil Hydro concession extension
-
5.5
Change in finance lease and financial concession assets
(34.3)
(37.9)
Other
4.8
1.7
Depreciation & Amortization
(361.2)
(399.2)
Finance costs net
(231.7)
(249.2)
Income tax
(107.0)
(63.2)
Net Income
253.5
79.7
Proportionate Adjusted EBITDA
Proportionate Adjusted EBITDA increased from $692.3 million in 2021 to $759.6 million in 2022
(9.7%) broadly in line with the increase than Adjusted EBITDA, primarily driven by the strong
commercial performance in Arrubal and the US and Trinidad assets acquired in February 2021,
neither of which have a minority interest.
Proportionate Adjusted EBITDA is calculated using Adjusted EBITDA calculated on a proportionally
consolidated basis based on applicable ownership percentage. The Proportionate Adjusted EBITDA as
well includes the net cash gain or loss on sell down transactions (of which there has been none during
2021 and 2020) as well as the underlying profit from continuing operations for the business in which
the minority interest sale relates to reflecting applicable ownership percentage going forward from the
date of completion of the sale of a minority interest.
Cash flow from Operations
Cash flow from operations is presented in the Consolidated statement of cash flows of the financial
statements and decreased from $810.3 million to $785.0 million, primarily driven by the increase in
income tax paid ($24.4 million) mainly attributed to the increase of taxable profits at Arrubal ($15.3
million), in addition to costs incurred in connection with the KKR transaction ($39.9 million);
partially offset by the increase in Adjusted EBITDA ($59.0 million).
ContourGlobal Limited (formerly ContourGlobal plc)
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Non-current assets
Non-current assets mainly comprise property, plant and equipment (”PPE”), financial and contract
assets, intangible assets and goodwill. The decrease in non-current assets by $232.4 million to
$4,517.1 million as of 31 December 2022 was mainly due to the decrease of PPE by $188.4 million
relating to depreciation ($326.8 million) and negative CTA FX impact ($27.6 million). This was
partially offset by PPE additions ($142.0 million) during the period mainly in Austria Wind for
repowering of wind farms ($46.2 million), fair value of PPE acquired in the Sochagota transaction
($41.7 million), Lea Power major overhaul ($16.0 million), Brazil Wind improvements ($10.5 million),
Vorotan structural improvements ($10.0 million) and Spain CSP major overhaul ($7.8 million).
Borrowings
Current and non-current borrowings decreased by $351.8 million to $3,824.3 million as of 31
December 2022, primarily due to scheduled repayments ($275.3 million), net repayment of the
Revolving Credit Facility ($42.1 million), Maritsa full repayment of debt ($32.8m), repayments of
affiliate loan with Energie Infrastructure Partners ($35.4 million) and the foreign exchange impact
due to decrease of the Euro against the USD for our Euro denominated debt ($121.3m). This was
partially offset by new borrowings represented primarily by the net impact of the Lea Power
refinancing ($88.1m), and Austria Wind repowerings ($41.8 million).
Net Consolidated Leverage ratio
The leverage ratio has decreased to 3.7x as of 31 December 2022 as compared to 4.6x in the prior year.
This decrease is primarily driven by a lower net debt of $3.3bn as of 31 December 2022 compared to
$3.8bn as of 31 December 2021.
The Net consolidated leverage ratio is measured as total net indebtedness (reported as the difference
between ‘Borrowings’ and ‘Cash and Cash Equivalents’ in accordance with IFRS statement of financial
position) to Adjusted EBITDA. The leverage ratio does not include the IFRS 16 liabilities ($35 million
as Dec. 31, 2022 and $30 million as Dec. 31, 2021). Whenever the impact would be significant, such a
ratio is adjusted to reflect the full year impact of acquisitions or for financial debt of projects under
construction which do not generate Adjusted EBITDA.
Non financial key performance indicators
The non financial key performance indicators of the group are as follows:
Non financial KPI
2022
2021
Lost time incident rate
0.00
0.07
The Lost Time Incident Rate (LTIR)
shows the recordable lost time injuries
per 200,000 labour hours so they can
be compared across any industry. In
2022 we achieved zero LTIs for the first
time, an extraordinary achievement in
our challenging sector.
Equivalent availability factor
93.4%
94.4%
The Equivalent Availability Factor
(EAF) represents the portion of the
production capacity of a power plant
that was available and ready to operate
in a given period of time. It is widely
used in the industry to track the
technical performance of power plants
and for benchmarking.
Equivalent forced outage rate
1.8%
1.8%
The Equivalent Forced Outage Rate
(EFOR) represents the production
capacity that is lost, over a given period
of time, due to equipment failure or
operational mistake (error). Like the
EAF, the EFOR is widely used in the
ContourGlobal Limited (formerly ContourGlobal plc)
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industry to measure technical
performance.
Gender diversity
(permanent employees at
year end)
1,229 male
257 female
1,241 male
227 female
We are committed to building a diverse
workforce ensuring equal opportunities
for all in the long term. Aligned with
our sustainability principles, gender
diversity is a key metric.
Principal Risks and Uncertainties
The Board of Directors has overall responsibility for the Company’s risk appetite, risk management
and ensuring that there is an effective risk management strategy and framework.
Up to the closing of the KKR transaction, the Audit & Risk Committee assisted the Board with
monitoring the Company’s risk management framework, identifying areas of risk, challenging control
weaknesses and providing independent assessment and opinion on the effectiveness and efficiency of
the Company’s internal controls and risk management systems. Subsequent to the close of the KKR
transaction, these risk monitoring activities will be overseen by the Board directly, supported by the
Executive and Senior Management group.
Risk management framework
The Company’s risk management framework consists of a register of all key risks, a risk map and
qualitative analysis of the likely causes and impacts of each risk. The register details the management
action plans in place to mitigate the effects of any risk materializing. Our risk management approach
is based on the three lines of defence model, with a set of controls, procedures, and responsibilities
designed to provide reasonable assurance.
Operational management in our businesses is the first line of defence. This ensures that day-to-day
risk management controls are implemented and monitored and that relevant systems are in place to
identify, evaluate and mitigate the Company’s business risks.
The second line of defence comprises Group functions such as compliance, internal control, legal and
IT. These focus on monitoring and compliance with risk control systems and processes implemented
by the business.
Our internal audit function together with external assurance providers serve as the third line of
defence, providing independent assurance of risk management, internal controls and governance.
Senior management plays a key role in monitoring the risk management governance framework and
policy. A focus group of key senior management members reviews and updates the risks identified on
the risk register.
Risk review
On an annual basis we undertake a review the risk register to consider the evolution of identified risks
and to identify emerging risks. As part of this review during 2022, two risks were considered to have
increased in severity from moderate to high; R01 Strategy – Impact of government actions and R05.
Operation and execution – Supply chain. The increases in risk were driven primarily by the increase in
government regulation, intervention and sanctions as a result of the war in Ukraine and the
corresponding impact on energy markets and supply chains. The resulting principal risks of the group
are as follows:
Risk factor
Main impact
Risk response (management and
mitigation)
R01. Strategy – Impact of governmental actions and regulations
The risk that
governmental actions
or changes in (1)
taxes or (2)
regulations of our
non-PPA long-term
fixed rate
arrangements (i.e.
Feed-in- Tariffs) and
Deterioration of financial performance
including loss of revenue and an increase
in expenses (including fossil fuel cost).
Loss of business/growth opportunities:
Termination of agreements:
•
Inability to obtain, maintain or
renew required governmental
permits/licenses
PPAs are held with state-owned,
regulated or other offtakers, the
majority of which are rated by
Standard & Poor’s, with a weighted
average credit rating (before
Political Risk Insurance – PRI) of
BBB (weighted by EBITDA).
ContourGlobal Limited (formerly ContourGlobal plc)
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PPAs including new
adverse
policymaking and
investigations by
regulatory or
competition law
authorities, as well as
(3) restrictive
regulation of thermal
generation as the
result of climate
change initiatives
and transition to
low-carbon economy,
without regulatory
risk pass-through
mechanisms will
have a negative
impact on our results
of operation and
growth prospects.
Risk Rating –
increased to high
following
increased
government
intervention due
to the current
economic
environment.
•
Inability to receive permits for
extension of existing capacities
Financing impact:
•
Limited access to capital for thermal
power generation projects
Impact on assets:
•
The Group is subject to changes in
laws, regulations and taxes or
changes in the application or
interpretation of laws, regulations
and taxes in jurisdictions where we
operate (particularly utilities where
electricity tariffs are subject to
regulatory review or approval) which
could adversely affect our business.
This is the case for instance in
Mexico where the current
government has engaged in several
attempts to change the regulatory
regime under which the Company’s
plants are operating and Kosovo,
where the Company is engaged in an
arbitration related to the
interpretation of its and
counterparties’ contractual
obligations.
•
To date windfall taxes have not had a
material impact on the business, due
to the contractual pricing
arrangements that are currently in
place in jurisdictions where windfall
taxes have been implemented.
However this remains a risk that the
Company monitors on an ongoing
basis.
PRI policies (from commercial
insurers) are in place for several
projects in case of events that could
affect our assets, in particular the
loss of invested capital. In some
cases, these cover a return on our
capital. These include:
•
Maritsa, Vorotan, KivuWatt,
Togo, Cap des Biches and
TermoemCali.
Close monitoring of regulatory and
enforcement developments is
undertaken, and engagement with
energy and regulatory associations
and advisors is maintained to
anticipate and address potential
changes in regulation and advocate
our interests.
Partnerships with multilateral
development banks for debt which
are key institutions in developing
markets.
Investment is placed in local
communities and hiring locally.
Close monitoring of global climate
change initiatives and taking them
into account in our medium- and
long-term operations and growth
strategy.
Proactive engagement and
communication.
Risk factor
Main impact
Risk response (management and
mitigation)
R02. Strategy – Geopolitical uncertainties and social instability (including environmental
activism, sanctions and trade war)
The risk that
geopolitical
instability, increased
social pressure on
politics and
increasing activism
will create additional
uncertainty for our
multinational
business operation
and will affect our
business model or
specific assets.
The risk that
sanctions affect our
counterparties or
stakeholders along
our supply chain will
Deterioration of financial performance:
•
Increase in operational costs
(including additional costs associated
with supply chain disruptions)
•
Higher financing transaction costs
•
Disruption of operation of one or
more of our assets
•
Increase in OPEX and CAPEX
•
Loss of invested capital
•
Adverse effect on results of operation
•
Unforeseen additional recurring costs
vs. financial model projections
(project Internal Rate of Return
(IRR) and cash flow)
•
Charges and penalties due to
noncompliance with external
requirements
PRI policies (from commercial
insurers) are in place for several
projects in case of events that could
affect our assets, in particular in
Africa and Eastern Europe. In some
cases we can recover a return on our
capital: Maritsa, Vorotan, KivuWatt,
Togo, Cap des Biches, TermoemCali,
and Kosovo.
•
Our diversified operations limit
the downside as the impact of a
localized geopolitical effect is
unlikely to have a significant
effect on the full portfolio
•
Diversification of jurisdictions
and technologies minimizes the
risk
ContourGlobal Limited (formerly ContourGlobal plc)
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have a negative
impact on our cost
structure and our
ability to acquire the
required equipment.
The risk that
excessive cross
border tariffs or
negative regulation
on foreign capital
flow will have an
impact on our supply
chain and limit our
flexibility in cross
border investments.
Risk Rating –
unchanged at
Moderate
Loss of business/growth opportunities:
•
Inability to operate effectively
•
Termination of agreements
•
Fewer opportunities for growth
Business disruption:
•
Inability to procure required
equipment
•
Impact on equivalent availability
factor and equivalent forced outage
rate
•
Access to several financial
markets allows the business to
choose the most opportune
sources of transactional
financing
•
Investment in local communities
and hiring locally creates
goodwill with local governments
and populations
•
Regular analysis of suppliers
and supply chain
•
Whilst we have no operations in
either Ukraine or Russia, we
continuously monitor the
geopolitical situation in relation
with conflict to assess potential
impact on our businesses
Risk factor
Main impact
Risk response (management and
mitigation
R03. Strategy: Disruptive innovation in power generation and storage technologies
The risk that
technological
breakthrough in
renewable
generation, storage
technologies and/or
energy trading and
financial markets
(i.e. blockchain) will
reduce our ability to
be competitive in
new investments or
could result in
stranded assets.
Risk Rating –
unchanged at
Moderate
Deterioration of financial performance
•
Loss of revenue
•
Decrease in operating cashflow
Loss of business / growth opportunities
•
Renegotiation/termination of
existing contracts
•
Inability to expand in strategically
important regions
•
PPAs drafted to protect
ContourGlobal from non
payment of revenue.
•
Diversification of
ContourGlobal’s portfolio
(Thermal and Renewable) and
installing the most modern
technologies (where possible) in
order to remain as competitive
as possible.
•
Innovation monitoring and
using internal capabilities to
capitalize on emerging
technologies and innovative
solutions already implemented
within the Group. For example
the ongoing solar PV and battery
project in Bonaire.
Risk factor
Main impact
Risk response (management and
mitigation)
R04. Operating and execution: Pandemic virus
The risk that global
pandemic(s) will
cause (1) health
issues for our
employees, (2)
business disruptions
at operational as well
as at corporate level,
(3) disruption of our
supply chain and (4)
delays in power
plants major
overhauls, (5)
increase in
Direct financial impact:
•
Adverse impact on revenue due to
force majeure claims, decreasing
power demand caused by slowdown
of economic growth
•
Slow payment of certain of our
offtakers or regulatory measures to
slow down payments
•
Adverse effect on results of
operations due supply chain
disruption (cost increase)
Business interruption:
•
During the peak of the pandemic
a COVID Committee managed
key decisions and coordinating
relevant measures across the
Group, including interaction
with Senior Management and
employees.
•
Internet site containing key
employee resources.
•
Mobility restriction, remote
work and social distancing
•
Remote power plant operations
in some locations or assets
operating in isolation mode.
ContourGlobal Limited (formerly ContourGlobal plc)
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counterparty risk
given deterioration of
our offtakers credit
strength as well as
(6) slowdown of
economic growth and
thus disruption of
global commodity
markets which could
result in adverse
financial impact.
Risk Rating –
unchanged at
Moderate
•
Business leaders’ distraction from
core business activities or employee
disruption due to illness
•
Delays to plants’ planned
maintenance from employees illness
or supply chain disruption
Indirect financial impact
(country/counterparty):
•
Adverse effect of economic growth
slowdown impacting our
counterparties, i.e. PPA offtakers and
governments’ Feed-in Tariffs
•
FX rate exposure
Financing and growth impact:
•
Inability to get access to financing for
new or existing projects due to
potential liquidity crunch caused by
global economy slowdown
•
Providing of masks and PPE
equipment
•
Supply chain analysis and
contract management.
•
Force majeure and termination
clauses analysis for key
contracts.
•
Review of annual maintenance
program to reschedule any
maintenance activities that
would require third-party
interventions on site
Risk factor
Main impact
Risk response (management and
mitigation)
R05. Operation and execution: Supply chain
Increased supply
chain risk, with the
identification and
management of
supply requiring
greater effort to
maintain resilience.
This may be due to a
more competitive
landscape among the
company’s peers
increasing costs; or
due to a shrinking of
available supply due
to suppliers going
out of business
during economic
downturn; or
politically-motivated
restrictions (such as
trade restrictions –
e.g. quotas, tariffs,
additional screening
- or sanctions)
following heightened
geopolitical tensions.
Risk Rating –
increased to High
following
increased supply
chain pressure in
the current
geopolitical and
economic
environment
Business disruption
•
Inability to procure required
equipment or parts
•
Impact on EAF and EFOR
Deterioration of financial performance
•
Increase in Opex and Capex
•
Increase in fuel costs
•
Supply chain analysis and
contract management: global
supply chain actions tracker per
plant with regular updates in
case of risks, regular reviews
•
Monitoring of force majeure and
termination clauses and
communication of potential
termination
•
Regular vendor risk assessment,
particularly of strategic and
bottleneck vendors
•
Diversification of suppliers to
avoid any dependency on any
particular vendor
•
PPAs that pass through fuel
costs or where merchant close
monitoring of movements in fuel
pricing as part of the overall
commercial risk.
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Risk factor
Main impact
Risk response (management and
mitigation
R06. Operation and execution: Project execution (CAPEX)
The risk that
inefficient
contractors’
selection,
contracting, project
management, and
execution of
greenfield
construction or
refurbishment
investment projects
will result in delays
or unanticipated cost
overruns.
Risk Rating –
unchanged at
Moderate
Financial impact:
•
Overrun of project costs (including
financing fees) vs. investment case
•
impacting projected cash flows and
IRR
•
Liquidated
damages/penalties/litigation
•
Reduced revenue due to construction
delays
•
Potential defaults on financing and
debt repayment before Commercial
Operations Date (COD)
•
Image and reputation impact
resulting from a loss of credibility
with counterparties, lenders and
other stakeholders
•
Controlling methodology:
specific internal resource is
dedicated to provide guidance
and best practice to ensure strict
and real-time project cost
control, enabling cost overruns
to be identified early and
mitigation actions put in place
•
Minimizing the risk of exceeding
construction budgets by entering
into fixed price contracts with
engineering, procurement and
construction (EPC) contractors
with proven track records
•
EPC contracts contain back-to-
back liquidated damages
provisions which protect
ContourGlobal against
construction delays and other
breaches by EPC contractors
•
Contract monitoring and
management with legal support
•
External support to obtain
permits
•
Project Review Procedure:
monthly review of the projects
organized by the Project
Management Team (including
the Group COO) and presented
to the Project Steering
Committee
•
Regular analysis of suppliers
and supply chain
Risk factor
Main impact
Risk response (management and
mitigation)
R07. Operation and execution: Asset integrity (OPEX)
The risk that asset
maintenance
processes not
managed in line with
O&M plan and
quality standards will
prevent power plants
from delivering
electricity and
ensuring availability
at the levels defined
in the long-term
PPAs.
Risk Rating –
unchanged at
Moderate
Deterioration of operational
performance:
•
Business interruption and power
outages
•
Performance below expected
efficiency and output levels
•
Inability to deliver electricity or
ensure availability defined in long-
term PPAs
Reduced profitability and cash flows:
•
Increase of expenses (OPEX and
CAPEX)
•
Unplanned O&M and capital
expenditures
•
Loss of revenue and PPA penalties
•
Liquidated damages
•
Business interruption insurance
•
O&M strategy focusing on
Health, Safety and Environment
(HSE), O&M organization, O&M
performance management,
benchmarks and KPIs
•
Maintenance strategy including
hydro and civil structures. O&M
IT systems (including remote
monitoring control room)
•
Maintenance activities with
regular KPIs for control, and
timely corrective actions
•
Daily KPIs and improvement
meetings between local plant
managers and operators
•
Regular analysis of suppliers
and supply chain
ContourGlobal Limited (formerly ContourGlobal plc)
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•
Reduction in distribution and
inability to service debt
•
Reputational impact
Risk factor
Main impact
Risk response (management and
mitigation)
R08. Operation and execution: Resources/Climate change
The risk that climate
change (e.g. changes
in temperature, wind
patterns and
hydrological
conditions) will
affect the certainty of
our forecasts, will
impact our
operations and
adversely affect our
financial
performance.
Risk Rating –
unchanged at
Moderate
•
Deterioration of financial
performance including a loss of
revenue and/or an increase in
expenses (O&M costs)
•
Impact on the operational
performance with a strong deviation
of actual renewable generation vs.
projections in the investment case
specifically for wind and hydro
•
Potential for the above impacts to
result in an impairment.
•
Diversified geographical and
technological portfolio of assets
•
Extensive weather phenomena
studies and due diligence before
acquisitions
•
Sign-off on all investment case
assumptions by a reputable
advisory firm
•
Retina Performance
Management platform for
Renewable businesses to
improve data analytics and
forecasting, enabling predictive
analysis for medium- to long-
range maintenance planning
and downtime reduction in
Brazil
•
Review of weatherization
planning for extreme
temperatures
Risk factor
Main impact
Risk response (management and
mitigation)
R09. Health, Safety and Environment and food: Prevention and regulation
The risk that failure
to prevent major
health, safety,
environmental and
food (CO2
production for
human
consumption)
incidents and/or
comply with relevant
regulations due to
inherent risks related
to our activities (fuel
types, technology,
equipment in more
than 20 countries)
will have a material
adverse impact in
our operations,
financing conditions
and reputation.
Risk Rating –
unchanged at
Moderate
Human and environmental impact:
•
LTIs (Lost Time Incidents) and
fatalities of ContourGlobal
employees, contractors or people in
local communities around the
facilities due to incidents at the
power plants
•
Environmental accidents on site and
in local communities
•
Contamination of food supply
•
Reputational impact
Financial and operational impact:
•
Increase in liabilities and compliance
costs
•
Business interruption
•
Loss of efficiency/productivity
•
Breach of loan covenants
•
Non-compliance with applicable HSE
legal requirements and potential
sanctions
•
Health and Safety Policy
reviewed annually and
communicated Company-wide
•
Health and Safety and
Environmental management
system is aligned with H&S
18001, ISO 14001 standards,
and also with World Bank
guidelines, namely the IFC
Performance Standards
•
Monitoring of reactive indicators
(such as responses to accidents)
and proactive indicators
(including known hazards,
inspection quality and number
of training hours)
•
Intense regular training
•
Continuous improvement and
failure analysis (such as 5 Whys
and lessons learned) to prevent
incident recurrence
•
Strong environmental policies
and procedures
•
Each business’s compliance with
applicable policies, local laws
and permit requirements is
managed directly by the
business
ContourGlobal Limited (formerly ContourGlobal plc)
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•
Oversight and audit through
operations, environmental,
health and safety departments
•
Third-party contractors’
environmental audits, including
Coca Cola audits of food grade
CO2
•
Arrubal, Spain CSP, Maritsa,
and Sochagota have achieved
ISO 14001 certification
•
Adherence to a Company-wide
environmental policy, reflecting
the business commitment to the
United Nations Global Compact
Risk factor
Main impact
Risk response (management and
mitigation)
R10. Regulation and compliance: Fraud, bribery and corruption
The risk that lack of
transparency, threat
of fraud, public
sector corruption,
money laundering
and other forms of
criminal activity
involving
government officials
or suppliers will
result in a failure to
comply with anti-
corruption
legislation, including
the UK Bribery Act
2010 and other
international anti-
bribery laws.
Risk Rating –
unchanged at
Moderate
Financial impact:
•
Financial losses as a result of
fraudulent activities
•
Violations of anti-corruption or
other laws
•
Criminal and/or civil sanctions
against individuals and/or the
Company
•
Loss of trust by key stakeholders
•
Debarment by multilateral
development banks and international
financial institutions
•
Reputation impact and loss of trust
•
Exclusion from government funding
programs
•
A comprehensive anti-bribery
compliance program that
reflects the components of an
‘effective ethics and compliance
program’ as set forth by various
international conventions and
enforcement authorities
Policies and procedures include:
•
Code of Conduct and Business
Ethics
•
Anti-Corruption Policy
•
Anti-Corruption Compliance
Guide
•
Policy for Engaging Suppliers
and Third-Party Service
Providers
•
Gifts & Hospitality Policy
•
Conflict of Interest Policy
•
Compliance Transactional Due
Diligence Protocol
•
Business Development
Consultant Compliance Protocol
•
Regular certification by
employees
•
Risk-based due diligence,
including for third parties and
transactions
•
Pre-approval by Compliance of
gifts and hospitality offered to
governmental officials
•
Online portal; EthicsLine
•
Regular checks and audits:
•
Periodic combined
Compliance and Finance
Audits
•
Internal audits
conducted by external
providers led by the
internal audit team
•
Internal spot checks
ContourGlobal Limited (formerly ContourGlobal plc)
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•
Tailored, risk-based training
according to a yearly training
plan
•
Anti-Corruption e-learning
course for new joiners and
regular refresh course for
existing employees
Risk factor
Main impact
Risk response (management and
mitigation)
R11. Information technology: Cyber security and system integrity
The risk that
insufficient IT
security or
maintenance of
systems will expose
the Company to data
corruption. This
could have a negative
impact on
information systems
as well as electronic
control systems used
at generating plants
and could disrupt
business operations,
resulting in loss of
service to customers
and expense to repair
security breaches
and/or system
damage.
Risk Rating –
unchanged at
High
Organizational and operational impact:
•
Disruptions to business operations
•
Compromise of data integrity in core
systems
Financial impact:
•
Potential for fraudulent activity due
to segregation of duties conflicts
•
Penalties related to non-compliance
with data-related laws and
regulations
•
Loss of revenue due to disruptions to
operations
•
Impact on reputation due to breach
of confidentiality
•
Dedicated IT security function
established for corporate and
operations
•
Ongoing projects aiming at
strengthening cyber security
controls
Plants
•
Physical access controls
•
Dedicated plant IT functions
established to consolidate IT
management approach in the
plants under a global framework
of IT/OT security policies and
procedures. This local,
segregated approach to the
management of plants
minimizes risk
Corporate
•
Security governance controls in
place (including security
policies, security training,
security reviews)
•
Security systems implemented
(e.g. anti-virus, web filtering,
firewalls, multifactor
authentication, encryption)
•
Security information and event
management system (SIEM)
•
Infrastructure hosting security
in place (ISO-27001 compliant
data centres)
•
User provisioning process for
key financial accounting and
reporting systems, and
segregation of duties where
applicable
•
Governance processes in place
(e.g. change management,
incident management)
•
Restricted USB access
•
Centralized administrative
access restricting any changes
introduced by individual users
•
Annual external audits of
financial systems and IT security
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
19
Risk factor
Main impact
Risk response (management and
mitigation)
R12. People and organization: Key people (senior executive management) succession
planning
The risk that a
combination of key
people’s (Senior
Executive
Management)
departure at short
notice may affect the
company’s ability to
deliver its strategic
objectives and the
overall Company
performance and
availability of talent
to support long term
growth plans.
Risk Rating –
unchanged at
Moderate
•
Removal or departure of key
individuals could result in
operational disruption, while
competition for employees could lead
to higher than expected increases in
the cost of recruitment, training and
employee costs
•
Loss of key management members
could have a reputational impact
•
Focused action to attract, retain
and develop high-calibre
employees
•
Managing organizational
capability and capacity to meet
our customers’ needs
•
Effective remuneration
arrangements to promote
effective employee behaviours
•
Clear succession plans in place
Whistleblowing, Bribery and Anti-Corruption
Whistleblowing
On behalf of the Board, until the close of the KKR transaction the Audit & Risk Committee (“ARC”)
reviewed the Group’s whistleblowing mechanism which allows employees and third parties to report
concerns about suspected impropriety or wrongdoing (whether financial or otherwise) on a
confidential basis, and anonymously if preferred. This includes an independent third-party reporting
facility comprising an online reporting process (the “EthicsLine”). Any matters reported are
investigated in line with our internal procedures and escalated to the Board as appropriate. Regular
compliance reports are prepared which detail matters raised through the whistleblowing procedure, a
description of the manner in which issues have been addressed and recommended remediation.
The Company provides regular training to existing employees reminding them about the available
reporting mechanisms within the Company, including through the EthicsLine, and the obligations to
report actual or suspected violations of the Company’s policies. The arrangements also form part of
the induction program for new employees.
Bribery and anti-corruption policy
The Board has a zero-tolerance policy for bribery and corruption of any sort. The Company provides
regular training to employees on our policies, procedures and protocols, highlighting areas of
vulnerability. Our third-party providers are required to comply with our policies or evidence that they
have similar policies and practices in place within their own businesses on a risk-adjusted basis.
Stakeholder engagement
As responsible leaders in power generation, and in accordance with our Section 172 obligations, we
engage closely with our key stakeholders in line with our commitment to make a positive long-term
impact around the world.
Employees
How we engage
We engage closely with our employees around the world to ensure we have
communication and clarity around their careers and aspirations, health and
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
20
safety, diversity, learning and development, remuneration and rewards and
other key issues.
We have a number of ways of engaging with our employees, including
structured career conversations, internal media platforms, employee forums
and engagement with trade unions.
Key engagement and activities in 2022:
• Multiple employee forums were held throughout 2022 regarding the KKR
acquisition of ContourGlobal, updating employees on progress and the
anticipated impact as the transaction progressed throughout 2022.
• The CEO and leadership team visited many sites throughout the year to
meet with employees.
• The Board received and discussed reports from the designated Non-
Executive Director for workforce engagement
Outcomes of engagement
The KKR transaction was completed during 2022 with limited impact on
employees and the business continues to operate effectively. Throughout the
transaction the Senior Management team provided information and updates
to employees through a series of webinars and written communications.
The health and safety of employees remains a key priority and the Company
has a regular, communication process with all employees, including, in
particular, our power plant-based employees. We continued to apply our
internal guidelines, and internal health and safety audits were carried out
using remote technology where appropriate.
In Bonaire during the year following extensive discussions with employees at
our plant our employees elected to leave the union and accept terms and
conditions offered by ContourGlobal.
The 2022 annual bonuses for all employees were paid in December and
recognized strong corporate performance, including achievement of “Target
Zero,” our most critical health and safety key performance indicator, for the
first time in Company history.
Customers and
clients
How we engage
We constantly interact with our customers throughout the course of long-
term contracts to ensure that we deliver energy in full accordance with our
contractual commitments and adapt to needs that may evolve throughout the
life of the contract. Key engagement activities include the following matters,
all discussed in depth, reviewed and sanctioned by the Board:
• A number of site visits took place during the year and where relevant and
appropriate meetings were held with energy customers.
• At each Board meeting performance of the operations is reviewed.
Outcomes of engagement
We reinforced in all the countries where we have presence our relationships
with our main clients. In particular:
In the United States, in our Borger Texas plant, we have been actively
working with our customers and main suppliers, leveraging on our
relationships and positive history as operators to extend the current
electricity, steam and gas contracts, which we expect will be achieved in the
course of 2023.
At Redwood, with a view to diversify our customer base, we added close to 10
new clients in our Resource Adequacy portfolio, taking advantage of the
significant increase in capacity needs to fully contract years 2023 and 2024,
and continue work to secure capacity contracts for the years 2025 to 2030.
On Bonaire, we leveraged our historical presence and relationships with the
main stakeholders on the island to extend the Power Purchase Agreement by
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
21
another 6 years and build additional solar PV and battery capacity on the
island, which we expect will reach COD in the course of 2023.
In Mexico, we interconnected new clients in 2022 to load points existing in
our permit, after strong efforts from our local commercial team. This
reinforces our client base and improves our interconnection rate close to
90% on our 2 plants in Mexico.
Shareholders,
investors and
lenders
How we engage
During the course of 2022, the Company undertook its regular programme of
engagement which included: the full reporting cycle and half-year financial
results as well as two quarterly trading statements, and face to face meetings
with investors, bondholders and lenders through many channels, including
our AGM, conferences and regular calls.
One of the principal items on which we interacted with shareholders,
investors and lenders was the acquisition of ContourGlobal plc by KKR.
The Board receives regular reports from our Senior Finance team and
brokers. These reports provide clarity on the investor landscape and help to
update directors on our investors’ views. Our corporate website provides a
dedicated investor section which contains, up until the delisting of
ContourGlobal plc on December 21, 2022, all London Stock Exchange
regulatory announcements and a copy of all of our Annual Reports.
Webcasts of our results and other investor presentations are also available to
shareholders, up to the point that the company was delisted on December 21,
2022.
Outcomes of engagement
Following the board approval of the KKR transaction on May 17, 2022, a
General Meeting of shareholders was held on July 6, 2022, where relevant
engagement took place in relation to the proposed transaction and the result
of the General Meeting was approval of the transaction by shareholders.
We also engaged with certain lenders who provide project finance in our
operational businesses to the extent that the transaction impacted existing
covenants or terms and obtained waivers to allow the relevant transaction to
proceed without impacting the project debt.
We engaged with (i) a new pool of lenders at our Hobbs plant in New Mexico,
United States, in order to refinance our project finance facility during the
year at attractive conditions, (ii) our corporate letters of credit holders to
refinance such letters of credit, which resulted in upsizing and extending
them and (iii) lenders at our Austrian wind farms to finance the repowering
of certain wind farms at favourable conditions.
Communities
How we engage
As a business we are deeply committed to making a positive long-term
improvement wherever we operate and we engage closely with communities
around the world. We achieve this by engaging with our communities to
identify opportunities to make high-impact social investments in the areas of
education, health and safety, the environment, human rights, and anti-
corruption. Our investments align with United Nations Sustainable
Development Goals, our Social Responsibility and Environmental
Sustainability Policy, our Anti-Corruption Policy and Guide and other
ContourGlobal policies.
Outcomes of engagement
Refer to page 25 regarding social investment in 2022.
Governments
and regulators
How we engage
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
22
We promote sector development and sustainable business practices by
engaging with governments and civil society.
Our plant managers meet regularly with host government counterparts,
including the ministries of finance, energy and infrastructure, and regular
regulatory updates are provided at Board meetings.
We invite government officials to plant inaugurations and other public
events, and organize private working events for visiting officials. Active
participation in several industry associations (including ABEEólica, the
Brazilian Association of Wind Power, the Bulgarian Energy Chamber and
international organizations and the United Nations Development Program).
Outcomes of engagement
Regarding the KKR transaction, there were several anti-trust, competition
law, and foreign direct investment regulatory approvals that were required to
be obtained across the group, which were completed by or with the
assistance of KKR and external legal advisors.
We continue to have dialogue with the EU and the Bulgarian government on
the proposed market reforms and energy transition plans. The Company is
working to support a transition to green energy and the development of
renewable energy as part of a phased transition from coal. This in turn
ensures we are able to support environmental goals, as well as security and
affordability of supply as Bulgaria transitions to low-carbon policies.
At our Bonaire asset in the Dutch Antilles, we have engaged with the
government, local authorities and regulator in the completion of our solar PV
and battery project, significantly enhancing our renewable energy generating
capability in the region.
In Austria, we have successfully participated in the first Austrian wind
auction and were awarded a 20-year CfD contract in December 2022 for one
of our projects under repowering. In parallel, we engaged in negotiations on
several sites which would have potential for additional wind farms with local
authorities and landowners.
Our People
Our people-the heart of our business
We aim to recruit and retain the best people, ensuring we deliver our strategy and run our operations
safely and productively. Around 1,541 employees work for us globally; they are the foundation of our
business. We create and promote an inclusive and diverse environment where the safety and well-
being of our people is the highest priority. To enable our people to perform at their best, we continue
to invest in technology and innovative ways to manage risk, streamline processes, and improve
productivity. We offer competitive remuneration that rewards expertise and we invest in the
development of our people to build capability and improve performance.
Pay and reward
To attract and retain the best talent, and reward our colleagues for their work, we regularly review pay
and benefits in the context of competitiveness, retention, and fairness. For all ContourGlobal
employees eligible for a bonus, we use a combination of a Group-wide and localised scorecard with a
mix of financial and non-financial measures, typically a combination of corporate, business and
functional scorecards. In this way, our bonuses match our strategic priorities.
Employee rights
Aligned with our commitment to the UN Global Compact, our Code of Conduct and Business Ethics,
together with our employee handbooks and other policies and procedures, ensures employee rights
are respected. We support freedom of association and collective bargaining wherever it is permitted. If
employees have any labour concerns, we encourage the use of informal processes to resolve them, but
we provide a formal grievance mechanism if these prove insufficient.
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
23
We seek to ensure our suppliers follow the same high standards of labour relations as those we
practice ourselves, and we train our employees to identify any instances of non-compliance.
Equality, diversity and inclusion
We are committed to developing an inclusive and diverse workforce, and one that provides equal
opportunities for all in the long term. This commitment promotes safety, productivity, and well-being,
and underpins our ability to attract new employees. The more representative we are of the
communities where we live and work, the better we become at truly serving people and society. Our
people policies are designed to achieve these commitments.
They also reflect relevant employment law, including the provisions of the Universal Declaration of
Human Rights and ILO Declaration on Fundamental Principles and Rights at Work. We expect our
people to treat each other with dignity and respect, and do not tolerate discrimination, bullying,
harassment, or victimization on any grounds.
We are committed to paying our people fairly and equitably relative to their role, skills, experience,
and performance – in a way that balances the needs of all our stakeholders. That means our
remuneration policies reward sustainable performance that is in line with our values as well as our
risk expectations. We encourage our people to benefit from ContourGlobal’s performance.
Regarding gender diversity, we continue to work at improving the representation of women in the
business. At the Management level (Vice President and above), 37.5% of positions are women.
However, gender diversity is much more challenging at the power plants. We are committed to
actively attracting women into these roles. We believe that hiring women in leadership positions in a
largely male-dominated workplace is vital to drive innovation and inclusivity. We celebrated
International Women’s Day to promote the role of women in the workplace and we will continue to
strive for increased gender diversity throughout the Company.
Our culture
Our Company culture is built on our values and principles and embrace the well-being and
development of our people and a commitment to continuous learning. Our culture drives our passion
to provide a safe and healthy work environment and to learn from our mistakes – we encourage
employees to be curious, to experiment, and to share things they learn.
As a learning organization, we conducted 581 “5 Whys” investigations this year, where employees
work together to analyse why things do not always go according to plan and to propose how to make
processes better. We publish and disseminate these widely to achieve continuous improvement. We
also coach and train our people on our values and principles and embedding these in the way we work
– we call this the ContourGlobal Way.
Health and Safety – Target Zero
Our global Target Zero programme, one in which we commit to have zero lost-time incidents, lies at
the heart of our approach to health and safety. We want to ensure that ‘everyone goes home safe, every
day, everywhere’. After adopting “Target Zero” in December 2016, we finally achieved our target in
2022 for the first time, an extraordinary accomplishment in our challenging sector.
Environment
Strategic framework
Our policy on environmental sustainability, which provides the framework under which we work, is
aligned both with the targets in UN SDG 12 and with the International Finance Corporation (IFC)
performance standards. Our environmental impacts are intensively regulated in all our markets and
reported publicly. For our European assets, we comply with EU environmental standards. These
promote environmental stewardship, including pollution prevention and abatement, biodiversity
conservation and responsible management of sustainable natural resources.
Climate Impact
Our sustainability strategy is designed to create value for shareholders and society and positively
impact the climate by reducing our CO2 emissions intensity in the medium term and achieving net
carbon zero by 2050. Our commitment to grow in low and no-carbon technologies will largely drive
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
24
this, along with increased investment in carbon capture technology, repowering existing renewable
assets, further applying battery storage technology and improving energy efficiency.
Over the last 13 years we have increased our renewable energy from zero to 1,652 MW of installed
capacity across wind, solar and hydro. In 2022, our Austria wind portfolio repowering increased
capacity by 3.8 MW and our Bonaire battery and solar projects continued to progress with completion
of the project on track for 2023. Our European Solutions plants continue to utilize carbon capture
technology and we are seeking to expand use of this technology within the portfolio.
The carbon emissions of our coal plant in Bulgaria are the most significant in our portfolio. Our
regulatory and engineering teams are investigating ways to convert the plant to operate on low- and
no-carbon fuels, such as solar fields, low-carbon gas or renewable biomass combined with carbon
capture technology. The timing of exiting coal completely will depend in large part on geopolitical
events and pressures related to commodity pricing and availability and, in particular, the timing of the
implementation of the energy transition in Bulgaria. Additionally, exiting coal will take into
consideration the need for a “just transition”, protecting the interests of our employees and the
community, balanced by the impact on climate.
Our greenhouse gas (GHG) emissions are reported according to the GHG Protocol guidelines. The
majority of these are generated from our thermal electricity and steam production, with CO2 emissions
representing 99% of total emissions. In addition to carbon emissions, we carefully manage other
atmospheric emissions, such as nitrogen oxide (NOx), sulfur oxide (SOx), and particulate matter
(PM), to reduce health risks and environmental impacts.
Using water responsibly
Our businesses, most of which are intensively regulated, undertake extensive monitoring and risk
mitigation activities related to water withdrawal, use, and discharge, as well as biodiversity impacts.
Where water is a primary fuel source – such as in hydro-electric generation – we ensure we utilize it in
the most efficient manner possible; we also manage other impacts, including sedimentation, drainage,
vegetation, and biodiversity.
At our Vototan business in Armenia, our hydroelectric complex utilizes dams to generate electricity.
We undertook a large-scale refurbishment of the facility from 2018-2021 to increase its generating
capacity while maintaining the size and impact of the dams and increasing the efficiency of water
resources.
Where water is required as an input in thermal operational processes, we access only the amount
required to meet our needs. Where we discharge water, such as at our KivuWatt business in Rwanda,
we replenish the sources from which it came with equivalent volumes, properly treated. Where we
can, we recycle water – for example, at our Cap des Biches plant in Senegal, we now recover water
used in plant operations to use for cleaning and sanitary purposes.
Limiting waste
We minimize waste as far as possible through planned reuse and recycling. However, some waste –
including hazardous waste – is unavoidable during power plant operations. We ensure this is properly
handled and treated. We have several hazardous waste initiatives at our plants. At our Maritsa plant,
for example, we have a long-term project to replace all fluorescent lighting containing mercury with
LED lights.
Spills and grievances
While we seek to avoid any adverse incidents or grievances, we keep ourselves fully prepared to deal
with emergencies, unexpected environmental impacts, or complaints from our stakeholders. We
therefore train our employees on how to recognize and avoid environmental risks and we report
environmental incidents transparently. Each time a spillage occurs, we are required to conduct a full
root cause analysis to learn from our mistakes. Grievances are also reported in quarterly management
reports and action plans are developed to address them.
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
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Biodiversity
To achieve sustainable resource management, we manage the use, development and protection of
renewable natural resources in a way, or at a rate, which enables people and communities to provide
for their present social, economic, and cultural well-being. We seek to use and develop natural
resources while also sustaining the potential of those resources to meet the reasonably foreseeable
needs of future generations and safeguarding the life-supporting capacity of air, water, and soil
ecosystems.
We take a proactive and systematic approach to local threats to biodiversity beyond our business
activities. We adopt biodiversity plans after consultation with impacted stakeholders, including
governments, nongovernmental organizations, and communities. We seek to prevent and protect
ecosystems from unwanted impacts, but where we cannot achieve that objective entirely, we seek to
rehabilitate, restore, and offset, in line with best-practice mitigation hierarchy. Our track record on
protecting and promoting biodiversity has generally been positive.
For further details on our environmental impact, please refer to our Sustainability Report, available
on our website at: https://www.contourglobal.com/our-principles-values.
Emissions
The methodology for the calculation of Scope 1 emissions for our plant in the United Kingdom are
based on fuel consumption and emissions factors at the asset level. Calculations utilize the most
relevant emission conversion factor for the United Kingdom, in line with the GHG Protocol for
calculating Carbon Dioxide equivalent (CO2е), extracted from official sources and the global warming
potential (“GWP”) values published by the Intergovernmental Panel on Climate Change (“IPCC”) with
CO2 having a GWP equivalent of 1. Values published by the IPCC are used for the GWP for HFC, CFC,
HCFC, PFC and SF6 also. GWP is used to convert the quantity of leaked gasses to tCO2е.
Scope 2 CO2е emissions, which include purchased electricity for ContourGlobal’s own use follow the
GHG Protocol’s Scope 2 Guidance and are calculated on a location-based method and marked-based
method.
2022
2021
Scope 1 CO2 emissions tCO2
12,899
16,918
Scope 2 CO2 emissions, tCO2e - Location based
1,404
1,153
Scope 2 CO2 emissions, tCO2e - Market based
-
174
Electricity production (MWh)
25,505
32,971
Heat production (MWh)
20,690
22,601
Total Energy Input (MWh)
46,195
55,572
Scope 1 CO2e emissions intensity – electricity produced (tCO2/MWhe)
0.51
0.51
Scope 1 CO2e emissions intensity – energy produced (tCO2/MWh)
0.28
0.30
Communities
A core part of ContourGlobal’s mission is to make the places where we work better because we are
there. We achieve this by engaging with our communities to identify opportunities to make high-
impact social investments in the areas of education, health and safety, the environment, human rights,
and anti-corruption. Our investments align with United Nations Sustainable Development Goals, our
Social Responsibility and Environmental Sustainability Policy, our Anti-Corruption Policy and Guide
and other ContourGlobal policies.
In 2022, we focused intensely on improving the long-term impact of our social investments with each
business assessing community needs, project impacts and developing three-year social investment
plans. The plans will be presented to our Sustainability Committee in 2023 for review and approval,
including project KPIs, implementation strategies, and budgets. As 2022 was a year of transition, our
social investments were only $1.1 million, as compared to $1.5m in 2021.
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
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Non-Financial Information Statement
We create value for all our stakeholders and track our performance against key financial and non-
financial indicators. The table below sets out where more information on non-financial matters can be
found in this Annual Report together with an overview of our relevant policies and standards.
Reporting required
Relevant
information
Policies, Standards and Commitments
Business model
Page 4 Business
Model
Our values:
• To care about our people’s health, safety, well-
being and development.
• To expect, embrace and enable excellence and
continuous learning through humility, and
knowledge that we will fail but when we do, we
will learn.
• To act transparently and with moral integrity.
• To honour the commitments of those who have
placed their trust in us.
• To work hard and without boundaries as a
multinational, integrated team.
Principal risk and
impact of business
activity
Page 11 Principal
risks and
uncertainties
• Risk Management Framework
Environmental matters
Page 23
Environment
Our environmental commitments include:
• Complying with all environmental regulations
and world-class best practices.
• Striving towards reducing our environmental
footprint.
• Training and developing our workforce to
understand our environmental and social
responsibilities.
• Executing targeted social investments aligned
with our core business.
• We are also a signatory of the United Nations
Global Compact
• Code of Conduct and Business Ethics
• Supplier Code of Conduct
• Social Responsibility & Environmental
Sustainability policy
Employees
Page 22 Our People
• Signatory of the United Nations Global Compact
• Code of Conduct and Business Ethics
Social matters
Page 25
Communities
• Signatory of the United Nations Global Compact
• Code of Conduct and Business Ethics
• Social Responsibility Environmental
Sustainability policy
• Social Investments Framework
• United Nations Global Compact signatory
Human rights
Page 22 Our People
Page 25
Communities
• Signatory of the United Nations Global Compact
• Code of Conduct and Business Ethics
• Supplier Code of Conduct
• ContourGlobal Modern Slavery Statement 2021
• Human Rights Policy Statement
Anti-corruption and
anti-bribery
Page 19
Whistleblowing,
Bribery and
Anticorruption
Page 11 Principal
risks and
uncertainties
• Code of Conduct and Business Ethics
• Anti-Corruption Policy
• Anti-Corruption Compliance Guide
• Supplier Code of Conduct
• Policy for Engaging Supplier and Third-Party
Service Providers
• Gifts & Hospitality Policy
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
27
• Compliance Transactional Due Diligence
Protocol
• ContourGlobal Modern Slavery Statement 2021
Section 172 of the Companies Act 2006
The role of the Board is to promote the long-term sustainable success of the Company, generating
long-term value for shareholders and contributing to wider society. The Board recognizes the
importance of ensuring that the interests of all parties that have a stake in our Company are factored
into our decision making process, both as a general principle and as part of each director’s s172 duty
under the Companies Act 2006. Our Board decisions can have a significant impact on one or a
number of our stakeholder groups, and it is therefore essential that we engage with those groups in a
way that helps and supports our understanding of the potential wider, long-term impact of those
decisions.
We communicate with our stakeholders through a range of channels and we have a number of ways in
which the Board is informed of these engagement activities and the key themes arising from such
engagement.
The Board endeavours to ensure that the expectations and concerns of stakeholders are taken into
consideration, and is of the view that their feedback is invaluable in helping the Board formulate the
long-term strategy, and the long-term success, of the Group. The Board also encourages management
to consider s172 matters when presenting to the Board, particularly where decisions are required.
The Board considers that it has complied with its duties under s172 of the Companies Act 2006
through its active engagement with stakeholders.
The main methods used by the directors to perform their duties include:
• An annual strategy review which assesses the long-term sustainable success of the Group and our
impact on key stakeholders;
• The Board’s risk management procedures identify the potential consequences of decisions in the
short, medium and long term so that mitigation plans can be put in place to prevent, reduce or
eliminate risks to our business and wider stakeholders (see Principal risks and uncertainties on page
11);
• The Board establishes the Group’s purpose, values and strategy and ensures they are aligned with
our culture;
• Direct and indirect stakeholder engagement, along with the themes emerging from such
engagement (see page 19);
• Specific training for our directors and senior managers, including ongoing training on strategic, legal
and regulatory developments.
The table below sets out where relevant disclosure against each s172 factor can be found.
The likely consequences of any decision in the long
term
Business model (page 4)
Principal risks and uncertainties (page 11)
The interests of the Company’s employees
Our people (page 22)
Health and safety (page 23)
Stakeholder engagement (page 19)
The need to foster the Company’s business
relationships
KPIs (page 7)
Stakeholder engagement (page 19)
The impact of the Company’s operations on the
community and the environment
Our sustainability principles (page 5)
Environment (pages 23)
Communities (page 25)
Principal risks and uncertainties (page 11)
Maintaining a reputation for high standards of
business conduct
Stakeholder engagement (page 19)
Acting fairly between members of the Company
Stakeholder engagement (page 19)
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
29
Directors Report
for the Year ended 31 December 2022
In accordance with section 415 of the Companies Act 2006, the directors of ContourGlobal Limited
present their report on the audited consolidated financial statements for the year ended 31 December
2022.
Strategic report
As permitted by section 414C of the Companies Act 2006, certain information required to be included
in the directors’ report has been included in the Strategic report, or as set out below.
Dividends
Total dividends for the year ended 31 December 2022 was $96.8 million equating to three quarterly
payments of 4.912 cents per share. Quarterly dividends for 2022 were paid on 10 June 2022, 9
September 2022 and 25 November 2022. The declaration and payment by the Company of any future
dividends and the amounts of any such dividends will be determined at the Company’s discretion.
Political Donations
It is the Company’s policy not to make political donations. No political donations were made in 2022
(2021: £nil).
Financial Instruments
Details of the Group’s use of financial instruments can be found in Notes 1.19, 1.20, 1.21 and 1.22 to
the financial statements.
Directors
The Board has the power at any time to elect any person to be a director. Following the completion of
the acquisition of ContourGlobal by KKR on 20 December 2022, a number of director resignations
took place. The directors who served during 2022, and up to the date of this report were as follows:
•
Joseph Brandt
•
Laurent Hullo was appointed as a director on 31 January 2023
•
Stefan Schellinger ceased to be a director on 31 January 2023
•
Gregg Zeitlin ceased to be a director on 20 December 2022
•
Ronald Traechsel ceased to be a director on 20 December 2022
•
Alejandro Santo Domingo ceased to be a director on 20 December 2022
•
Craig Huff ceased to be a director on 20 December 2022
•
Daniel Camus ceased to be a director on 20 December 2022
•
Dr Alan Gillespie ceased to be a director on 20 December 2022
•
Mariana Gheorghe ceased to be a director on 20 December 2022
Directors’ and officers’ liability insurance
Directors and officers of the Company and its subsidiaries have been and continue to be covered by
director and officer liability insurance.
Company Secretary
LDC Nominee Secretary Limited ceased to be company secretary on 1 February 2023.
Stakeholder and workforce engagement
We set out further details of our stakeholder engagement activity on page 19.
Employees
We set out further details of our Employees and associated policies and arrangements on page 22 Our
people.
ContourGlobal Limited (formerly ContourGlobal plc)
(Registered number: 10982736)
30
Revolving credit facility and Euro Bonds
On 26 July 2018, CG Power Holdings issued the Euro Bonds in a private offering exempt from the
registration requirements of the Securities Act 1933, as amended. The Euro Bonds had an initial
aggregate principal amount of €750 million split between two tranches: €450 million of 3.375%
Senior Secured Notes due in 2023 and €300 million of 4.125% Senior Secured Notes due in 2025. On
30 July 2019, CG Power Holdings completed an add-on offering of €100 million of 4.125% Senior
Secured Notes due in 2025.
On 17 December 2020, a new Euro Bond composed of two tranches was issued for €410 million
aggregate principal amount of 2.75% Senior Secured Notes due in 2026 and €300 million aggregate
principal amount of 3.125% Senior Secured Notes due in 2028.
On 6 January 2021, the Group redeemed the €450 million ($549.7 million) aggregate principal
amount of its 3.375% Senior Secured Notes due in 2023.
The Euro Bonds have an aggregate principal amount of €1,010 million split between three tranches:
€400 million of 4.125% Senior Secured Notes due 2025, €410 million of 2.75% Senior Secured Notes
due 2026 and €300 million of 3.125% Senior Secured Notes due in 2028.
The Euro Bond Indentures provide redemption conditions depending on the date of the redemption.
If ContourGlobal sells certain of its assets or experiences specific kinds of changes in control (as
defined in the Euro Bond Indenture), ContourGlobal must offer to purchase the Euro Bonds at a
purchase price equal to 100% and 101% respectively of the principal amount thereof, plus accrued and
unpaid interest thereon to, but excluding, the date of purchase. The KKR acquisition did not trigger
any such change in control provisions and as such had no impact on the Euro Bond Indentures.
On 12 December 2020, the Group also entered into a €120 million revolving credit facility available
for general corporate purposes, maturing in November 2023, which is undrawn as of 31 December
2022 (31 December 2021: €80m drawn).
Regarding any changes in capital structure subsequent to 31 December 2022, refer to subsequent
events.
Significant contractual arrangements – relationship agreement
In November 2017, the Company, ContourGlobal LP, the Reservoir Funds, Reservoir Capital and the
Company President and Chief Executive Officer, Joseph C. Brandt entered into a Relationship
Agreement. Following the completion of the acquisition of ContourGlobal by KKR on 20 December
2022, resulting in Reservoir Capital no longer being the majority shareholder, the Relationship
Agreement is no longer in force or effect.
Research and development
ContourGlobal Limited is engaged in utilising the relevant product innovations as opportunities arise
relating to the usage of technologies such as battery storage and hydrogen.
Corporate governance
Until the delisting from the London Stock Exchange on 21 December 2022, the Company was subject
to the corporate governance requirements of a premium listed company. Having delisted before the
year end, the Company is not required to report against the UK Corporate Governance Code. Despite
the delisting certain Executive and Senior Management governance structures remain in place the
Company continues to assess its Corporate Governance arrangements as appropriate for a privately
owned group.
33
Independent auditors’ report to the
members of ContourGlobal Limited
Report on the audit of the financial statements
Opinion
In our opinion:
● ContourGlobal Limited’s group financial statements and company financial statements (the “financial statements”) give
a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2022 and of the group’s
profit and the group’s cash flows for the year then ended;
● the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the Companies Act 2006;
● the company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and applicable law); and
● the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual
Report”), which comprise: the consolidated statement of financial position and the company balance sheet as at
31 December 2022; the consolidated statement of income and other comprehensive income, the consolidated statement
of cash flows, and the consolidated statement of changes in equity and the company statement of changes in equity for
the year then ended; and the notes to the financial statements, which include a description of the significant accounting
policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
● We conducted our audit work over 10 components in 9 countries;
● 8 components were subject to an audit of their complete financial information due to their size;
● 2 components were subject to audit of specified financial statement line items reflecting either the financial significance
of the balances or audit risk;
● Specific audit procedures were performed on certain material balances within cash and cash equivalents, and
borrowings in out of scope components;
● In addition, centrally managed functions, including the group consolidation, were audited at the head office by the
group engagement team.
34
Key audit matters
● Assessment of significant judgements relating to litigation and claims in Kosovo and Togo (group)
● Impairment of property, plant and equipment and intangible assets (group)
● Impairment of investments in subsidiary companies (parent)
Materiality
● Overall group materiality: US$22,500,000 (2021: US$21,000,000) based on approximately 2.5% of Adjusted EBITDA.
● Overall company materiality: US$21,600,000 (2021:US$21,500,000) based on approximately 1% of Total assets.
● Performance materiality: US$16,800,000 (2021: US$15,750,000) (group) and US$16,200,000 (2021:
US$16,125,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
This is not a complete list of all risks identified by our audit.
Accounting for business combinations, which was a key audit matter last year, is no longer included because of the
reduction in materiality of such transactions. Otherwise, the key audit matters below are consistent with last year.
35
Key audit matter
How our audit addressed the key audit matter
Assessment of significant judgements relating to
litigation and claims in Kosovo and Togo (group)
(note 1.5 Critical accounting estimates and judgements
and 1.38 Financial commitments and contingent
liabilities)
In the ordinary course of business, the group is subject
to actual or potential liabilities arising from litigations and
claims, including contractual disputes brought by
government bodies (including regulators and tax
authorities), off-takers and suppliers. Power Purchase
Agreements (PPAs) are held with state owned, regulated
bodies and other offtakers. Where disputes arise in
connection with such agreements, there is usually a
process of dialogue between the counterparties which
can take place over an extended period of time.
Management reviews such litigation and claims on a
case-by-case basis to determine the likely outcome and
to estimate the possible magnitude and timing of any
resultant payments from adverse outcomes. Matters of
this nature are inherently uncertain and as such
management applies significant judgement in
determining the likely outcome of such matters as well as
the potential effect on future operations and the financial
statements.
We met with the Executive Vice President - General
Counsel and other members of senior management to
discuss ongoing and potential litigation and claims. The
more significant judgements relate to litigation and claims in
Kosovo and Togo given the potential magnitude. We
evaluated the significant judgements associated with each
of these matters including the likelihood of economic
outflow to settle the obligation / recoverability of costs and
whether a reliable estimate can be determined based on
the facts of the case. Audit procedures performed to
support conclusions have included review and assessment
of contracts, review of correspondence with counterparties
and internal and external legal counsel, and obtaining legal
letters from management’s external legal counsel. We
have also discussed matters directly with external legal
counsel in evaluating the likely outcome of the cases.
Based on the evidence obtained we have evaluated the
accounting for these litigation and claims, including
determination of whether a provision should be recorded, or
a contingent liability should be disclosed. We found that
these items had been accounted for appropriately.
We also assessed the disclosure of these matters
against the requirements of the relevant accounting
standards and concluded that the disclosures were
appropriate. Where significant judgements have been
applied by management, we also found that these
judgements are appropriately disclosed within the financial
statements.
36
Impairment of property, plant and equipment
and intangible assets (group)
(note 1.5 Critical accounting estimates and judgments,
1.15 Intangible assets and goodwill and 1.16 Property,
plant and equipment)
The group has $3.7 billion of property, plant and
equipment, the majority of which relates to power plant
assets, and $0.3 billion of intangible assets, the majority
of which relates to legado rights in Mexico.
The group is required to assess whether or not there are
any indicators of impairment over these assets. In the
event an impairment trigger is identified, the recoverable
value of property, plant and equipment and intangible
assets are assessed by a calculation of the higher of
value in use (which is based on future discounted cash
flow forecasts) and fair value less costs to sell.
Impairment assessments of this nature require significant
judgement and there is the risk that potential impairment
triggers are not identified by management and, in the
event that there is an impairment trigger, there is a risk
that the calculation of the recoverable amount of the
asset is incorrect and therefore the value of the assets
may be misstated. Forecasts and assumptions used in
both value in use calculations and the estimation of fair
value less costs to sell are inherently judgemental and
therefore may give rise to increased risk of
misstatement.
For the year ended December 31, 2022 management
has identified certain triggering events related to the
Brazilian wind power plants. This is primarily due to the
performance of the assets due to resource levels. As
required by IAS 36, management has performed a value
in use calculation to assess the recoverable value of the
cash generating unit. Management also performed
sensitivity analysis on certain key variables in the
calculation to understand the impact of changes in
certain assumptions. Based on the impairment test
performed, no impairment has been recorded.
No further impairment triggers have been identified by
management.
We evaluated management’s assessment of impairment
triggers by reviewing performance data by cash generating
unit, considering significant variances in performance
against forecasts, and from meetings held with divisional
finance directors to discuss plant performance. We have
also considered other information gathered during the
course of our audits of components and assessed whether
there are any other indicators of impairment, as well as
considering other factors that could indicate increased
impairment risk such as regulatory changes and potential
impacts of climate change.
No impairment triggers other than the Brazilian wind power
plants already noted by management were identified from
our procedures.
In relation to the Brazilian wind power plants, we performed
audit procedures over the value in use calculation prepared
by management. These procedures were primarily
performed by our Brazilian component team with oversight
from the group engagement team. We used PwC valuation
specialists to assess the methodology applied in the
valuation and the discount rate used. We benchmarked the
discount rate to comparable assets and considered the
underlying assumptions based on our knowledge of the
group and its industry. We assessed the accuracy of
management’s forecasting by reference to the accuracy of
historical forecasts compared to actual cash flow forecasts
and tested the mathematical accuracy of the impairment
model. We also challenged management's key assumptions
and prepared alternative scenarios.
A wind study performed by an external expert engaged by
management is utilised to assess future asset performance.
This is a key assumption in the estimation of future cash
flows from the operation of the plants in the value in use
calculation. We evaluated the objectivity, independence and
competence of the expert engaged by management. We
validated the key assumptions related to future capacity by
reference to resource forecast and reviewing board
approved budgets. We also assessed management's ability
to forecast accurately by comparing prior year wind
resources per the forecasts to actual conditions during the
year.
Based on our audit procedures performed we found the
methodology and assumptions used in the calculation of
value in use for the Brazilian wind power plant assessment
and the conclusion that no impairment charge was
recognised, was reasonable.
We also assessed the disclosure in relation to the
impairment assessment completed, the critical accounting
judgement and estimates associated with impairment of
property, plant and equipment and intangible assets, and
the associated sensitivity analyses and have found these to
be appropriate.
37
Impairment of investments in subsidiary
companies (company)
(note 6 Investments in Subsidiaries)
The company has investments in subsidiaries of
$2,130.0m (2021: $2,148.0m). Annually, the Directors
consider whether any events or circumstances have
occurred that could indicate that the carrying amount of
the investments in subsidiaries may not be recoverable.
If such circumstances are identified an impairment
review is undertaken to establish whether the carrying
amount of the investment exceeds its recoverable
amount, being the higher of fair value less cost to sell or
value in use.
Impairment assessments of this nature require
significant judgement and there is the risk that a potential
impairment trigger may not be identified by management
and, in the event that there is an impairment trigger,
there is a risk that the calculation of the recoverable
amount of the investments is incorrect and therefore the
value of the investments may be misstated.
In assessing whether or not there were any impairment
triggers management considered a number of factors
including the underlying financial performance of the
group and other available evidence to support the fair
value of the group.
The completed cash acquisition of the group by
Cretaceous Bidco Limited (a newly formed company
indirectly owned by funds advised by Kohlberg Kravis
Roberts & Co. L.P. and its affiliates) ("KKR") on 21
December 2022 for approximately $2.14 billion
provides an indicative value of the group. This is
approximately equivalent to and supports the carrying
value of the investments in subsidiaries given the
remaining net assets in the parent company are
immaterial. This is lower than the carrying value of
investments.
Based on this, management concluded that there was an
impairment trigger. The carrying value of investments
was assessed by calculating the recoverable amount of
the investments in subsidiaries. The recoverable amount
was estimated by reference to fair value less cost to sell
(being $2.14 billion net of estimated costs to sell of
$10m), and based on this assessment the directors
recorded an impairment in value of $75.3m.
We have evaluated management’s consideration of
impairment triggers and impairment recorded through
performing our own independent assessment. This included
comparing the cash acquisition price of the group close to
year end, adjusted for estimated costs to sell, and
comparing this to the carrying value of investments.
We assessed the audit evidence supporting the recoverable
value of the group based on fair value less costs to sell, and
agreed with management’s conclusion of recording an
impairment charge of $75.3m.
We also assessed the disclosures associated with
impairment of investments and have found these to be
appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
The group financial statements are a consolidation of multiple reporting components, comprising the group's operating
locations (including operating entities and their related financing entities) and other centralised functions.
The group's reporting components vary significantly in size and we identified eight components that, in our view, required
an audit of their complete financial information due to their size and contribution to the group and/or specific risk criteria,
including emerging risks such as from climate change. A further two reporting components were identified that required
audit procedures over specified financial statement line items based on specific risks and/or the contribution of each to
those financial statement line items. Specific audit procedures were also performed on certain material balances in out of
scope components to ensure we have obtained sufficient coverage over all material financial statement line items. Given
the size and risk, the parent company reporting component is an out of scope component for the purpose of the group
audit.
Where the work was performed by component auditors, we determined the level of involvement we needed to have in
their audit work at those entities to conclude whether sufficient appropriate audit evidence has been obtained as a basis
38
for our opinion on the group financial statements as a whole. The group engagement team performed two physical site
visits in Bulgaria and Spain. For all components, we received detailed reports on the findings of their audit work and held
a number of calls with the component teams before, during and after the completion of their work. We also attended
clearance calls with all component teams, at which we discussed the audit findings with the local component audit team,
local management and group management. We remotely reviewed certain working papers from the audit files of all in
scope component teams at the conclusion of their audit work.
The group consolidation, including the consolidated financial statement disclosures and certain centrally managed
functions and balances were audited at the head office by the group audit engagement team.
The parent company is principally a holding company and there are no branches or other locations to be considered when
scoping the audit. There are no financial statement line items in scope for the group audit. The company is audited on a
stand-alone basis,and hence, testing has been performed on all material financial statement line items.
The impact of climate risk on our audit
As part of our audit, we made enquiries of management to understand its process to assess the extent of the potential
impact of climate risk on the group’s and company’s financial statements. We used our knowledge of the Group to
consider the risk assessment and instructed our component audit teams to perform individual risk assessments. The
Group has published an intention to reduce CO2 emissions intensity in the medium term and to achieve net carbon zero
by 2050.
Our work on impairment of property, plant and equipment, including the assessment for indicators of impairment has
considered the impact of climate change. These considerations included both physical and transition risks arising from
climate change. Useful economic lives of power plant assets are reviewed at least annually by management and
changes could impact depreciation charges and the timing of decommissioning activities. Based on the work performed,
there were no indications that useful lives had been materially impacted by climate change. Our work on impairment of
property, plant and equipment and intangible assets has been further described in the relevant Key Audit Matter.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - group
Financial
statements -
company
Overall
materiality
US$22,500,000 (2021: US$21,000,000).
US$21,600,000 (2021:
US$21,500,000).
How we
determined
it
Based on approximately 2.5% of Adjusted EBITDA
Based on approximately
1% of Total assets
Rationale
for
benchmark
applied
We applied Adjusted EBITDA as the benchmark for materiality. We
consider that this is the key profit-based measure used by management in
both assessing the performance of the business, and in reporting
performance of the business to stakeholders. Management uses this
measure as it allows the underlying profitability of the group's core
business activities, including the contribution from associates, to be
assessed year on year. It eliminates transactions related to the initial
acquisition of assets (which are not directly related to ongoing
performance of the assets) and certain other items which give rise to
fluctuations in results which are not directly linked to the performance of
the assets. Further details of the use of Adjusted EBITDA are set out in
note 1.8 Segment reporting.
We believe that total
assets is an appropriate
benchmark for the
company as the entity is
principally a holding
company.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was between US$2 million and US$15 million. Certain
components were audited to a local statutory audit materiality that was also less than our overall group materiality.
39
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance materiality was 75% (2021: 75%) of overall materiality,
amounting to US$16,800,000 (2021: US$15,750,000) for the group financial statements and US$ 16,200,000 (2021: US$
16,125,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit
above US$1,000,000 (group audit) (2021: US$1,000,000) and US$1,000,000 (company audit) (2021: US$1,000,000) as
well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern
basis of accounting included:
● Obtaining management’s cash flow forecasts performed at the group level, which sets out the expected distributions
from subsidiaries to holding companies, net of repayments of corporate debt and other cash outflows at the group level
● Performing audit procedures over the group cash flow forecast, including inquiries with management over the
preparation of the distribution forecast, agreeing cash flow distributions from subsidiaries to the underlying trading
company cash flow forecasts for full scope components, agreeing existing cash balances in the holding companies to
underlying financial records, assessing the reasonableness of forecast cash outflows (e.g. for corporate debt
repayments) and testing the mathematical accuracy of the forecast model .
● Assessing whether the severe but plausible downside scenario performed by management considers appropriate
factors within the next 12 months
● Performing audit procedures at full scope components with material forecast distributions up to group level, to assess
the ability of trading subsidiaries to make those future distributions in line with the group cash flow forecast
● Evaluating the debt covenants including the assessment of any breaches or potential breaches within the next 12
months and the impact this may have on management’s cash flow forecast
● Reviewing the debt agreements to confirm the terms and conditions and amounts available from committed facilities
● Where debt finance is held at the component level, we have corroborated management’s assessment as debt held as
being “non recourse” to the parent entity to third party evidence, where applicable
● Local component audit teams performing full scope audits evaluated the going concern basis at the component level
(with one exception as agreed between the group team and the component team) and where any risks were identified
these have been considered through sensitivities performed over the group cash flow forecast
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's
and the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
40
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors' Report for the year ended 31 December 2022 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors' responsibilities in respect of the financial statements, the directors
are responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also 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.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or have no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our 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 an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a 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 the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to breaches of health and safety regulations, environmental regulations and Governmental
regulations, and we considered the extent to which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have a direct impact on the financial statements such as
Companies Act 2006 and relevant tax legislation. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks
were related to inappropriate journal entries and/or management exercising bias in accounting estimates that would result
in the overstatement of Adjusted EBITDA. The group engagement team shared this risk assessment with the component
auditors so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures
performed by the group engagement team and/or component auditors included:
● Review of Board minutes
41
●
Meeting with group head of tax to confirm any known instances of non-compliance with tax legislation
●
Identifying and testing journal entries that increased Adjusted EBITDA, in particular certain journal entries posted with
unusual account combinations
●
Challenging assumptions and judgements made by management in significant accounting estimates and assessing
for any evidence of bias, including the disclosure of such matters in the financial statements
●
Incorporating elements of unpredictability into the audit procedures performed
●
Reviewing the presentation of Adjusted EBITDA in the Annual Report, including the disclosure of the reconciliation of
Adjusted EBITDA to statutory profit, and ensuring that sufficient prominence was given to statutory profit measures in
the Annual Report
●
Reviewing the disclosures in the Annual Report and financial statements against the specific legal requirements to
assess compliance of the disclosures against relevant legislation
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
●
we have not obtained all the information and explanations we require for our audit; or
●
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
●
certain disclosures of directors’ remuneration specified by law are not made; or
●
the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Matthew Mullins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
42
Consolidated Financial Statements
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL
PLC) AND SUBSIDIARIES
For the year ended December 31, 2022
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
For the year ended December 31, 2022
43
The accompanying notes are an integral part of these consolidated financial statements
TABLE OF CONTENTS
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME ............. 44
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................... 45
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .......................................................... 46
CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................ 47
1.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................................... 49
1.1.
GENERAL INFORMATION ................................................................................................................................. 49
1.2.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ..................... 51
1.3.
NEW STANDARDS AND INTERPRETATIONS NOT YET MANDATORILY APPLICABLE .................................................. 52
1.4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ........................................................................................... 53
1.5.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS ........................................................................................ 66
1.6.
2022 TRANSACTIONS ...................................................................................................................................... 71
1.7.
2021 TRANSACTIONS ...................................................................................................................................... 74
1.8.
SEGMENT REPORTING ..................................................................................................................................... 75
1.9.
REVENUE ....................................................................................................................................................... 79
1.10.
EXPENSES BY NATURE .................................................................................................................................... 80
1.11.
EMPLOYEE COSTS AND NUMBERS ..................................................................................................................... 81
1.12.
ACQUISITION AND OTHER TRANSACTIONS RELATED ITEMS ................................................................................ 81
1.13.
NET FINANCE COSTS, FOREIGN EXCHANGE GAINS AND LOSSES, AND CHANGES IN FAIR VALUE OF DERIVATIVES .... 82
1.14.
INCOME TAX EXPENSE AND DEFERRED INCOME TAX ..........................................................................................83
1.15.
INTANGIBLE ASSETS AND GOODWILL ................................................................................................................ 87
1.16.
PROPERTY, PLANT AND EQUIPMENT ................................................................................................................ 88
1.17.
FINANCE LEASE AND FINANCIAL CONCESSION ASSETS ....................................................................................... 91
1.18.
INVESTMENTS IN ASSOCIATES .......................................................................................................................... 92
1.19.
MANAGEMENT OF FINANCIAL RISK .................................................................................................................. 93
1.20.
DERIVATIVE FINANCIAL INSTRUMENTS .......................................................................................................... 101
1.21.
FAIR VALUE MEASUREMENTS ........................................................................................................................ 103
1.22.
FINANCIAL INSTRUMENTS BY CATEGORY ........................................................................................................ 104
1.23.
OTHER NON-CURRENT ASSETS....................................................................................................................... 105
1.24.
INVENTORIES ............................................................................................................................................... 105
1.25.
TRADE AND OTHER RECEIVABLES .................................................................................................................. 106
1.26.
OTHER CURRENT ASSETS ............................................................................................................................... 106
1.27.
CASH AND CASH EQUIVALENTS ...................................................................................................................... 106
1.28.
EQUITY ........................................................................................................................................................ 107
1.29.
NON-CONTROLLING INTERESTS ..................................................................................................................... 108
1.30.
BORROWINGS ................................................................................................................................................113
1.31.
OTHER NON-CURRENT LIABILITIES ................................................................................................................ 119
1.32.
PROVISIONS ................................................................................................................................................. 120
1.33.
SHARE-BASED COMPENSATION PLANS .............................................................................................................121
1.34.
TRADE AND OTHER PAYABLES ........................................................................................................................ 122
1.35.
OTHER CURRENT LIABILITIES ........................................................................................................................ 122
1.36.
GROUP UNDERTAKINGS................................................................................................................................. 123
1.37.
RELATED PARTY DISCLOSURE .........................................................................................................................131
1.38.
FINANCIAL COMMITMENTS AND CONTINGENT LIABILITIES .............................................................................. 132
1.39.
GUARANTEES AND LETTERS OF CREDIT .......................................................................................................... 135
1.40.
STATUTORY AUDITORS’ FEES ......................................................................................................................... 136
1.41.
SUBSEQUENT EVENTS ................................................................................................................................... 136
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Consolidated statement of income and other comprehensive income
For the year ended December 31, 2022
44
The accompanying notes are an integral part of these consolidated financial statements
Consolidated statement of income and other comprehensive income
Years ended December 31
In $ millions
Note
2022
2021
Revenue
1.9
2,828.3
2,151.9
Cost of sales
1.10
(2,318.6)
(1,730.5)
Gross profit
509.7
421.4
Selling, general and administrative expenses
1.10
(38.0)
(40.5)
Other operating income
18.9
6.8
Other operating expenses
(3.4)
(3.4)
Acquisition, disposal and other transactions related items
1.12
(49.2)
(14.2)
Profit on acquisition / disposal of power generating plants
1.6
138.0
-
Income from Operations
576.0
370.1
Other income
-
5.8
Share of profit in associates
1.18
16.3
16.2
Finance income
1.13
12.0
3.9
Finance costs
1.13
(254.3)
(296.8)
Net foreign exchange gains and change in fair value of derivatives
1.13
10.5
43.7
Profit before income tax
360.5
142.9
Income tax expenses
1.14
(107.0)
(63.2)
Net profit for the period
253.5
79.7
Profit for the period attributable to
- Equity shareholders of the Company
231.3
78.3
- Non-controlling interests
22.2
1.4
Years ended December 31
In $ millions
2022
2021
Net profit for the period
253.5
79.7
Changes in actuarial gains and losses on retirement benefit, before
tax
0.8
(0.3)
Deferred taxes on changes in actuarial gains and losses on
retirement benefit
(0.1)
-
Items that will not be reclassified subsequently to income
statement
0.7
(0.3)
Gain / (Loss) on hedging transactions
159.8
55.0
Cost of hedging reserve
(0.2)
(0.2)
Deferred taxes on gain / (loss) on hedging transactions
(41.6)
(14.4)
Reclassification of currency translation differences to profit or loss
on disposal of Brazil Hydro assets (note 1.6)
17.8
-
Currency translation differences
74.3
28.9
Items that may be reclassified subsequently to income
statement
210.1
69.3
Other comprehensive profit for the period net of tax
210.8
69.0
Total comprehensive profit for the period
464.3
148.7
Attributable to
- Equity shareholders of the Company
430.6
146.9
- Non-controlling interests
33.7
1.8
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Consolidated statement of changes in equity
For the year ended December 31, 2022
46
The accompanying notes are an integral part of these consolidated financial statements
Consolidated statement of changes in equity
In $ millions
Share
capital
Share
premium
Treasury
shares
Currency
Translation
Reserve
Hedging
reserve
Cost of
hedging
reserve
Actuarial
reserve
Retained
earnings
Total equity
attributable to
shareholders
of the
Company
Non-
controlli
ng
interests
Total
equity
Balance as of December 31, 2020
8.9
380.8
(30.4)
(179.2)
(93.0)
(1.5)
(2.1)
98.9
182.4
155.3
337.7
Balance as of January 1, 2021
8.9
380.8
(30.4)
(179.2)
(93.0)
(1.5)
(2.1)
98.9
182.4
155.3
337.7
Profit for the period
-
-
-
-
-
-
-
78.3
78.3
1.4
79.7
Other comprehensive profit
-
-
-
29.2
38.7
(0.2)
(0.3)
-
68.6
0.4
69.0
Total comprehensive income / (loss) for the period
-
-
-
29.2
38.7
(0.2)
(0.3)
78.3
146.9
1.8
148.7
Purchase of treasury shares
-
-
(7.4)
-
-
-
-
-
(7.4)
-
(7.4)
Employee share schemes
-
-
-
-
-
-
-
1.9
1.9
-
1.9
Acquisition and contribution of non-controlling interest not
resulting in a change of control
-
-
-
-
-
-
-
-
(2.7)
1.1
(1.6)
Dividends
-
-
-
-
-
-
-
(114.5)
(114.5)
(3.6)
(118.1)
Transaction with non-controlling interest
-
-
-
-
-
-
-
-
-
9.5
9.5
Other
-
-
-
-
-
-
-
2.4
2.4
(2.6)
(0.2)
Balance as of December 31, 2021
8.9
380.8
(37.8)
(150.0)
(54.3)
(1.7)
(2.4)
65.5
209.0
161.5
370.5
Balance as of January 1, 2022
8.9
380.8
(37.8)
(150.0)
(54.3)
(1.7)
(2.4)
65.5
209.0
161.5
370.5
Profit for the period
-
-
-
-
-
-
-
231.3
231.3
22.2
253.5
Reclassification to profit or loss on disposal of Brazil Hydro
assets (note 1.6)
-
-
-
17.8
-
-
-
-
17.8
-
17.8
Other comprehensive profit
-
-
-
72.8
108.2
(0.2)
0.7
-
181.5
11.5
193.0
Total comprehensive income / (loss) for the period
-
-
-
90.6
108.2
(0.2)
0.7
231.3
430.6
33.7
464.3
Treasury shares
(0.1)
-
37.8
-
-
-
-
(37.7)
-
-
-
Employee share schemes
-
-
-
-
-
-
-
5.8
5.8
-
5.8
Acquisition of non-controlling interest not resulting in a
change of control (note 1.6)
-
-
-
-
-
-
-
(12.9)
(12.9)
(8.5)
(21.4)
Dividends
-
-
-
-
-
-
-
(126.1)
(126.1)
(25.2)
(151.3)
Transaction with non-controlling interests
-
-
-
-
-
-
-
-
-
(26.2)
(26.2)
Other
-
-
-
-
-
-
-
(0.1)
(0.1)
0.1
-
Balance as of December 31, 2022
8.8
380.8
-
(59.4)
53.9
(1.9)
(1.7)
125.8
506.3
135.4
641.7
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Consolidated statement of cash flows
For the year ended December 31, 2022
47
The accompanying notes are an integral part of these consolidated financial statements
Consolidated statement of cash flows
Years ended December 31
In $ millions
Note
2022
2021
CASH FLOW FROM OPERATING ACTIVITIES
Net profit
253.5
79.7
Adjustment for:
Amortization, depreciation and impairment expense
1.10
361.2
399.2
Change in provisions
(3.6)
(1.6)
Share of profit in associates
1.18
(16.3)
(16.2)
Net foreign exchange gains and change in fair value of derivatives
1.13
(10.5)
(43.7)
Interest expenses - net
1.13
177.1
201.6
Other financial items
1.13
65.1
91.3
Income tax expense
1.14
107.0
63.2
Mexico CHP fixed margin swap
1.8
(2.9)
(5.5)
Change in finance lease and financial concession assets
1.8
34.3
37.9
Gain on Brazil hydro sale
1.6
(121.2)
-
Gain on deemed disposal of Sochagota
1.6
(16.8)
-
Other items
(2.6)
(5.7)
Change in working capital
49.0
45.9
Income tax paid
(61.0)
(36.6)
Non cash tax item
1.6
(29.1)
-
Contribution received from associates
1.18
1.8
0.8
Net cash generated from operating activities
785.0
810.3
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
(129.3)
(104.4)
Purchase of intangibles
(6.1)
(16.1)
Acquisition of subsidiaries, net of cash received
1.6
(12.1)
(654.6)
Sale of subsidiaries, net of divested cash
1.6
125.9
-
Other investing activities
5.1
(2.6)
Net cash used in investing activities
(16.5)
(777.7)
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid
(126.1)
(114.5)
Purchase of treasury shares
-
(7.4)
Proceeds from borrowings
1.30
396.4
790.7
Repayment of borrowings
1.30
(565.6)
(1,304.2)
Debt issuance costs
(12.3)
(26.7)
Interest paid
(172.9)
(192.9)
Cash distribution to non-controlling interests
1.29
(16.6)
(19.3)
Dividends paid to non-controlling interest holders
1.29
(23.5)
(3.5)
Transactions with non-controlling interest holders, cash received
1.29
6.1
17.5
Transactions with non-controlling interest holders, cash paid
1.29
(102.0)
(79.2)
Other financing activities and derivatives
(69.5)
(51.0)
Net cash generated from financing activities
(686.0)
(990.5)
Exchange gains / (losses) on cash and cash equivalents
45.6
(57.6)
Net change in cash and cash equivalents
128.1
(1,015.4)
Cash & cash equivalents at beginning of the period
381.5
1,396.9
Included in cash and cash equivalents in the balance sheet
369.1
1,396.9
Included in assets held for sale
12.4
-
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Consolidated statement of cash flows
For the year ended December 31, 2022
48
The accompanying notes are an integral part of these consolidated financial statements
Cash & cash equivalents at end of the period
509.6
381.5
Included in cash and cash equivalents in the balance sheet
509.6
369.1
Included in the assets held for sale
-
12.4
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
49
1.
Notes to the consolidated financial statements
1.1.
General information
The recommended cash acquisition (the "Transaction") of ContourGlobal Plc by Cretaceous Bidco
Limited (a newly formed company indirectly owned by funds advised by Kohlberg Kravis Roberts &
Co. L.P. and its affiliates) ("KKR") announced on 17 May 2022 was approved by the required majority
of shareholders at the Court and General meeting of shareholders held on 6 July 2022. The scheme of
arrangement became effective on 20 December 2022 and ContourGlobal plc was delisted from the
London Stock Exchange on 21 December 2022. Following the completion of the transaction the
Company was re-registered as a private company resulting in a change in name to ContourGlobal
Limited.
ContourGlobal Limited (the ‘Company’), formerly known as ContourGlobal Plc, is a private company,
domiciled in the United Kingdom and incorporated in England and Wales. It is the holding company
for the group whose principal activities during the period were the operation of wholesale power
generation businesses with thermal and renewables assets in Europe, Latin America, United States of
America and Africa, and its registered office is:
55 Baker Street
5th Floor
London
W1U 8EW
United Kingdom
Registered number: 10982736
Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law
and became UK-adopted International Accounting Standards, with future changes being subject to
endorsement by the UK Endorsement Board. ContourGlobal Limited transitioned to UK-adopted
International Accounting Standards in its consolidated financial statements on 1 January 2021.
The consolidated financial statements have been prepared in accordance with UK adopted
international accounting standards in conformity with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared on the going concern basis under the
historical cost convention, as modified by the revaluation of financial assets and financial liabilities
(including derivative instruments) at fair value through profit or loss.
The financial information is presented in millions of US dollars, with one decimal. Thus numbers may
not sum precisely due to rounding.
The principal accounting policies applied in the preparation of the consolidated financial statements
are set out in note 1.4. These policies have been consistently applied to the periods presented, unless
otherwise stated.
The financial information presented is at and for the financial years ended 31 December 2022 and 31
December 2021. Financial year ends have been referred to as 31 December throughout the
consolidated financial statements as this is the accounting reference date of ContourGlobal Limited.
Financial years are referred to as 2022 and 2021 in these consolidated financial statements.
The preparation of the IFRS financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the year. Although these estimates are
based on management’s best knowledge of the amount, event or actions, actual results may differ from
those estimates, as noted in the critical accounting estimates and judgements in note 1.5.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
50
Going Concern
The Directors have formed a judgement, at the time of approving the consolidated financial
statements, that there is a reasonable expectation that the Group has adequate resources to continue
in operational existence for a period of at least 12 months from the date of this report. The assessment
performed by the directors considers ongoing liquidity requirements and covenant compliance.
On 20 December 2022 the acquisition of ContourGlobal Limited (‘CG Limited’) by Cretaceous Bidco
Limited completed. Subsequent to year end, in February and March 2023 the following took place:
•
CG Limited acceded as a borrower to KKR’s bridge facility agreement in the amount of €400
million ($428 million). The proceeds were used to repay in full the outstanding €400 million
($428 million) principal on the 2025 Corporate Bonds; and
•
The KKR acquisition loan of €510 million ($546 million) was novated to CG Limited.
In evaluating CG Limited’s ability to continue as a going concern, which included severe but plausible
downside scenarios, these changes to debt facilities were considered in addition to the existing debt
profile and associated obligations of the group.
The Group’s forecasts and projections indicate that the Group has sufficient financial resources,
together with assets that are expected to generate free cash flow to the Group. As a consequence, the
Group has a reasonable expectation to be well placed to manage its business risks and to continue in
operational existence for the foreseeable future (at least for the 12 month period from the approval
date of these financial statements). Accordingly, the Group continues to adopt the going concern basis
in preparing the consolidated financial statements.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
51
1.2.
Application of new and revised International Financial Reporting Standards
(IFRS)
The Group has applied the accounting standard amendments for the first time for their annual
reporting period commencing 1 January 2022:
•
Property, plant and equipment: Proceeds before intended use – Amendments to IAS 16;
•
Onerous contracts – Cost of fulfilling a contract – Amendments to IAS 37;
•
Annual improvements to IFRS standard 2018-2020; and
•
Reference to conceptual framework – Amendments to IFRS 3.
There was no material impact from the application of these amendments in the current or prior period.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
52
1.3.
New standards and interpretations not yet mandatorily applicable
A number of additional new standards and amendments and revisions to existing standards have been
published which will apply to the Group’s future accounting periods. None of these are expected to
have a significant impact on the consolidated results, financial position or cash flows of the Group
when they are adopted.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
53
1.4.
Summary of significant accounting policies
Principles of consolidation
The consolidated financial statements include both the assets and liabilities, and the results and cash
flows, of the Group and its subsidiaries and the Group’s share of the results and the Group’s
investments in associates.
Inter-company transactions and balances between Group companies are eliminated.
(a) Subsidiaries
Entities over which the Group has the power to direct the relevant activities so as to affect the returns
to the Group, generally through control over the financial and operating policies, are accounted for as
subsidiaries. Interests acquired in subsidiaries are consolidated from the date the Group acquires
control.
(b) Associates
Where the Group has the ability to exercise significant influence over entities, generally from a
shareholding of between 20% and 50% of the voting rights, they are accounted for as associates. The
results and assets and liabilities of associates are incorporated into the consolidated financial
statements using the equity method of accounting. The Group’s investment in associates includes
goodwill identified on acquisition.
The Group determines at each reporting date whether there is objective evidence that the investment
in the associate is impaired. If there is evidence, the Group calculates the amount of impairment as the
difference between the recoverable amount of the investment in the associate and its carrying value
and recognizes this amount in the consolidated statement of income.
Business combinations
The acquisition consideration is measured at fair value which is the aggregate of the fair values of the
assets transferred, the liabilities incurred or assumed and the equity interests issued in exchange for
control. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Adjustments to consideration within the 12 month
measurement period post acquisition as allowed under IFRS are recognised against goodwill, where
applicable. Any contingent consideration to be transferred by the Group is recognized at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration are
recognized in the consolidated statement of income. Where the consideration transferred, together
with the non-controlling interest, exceeds the fair value of the net assets, liabilities and contingent
liabilities acquired, the excess is recorded as goodwill. Acquisition related costs are expensed as
incurred and classified as “Acquisition related items” in the consolidated statement of income.
Goodwill is capitalized as a separate item in the case of subsidiaries and as part of the cost of
investment in the case of associates. Goodwill is denominated in the functional currency of the
operation acquired.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any
gains or losses arising from such remeasurement are recognized in the income statement.
Changes in ownership interests in subsidiaries without change of control
In line with IFRS 10 “Consolidated financial statements”, transactions with non-controlling interests
that do not result in a gain or loss of control are accounted for as equity transactions – that is, as
transactions with the owners in their capacity as owners.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
54
In the case of an acquisition of non-controlling interest that does not result in a gain of control, the
difference between fair value of any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity.
In the case of a sale of non-controlling interests that do not result in a loss of control (“sell-down”), the
net cash gain on sale of these assets are recorded as an increase in the equity attributable to owners of
the parent and corresponds to the difference between the consideration received for the sale of shares
and of the carrying amount of non-controlling interest sold. Consistent with this approach, subsequent
true-ups to earn-outs in the context of sell-down transactions are also recorded in equity. The net cash
gain or loss on sell-down is presented in Adjusted EBITDA, as disclosed in note 1.8.
Non-current assets and disposal groups held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. An impairment loss is recognized for any initial or subsequent write-down
of the asset (or disposal group) to fair value less costs to sell. Assets and liabilities of a disposal group
classified as held for sale are presented separately on the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held
for sale and that represents a separate major line of business or geographical area of operations, is part
of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a
subsidiary acquired exclusively with a view to resale. The results of discontinued operations are
presented separately in the statement of profit or loss.
Functional and presentation currency and currency translation
The assets and liabilities of foreign undertakings are translated into US dollars, the Group’s
presentation currency, at the year-end exchange rates. The results of foreign undertakings are
translated into US dollars at the relevant average rates of exchange for the year. Foreign exchange
differences arising on retranslation of opening net assets, and the difference between average exchange
rates and year end exchange rates on the result for the year are recognized directly in the currency
translation reserve.
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of transactions and from the translation of monetary assets and liabilities denominated in
foreign currencies are recognized at year end exchange rates in the consolidated statement of income
line which most appropriately reflects the nature of the item or transaction.
The following table summarizes the main exchange rates used for the preparation of the consolidated
financial statements of ContourGlobal:
CLOSING RATES
AVERAGE RATES
Year ended 31st December
Year ended 31st December
Currency
2022
2021
2022
2021
EUR / USD
1.0706
1.1373
1.0542
1.1833
BRL / USD
0.1917
0.1792
0.1941
0.1857
BGN / USD
0.5474
0.5815
0.5390
0.6049
MXN / USD
0.0515
0.0486
0.0497
0.0493
When a foreign undertaking is sold, the associated exchange differences are reclassified to profit or
loss, as part of the gain or loss on sale.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
55
Operating and reportable segments
The Group’s reporting segments reflect the operating segments which are based on the organizational
structure and financial information provided to the Chief Executive Officer, who represents the chief
operating decision-maker (“CODM”). The Group’s organizational structure reflects the different
electricity generation methods, being Thermal and Renewables. A third category, Corporate & Other,
primarily reflects costs for certain centralized functions including executive oversight, corporate
treasury and accounting, legal, compliance, human resources, IT and facilities management and
certain technical support costs that are not allocated to the segments for internal management
reporting purposes.
The principal profit measure used by the CODM is “Adjusted EBITDA” as defined in note 1.8. A
segmented analysis of “Adjusted EBITDA” is provided in note 1.8 to the consolidated financial
statements.
Revenue recognition
The Group revenue is mainly generated from the following:
(i) revenue from power sales;
(ii) revenue from operating leases;
(iii) revenue from financial assets (concession and finance lease assets); and
(iv) other revenue such as environmental, operational and maintenance services rendered to
offtakers.
Revenue from operating leases is recognized under IFRS 16, revenue from financial assets is
recognised under IFRS 16 and IFRIC 12, and revenue from power sales and other revenue are
recognized under IFRS 15.
Revenue recognition in accordance with IFRS 15, ‘Revenues from contracts with customers’ is based
on the transfer of control, i.e. the notion of control is used to determine when a good or service is
transferred to the customer. In accordance with this, the Group has adopted a single comprehensive
model for the accounting for revenues from contracts with customers, using a five-step approach for
revenue recognition: (1) identifying the contract; (2) identifying the performance obligations in the
contract; (3) determining the transaction price; (4) allocating the transaction price to the performance
obligations in the contract; and (5) recognizing revenue when the Group satisfies a performance
obligation.
Based on this recognition model, sales are recognised when goods are delivered to the customer and
have been accepted by the customer, even if they have not been invoiced, or when services are
rendered, and it is probable that the economic benefits associated with the transaction will flow to the
entity. Revenue for the year includes the estimate of the energy supplied that has not yet been
invoiced.
When determining the transaction price, the Group considers the effects of the variable consideration,
the constraining estimates of variable consideration, the existence of a significant financing
component in the contract, the non-cash consideration and the consideration payable to a customer.
If the consideration promised in a contract includes a variable amount, the Group estimates the
amount of consideration to which it will be entitled in exchange for transferring the promised goods or
services to a customer. An amount of consideration can vary because of discounts, rebates, refunds,
credits, price concessions, incentives, performance bonuses, penalties or other similar items. The
Group considers the impact of any potential penalties for breaching minimum performance levels of
the Group’s power plants when assessing revenue recognised.
Certain of the Group’s power plants sell their output under Power Purchase Agreements (“PPAs”) and
other long-term arrangements. Under such arrangements it is usual for the Group to receive payment
for the provision of electrical capacity or availability whether or not the offtaker requests the electrical
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
56
output (capacity payments) and for the variable costs of production (energy payments). In such
situations, revenue is recognized in respect of capacity payments as:
a) Service income in accordance with the contractual terms, to the extent that the capacity has
been made available to the contracted offtaker during the period and / or energy produced and
delivered in the period. This income is recognized as part of revenue from power sales;
b) Financial return on the operating financial asset where the PPA is considered to be or to
contain a finance lease or where the contract is considered to be a financial asset under
interpretation IFRIC 12: “Service concession arrangements”.
c) Service income related to environmental, operational and maintenance services rendered to
offtakers are presented as part of Other revenue.
Under finance lease arrangements, those payments which are not included within minimum lease
payments are accounted for as service income (outlined in (a) above).
Energy payments under PPAs are recognized in revenue in all cases as the contracted output is
delivered.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s net carrying amount on initial
recognition.
Concession arrangements
The interpretation IFRIC 12 governs accounting for concession arrangements. An arrangement within
the scope of IFRIC 12 is one which involves a private sector entity (known as “an operator”)
constructing infrastructure used to provide a public service, or upgrading it (for example, by increasing
its capacity) and operating and maintaining that infrastructure for a specified period of time.
IFRIC 12 applies to public-to-private service concession arrangements if:
(a) The “grantor” (i.e. the public sector entity – the offtaker) controls or regulates what services
the operator must provide with the infrastructure, to whom it must provide them, and at what
price, and
b) The grantor controls through ownership, beneficial entitlement or otherwise any significant
residual interest in the infrastructure at the end of the term of the arrangement. Infrastructure
used in a public-to-private service concession arrangement for its entire useful life (a whole of
life asset) is within the scope of IFRIC 12 if the conditions in a) are met.
Under concession arrangements within the scope of IFRIC 12, which comply with the “financial asset”
model requirements, the operator recognizes a contract asset, attracting revenue in consideration for
the services it provides (design, construction, etc.), to the extent that it has an unconditional
contractual right to receive cash or another financial asset from or at the direction of the grantor for
the construction services; the grantor has little, if any, discretion to avoid payment, usually because the
agreement is enforceable by law. The Group has an unconditional right to receive cash if the grantor
contractually guarantees to pay the Group (a) specified or determinable amounts or (b) the shortfall, if
any, between amounts received from users of the public service and specified or determinable
amounts, even if payment is contingent on the Group ensuring that the infrastructure meets specified
quality or efficiency requirements. This model is based on input assumptions such as budgets and cash
flow forecasts. Any change in these assumptions may have a material impact on the measurement of
the recoverable amount and could result in reducing the value of the asset. Such contract assets are
recognized in the consolidated statement of financial position in an amount corresponding to the fair
value of the infrastructure on first recognition and subsequently at amortized cost less impairment
losses. The receivable is settled by means of the grantor’s payments being received. The financial
income calculated on the basis of the effective interest rate, equivalent to the project’s internal rate of
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
57
return, is reflected within the “Revenue from concession and finance lease assets” line in note 1.9. Cash
outflows relating to the acquisition of contract assets under concession agreements are presented as
part of cash flow from investing activities. Net cash inflows generated by the contract assets'
operations are presented as part of cash flow from operating activities.
For purchase power arrangements, revenue for service income is generally recognized as billed after
excluding the portion of the payment that is allocated to cover the return on financial assets arising
from service concession arrangements as described above. We have therefore not disclosed the
transaction price allocated to unsatisfied contracts based as permitted by paragraph 121 of IFRS 15.
Share-based compensation plans
The share-based payment charge arises from the Long Term Incentive Plan (LTIP) which is applicable
to senior executives and senior and middle management. Shares issued under the schemes vest subject
to continued employment within the Group and satisfaction of the non-market performance
conditions. Employees leaving prior to the vesting date will normally forfeit their rights to unvested
share awards. The fair value of the awards is measured using the market value at the date of grant. The
fair value determined at the grant date is expensed on a straight-line basis together with a
corresponding increase in equity over the vesting period, based on the Group’s estimate of the number
of awards that will vest, and adjusted for the effect of non-market-based vesting conditions.
Acquisition, disposal and other transactions related items
Acquisition related items expenses that are recognized immediately in the profit or loss including pre-
acquisition costs (such as professional fees and due diligence costs), earn-outs and other related
incremental costs incurred as part of completed or contemplated acquisitions.
Finance income and finance costs
Finance income primarily consists of interest income on funds invested. Finance costs primarily
comprise interest expense on borrowings, unwinding of the discount/step up on finance lease and
financial concession assets and provisions, interests and penalties that arise from late payments of
suppliers or taxes, bank charges, differences between the historically estimated and actual dividends of
the debt payable to non-controlling interests in our Bulgarian power plant, changes in the fair value of
derivatives not qualifying for hedge accounting and net foreign exchange gains and losses.
Intangible assets and goodwill
Goodwill
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to
each of the cash generating units (“CGUs”), or groups of CGUs that is expected to benefit from the
synergies of the combination. Each unit or group of units represents the lowest level within the entity
at which the goodwill is monitored for internal management purposes. A CGU is determined as a
group of assets at a country level using shared technology which is typically the case for solar and wind
assets.
The reporting units (which generally correspond to power plants) or group of reporting units have
been identified as its cash-generating units.
Goodwill impairment reviews are undertaken at least annually.
Intangible assets
Intangible assets include licenses, permits, contracts, project development rights when specific rights
are acquired and software. Intangible assets separately acquired in the normal course of business are
recorded at historical cost, and intangible assets acquired in a business combination are recognized at
fair value at the acquisition date. When the power plant achieves its commercial operations date, the
related intangible assets are amortized using the straight-line method generally over the life of the PPA
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
58
or over the duration of the permits, licenses and contracts granted, generally over 15 to 20 years
(excluding software). Software is amortized over 1 to 3 years.
Property, plant and equipment
Initial recognition and subsequent measurement
Property, plant and equipment are stated at historical cost, less depreciation and impairment, or at fair
value at the acquisition date if acquired in the context of a business combination. Historical cost
includes an initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located, when the entity has a present legal or constructive obligation to do so. In the
context of a business combination the fair value valuation is usually based on an income-approach
based method.
Property, plant and equipment recognized as right-of-use assets under IFRS 16 are measured at cost
less depreciation, impairment and adjustments to certain remeasurements of the lease liability.
Costs relating to major inspections and overhauls are capitalized and any remaining carrying amount
of the cost of the previous overhaul is derecognized when new expenditure is capitalized. Minor
replacements, repairs and maintenance, including planned outages to our power plants that do not
improve the efficiency or extend the life of the respective asset, are expensed as incurred.
The Group capitalizes certain direct pre-construction costs associated with its power plant project
development activities when it has been determined that it is more likely than not that the opportunity
will result in an operating asset. Factors considered in this determination include (i) the availability of
adequate funding, (ii) the likelihood that the Group will be awarded the project or the barriers are not
likely to prohibit closing the project, and (iii) there is an available market and the regulatory,
environmental and infrastructure requirements are likely to be met. Capitalized pre-construction costs
include initial engineering, environmental and technical feasibility studies, legal costs, permitting and
licensing and direct internal staff salary and travel costs, among others. Pre-construction costs are
expensed if a project is abandoned or if the conditions stated above are not met.
Construction work in progress (“CWIP”) assets are transferred out of CWIP when construction is
substantially completed and the power plant achieves its commercial operations date (“COD”), at
which point depreciation commences.
Borrowing costs directly attributable to construction of a qualifying assets are capitalized during the
period of time that is required to complete and prepare the asset for its intended use.
Depreciation
Property, plant and equipment are depreciated to their estimated residual value using the straight-line
method over the following estimated useful lives:
Useful lives as of December 31, 2021 and
2022
Power plant assets
Lignite, coal, gas, oil, biomass power plants
3 to 32 years
Hydro plants and equipment
24 to 40 years
Wind farms
16 to 25 years
Tri and quad-generation combined heat power plants
15 to 23 years
Solar plants
11 to 20 years
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
59
Useful economic lives are assessed on acquisition to reflect the remaining lives of plants from the date
of acquisition by the group.
The residual values and useful lives are reviewed at least annually taking into account a number of
factors such as operational and technical risks, and risks linked to climate change (for example from
emerging government policies) and if expectations differ from previous estimates, the remaining
useful lives are reassessed and adjustments are made. In the case of assets acquired as part of a
business combination, the remaining useful lives are assessed at the acquisition dates by performing
technical due diligence procedures.
‘Generation plants and equipment’ and ‘Other property, plant and equipment’ categories are presented
respectively under ‘Power plant assets’ and ‘Other’ in note 1.16.
See below for the Group’s depreciation policy on right-of-use assets.
The range of useful lives is due to the diversity of the assets in each category, which is partly due to
acquired assets and from asset’s groupings.
Where a power purchase agreement (“PPA”) acquired as part of business combination is deemed to
contain an operating lease, the company depreciates separately the amounts reflected in the acquired
fair value of that Property Plant & Equipment that are attributable to favorable or unfavorable lease
terms relative to market terms. Such amounts are depreciated over the term of the related PPA (2 to 12
years).
Leases
The Group applies IFRS 16 “Leases” and leases are recognized as a right-of-use asset and a
corresponding liability at the date at which the leased asset is available for use by the Group.
Accounting for a lease as a lessee - Assets and liabilities arising from a lease are initially measured on
a present value basis. Lease liabilities include the net present value of the following lease payments:
-
fixed payments (including in-substance fixed payments), less any lease incentives receivable
-
variable lease payments that are based on an index or a rate, initially measured using the index
or rate as at the commencement date
-
amounts expected to be payable by the Group under residual value guarantees
-
the exercise price of a purchase option if the Group is reasonably certain to exercise that
option, and
-
payments of penalties for terminating the lease, if the lease term reflects the Group exercising
that option
Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability. The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the
lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group applied a single discount rate to a portfolio of
leases with reasonably similar characteristics.
The Group is exposed to potential future increases in variable lease payments which are linked to gross
revenues or based on an index or rate. No right of use assets or corresponding lease liability is
recognized in respect of variable consideration leases which are linked to gross revenues. Variable
lease payments that depend on gross revenues are recognized in the statement of income in the period
in which the related revenue is generated.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
60
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
-
the amount of the initial measurement of lease liability
-
any lease payments made at or before the commencement date less any lease incentives
received
-
any initial direct costs, and
-
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease
term on a straight-line basis. If the group is reasonably certain to exercise a purchase option, the right-
of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases (less than 12 months) of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an expense in the statement of
income.
Accounting for arrangements that contain a lease as lessor - PPA’s and other long-term contracts
may contain, or may be considered to contain, leases where the fulfilment of the arrangement is
dependent on the use of a specific asset such as a power plant and the arrangement conveys to the
customer the right to use that asset. Such contracts may be identified as either operating leases or
finance leases.
(i) Accounting for finance leases as lessor
Where the Group determines that the contractual provisions of a long-term PPA contain, or are, a
lease and result in the offtaker assuming the principal risks and rewards of ownership of the power
plant, the arrangement is a finance lease. Accordingly the assets are not reflected as property, plant
and equipment and the net investment in the lease, represented by the present value of the amounts
due from the lessee is recorded within financial assets as a finance lease receivable.
The capacity payments as part of the leasing arrangement are apportioned between minimum lease
payments (comprising capital repayments relating to the plant and finance income) and service
income. The finance income element is recognized as revenue, using a rate of return specific to the
plant to give a constant rate of return on the net investment in each period. Finance income and
service income are recognized in each accounting period at the fair value of the Group’s performance
under the contract.
(ii) Accounting for operating leases as lessor
Where the Group determines that the contractual provisions of the long-term PPA contain, or are, a
lease, and result in the Group retaining the principal risks and rewards of ownership of the power
plant, the arrangement is an operating lease. For operating leases, the power plant is, or continues to
be, capitalized as property, plant and equipment and depreciated over its useful economic life. Rental
income from operating leases is recognized on an output basis over the term of the arrangement.
Impairment of non-financial assets
Assets that are subject to depreciation or amortization are reviewed annually for indicators of
impairment where events or changes in circumstances indicate that carrying values may not be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
of disposal (market value) and value in use determined using estimates of discounted future net cash
flows of the asset or group of assets to which it belongs. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-
generating units).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
61
Financial assets
Classification of financial assets
The Group classifies its financial assets in the following categories: at fair value through profit and loss
and at amortized cost.
a) Financial assets at fair value through profit and loss
Financial assets have been acquired principally for the purpose of selling, or being settled, in the short
term. Financial assets at fair value through statement of income are “Cash and cash equivalents” when
held in money market funds and derivatives held for trading unless they are designated as hedges.
b) Financial assets held at amortized cost
These financial assets are held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, and are measured at amortized cost. They are
included in current assets, except those that mature greater than 12 months after the end of the
reporting period, which are classified in non-current assets. The Group’s financial assets and
amortized costs comprise “Trade and other receivables”, “Finance lease and financial concession
assets” and “Cash and cash equivalents” that are not required to be carried at fair value through
statement of income in the consolidated statement of financial position.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
Recognition and measurement
Purchases and sales of financial assets are recognized on trade date (that is, the date on which the
Group commits to purchase or sell the asset).
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through statement of income, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair
value through the statement of income are expensed in the consolidated statement of income and
other comprehensive income.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards
of ownership.
a) Financial assets at fair value through statement of income
Gains or losses on financial assets at fair value through statement of income are recognised in the
consolidated statement income and other comprehensive income. These are presented within finance
income and finance costs respectively.
b) Financial assets held at amortized cost
These financial assets are held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, and are measured at amortised cost. Interest
income from these financial assets is included in finance income using the effective interest rate
method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented
in finance income or finance costs.
Impairment
For trade receivables, finance lease and financial concession assets, the Group applies the IFRS 9
simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
62
for all trade receivables and contract assets. The impairment methodology applied depends on whether
there has been a significant increase in credit risk.
Allowances for expected credit losses are made based on the risk of non-payment taking into account
ageing, previous experience, economic conditions, existing insurance policies and forward looking
data. Political risk insurance (PRI) policies are factored into this assessment due to being closely
related insurance policies for which cash flows have been factored into the expected credit loss
calculations (including risk of default on insurance provider) and presented on a net basis. Such
allowances are measured as either 12-months expected credit losses or lifetime expected credit losses
depending on changes in the credit quality of the counterparty.
While the financial assets of the Group are subject to the impairment requirements of IFRS 9, the
identified impairment loss was immaterial.
The Group has three types of financial assets that are subject to the expected credit loss model:
(1) Trade and other receivables
(2) Finance lease and financial concession assets
(3) Other financial assets
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, no
impairment loss has been identified.
Derivative financial instruments and hedging activities
Derivative instruments are measured at fair value upon initial recognition in the consolidated
statement of financial position and subsequently are re-measured to their fair value at the end of each
reporting period. The accounting for subsequent changes in fair value depends on whether the
derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
Derivative instruments are presented according to their maturity date, regardless of whether they
qualify for hedge accounting under IFRS 9 (hedging instruments versus trading instruments).
Derivatives are classified as a separate line item in the consolidated statement of financial position.
As part of its overall foreign exchange and interest rate risk management policy, the Group enters into
various hedging transactions involving derivative instruments.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the
remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or
liability when the remaining maturity of the hedged item is less than 12 months.
In connection with the Group’s hedging policy, the Group uses forward exchange contracts for
currency risk management as well as foreign exchange options.
The Group also hedges particular risks associated with the cash flows of recognized assets and
liabilities and highly probable forecast transactions (cash flow hedges). Notably, the Group uses
interest rate swap contracts for interest rate risk management in order to hedge certain forecasted
transactions and to manage its anticipated cash payments under its variable rate financing by
converting a portion of its variable rate financing to a fixed rate basis through the use of interest rate
swap agreements, and a cross currency swap contract for both currency and interest rate risk
management.
The Group can also hedge specific risks identified such as exposure to energy spot price for example in
the case of the CHP Mexico fixed margin swap which protects certain power purchase agreements
against variations in the CFE tariffs.
Items qualifying as hedges
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
63
The Group formally documents all relationships between hedging instruments and hedged items, as
well as its risk management objectives and strategies for undertaking hedge transactions and the
method used to assess hedge effectiveness. Hedging transactions are expected to be highly effective in
achieving offsetting changes in cash flows and are regularly assessed to determine that they actually
have been highly effective throughout the financial reporting periods for which they are implemented.
When derivative instruments qualify as hedges for accounting purposes, as defined in IFRS 9
“Financial instruments”, they are accounted for as follows:
a) Cash flow hedges that qualify for hedge accounting
-
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges is recognized in the cash flow hedge reserve within equity and through the
consolidated statement of other comprehensive income (“OCI”). The gain or loss relating to the
ineffective portion is recognized immediately within the consolidated statement of income. Amounts
recognized directly in OCI are reclassified to the consolidated statement of income when the hedged
transaction affects the consolidated statement of income.
-
If a forecast transaction or firm commitment is no longer expected to occur, amounts previously
recognized in OCI are reclassified to the consolidated statement of income as finance income or
finance costs.
If a hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or
if its designation as a hedge is revoked, amounts previously recognized in OCI remain in accumulated
OCI until the forecast transaction or firm commitment occurs, at which point they are reclassified to
the consolidated statement of income.
b) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any
derivative instrument that does not qualify for hedge accounting are recognized immediately in profit
or loss and are included in net foreign exchange (losses) and gains and change in fair value of
derivatives.
In connection with the Group’s hedging policy, the Group uses forward exchange contracts for
currency risk management as well as foreign exchange options, interest rate swap contracts for interest
rate risk management in order to hedge certain forecasted transactions and to manage its anticipated
cash payments under its variable rate financing by converting a portion of its variable rate financing to
a fixed rate basis through the use of interest rate swap agreements, and a cross currency swap contract
for both currency and interest rate risk management.
Inventories
Inventories consist primarily of power generating plant fuel, non-critical spare parts that are held by
the Group for its own use and emission quotas (see below). Inventories are stated at the lower of cost,
using a first-in, first-out method, and net realizable value, which is the estimated selling price in the
ordinary course of business, less applicable selling expenses.
Emission quotas
Some companies of the Group emit CO2 and have as a result obligations to buy emission quotas on the
basis of local legislation. The emissions made by the companies emitting CO2 which are in excess of
any allocated quotas are purchased at free market price and shown as inventory before their effective
use. If emissions are higher than allocated quotas, the companies recognize an expense and respective
liability for those emissions at prevailing market value. At the end of each reporting period, CO2
quotas that remain available to the companies are revalued at the lower of cost or prevailing market
value.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
64
The Group presents the quotas in Inventory which reflects the fact that the cost to purchase the quotas
is part of the production cost and linked to the production output rather than the plant itself. The
quotas directly contribute to revenue as the cost of quotas is billed on to the customer as a pass-
through cost. The Group expects to realize the asset within 12 months after the year end.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and current balances with banks and similar
institutions and short-term investments, all of which are readily convertible to cash and are subject to
insignificant risk of changes in value and have an original maturity of three months or less. Bank
overdrafts are included within current borrowings. Cash and cash equivalents also includes cash
deposited on accounts to cover for short-term debt service of certain project financings and which can
be drawn for short term related needs. Money market funds comprise investment in funds that are
subject to an insignificant risk of changes in fair value.
Maintenance reserves held for the purpose of covering long-term major maintenance and long-term
deposits kept as collateral to cover decommissioning obligations are excluded from cash and cash
equivalents.
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction from the proceeds.
The premium received on the issue of shares in excess of the nominal value of shares is credited to the
share premium account and included within shareholders’ equity.
Treasury shares
The Group’s treasury shares are included under “Treasury shares” in the consolidated statement of
financial position and are measured at acquisition cost.
The treasury shares are removed from Other reserves when utilised or cancelled. This results in a
reclassification of the carrying value to Retained Earnings
The Group buys and sells treasury shares in accordance with the prevailing law and the resolutions of
the General Shareholders’ Meeting. Such transactions include sale and purchase of company shares.
Financial liabilities
a) Borrowings
Borrowings are recognized initially at fair value of amounts received, net of transaction costs.
Borrowings are subsequently measured at amortized cost using the effective interest method; any
difference between the proceeds (net of transaction costs) and the redemption value is recognized in
the consolidated statement of income over the period of the borrowings using the effective interest
method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expires.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
b) Trade and other payables
Financial liabilities within trade and other payables are initially recognized at fair value, which is
usually the invoiced amount, and subsequently carried at amortized cost using the effective interest
method.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
65
Trade and other payables are presented as current liabilities unless payment is not due within 12
months after the reporting period.
Unless otherwise stated, carrying value approximates to fair value for all financial liabilities.
Provisions
Provisions principally relate to decommissioning, maintenance, environmental, tax and legal
obligations and which are recognized when there is a present obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount can be
reliably estimated.
Provisions are re-measured at each statement of financial position date and adjusted to reflect the
current best estimate. Any change in present value of the estimated expenditure attributable to
changes in the estimates of the cash flow or the current estimate of the discount rate used are reflected
as an adjustment to the provision. Any increase in provisions due to the passage of time is recognised
as finance costs in the consolidated statement of income.
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognized in the
consolidated statement of income, except to the extent that it relates to items recognized in other
comprehensive income. In this case, the tax is also recognized in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the statement of financial position date in the countries where the Group and its
subsidiaries operate and generate taxable income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable tax regulation is subject to interpretation
and considers whether it is probable that a taxation authority will accept an uncertain tax treatment.
The Group measures its tax balances either based on the most likely amount or the expected value,
depending on which method provides a better prediction of the resolution of the uncertainty.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax
liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax
is not recognized if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit
or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the statement of financial position date and are expected to apply when the
related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be utilized.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where there is an intention to settle the balances on a net basis.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
66
1.5.
Critical accounting estimates and judgments
The preparation of the consolidated financial statements in line with the Group’s accounting policies
set out in note 1.4 involves the use of judgment and/or estimation. These judgments and estimates are
based on management's best knowledge of the relevant facts and circumstances, giving consideration
to previous experience, and are regularly reviewed and revised as necessary. Actual results may differ
from the amounts included in the consolidated financial statements. The estimates and judgments that
have the most significant effect on the carrying amounts of assets and liabilities are presented below.
Critical accounting judgments
Accounting for long-term power purchase agreements and related revenue recognition
When power plants sell their output under long-term power purchase agreements (“PPA”), it is usual
for the operator of the power plant to receive payment (known as a capacity payment) for the provision
of electrical capacity whether or not the offtaker requests electrical output. In assessing the accounting
for the PPA, there may be a degree of judgement as to whether a long-term contract to sell electrical
capacity constitutes a service concession arrangement, a form of lease, or a service contract. This
determination is made at the inception of the PPA, and is not required to be revisited in subsequent
periods under IFRS, unless the agreement is renegotiated.
Given that the fulfilment of the PPAs is dependent on the use of a specified asset, the key judgement in
determining if the PPA contains a lease is the assessment of whether the PPA conveys a right for the
offtaker to obtain substantially all the economic benefit from the asset and whether the offtaker has
the right to direct the use of the asset throughout the period of use.
In assessing whether the PPA contains a service concession, the Group considers whether the
arrangement (i) bears a public service obligation; (ii) has prices that are regulated by the offtaker; and
(iii) the residual interest is transferred to the offtaker at an agreed value.
All other PPAs are determined to be service contracts.
Concession arrangements - For those agreements which are determined to be a concession
arrangement, there are judgements as to whether the infrastructure should be accounted for as an
intangible asset or a financial asset depending on the nature of the payment entitlements established
in the agreement.
Concession arrangements determined to be a financial asset – The Group recognizes a financial asset
when demand risk is assumed by the grantor, to the extent that the contracted concession holder has an
unconditional right to receive payments for the asset. The asset is recognized at the fair value of the
construction services provided. The fair value is based on input assumptions such as budgets and cash
flow forecasts, future costs include maintenance costs which impact the overall calculation of the
estimated margin of the project. The inputs include in particular the budget for fixed and variable costs.
Any change in these assumptions may have a material impact on the measurement of the recoverable
amount and could result in reducing the value of the asset. The financial asset is subsequently recorded
at amortized cost calculated according to the effective interest rate method. Revenue for operating and
managing the asset is recorded as revenue in each period.
Leases - For those arrangements determined to be or to contain leases, further judgement is required
to determine whether the arrangement is finance or operating lease. This assessment requires an
evaluation of where the substantial risks and rewards of ownership reside, for example due to the
existence of a bargain purchase option that would allow the offtaker to buy the asset at the end of the
arrangement for a minimal price. Judgement has been applied based on the significance of the life of
the asset remaining and the remaining net book value of the asset at the end of the lease term.
The accounting for long-term power purchase agreements was considered during 2021 for the
acquisition of the Western Generation portfolio. Three assets PPA’s were identified as containing
operating leases and were accounted for accordingly.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
67
Assessing property, plant and equipment and intangible assets for impairment triggers
The Group’s property, plant and equipment and intangible assets are reviewed for indications of
impairment (an impairment “trigger”). Judgement is applied in determining whether an impairment
trigger has occurred, based on both internal and external sources. External sources may include:
market value declines, negative changes in technology, markets, economy, impact of climate changes
or laws. Internal sources may include: obsolescence or physical damage, or worse economic
performance than expected, including from adverse weather conditions for renewable plants.
The Group also considers the end date of the PPAs as part of the impairment indicator analysis and
assesses if the market conditions are significantly adverse such that the expiry of the PPA indicates an
impairment trigger. The Group has notably considered the ending date of the PPA in Maritsa ending in
February 2024 and concluded that this does not constitute an impairment indicator considering the
current economic conditions in market, geopolitical issues and the continued high dependency on the
asset in the region.
During 2022 the Brazil Wind business was assessed for impairment indicators. It was concluded that
based on the below budget performance during the year, impairment indicators exist and as such an
impairment test was performed, refer to Note 1.16 for details.
As part of the Group’s risk assessment procedures, risks associated with climate change are evaluated
on an ongoing basis, including whether market and other climate related factors could result in an
indicator of impairment. We also consider when making acquisitions whether the technology being
acquired and the remaining useful life of the plant could be impacted by climate related factors. The
Group’s PPA arrangements typically provide mechanisms to protect against movements in market
prices for energy and carbon over the duration of the PPA which insulate against climate factors.
Beyond the PPA period, we consider the likelihood that there could be a significant erosion of value
that could result in an impairment indicator. No such indicators of impairment were identified during
the year.
Provisions for claims
The Group receives legal or contractual claims against it from time to time, in the normal course of
business. The Group considers external and internal legal counsel opinions in order to assess the
likelihood of loss and to define the defense strategy. Judgements are made as to the potential
likelihood of any claim succeeding when making a provision or disclosing a contingent liability. The
timeframe for resolving legal or contractual claims may be judgemental, as is the amount of possible
outflow of economic benefits.
The main judgments are related to the litigations disclosed in the note 1.38, such as the Togo claim,
and as disclosed below related to Mexico.
Functional currency of the assets
The Group operates in various countries and performs an analysis of the functional currency of each
operating asset considering the IAS 21 standard requirements. In some countries, the functional
currency of the operating asset may differ from the local currency when the primary indicators (such
as sales and cash inflows and expenses and cash outflows) are influenced by a currency which is not
the local currency.
Cash generating units (“CGUs”)
A CGU is defined as the asset or smallest identifiable group of assets that generates cash inflows that
are largely independent of the cash inflows from other assets or groups of assets. In the case of Solar
and Wind assets, typically a group of assets at a country level using shared technology is identified as a
CGU.
Judgments are made in allocating each reporting unit (which generally correspond to power plants) or
group of reporting units to CGUs. The Group notably considers that the assessment of the
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
68
independence of cash flows involves consideration of the businesses contractual arrangements or
financing relationship between the reporting units, and how management makes decisions about
continuing or disposing of the entity’s assets and operations.
The definition of the CGU is critical for the purpose of assessing impairment indicators and
performing impairment testing.
Regulatory changes in Mexico
Amendment to permit modification
In October 2020, CRE (Energy Regulatory Commission) issued a new resolution amending the general
administrative rules to modify and transfer the “Legado” permits. This amendment included
additional restrictions on including new offtakers in the “Legado” permits. The Resolution 1094 is
expected to be used by CRE to reject the permit modifications required for expanding the offtakers and
the load points in the “Legado” permits. The Company filed an Amparo against these changes,
claiming them to be unconstitutional which was successfully granted in June 2021. Given the Amparo
remains in place and having taken legal advice the Company has concluded that those changes do not
constitute an indicator of impairment as at December 31, 2022.
Power industry law (Ley de la Industria Eléctrica - LIE)
On 10 March 2021, the Mexican Government enacted reform of the Electricity Sector Act (Ley de la
Industria Eléctrica the “LIE reform”). One of the proposed changes under the LIE reform is to modify
the order in which electricity produced by power plants such as our assets in Mexico (“CGA” and
“CELCSA”) is dispatched to the National Electricity System (“Dispatch Order”),which would favor the
state-owned or operated power plants and may have an adverse impact on future revenues and profits
of ContourGlobal’s Mexican assets. CGA and CELCSA both filed an Amparo lawsuit against this LIE
reform. The Mexican First District Court granted CGA and CELCSA an injunction against the LIE
reform, which prevents the application and implementation of the challenged provisions by the
relevant authorities. In 2022, the appeal filed by the Mexican authorities against the admission of the
Amparo claim and injunction of CGA was granted, and after challenge by CGA, is subject to review and
further resolution of the Collegiate Courts.
Given there has been no direct impact of the LIE reform to date, and management’s view of the likely
outcomes of the amparo proceedings and that there are a number of legal matters that are still to be
resolved, management has concluded that these potential changes do not constitute an indication of
impairment (impairment “trigger”) as per IAS 36 as of December 31, 2022.
Kosovo e Re project arbitration
On 24 May 2020, ContourGlobal Kosovo LLC (“CG Kosovo”), a wholly-owned subsidiary within the
ContourGlobal Group, sent a notice of termination to the Government of Kosovo (represented by the
Ministry of Economy and Environment of the Government of Kosovo) (the “GoK”) and other publicly
owned entities, namely Kosovo Energy Corporation, J.S.C., New Kosovo Electric Company J.S.C., HPE
Ibër-Lepenc, J.S.C.and Operator Sistemi, Transmission Dhe Tregu –KOSTT, SH.A., under various
project documents entered into with each of those entities in respect of a project whereby CG was to
build a coal-fired power plant in Kosovo. The notice of termination was sent as a result of the failure of
the above-mentioned entities to meet certain obligations and conditions precedent under such project
documents, which prevented the project from meeting certain required milestones by its required
completion date and therefore meant the project could not go forward.
On 25 September 2020, CG Kosovo sent a formal written notice of dispute under the project
documents seeking recovery of costs incurred to date, as anticipated and set out in the project
contracts and capped at €19.7 million ($22.1 million) plus interest for late payment, to which CG
Kosovo is entitled where the termination of the project is attributable to failures by GoK and/or the
relevant publicly owned entities. On 19 November 2020, CG Kosovo filed a request for arbitration with
ICSID.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
69
As of 31 December 2022, €19.7 million ($21.1 million) of recoverable development costs are presented
in Other non-current assets. The recovery of this asset is likely to depend on the outcome of the
arbitration proceedings and so is subject to some degree of judgement. The Group believes it will be
able to demonstrate that the project failed to close for reasons attributable to the GoK and/or the
relevant publicly owned companies, which is the key judgement that supports the recognition of the
asset. The arbitration proceedings are ongoing, with nothing taking place in the arbitration to date
which has altered the Group’s assessment of the recoverability of the development costs.
Assets held for sale and discontinued operations
Where a disposal group is undergoing a sale process, we consider whether or not the disposal group
meets the definition of assets held for sale and discontinued operations. During the year of 2022 a sale
process was initiated for the Brazil Wind asset portfolios. At year end we assessed whether these asset
portfolios should be classified as held for sale.
The Brazil Wind portfolio was not classified as held for sale at year end. This was due to the
uncertainties associated with the structure of the transaction resulting in the highly probable criteria
not being met.
We also considered whether the Brazil Hydro portfolio disposed of during 2022 constituted a
discontinued operation. Given the portfolio does not constitute a major line of business or a
geographical area of operations, it does not meet the definition of a discontinued operation.
Critical accounting estimates
Estimation of useful lives of property, plant and equipment
Property, plant and equipment represents a significant proportion of the asset base of the Group,
primarily due to power plants owned, being 59.6% (2021: 63.2%) of the Group’s total assets. Estimates
and assumptions made to determine their carrying value and related depreciation are significant to the
Group’s financial position and performance. The annual depreciation charge is determined after
estimating an asset’s expected useful life and its residual value at the end of its life. The useful lives and
residual values of the Group’s assets are determined by management at the time the asset is acquired
and reviewed annually for appropriateness. The Group derives useful economic lives based on
experience of similar assets, including use of third party experts at the time of acquisition of assets,
and these lives may exceed the period covered by contracted power purchase agreements.
Emerging governmental policies are also considered when reviewing the appropriateness of useful
economic lives, including whether asset life assessments could be impacted by factors arising from
climate transition or other regulatory and market factors. This includes consideration of government
energy transition policies, and how our thermal assets are expected to be used, in particular to provide
a secure supply during a medium to long-term transition to renewables. In particular, during 2022 the
expiration of the Maritsa PPA in February 2024 was considered together with the emerging
geopolitical issues and the continued high dependency on the asset in the region which outweigh the
climate transition factors in the short to medium term. As a result, during the year, the useful life of
the asset was increased. The impact on depreciation was not material.
A decrease in the average useful life by one year in power plant assets would result in a decrease in the
net book value of $16.0 million (2021: $21.1 million).
Recoverable amount of property, plant and equipment and intangible assets
Where an impairment trigger has been identified (see critical accounting judgements section), the
Group makes significant estimates in its impairment evaluations of property, plant and equipment and
intangible assets. The determination of the recoverable amount is typically the most judgmental part
of an impairment evaluation. The recoverable amount is the higher of (i) an asset’s fair value less costs
of disposal (market value), and (ii) value in use determined using estimates of discounted future net
cash flows (“DCF”) of the asset or group of assets to which it belongs.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
70
Management applies considerable judgment in selecting several input assumptions in its DCF models,
including discount rates and capacity / availability factors. These assumptions are consistent with the
Group’s internal budgets and forecasts for such valuations. Examples of the input assumptions that
budgets and cash-flow forecasts are sensitive to include macroeconomic factors such as growth rates,
inflation, exchange rates, and, in the case of renewables plants, environmental factors such as wind,
solar and water resource forecast. Any changes in these assumptions may have a material impact on
the measurement of the recoverable amount and could result in impairing the tested assets.
Emerging governmental policies are also considered when determining the recoverable amount of
property, plant and equipment and intangible assets including the impact on DCF models arising from
climate transition or other regulatory and market factors. In the current year, climate transition
factors have been outweighed by geopolitical factors. We consider future forecasts of the key inputs to
the cashflow models, such as energy, fuel and carbon pricing and whether these result in a change in
useful life. Typically, during the PPA period our assets are insulated from these market risks through
fixed energy pricing and the ability to pass through variations in fuel and carbon costs, hence where
relevant we consider the impact on cash flows in the post PPA period.
As noted in the Critical accounting judgements above, an impairment indicator was noted in relation
to the Brazil Wind as at 31 December 2022. See note 1.16 for further information on the impairment
tests performed, and relevant sensitivity analysis.
Fair value of assets acquired and liabilities assumed in a business combination
Business combinations are recorded in accordance with IFRS 3 using the acquisition method. The
Group estimates the excess purchase price in accordance with IFRS3 as the difference of the
consideration paid for the acquisition (including potential contingent consideration) and the net asset
of the target company at the acquisition date.
Under this method, the identifiable assets acquired and the liabilities assumed are recognized at their
fair value at the acquisition date. In the current year fair valuation assessments for business
combination purposes have been performed in relation to the Sochagota acquisition in Note 1.6.
Therefore, through a number of different approaches, the Group identifies what it believes is the fair
value of the assets acquired and liabilities assumed at the acquisition date. These valuations involve
the use of judgement and include a number of estimates. Judgement is exercised in identifying the
most appropriate valuation approach which is then used to determine the allocation of fair value.
Depending on which is most appropriate for the transaction, the Group typically uses one of the cost
approach, the income approach and the market approach.
Judgement is exercised in identifying intangible assets, separately from property plant and equipment
taking into consideration the intangible asset recognition criteria within IAS 38. No intangible assets
were identified in the Sochagota acquisition.
Each of these valuation approaches involve the use of estimates in a number of areas, including the
determination of cash flow projections and related discount rates, industry indices, market prices
regarding replacement cost and comparable market transactions. While the Group believes that the
estimates and assumptions underlying the valuation methodologies are reasonable, different
assumptions could result in different fair values.
Fixed margin swap
Certain estimates are made in relation to the valuation of the fixed margin swap agreements held by
CHP Mexico which protect certain power purchase agreements against variations in the CFE tariffs.
The valuation of this derivative is based on a number of data points, which includes both factual inputs
and estimates. Refer to note 1.21 for sensitivity analysis of this instrument.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
71
1.6.
2022 transactions
Acquisition remaining 51% shareholding of Sochagota
On 30 December 2022 ContourGlobal’s subsidiary Crasodel Spain acquired from Steag GmbH the
remaining 51% of shareholding of Compañía Eléctrica de Sochagota S.A. (“Sochagota”), a 160 MW coal
fired power station in Colombia. Following completion of the acquisition, ContourGlobal controls 100%
of the shares of Sochagota.
To account for the step acquisition, there is a deemed disposal at acquisition date of the existing
investment in associate at fair value:
In $ millions
Deemed disposal of equity interest in associate
(49%) at fair value
36.4
Carrying value of investment in associate
19.6
Gain on deemed disposal
16.8
The total consideration to acquire the 51% controlling interest was $37.9m, of which $25m was paid in
cash.
In $ millions
Liability assumed
12.9
Cash
25.0
Consideration payable to third party (51%)
purchase price
37.9
The gain on deemed disposal of $16.8 million has been recognised in Profit on acquisition / disposal of
power generating plants in the Consolidated Statement of Income.
The acquisition consideration reflecting 100% ownership following the deemed disposal of the
investment in associate is as follows:
In $ millions
Consideration payable to third party (51%)
37.9
Fair value of equity interest in associate (49%)
36.4
74.3
Elimination of pre existing relationship between
Contourglobal and Sochagota
(11.5)
Consideration attributable to the net assets
acquired
62.8
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
72
The preliminary determination of the fair value of assets acquired and liabilities assumed at the
acquisition date for the 100% shareholding are:
In $ millions
Fair value of assets
and liabilities
acquired
Property, plant and equipment
49.9
Inventories (1)
14.5
Trade receivables (1)
11.7
Other assets
28.8
Cash and cash equivalents
12.9
Borrowings
(15.8)
Deferred tax liabilities
(15.3)
Other liabilities
(12.3)
Total net identifiable assets
74.3
less pre-existing relationship settled
(included within trade and other
receivables)
(11.5)
Net assets acquired
62.8
(1) Contractual value equivalent to fair value
Net assets of $62.8m were acquired at their fair value. The transaction did not give rise to goodwill or a
bargain purchase.
Deemed settlement of a pre-existing intercompany balance amounting to $11.5m has been accounted
for as a separate transaction before acquisition accounting. This was an intercompany receivable for
Sochagota (included within trade and other receivables) and an intercompany payable for the Group.
The $11.5m represents the fair value of this intercompany balance.
On a consolidated basis, had this acquisition taken place as of 1 January 2022, the Group would have
recognized consolidated revenue of $2,938.1 million, Adjusted EBITDA of $918.0 million, and
consolidated net profit of $278.9 million. Given the acquisition closed on 30 December 2022, the
acquisition did not contribute to the year ended December 31, 2022.
Brazil Hydro sale
On 30 June 2022 the sale of the Brazil Hydro business, which comprises nine run-of-river hydro-
electric generation assets with 168MW of gross capacity, completed. The total price for the sale was
BRL 946 million ($181 million). The resulting gain on disposal is:
BRL millions
$ millions
Transaction price
946.2
181.0
Working capital adjustment
0.3
Other liabilities
(0.6)
Loss on FX forward
-
(10.9)
Net transaction price
946.2
169.8
Reclassification of currency translation
reserve to profit and loss account
(17.8)
Less: net assets disposed of
-
(31.0)
Gain on disposal
-
121.2
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
73
The gain on disposal of $121.2 million is presented in Profit on disposal of subsidiaries in the
Consolidated Statement of Income. The gain net of withholding tax ($29.1 million) of $92.1 million is
attributable to the shareholders of the Group as $73.7 million and to non-controlling interests as $18.4
million.
The withholding tax of $29.1 million was settled by the purchaser on behalf of CG which resulted in net
proceeds received of $140.7 million. In August 2022, a post-closing working capital adjustment
resulted in additional proceeds of $0.3 million.
The transaction proceeds of $140.7 million net of cash disposed of $14.8 million results in $125.9
million as disclosed in the Statement of Cash Flows.
Prior to disposal the assets and liabilities of the Brazil Hydro group were classified as assets and
liabilities held for sale with a carrying value of $186.3 million and $155.3 million respectively. Assets
held for sale include cash and cash equivalents of $14.8 million.
The entities included in the Brazilian Hydro disposal group at 31 December 2021, which were
subsequently disposed on 30 June 2022 are:
- ContourGlobal do Brasil Participacoes SA
- Galheiros Geração De Energia S.A.
- Santa Cruz Power Corporation Usinas Hidroelétricas S.A
- Goias Sul Geração De Energia S.A.
- Rio PCG I S.A.
- Bahia PCH I S.A.
- Afluente Geração de Energia Eletrica S.A.
Acquisition of non-controlling interests which did not result in a change of control
In December 2022 the Group acquired the remaining 20.0% minority shareholding in ContourGlobal
Togo S.A. for a consideration paid of $21.4 million. After this transaction, the Group owns 100% of the
entity ownership. This transaction did not result in a change of control and has therefore been
accounted for within shareholder’s equity as transactions with owners without change of control acting
in their capacity of owners. The carrying value of non-controlling interests of $8.5m was derecognised
on the date of acquisition, and the difference between the consideration paid and carrying value of non-
controlling interests of $12.9m is recognised directly within equity.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
74
1.7.
2021 transactions
Acquisition of a portfolio located in the United States and Trinidad and Tobago
On December 7th, 2020, the Group entered into an agreement to acquire a 1,502 MW portfolio of six
contracted operating power plants located in the United States and Trinidad and Tobago from Western
Generation Partners, LLC. The transaction closed on 18 February 2021.
The total consideration paid amounted to $646.1 million.
The determination of fair value of assets acquired and liabilities was finalized at the previous financial
year end. There have been no subsequent changes to fair values to be recognized.
Acquisition of a Solar portfolio in Italy
On June 4, 2021 the Group entered into an agreement with a group of private shareholders to acquire a
100% of shares of Green Hunter Group Sarl, the parent entity of a portfolio of solar photovoltaic assets
totalling 18 MW located in Italy. The transaction completed on November 23 2021. The Group’s
effective shareholding of the Green Hunter Group is 51%.
The total consideration paid amounted to €30.1 million ($33.9 million).
The determination of fair value of assets acquired and liabilities was finalized at the previous financial
year end. There have been no subsequent changes to fair values to be recognized.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
75
1.8.
Segment reporting
The Group’s reporting segments reflect the operating segments which are based on the organizational
structure and financial information provided to the Chief Executive Officer, who represents the chief
operating decision-maker (“CODM”).
Thermal Energy for power generating plants operating from coal, lignite, natural gas, fuel oil and
diesel. Thermal plants include Maritsa, Arrubal, Togo, Cap des Biches, KivuWatt, Energies Saint-
Martin, Bonaire, Mexican CHP, US and Trinidad & Tobago assets and our equity investees (primarily
Termoemcali and Sochagota). The Group acquired on December 30, 2022 the 51% remaining shares in
Sochagota. Our thermal segment also includes plants which provide electricity and certain other
services to beverage bottling companies and other industries.
Renewable Energy for power generating plants operating from renewable resources such as wind,
solar and hydro in Europe and Latin America. Renewables plants include Asa Branca, Chapada I, II,
III, Inka, Vorotan, Austria Portfolio 1 & 2, Spanish Concentrated Solar Power and our other European
plants.
The Corporate & Other category primarily reflects costs for certain centralized functions including
executive oversight, corporate treasury and accounting, legal, compliance, human resources, IT and
facilities management and certain technical support costs that are not allocated to the segments for
internal management reporting purposes.
The CODM assesses the performance of the operating segments based on Adjusted EBITDA which is
defined as profit for the period from continuing operations before income taxes, net finance costs,
depreciation and amortization, acquisition, disposal and other transactions related expenses,
gains/losses on disposal of power generating plants, plus, if applicable, net cash gain or loss on sell
down transactions (in addition to the entire full period profit from continuing operations for the
business the sell down transaction relates to) and specific items which have been identified and
material items where the accounting diverges from the cash flow and therefore does not reflect the
ability of the assets to generate stable and predictable cash flows in a given period, less the Group’s
share of profit from non consolidated entities accounted under the equity method, plus the Group’s
pro rata portion of Adjusted EBITDA for such entities. In determining whether an event or transaction
is adjusted, management considers quantitative as well as qualitative factors such as the frequency or
predictability of occurrence.
The Group also presents the Proportionate Adjusted EBITDA which is the Adjusted EBITDA
calculated on a proportionally consolidated basis based on applicable ownership percentage. The
Proportionate Adjusted EBITDA includes the net cash gain or loss on sell down transactions as well as
the underlying profit from continuing operations for the business in which the minority interest sale
relates to reflecting applicable ownership percentage going forward from the date of completion of the
sale of a minority interest.
The Group considers that the presentation of Adjusted EBITDA and Proportionate Adjusted EBITDA
enhances the understanding of ContourGlobal’s financial performance, in regards to understanding its
ability to generate stable and predictable cash flows from operations. Where applicable, the cash gain
on sell down is also included to demonstrate the ability of the Group to sell down assets at a significant
premium, which is a distinct activity from operational performance of the power plants. The Group
also believes Adjusted EBITDA is useful to investors because it is frequently used by security analysts,
investors, ratings agencies and other interested parties to evaluate other companies in our industry
and to measure the ability of companies to service their debt.
The CODM does not review nor is presented a segment measure of total assets and total liabilities.
All revenue is derived from external customers.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
76
Geographical information
The Group also presents revenue in each of the geographical areas in which it operates as follows:
-
Europe (including our operations in Austria, Armenia, Northern Ireland, Italy, Romania, Poland,
Bulgaria, Slovakia and Spain)
-
Latin America which includes South America (including Brazil, Peru, Colombia), Mexico and
Caribbean Islands (including Dutch Antilles, French Territory and Trinidad and Tobago)
-
United States of America
-
Africa (including Nigeria, Togo, Senegal and Rwanda)
Years ended December 31
In $ millions
2022
2021
Revenue
Thermal Energy
2,389.4
1,708.3
Renewable Energy
438.9
443.7
Total revenue
2,828.3
2,151.9
Adjusted EBITDA
Thermal Energy
599.8
541.3
Renewable Energy
332.6
334.7
Corporate & Other (1)
(31.9)
(34.5)
Total adjusted EBITDA
900.5
841.5
Proportionate adjusted EBITDA
759.6
692.3
Non controlling interests
140.9
149.2
Total adjusted EBITDA
900.5
841.5
Reconciliation to profit before income tax
Depreciation, amortization and impairment (note 1.10)
(361.2)
(399.2)
Net finance costs, foreign exchange gains and losses, and changes in
fair value of derivatives (note 1.13)
(231.7)
(249.2)
Share of adjusted EBITDA in associates (2)
(25.6)
(27.0)
Share of profit in associates (note 1.18)
16.3
16.2
Acquisition, disposal and other transactions related items (note 1.12)
(49.2)
(14.2)
Mexico CHP fixed margin swap (3)
2.9
5.5
Change in finance lease and financial concession assets (4)
(34.3)
(37.9)
Brazil Hydro concession assets extension (5)
-
5.5
Gain on Brazil Hydro sale (note 1.6) (6)
121.2
-
Gain on Sochagota acquisition (note 1.6)
16.8
-
Other
4.8
1.7
Profit before income tax
360.5
142.9
(1) Corporate costs correspond to selling, general and administrative expenses before depreciation
and amortization of $5.9 million (December 31, 2021: $6.1 million).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
77
(2) Corresponds to our share of Adjusted EBITDA of plants accounted for under the equity method
(Sochagota and Termoemcali) which are reviewed by our CODM as part of our Thermal Energy
segment. On December 30, 2022 the Group acquired the remaining 51% shares in Sochagota,
resulting in the discontinuation of equity accounting.
(3) Reflects an adjustment to align the recognized earnings with the cash flows generated under the
CHP Mexico fixed margin swap during the period as presented in the consolidated statement of
cash flow as “Mexico CHP fixed margin swap”.
(4) Reflects an adjustment to align the recognized earnings with the cash flows generated under
finance lease and financial concession arrangements which is presented in the consolidated
statement of cash flow as “Change in finance lease and financial concession assets”.
(5) Reflects the non-cash gain recognized due to Generating Scaling Factor (“GSF”) settlement in
Brazil Hydro whereby a concession extension has been granted to compensate for historical GSF
liability payments made prior to acquisition of the assets by ContourGlobal.
(6) Represents the gain on disposal on Brazil Hydro sale described in note 1.6
Cash outflows on capital expenditure
Years ended December 31
In $ millions
2022
2021
Thermal Energy
50.2
43.2
Renewable Energy
78.3
57.8
Corporate & Other
0.8
3.4
Total capital expenditure
129.3
104.4
Geographical information
The geographical analysis of revenue, based on the country of origin in which the Group’s operations
are located, and Adjusted EBITDA is as follows:
Years ended December 31
In $ millions
2022
2021
Europe (1)
1,732.8
1,302.5
Latin America (2)
644.8
530.5
United States
299.6
183.0
Africa
151.1
136.0
Total revenue
2,828.3
2,151.9
(1) Revenue generated in 2022 in Bulgaria and Spain amounted to $910.0 million and $620.6 million
respectively (December 31, 2021: $706.9 million and $426.9 million respectively).
(2) Revenue generated in 2022 in Brazil and Mexico amounted to $125.4 million and $394.4 million
respectively (December 31, 2021: $140.2 million and $296.1 million respectively).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
78
Years ended December 31
In $ millions
2022
2021
Europe (1)
451.4
438.1
Latin America (2)
287.3
273.0
United States
112.3
84.6
Africa
81.4
80.3
Corporate & Other
(31.9)
(34.5)
Total adjusted EBITDA
900.5
841.5
(1) Adjusted EBITDA generated in 2022 in Bulgaria and Spain amounted to $121.8 million and
$207.9 million respectively (December 31, 2021: $127.8 million and $200.5 million respectively).
(2) Adjusted EBITDA generated in 2022 in Brazil and Mexico amounted to $79.5 million and $129.2
million respectively (December 31, 2021: $93.8 million and $110.5 million respectively).
The geographic analysis of non-current assets, excluding derivative financial instruments and deferred
tax assets, based on the location of the assets, which are not presented to the CODM, is as follows:
December 31
In $ millions
2022
2021
Europe
1,793.5
1,941.3
Latin America
1,578.4
1,614.0
United States
696.5
773.8
Africa
347.9
370.3
Total non-current assets
4,416.3
4,699.6
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
79
1.9.
Revenue
Years ended December 31
In $ millions
2022
2021
Revenue from power sales (1)
2,455.1
1,801.3
Revenue from operating leases (2)
207.6
184.9
Revenue from concession and finance lease assets (3)
28.3
33.9
Other revenue (4)
137.3
131.8
Total revenue
2,828.3
2,151.9
Revenue from power sales and Other revenue are recognised under IFRS 15 and total $2,592.4 million
in the year to December 31, 2022 (December 31, 2021: $1,933.1 million). Revenue from operating
leases and revenue from concession and finance lease assets are recognised under IFRS 16 and IFRIC
12 respectively.
(1) The increase in Revenue from power sales from $1,801.3 million to $2,455.1 million is principally
due to revenue increase in our Maritsa plant for $203.2 million mainly due to higher generation and
higher revenue from the passthrough CO2 emissions costs, revenue increase in Arrubal for $204.9
million mainly due to trading optimization, higher generation and higher gas pass throughs and
additional interconnections at Mexico CHP contributing $98.3 million.
(2) Revenue from operating leases mainly includes $62.9 million relating to our Solutions plants,
$50.9 million relating to our Bonaire plant, $93.9 million relating to certain US and Trinidad and
Tobago assets in December 31, 2022 (December 31, 2021: $55.1 million, $31.7 million, and $98.1
million respectively).
(3) Some of our main plants are operating under specific arrangements for which certain other
accounting principles are applied as follows:
-
Our Togo, Rwanda (Kivuwatt) and Senegal (Cap des Biches) plants are operating pursuant to
concession agreements that are under the scope of IFRIC 12.
-
Our Energies Saint Martin plant is operating pursuant to power purchase agreements that are
considered to contain a finance lease
(4) Other revenue primarily relates to environmental, operational and maintenance services rendered
to offtakers in our power plants in Bulgaria, Togo, Rwanda and Senegal.
The Group has one customer contributing more than 10% of Group’s revenue (2021: one customer).
Years ended December 31
2022
2021
Customer A
32.2%
32.8%
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
80
1.10.
Expenses by nature
Years ended December 31
In $ millions
2022
2021
Fuel costs
925.7
541.3
Depreciation, amortization and impairment
361.2
399.2
Operation and maintenance costs
80.8
95.5
Employee costs
111.3
107.9
Emission allowance utilized (1)
666.6
449.5
Professional fees
17.9
22.0
Purchased power
42.1
30.6
Transmission charges
43.8
34.7
Operating consumables and supplies
25.3
21.2
Insurance costs
36.1
33.1
Other expenses (2)
45.8
36.0
Total cost of sales and selling, general and administrative
expenses
2,356.6
1,771.0
(1) Emission allowances utilized corresponds mainly to the costs of CO2 quotas in Maritsa which are
passed through to its offtaker and purchases of CO2 allowances in Arrubal, and includes the write-
down of CO2 quotas held in inventory to their net realizable value where relevant.
(2) Other expenses include facility costs of $17.3 million at December 31, 2022 (December 31, 2021:
$15.2 million) and provision for bad debt of $9.3 million at December 31, 2022 (December 31, 2021:
nil).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
81
1.11.
Employee costs and numbers
Years ended December 31
In $ millions
2022
2021
Wages and salaries
(84.9)
(85.0)
Social security costs
(17.6)
(14.4)
Share-based payments (1)
(2.1)
(1.9)
Pension and other post-retirement benefit costs
(0.7)
(0.8)
Other
(6.0)
(5.8)
Total employee costs
(111.3)
(107.9)
Monthly average number of full-time equivalent employees
1,541
1,491
- Thermal
947
868
- Renewable
398
413
- Corporate
196
210
(1) See note 1.33 Share-based compensation plans for a description of the long term incentive plan.
1.12.
Acquisition and other transactions related items
Years ended December 31
In $ millions
2022
2021
Acquisition and disposal related items (1)
9.3
14.2
Other transaction related items (2)
39.9
-
Acquisition, disposal and other transactions related items
49.2
14.2
(1) Acquisition and disposal related items costs include notably pre-acquisition costs such as due
diligence costs and professional fees and other related incremental costs incurred as part of
completed or contemplated acquisitions and disposals. In the year ended December 2022, costs
incurred primarily to the sale of the Brazil Hydro assets (December 31, 2021: corresponds mainly
to completed acquisition in the United States and Italy).
(2) Other transaction related items correspond to KKR transaction and delisting costs. These include
the due diligence costs incurred in connection with the acquisition by KKR, legal and finance
advisor’s costs and the impact of accelerated vesting of long term incentive share plan due to the
acquisition by KKR.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
82
1.13.
Net finance costs, foreign exchange gains and losses, and changes in fair value
of derivatives
Years ended December 31
In $ millions
2022
2021
Finance income
12.0
3.9
Net change in fair value of fixed margin derivative (1)
(16.1)
13.6
Net fair value changes of other derivatives and reclassification from
cash flow hedge reserve (2)
4.2
11.7
Net foreign exchange differences (3)
22.3
18.4
Net foreign exchange gains and (losses) and change in fair
value of derivatives
10.5
43.7
Interest expenses on borrowings
(189.1)
(205.5)
Amortization of deferred financing costs
(15.1)
(20.8)
Unwinding of discounting (4)
(23.8)
(26.0)
Other (5)
(26.4)
(44.5)
Finance costs
(254.3)
(296.8)
Net finance costs, foreign exchange gains and losses, and
changes in fair value of derivatives
(231.8)
(249.2)
(1) Net change in fair value of derivative related to the CHP Mexico fixed margin liability.
(2) Within this balance the Group recognized a profit of $4.5 million in the 12 months ended
December 31, 2022 in relation to its interest rate, cross currency and financial swaps, options,
foreign exchange options and forward contracts (December 31, 2021: profit of $8.1 million) which
relates to fair value changes on derivatives not hedge accounted and amounts reclassified from the
cash flow hedge reserve.
(3) Net foreign exchange differences include foreign exchange gains and losses related to conversion
of foreign currency denominated cash balances and foreign exchange differences relating to loans
in subsidiaries that have a functional currency different to the currency in which the loans are
denominated.
(4) Unwinding of discounting mainly relates to other long-term liabilities in the 12 months ended
December 31, 2022 and 2021.
(5) Other mainly includes costs associated with other financing, Maritsa debt to non-controlling
interests, finance costs of leases, income and expenses related to interest and penalties for late
payments.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
83
1.14.
Income tax expense and deferred income tax
Income tax expense
Years ended December 31,
In $ millions
2022
2021
Current tax
- current tax expense of the year
(108.2)
(45.1)
- prior year adjustment
(1.7)
(2.0)
Total current tax expense
(109.9)
(47.1)
Deferred tax
- deferred tax expense of the year
3.9
(19.5)
- prior year adjustment
(1.0)
3.4
Total deferred tax expense
2.9
(16.1)
Income tax expense
(107.0)
(63.2)
The increase of the tax charge in 2022 compared to 2021 is mainly attributable to the $29.1m
withholding tax applied on the sale of the Brazilian hydro business.
The main jurisdictions contributing to the income tax expense for the year ending 31st December 2022
in addition to the effect of the Brazilian hydro business sale are i) Spain, ii) Mexico and iii) Italy.
During 2021, the OECD published a framework for the introduction of a global minimum effective tax
rate of 15%, applicable to large multinational groups. During the year 2022, HM Treasury released
draft legislation to implement these 'Pillar 2' rules with effect from 2024. The Group is reviewing these
draft rules to understand any potential impacts.
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise
from applying the statutory tax rate of the parent company (2022: 19%, 2021: 19%) to the results of the
consolidated entities as follows:
Effective tax rate reconciliation
Years ended December 31,
In $ millions
2022
2021
Profit before income tax
360.5
142.9
Profit before income tax at UK statutory tax rate
(68.5)
(27.2)
Tax effects of:
Differences between statutory tax rate and foreign statutory
tax rates (1)
(3.3)
(1.8)
Changes in unrecognized deferred tax assets (2)
(5.3)
(18.6)
Reduced rate and specific taxation regime (3)
9.7
3.2
Foreign exchange movement(4)
9.6
4.7
Prior year adjustment - current tax
(1.7)
(2.0)
Prior year adjustment - deferred tax
(1.0)
3.4
Brazil hydro business sale (5)
(6.7)
-
Permanent differences and other items (6)
(40.0)
(25.0)
Income tax expense
(107.0)
(63.2)
Effective rate of income tax
29.7%
44.2%
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
84
(1) Includes the effect of recognizing net income of investments in associates in the profit before
income tax.
(2) Mainly relates to tax losses in UK, Luxembourg and Brazil where deferred tax assets are not
recognized.
(3) Relates to specific tax regimes and some of the Brazilian entities being taxed by reference to
revenue rather than accounting profits.
(4) Mainly driven by difference between functional currency of statutory entities and currency used for
local tax reporting and non-deductibility of foreign exchange movements in certain jurisdictions.
(5) Includes the total impact of the sale of the Brazilian hydro assets, composed mainly of the
difference between the UK statutory rate and withholding tax rate applied on the sale in Brazil.
(6) This category is composed of tax impacts of inflationary adjustments (2022: $3.4 million, 2021:
$13.0 million), of non-deductible group costs (2022: $4.6 million, 2021: $4.0 million), financing costs
(2022: $4.8 million, 2021: $3.4 million) and transaction costs (2022: $10.0 million, 2021: $0 million)
as well as a number of individually immaterial items such as withholding taxes. This category also
includes the effect of new taxes imposed on energy businesses (windfall profit taxes). In 2022 the
additional tax charge resulting from these taxes amounts to $5.3 million, mainly comprising of $4.5
million in Italy.
Net deferred tax movement
The gross movements of net deferred income tax assets (liabilities) were as follows:
December 31,
In $ millions
2022
2021
Net deferred tax assets (liabilities) as of January, 1
(275.5)
(211.4)
Statement of income
2.9
(16.1)
Deferred tax recognized directly in other comprehensive income
(41.6)
(14.4)
Acquisitions
(15.0)
(35.7)
Currency translation differences and other
4.4
2.1
Net deferred tax assets (liabilities) as of December, 31
(324.8)
(275.5)
Including net deferred tax assets balance of:
38.7
49.7
Deferred tax liabilities balance of:
(363.6)
(325.2)
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
85
Analysis of the net deferred tax position recognized in the consolidated statement of financial
position
The net deferred tax positions and their movement can be broken down as follows:
In $ millions
Tax
losses
Property,
plant and
equipme
nt
Intangibl
e assets(1)
Derivative
financial
instruments (2)
Deferred
financing
costs
Other (3)
Total
As of January 1, 2021
117.6
(349.4)
(49.5)
35.1
20.0
14.7
(211.4)
Statement of income
20.5
(40.3)
4.3
(2.9)
0.5
1.8
(16.1)
Other comprehensive
income
-
-
-
(14.4)
-
-
(14.4)
Acquisitions
1.3
(117.0)
64.7
(2.7)
8.1
9.9
(35.7)
Currency translations and
other
(0.6)
8.9
(0.9)
(0.1)
(1.8)
(3.4)
2.1
As of December 31, 2021
138.8
(497.8)
18.6
14.9
26.8
23.2
(275.5)
Statement of income
(30.5)
11.8
12.1
(0.3)
4.3
5.4
2.9
Other comprehensive
income
-
-
-
(41.6)
-
-
(41.6)
Acquisitions (4)
-
(15.0)
-
-
-
-
(15.0)
Currency translations and
other
(0.4)
8.3
(0.4)
0.3
(2.1)
(1.4)
4.4
As of December 31, 2022
107.8
(492.7)
30.4
(26.6)
29.0
27.2
(324.8)
(1) Mainly relates to assets acquired through business combinations.
(2) $(20.4) million of the current year movement through other comprehensive income represents the
movement in the year of hedging expenses in Mexico (2021: $(9.9) million).
(3) This category is made up of various items, including finance lease capitalization of $(11.7) million
(2021: $(13.7) million) and Mexico fixed margin swap of $6.5 million (2021: $7.3 million).
(4) $(15.0) million relates to opening balance sheet deferred tax liabilities on the 51% share acquired in
Sochagota plant in Colombia in December 2022. Further to this acquisition, the Group holds 100% of
the Sochagota power plant asset.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
86
Deferred tax assets recognized in the consolidated statement of financial position
The Group recognizes deferred tax assets to the extent that it is probable that sufficient future taxable
profits will arise against which these deductible temporary differences can be utilized. The Group has
performed an assessment of the recovery of deferred tax assets which has involved the use of budgets
and forecasts.
There is a deferred tax asset in Spain of $16.9 million (2021: $20.9 million) which relates
predominantly to intangible assets. The relevant tax group is profitable, and the reversal of the
deferred tax asset is scheduled to be within three years. There is an amount of deferred tax assets on
tax losses that are dependent on future taxable profits not arising from the reversal of existing deferred
tax liabilities of $16.7 million ($16.2 million in 2021), which is scheduled to be reversed within 13 to 15
years. This utilisation horizon takes into account management's best estimate of risks to which the
operations may be exposed and is considered appropriate given the long term nature of the acquired
assets.
Analysis of the deferred tax position unrecognized in the consolidated statement of financial position
Unrecognized deferred tax assets amount to $278.0 million as of December 31, 2021 (December 31,
2021: $300.2 million) and can be broken down as follows:
December 31,
In $ millions
2022
2021
Unrecognized deferred tax assets on tax losses
256.4
276.0
Unrecognized deferred tax assets on deductible temporary differences
21.6
24.2
Total unrecognized deferred tax assets
278.0
300.2
The total amount of deductible temporary differences and unused tax losses for which no deferred tax
asset is recognized amounts to $1,086.7 million (2021: $1,179.6 million) and is broken down as
follows:
December 31,
2022
2021
Tax losses - no deferred tax asset recognized
992.7
1,060.3
Deductible temporary differences - no deferred tax asset recognized
94.0
119.3
Total
1,086.7
1,179.6
Deferred tax assets that have not been recognized mainly relate to tax losses in Luxembourg, Brazil
and the UK where it is not probable that future taxable profit will be available against which the tax
losses can be utilized. The amounts unrecognised for deferred tax purposes generally do not expire
with the exception of Luxembourg.
With respect to Luxembourg, tax losses of $263.4m arising prior to 31 December 2016 can be carried
forward without time limit. As from January 1, 2017, new tax losses expire after 17 years and therefore
tax losses of $48.2m, $90.3m, $138.9m, $158.5m, $19.7m and $0.5m expire on December 31, 2034,
2035, 2036, 2037, 2038 and 2039 respectively.
The Group accrues deferred tax liabilities for the withholding tax that will arise on the future
repatriation of undistributed earnings. There are no temporary differences on undistributed earnings
with material unrecognized deferred tax liabilities.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
87
1.15.
Intangible assets and goodwill
In $ millions
Goodwill
Work in
progress
Legado
rights
Contracts
Permits,
licenses
and
other
project
develop
ment
Software
and
Other
Total
Cost
0.6
1.5
233.3
-
122.8
40.9
399.1
Accumulated amortisation and
impairment
-
-
(14.9)
-
(43.4)
(21.1)
(79.4)
Carrying amount as of
January 1, 2021
0.6
1.5
218.4
-
79.4
19.7
319.7
Additions
-
1.4
-
-
14.5
1.6
17.5
Disposals
-
-
-
-
-
-
-
Acquired through business
combination(1)
3.5
-
-
31.4
0.3
-
35.2
Assets recognized as held for sale(2)
-
-
-
-
(22.7)
(0.2)
(22.9)
Currency translation differences
-
-
-
-
(4.8)
(0.2)
(5.0)
Reclassification
-
(2.8)
-
-
1.4
1.4
-
Amortisation charge
-
-
(13.7)
(8.1)
(13.6)
(3.6)
(39.0)
Closing net book amount
4.1
0.1
204.7
23.3
54.5
18.7
305.4
Cost
4.1
0.1
233.3
31.4
89.0
50.3
408.2
Accumulated amortisation and
impairment
-
-
(28.6)
(8.1)
(34.5)
(31.6)
(102.8)
Carrying amount as of
January 1, 2022
4.1
0.1
204.7
23.3
54.5
18.7
305.4
Additions
-
4.6
-
-
0.5
1.0
6.1
Disposals
-
-
-
-
-
-
-
Currency translation differences
(0.1)
-
-
-
2.2
-
2.1
Reclassification
-
(3.9)
-
-
1.8
2.1
-
Amortisation charge
-
-
(13.7)
(9.3)
(6.7)
(4.7)
(34.4)
Closing net book amount
4.0
0.8
191.0
14.0
52.3
17.1
279.2
Cost
4.0
0.8
233.3
31.4
94.7
65.6
429.8
Accumulated amortisation and
impairment
-
-
(42.3)
(17.4)
(42.4)
(48.5)
(150.6)
Carrying amount as of
December 31, 2022
4.0
0.8
191.0
14.0
52.3
17.1
279.2
Contracts relate to the fair valuation on acquisition of power purchase agreements in the United States
of America, in note 1.7. Contracts are subsequently measured at amortized cost.
Permits, licenses and other project development rights relate to licenses acquired from the initial
developers for our wind parks in Peru and Brazil. Legado rights were recognized on acquisition of
Mexico CHP.
Amortization included in ‘cost of sales’ in the consolidated statement of income amounted to $30.6
million in the year ended December 31, 2022 (December 31, 2021: $35.6 million) and amortization
included in ‘selling, general and administrative expenses’ amount to $3.8 million in the year ended
December 31, 2022 (December 31, 2021: $3.4 million).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
88
1.16.
Property, plant and equipment
The power plant assets predominantly relate to wind farms, natural gas plants, fuel oil or diesel plants,
coal plants, hydro plants, solar plants, asset retirement obligations and other buildings.
Other assets mainly include IT equipment, furniture and fixtures, facility equipment and vehicles, and
project development costs.
Assets acquired through business combinations are explained in Note 1.6.
In $ millions
Land
Power plant
assets
Construction
work in
progress
Right of use
of assets
Other
Total
Cost
76.7
5,842.0
30.3
50.1
198.8
6,197.9
Accumulated depreciation and
impairment
(0.8)
(2,151.5)
-
(17.7)
(102.5)
(2,272.5)
Carrying amount as of
January 1, 2022
75.9
3,690.5
30.3
32.4
96.3
3,925.4
Additions
0.3
34.5
85.3
13.3
8.6
142.0
Disposals
(0.1)
(19.1)
(2.1)
(3.1)
(1.6)
(26.0)
Reclassification
(5.8)
53.0
(60.3)
-
13.1
-
Acquired through business
combination(1)
-
49.5
-
-
0.4
49.9
Currency translation differences
(3.4)
(20.7)
0.3
(1.2)
(2.4)
(27.5)
Depreciation charge
(0.1)
(305.7)
-
(5.6)
(15.4)
(326.8)
Closing net book amount
66.8
3,482.0
53.5
35.8
99.0
3,737.0
Cost
67.6
5,843.0
53.5
57.0
215.4
6,236.4
Accumulated depreciation and
impairment
(0.8)
(2,361.0)
-
(21.2)
(116.4)
(2,499.4)
Carrying amount as of
December 31, 2022
66.8
3,482.0
53.5
35.8
99.0
3,737.0
(1) See note 1.6 for a description of the acquisition of the 51% in Sochagota.
Construction work in progress as of December 31, 2022 predominantly relates to our ongoing Austria
Wind repowering project and projects at Bonaire, Vorotan and Maritsa. Reclassification from
Construction work in progress to Power plant assets primarily relates to Austria Wind repowering
project ($31.1 million).
As of December 31, 2022, the Other category mainly related to $52.6 million of instruments and tools,
$22.4 million of critical spare parts.
Depreciation included in ‘cost of sales’ in the consolidated statement of income amounted to $324.7
million in the year ended December 31, 2022 (December 31, 2021: $357.5 million) and depreciation
included in ‘selling, general and administrative expenses’ amount to $2.1 million in the year ended
December 31, 2022 (December 31, 2021: $2.7 million).
In the year ended December 31, 2022, the Group capitalized $0.3 million of borrowing costs in relation
to project financing.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
89
In $ millions
Land
Power plant
assets
Construction
work in
progress
Right of use
of assets
Other
Total
Cost
72.2
5,172.5
76.8
47.6
285.2
5,654.4
Accumulated depreciation and
impairment
(0.6)
(1,988.5)
-
(13.1)
(135.0)
(2,137.3)
Carrying amount as of
January 1, 2021
71.6
3,184.0
76.8
34.5
150.2
3,517.1
Additions
-
33.7
48.6
3.2
9.2
94.7
Disposals
-
(5.2)
(0.1)
(0.5)
(2.0)
(7.8)
Reclassification
-
114.6
(97.2)
-
(19.4)
(2.0)
Acquired through business
combination(1)
14.4
918.3
-
2.8
21.0
956.5
Assets recognized as held for sale(2)
(5.2)
(79.5)
-
(0.1)
(39.1)
(123.9)
Currency translation differences
(4.8)
(135.7)
2.2
(1.8)
(8.9)
(149.0)
Depreciation charge
(0.1)
(339.7)
-
(5.7)
(14.7)
(360.1)
Closing net book amount
75.9
3,690.5
30.3
32.4
96.3
3,925.4
Cost
76.7
5,842.0
30.3
50.1
198.8
6,197.9
Accumulated depreciation and
impairment
(0.8)
(2,151.5)
-
(17.7)
(102.5)
(2,272.5)
Carrying amount as of
December 31, 2021
75.9
3,690.5
30.3
32.4
96.3
3,925.4
(1) Assets acquired through business combination relate to our United States of America and Trinidad
and Tobago and Solar Italy portfolios detailed in note 1.7.
(2) Assets recognized as held for sale relate to our Brazil Hydro portfolio, detailed in note 1.6.
Construction work in progress as of December 31, 2021 predominantly relates to our ongoing Austria
Wind repowering project, Vorotan refurbishment project, and projects at Maritsa. Reclassification
from Construction work in progress to Power plant assets primarily relates to completed phases of the
Vorotan refurbishment project ($56.9 million), Austria Wind repowering project ($13.8 million) and
projects at Maritsa ($12.1 million).
As of December 31, 2021, the Other category mainly related to $53.6 million of instruments and tools,
$22.2 million of critical spare parts.
In the year ended December 31, 2021, the Group capitalized $2.8 million of borrowing costs in relation
to project financing.
Impairment tests on tangible and intangible assets
For the year ended December 31, 2022 certain triggering events were identified related to the Brazilian
wind power plants primarily driven by lower performance of the assets and environmental factors
impacting resource level, requiring an impairment test. The recoverable amount is determined as the
higher of the value in use determined by the discounted value of future cash flows (discounted cash
flow method or “DCF”, determined by using cash flow projections consistent with the following year
budget and the most recent forecasts prepared by management and approved by the Board) and the
fair value (less costs to sell), determined on the basis of market data (comparison with the value
attributed to similar assets or companies in recent transactions).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
90
Impairment tests were performed for the year ended December 31, 2022 using the following
assumptions and related sensitivity analysis:
In
$
million
Net
book
value
Valuation
approach
Discount
rate
Generation
Sensitivity analysis
Brazilian
wind power
plants
365.2
DCF
10.87%
2,180 Gwh
Discount rate increased by 1%
5% decrease in generation
The sensitivity calculations show that an increase by 1% of the discount rate and a 5% decrease in
generation for Brazilian wind power plants assets would not have a material impact on the results of
impairment tests or, therefore, on the Group’s consolidated financial statements as of December 31,
2022. There are no reasonably possible changes to the key impairment test assumptions that would
result in an impairment charge.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
91
1.17.
Finance lease and financial concession assets
December 31
In $ millions
2022
2021
Contract assets - Concession arrangements (1)
346.9
378.0
Finance lease receivables (2)
4.9
9.9
Other
17.7
14.9
Total finance lease and financial concesssion assets
369.4
402.8
Total finance lease and financial concesssion assets non-current
portion
346.4
370.5
Total finance lease and financial concesssion assets current portion
23.0
32.3
(1) The Group operates plants in Togo, Rwanda and Senegal which are in the scope of the financial
model of IFRIC 12 ‘Service Concession Arrangements’.
Our Rwanda power plant consists of the development, construction and operation of Gas Extraction
Facilities (“GEF”) and an associated power plant. The GEF is used to extract methane and biogas from
the depths of Lake Kivu in Rwanda and deliver the gas via submerged gas transport pipelines to shore-
based power production facilities totaling 26 MW of gross capacity. The PPA runs for 25 years starting
on the commercial operation date and ending in 2040, date when the GEF along with all equipment
necessary for the operation of the plant, will be transferred to the Republic of Rwanda.
Our Togo power plant was commissioned in 2010 and is operated under a power purchase agreement
with a unique offtaker, Compagnie Energie Electrique du Togo (“CEET”) which has an average
remaining contract life of approximately 12.8 years as of December 31, 2022 (December 31, 2021: 13.8
years). At expiration, the Togo plant, along with all equipment necessary for the operation of the plant,
will be transferred to the Republic of Togo. This arrangement is accounted for as a concession
arrangement and the value of the asset is recorded as a financial asset. The all-in base capacity tariff
under the Togo power purchase agreement is adjusted annually for a combination of US$, Euro and
local consumer price index related to the cost structure.
Our Cap des Biches power plant in Senegal consists of the development, construction and operation of
five engines with a flexi-cycle system technology based on waste heat recovery totalling about 86MW.
A PPA integrating all the Cap des Biches requirements and agreements on price was signed for 20
years starting on the commercial operation date of the project and ending in 2036, the date when the
power plant along with all equipment necessary for the operation of the plant, will be transferred to
the Republic of Senegal.
(2) Relates to finance leases where the Group acts as a lessor, and includes our Saint Martin plant in
the French Territory. Saint Martin has an average remaining contract life of approximately 0.3 years as
of December 31, 2022 (December 31, 2021: 1.3 years).
No losses from impairment of contracted concessional assets and finance lease receivables in the above
projects were recorded during the years ended December 31, 2022 and 2021.
Net cash inflows generated by the financial assets under concession agreements amounted to $53.1
million as of December 31, 2022 (December 31, 2021: $66.8 million).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
92
1.18.
Investments in associates
Set out below are the associates of the Group as of December 31, 2022:
Operational plant
Country of
incorporation
Ownership interests
Date of acquisition
2022
2021
Sochagota
Subsidiary /
Associate
Colombia
100.0%
49.0%
2006 and 2010
Termoemcali
Associate
Colombia
37.4%
37.4%
2010
Evacuacion Villanueva del Rey, S.L.
Associate
Spain
34.6%
39.9%
2018
The Group acquired the 51% remaining shares in Sochagota on December 30, 2022. See note 1.6.
Set out below is the summarized financial information for the investments which are accounted for
using the equity method (presented at 100%):
In $ millions
Current
assets
Non-
current
assets
Current
liabilities
Non-
current
liabilities
Revenue
Net
income
Year ended December 31, 2021
Sochagota
76.1
28.6
27.2
21.0
101.9
25.4
Termoemcali
21.2
49.3
16.2
26.7
29.9
10.1
Evacuacion Villanueva del Rey, S.L.
0.1
2.6
0.2
2.5
0.3
-
Year ended December 31, 2022
Termoemcali
19.4
48.9
13.1
17.9
30.6
14.4
Evacuacion Villanueva del Rey, S.L.
0.2
2.3
0.3
2.2
0.3
-
The reconciliation of the investments in associates for each year is as follows:
Years ended 31st December
In $ millions
2022
2021
Balance as of January 1,
33.5
29.5
Share of profit
16.3
16.2
Dividends
(14.1)
(8.3)
Deemed disposal (1)
(19.6)
-
Other
(3.1)
(3.9)
Balance as of December 31,
13.0
33.5
(1) See note 1.6 for a description of the acquisition of the 51% in Sochagota.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
93
1.19.
Management of financial risk
The Group’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses
derivative financial instruments to hedge certain risk exposures.
Interest rate risk
Interest rate risk arises primarily from our long-term borrowings. Interest cash flow risk arises from
borrowings issued at variable rates, partially offset by cash held at variable rates. Typically for any new
investments, the Group hedges variable interest risk on newly issued debt in a range of 75% to 100% of
the nominal debt value. Interest rate risk is managed on an asset by asset basis through entering into
interest rate swap agreements, entered into with commercial banks and other institutions. The interest
rate swaps qualify as cash flow hedges. Their duration usually matches the duration of the debt
instruments. Approximately 8% of the Group’s existing external debt obligations carry variable
interest rates in 2022 (2021: 10.2%) (after taking into account the effect of interest rate swaps).
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged item and hedging instrument. To hedge interest rate exposures, the group enters into interest
rate swaps and cross currency swaps that have similar critical terms to the hedged items, such as the
notional amounts, payment dates, reference rate and maturities. The Group does not hedge 100% of its
loans, therefore the hedged item is identified as a proportion of outstanding loans up to the notional
amount of the swaps. As all critical terms match, there is an economic relationship and the hedge ratio
is established as 1:1. The Group therefore performs a qualitative assessment of effectiveness. If changes
in circumstances affect the terms of the hedged item such that the critical terms no longer match
exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative
method to assess effectiveness.
The main sources of hedge ineffectiveness in these hedging relationships is the effect of the
counterparty and the Group’s own credit risk on the fair value of the interest rate swap and cross
currency swap contracts, which are not reflected in the fair value of the hedged item attributable to
changes in underlying rates, and the risk of over-hedging where the hedge relationship requires re-
balancing. No other material sources of ineffectiveness emerged from these hedging relationships. Any
hedge ineffectiveness is recognized immediately in the income statement in the period that it occurs.
The following table presents a reconciliation by risk category of the cash-flow hedge reserve and
analysis of other comprehensive income in relation to hedge accounting:
Years ended December 31
In $ millions
2022
2021
Brought forward cash-flow hedge reserve
(72.7)
(127.5)
Interest rate and cross currency swap contracts:
Net fair value gain/(loss) on effective hedges
164.2
62.0
Amounts reclassified to Net finance cost
(4.6)
(7.2)
Carried forward cash-flow hedge reserve (1)
86.9
(72.7)
(1) The above table show pre-tax cash flow hedge positions, including non-controlling interest. The
amounts on the balance sheet include -$21.4 million deferred tax (2021: $17.0 million).
The debit value adjustment on the interest rate swaps and cross currency swaps in the interest rate
hedge amounts to nill million (2021: $1.9 million). These amounts are recognized on the financial
statements against the fair value of derivative (note 1.20). Aside from the IFRS 13 credit/debit risk
adjustment, cash-flow hedges generated immaterial ineffectiveness in 2022 which was recognized in
the income statement through finance costs.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
94
The following tables set out information regarding the cumulative change in value of the hedged item
used in calculating hedge ineffectiveness as well as the impacts on the cash-flow hedge reserve:
In $ millions
Hedged item
Hedged exposure
Hedging instrument
Change in value of
hedged item for
calculating
ineffectiveness
Change in value of
hedging instrument
for calculating
ineffectiveness
As of December 31, 2021
Cash flows payable
on a proportion of
borrowings
Interest rate risk
Interest rate swaps
65.6
(65.6)
Cash flows payable
on a proportion of
borrowings
Interest rate risk and
foreign currency risk
Cross currency swaps
7.1
(7.1)
As of December 31, 2022
Cash flows payable
on a proportion of
borrowings
Interest rate risk
Interest rate swaps
(78.8)
78.8
Cash flows payable
on a proportion of
borrowings
Interest rate risk and
foreign currency risk
Cross currency swaps
(8.1)
8.1
Hedged cash flows are contractual such that the maturity dates on the interest rate swaps are aligned
to the hedged item, except for hedged cash flows on $894.8 million principal, with swaps maturing
between 2025 and 2033, in relation to CHP assets in Mexico, United States portfolio and Caribbean
assets that are subject to refinancing after 2026 for CHP assets in Mexico and 2027 for the United
States portfolio and Caribbean assets. Refinancing for an additional five, six and four years to match
the term of the swap is considered highly probable since the Group will continue to maintain
significant levels of US$ debt in relation to the CHP assets in Mexico, United States portfolio assets
and the Caribbean assets through to 2033.
These agreements involve the receipt of variable payments in exchange for fixed payments over the
term of the agreements without the exchange of the underlying principal amounts. The main interest
rate exposure for the Group relates to the floating rates with the TJLP, EURIBOR, LIBOR and SOFR
which are not hedged through interest rate swaps (refer to note 1.30). A change of 0.5% of those
floating rates would result in an increase in interest expenses by $1.6 million in the year ended
December 31, 2022 (2021: $2.1 million).
The replacement of benchmark interest rates such as LIBOR and other interbank offered rates
(IBORs) is ongoing globally. At the end of 2021, the polled publication of JPY, CHF and GBP LIBORs
ceased, while certain USD LIBORs (overnight, 1-, 3-, 6- and 12-month tenors) polled publication will
likely continue until June 2023 (if current regulatory plans do not change). Issuance of new floating-
rate loans referencing USD LIBOR are no longer permitted after the end of 2021, and new LIBOR-
based swaps traded after 2021 are only permitted if they demonstrably reduce an entity's LIBOR-based
risk. The European Central Bank (“ECB”) has disclosed no plans for the elimination of EURIBORs,
and they will remain in existence (unless the ECB decides otherwise) alongside the ECB's new
overnight index ESTR (Euro short-term rate).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
95
The Group has borrowings and IFRS 9 designated hedge relationships that are impacted by IBOR
reform including interest rate swap contracts and a cross currency swap that qualify as cash-flow
hedges, used to hedge a proportion of our external borrowings. These swaps reference six-month
EURIBOR, three-month USD LIBOR and six-month USD LIBOR. During 2022 borrowings and
interest rate swaps with notional value of $160.7 million at transition date relating to our Caribbean
assets was transitioned from US LIBOR to TERM SOFR. Following a refinancing in our US business,
new borrowings and interest rate swaps with a notional value of $313.5 million were entered into
utilizing 3-month TERM SOFR. No other borrowings or interest rate swaps were transitioned during
the period.
In $ millions
Measurement basis
Carrying value at December 31, 2021
Notional
Assets
Liabilities
Borrowings nominal
outstanding - EURIBOR
Amortised cost
-
593.6
Borrowings nominal
outstanding - USD LIBOR
Amortised cost
-
885.5
Derivatives - EURIBOR
Cash flow hedge
2.3
2.8
452.3
Derivatives - USD LIBOR
Cash flow hedge
1.4
71.6
778.9
Measurement basis
Carrying value at December 31, 2022
Notional
Assets
Liabilities
Borrowings nominal
outstanding - EURIBOR
Amortised cost
-
498.7
Borrowings nominal
outstanding - USD LIBOR
Amortised cost
-
667.2
Borrowings nominal
outstanding - SOFR
Amortised cost
-
407.7
Derivatives - EURIBOR
Cash flow hedge
41.3
-
358.7
Derivatives - USD LIBOR
Cash flow hedge
32.1
-
607.5
Derivatives - SOFR
Cash flow hedge
17.2
-
456.2
The risk for the Group regarding this transition is ensuring that the alternative rates are consistent
between borrowings and derivatives so that the hedging relationships remain effective in managing
interest rate exposure. The Group is managing this risk by ongoing engagement with the
counterparties to our borrowings and derivatives regarding the proposed transition.
Foreign currency risk
Foreign exchange risk arises from various currency exposures, primarily with respect to the Euro,
Brazilian Real and Bulgarian Lev (which is pegged to the Euro). Currency risk comprises (i)
transaction risk arising in the ordinary course of business, including certain financial debt
denominated in a currency other than the currency of the operations; (ii) transaction risk linked to
investments or mergers and acquisitions; and (iii) translation risk arising on the consolidation in US
dollars of the consolidated financial statements of subsidiaries with a functional currency other than
the US dollar.
To mitigate foreign exchange risk, (i) most revenues and operating costs incurred in the countries
where the Group operates are denominated in the functional currency of the project company, (ii) the
external financial debt is mostly denominated in the currency that matches the currency of the revenue
expected to be generated from the benefiting project, thereby reducing currency risk, and (iii) the
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
96
Group enters into various foreign currency sale / forward and / or option transactions at a corporate
level to hedge against the risk of lower distribution. Typically, the Group hedges its future distributions
in Brazil through a combination of forwards and options for any new investment in the country. The
analysis of financial debt by currency is presented in note 1.30.
Potential sensitivity on the post-tax profit result for the year linked to financial instruments is as
follows:
-
if the US dollar had weakened/strengthened by 10% against the Euro, post-tax profit for the year
ended December 31, 2022 would have been $5.1 million higher/lower (2021: $0.5 million
higher/lower); and
-
if the US dollar had weakened/strengthened by 10% against the Brazilian Real, post-tax profit for
the year ended December 31, 2022 would have been $1.3 million higher/lower (2021: $0.1 million
higher/lower).
The Bulgarian Lev is pegged to the Euro therefore the Group’s exposure to the Lev is consistent with the
Euro. The exposure to the Mexican Peso is limited due to the fixed margin swap derivative which fixes
the underlying gas price in US dollar, refer to sensitivity as disclosed in note 1.21. The Group’s hedge
policy states that the exposure between US Dollar and Euros will not be hedged, as both currencies are
considered as more stable currencies.
Commodity and electricity pricing risk
Apart from the Arrubal plant, the Group’s current and future cash flows are generally not impacted by
changes in the prices of electricity, gas, oil and other fuel prices as most of the Group’s non-renewable
plants operate under long-term power purchase agreements and fuel purchase agreements and other
commercial agreements such as the fixed margin swap arrangement. These agreements generally
mitigate against significant fluctuations in cash flows as a result in changes in commodity prices by
passing through changes in fuel prices to the offtaker.
Credit risk
Credit risk relates to risk arising from customers, suppliers, partners, intermediaries and banks on its
operating and financing activities, when such parties are unable to honour their contractual
obligations. Credit risk results from a combination of payment risk, delivery risk (failure to deliver
services or products) and the risk of replacing contracts in default (known as mark to market exposure
– i.e. the cost of replacing the contract in conditions other than those initially agreed). Financial assets
are generally considered to be credit impaired when they are past their contractual due date, or in
some jurisdictions outside of historical payment timeframes.
The Group analyzes the credit risk for each new client prior to entering into an agreement. In addition,
in order to minimize risk, the Group contracts political risk insurance policies from multilateral
organizations or commercial insurers which usually provide insurance against government defaults.
Such policies cover project companies in Armenia, Bulgaria, Colombia, Rwanda, Togo, Senegal and
Kosovo.
Where possible, the Group restricts exposure to any one counterparty by setting credit limits based on
the credit quality as defined by Moody’s and S&P and by defining the types of financial instruments
which may be entered into. The minimum credit ratings the Group generally accepts from banks or
financial institutions are BBB- (S&P) and Baa3 (Moody’s). For offtakers, where credit ratings are CCC+
or below, the Group generally hedges its counterparty risk by contracting political risk insurance.
If there is no independent rating, the Group assesses the credit quality of the customer, taking into
account its financial position, past experience and other factors.
For trade receivables, finance lease and financial concession assets, the Group applies the IFRS 9
simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables and contract assets.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
97
In $ millions
Carrying value at December 31, 2021
Investment
grade
Non
Investment
grade with
PRI
Non
Investment
grade
Total
Contract assets - Concession arrangements
-
378.0
-
378.0
Trade receivables - gross
22.1
75.1
9.6
106.8
Carrying value at December 31, 2022
Investment
grade
Non
Investment
grade with
PRI
Non
Investment
grade
Total
Contract assets - Concession arrangements
-
346.9
-
346.9
Trade receivables - gross
35.4
119.0
11.0
165.4
To measure the expected credit losses, trade receivables and contract assets have been grouped based
on shared credit risk characteristics and the days past due. The contract assets have substantially the
same risk characteristics as the trade receivables for the same types of contracts.
The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets. The expected loss rates are based on the
payment profiles of sales over a period of 36 months before 31 December 2022 or 31 December 2021
respectively and the corresponding historical credit losses experienced within this period. In this
context, the Group has taken into account available information on past events (such as customer
payment behavior), current conditions and forward-looking factors that might impact the credit risk of
the Group’s debtors.
Trade receivables can be due from a single customer or a few customers who will purchase all or a
significant portion of a power plant’s output under long-term power purchase agreements. This
customer concentration may impact the Group’s overall exposure to credit risk, either positively or
negatively, in that the customers may be affected by changes in economic, industry or other conditions.
Ageing of trade receivables – net are analyzed below:
December 31
In $ millions
2022
2021
Trade receivables not overdue
99.9
65.7
Past due up to 90 days
40.2
19.0
Past due between 90 - 180 days
11.5
0.3
Past due over 180 days
-
18.4
Total trade receivables
151.6
103.4
As of December 31, 2022, $50.7 million and $29.6 million (December 31, 2021: $24.8million and
$30.8 million) of trade receivables were outstanding in connection with our Cap des Biches in Senegal
and Bulgarian power plant, Maritsa East 3. The increase in trade receivables in Senegal is due to a
delay in the settlement of invoices by SENELEC at year end, of which $31.1m was settled subsequent to
year end.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
98
The trade receivables include an expected credit loss of $13.7 million (December 31, 2021: $3.3
million) on the Past due between 90 – 180 days and Past due over 180 days categories with an increase
in allowance recognized in profit and loss of $9.3 million in 2022, (December 31, 2021: $2.6 million).
There were immaterial credit losses and no overdue balances identified on finance lease and financial
concession assets.
The Group deems the associated credit risk of the trade receivables not overdue to be suitably low.
Liquidity risk
Liquidity risk arises from the possibility of the Group not being able to meet its obligations. The Group
mainly relies on long-term debt obligations to fund its acquisitions and construction activities with
Corporate bonds issued in the corporate Luxembourg holdcos and project financings arrangement at
the assets level. All significant asset level long-term financing arrangements are supported locally and
covered by the cash flows expected from the power plants when operational. The Group has, to the
extent available at acceptable terms, utilized non-recourse debt to fund a significant portion of the
capital expenditures and investments required to construct and acquire its electric power plants and
related assets.
A rolling cash flow forecast of the Group’s liquidity requirements is prepared to confirm sufficient cash
is available to meet operational needs and to comply with borrowing limits or covenants. Such
forecasting takes into consideration the future debt financing strategy, covenant compliance,
compliance with internal statement of financial position ratio targets and, if applicable external
regulatory or legal requirements – for example, cash restrictions.
The subsidiaries are separate and distinct legal entities and, unless they have expressly guaranteed any
of the holding company indebtedness, have no obligation, contingent or otherwise, to pay any amounts
due pursuant to such debt or to make any funds available whether by dividends, fees, loans or other
payments.
Some of the Group’s subsidiaries have given guarantees on the credit facilities and outstanding debt
securities of certain holding companies in the Group.
The table below analyzes the Group’s financial liabilities into relevant maturity groupings based on the
remaining period to the contractual maturity date:
In $ millions
Less than 1
year
Between 1
and 5 years
Over 5 years
Total
Year ended December 31, 2021
1,107.2
2,303.1
1,776.2
5,186.5
Borrowings (1)
349.1
2,132.8
1,710.3
4,192.2
Trade and other payables
597.0
-
-
597.0
Derivative financial instruments
26.3
43.7
27.8
97.8
IFRS 16 lease liabilities
3.9
15.8
10.4
30.2
Other current liabilities
130.8
-
-
130.8
Other non current liabilities
-
110.8
27.7
138.5
Year ended December 31, 2022
1,485.7
2,622.2
1,016.5
5,124.4
Borrowings (2)
411.8
2,476.1
989.3
3,877.2
Trade and other payables
849.0
-
-
849.0
Derivative financial instruments
16.0
19.2
2.9
38.1
IFRS 16 lease liabilities
5.4
21.7
8.1
35.2
Other current liabilities (3)
203.5
-
-
203.5
Other non current liabilities (3)
-
105.2
16.2
121.4
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
99
(1) Borrowings represent the outstanding nominal amount (note 1.30). Short-term debt of $349.1
million as of December 31, 2021 related to the short-term portion of long-term financing that matured
within the next 12 months, that was repaid using cash on hand and cash received from operations.
(2) Borrowings represent the outstanding nominal amount (note 1.30). Short-term debt of $411.8
million as of December 31, 2022 relates to the short-term portion of long-term financing that matures
within the next 12 months, that we expect to repay using cash on hand and cash received from
operations.
(3) Other current liabilities and Other non current liabilities as presented in notes 1.35 and 1.31
respectively, excludes IFRS 16 lease liabilities, other taxes payable and deferred credits.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
100
The table below analyzes the Group’s forecasted interest to be paid into relevant maturity groupings
based on the interest’s maturity date:
Year ended December 31, 2021
In $ millions
Less than 1
year
Between 1
and 5 years
Over 5 years
Total
Forecast interest expense to be paid
176.0
533.6
339.6
1,049.2
Year ended December 31, 2022
In $ millions
Less than 1
year
Between 1
and 5 years
Over 5 years
Total
Forecast interest expense to be paid
175.7
458.9
207.0
841.6
The Group’s forecasts and projections, taking into account reasonably possible changes in operating
performance, indicate that the Group has sufficient financial resources, together with assets that are
expected to generate free cash flow to the Group. As a consequence, the Group has a reasonable
expectation to be well placed to manage its business risks and to continue in operational existence for
the foreseeable future (at least for the 12 month period from the approval date of these financial
statements). Accordingly, the Group continues to adopt the going concern basis in preparing the
consolidated financial statements.
Capital risk management
The Company considers its capital and reserves attributable to equity shareholders to be the
Company’s capital.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern while providing adequate returns for shareholders and benefits for other stakeholders
and to maintain a capital structure to optimise the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares, sell assets to reduce debt. It may
also increase debt provided that the funded venture provides adequate returns so that the overall
capital structure remains supportable.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
101
1.20.
Derivative financial instruments
The Group uses interest rate swaps to manage its exposure to interest rate movements on borrowings,
foreign exchange forward contracts and option contracts to mitigate currency risk, a financial swap in
our Mexican CHP business to protect power purchase agreements and cross currency swap contracts
in the Cap des Biches project in Senegal to manage both currency and interest rate risks. The fair value
of derivative financial instruments are as follows:
December 31,
December 31,
2022
2021
In $ millions
Assets
Liabilities
Assets
Liabilities
Interest rate swaps - Cash flow hedge (1)
80.9
-
3.7
63.3
Cross currency swaps - Cash flow hedge (2)
9.8
-
-
11.1
Foreign exchange forward contracts - Trading (3)
0.4
-
0.8
0.0
Option contracts - not in hedge relationships
-
-
-
-
Financial swap on commodity (4)
0.2
1.6
0.6
-
Fixed margin swap(5)
-
36.6
-
23.4
Other (6)
6.1
-
10.8
-
Total
97.3
38.1
16.0
97.8
Less non-current portion:
Interest rate swaps - Cash flow hedge
53.1
-
3.7
45.5
Cross currency swaps - Cash flow hedge
6.5
-
-
10.1
Foreign exchange forward contracts - Trading
-
-
0.1
-
Option contracts - not in hedge relationships
-
-
-
-
Financial swap on commodity
0.2
-
0.3
-
Fixed margin swap
-
22.1
-
15.8
Other
2.0
-
5.8
-
Total non-current portion
61.9
22.1
9.9
71.5
Current portion
35.4
16.0
6.1
26.3
(1) Interest rate swaps are used to hedge floating rate borrowings such that in effect the Group will be
paying interest at a fixed rate. The fair value of the interest rate swaps mostly relate to contracts in
Italy, Mexico and Austria for asset $53.0 million (December 31, 2021: to contracts in Mexico for
liability $51.2 million) maturing between December 2026 and December 2035. The increase in fair
value of the Interest rate swaps is primarily due to the increase in floating interest rates. Interest rate
swaps are hedge accounted and as a result changes in fair value are recognized in other comprehensive
income.
(2) In 2015, the Group entered into cross currency swaps in our Cap des Biches project in Senegal. The
fair value of the instruments as of December 31, 2022 amounts to asset $9.8 million (December 31,
2021: liability $11.6 million) maturing in July 2033. Currency swaps are hedge accounted and as a
result changes in fair value are recognized in other comprehensive income.
(3) The Group has executed a series of offsets to protect in value, in USD terms, of EUR-denominated
expected distributions. The EUR-denominated distributions have been hedged using forward
exchange contracts with a fair value of asset $0.4 million and maturity in January 2024 (December 31,
2021: EUR-denominated distributions with a fair value of asset $0.2 million and BRL-denominated
distributions with fair value of asset $0.6 million). Hedge accounting is not applied to EUR/USD
foreign exchange forward contracts, as a result changes in fair value are recognized in the consolidated
statement of income.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
102
(4) The Group entered into a financial swap related to our Mexican CHP business to protect one
purchase power agreement against the variations of the natural gas price maturing in April 2024.
(5) CHP Mexico entered into fixed margin swap agreements with the seller’s affiliates in order to
protect certain power purchase agreements against variations in the CFE tariffs (electricity prices). The
cash flows hedged amount to around $40 million of annual revenue over the next 8 years.
(6) Contract derivative recognized on acquisition of Western Generation in 2021.
The notional amount of derivative financial instruments:
- the outstanding interest rate swap contracts and cross currency swap qualified as cash-flow hedge
amounted to $1,422.4 million as of December 31, 2022 (December 31, 2021: $1,231.2 million), bearing
interest ranging between –0.15% and 4.58% as of December 31, 2022 (December 31, 2021: -0.15% and
4.58%).
- the outstanding foreign exchange forward and option contracts amounted to $4.7 million as of
December 31, 2022 (December 31, 2021: $16.5 million); and
- the commodity swap (gas) relates to one PPA in our Mexican CHP plant amounting to $12.3 million
as of December 31, 2022 (December 31, 2021: $2.1 million).
The Group recognized in Net Finance costs a loss in respect of changes in fair value of derivatives
listed above of $11.6 million in the year ended December 31, 2022 (December 31, 2021: gain of $21.7
million) and a loss of $0.2 million in the year ended December 31, 2022 in relation to settled positions
(December 31, 2021: gain of $2.4 million).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
103
1.21.
Fair value measurements
Fair value measurements of financial instruments are presented through the use of a three-level fair
value hierarchy that prioritizes the valuation techniques used in fair value calculations. The Group’s
policy is to recognize transfers into and out of fair value hierarchy levels as at the end of the reporting
period.
The levels in the fair value hierarchy are as follows:
-
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the Group has the ability to access at the measurement date.
-
Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly or indirectly.
-
Level 3 inputs are unobservable inputs for the asset or liability.
There were no transfers between fair value measurement levels between December 31, 2021 and
December 31, 2022.
When measuring our interest rate, cross currency swaps and foreign exchange forward and option
contracts at fair value on a recurring basis at both December 31, 2022 and December 31, 2021, we have
measured these at level 2 in the fair value hierarchy with the exception of the fixed margin swap and
contract derivative which are level 3. The fair value of those financial instruments is determined by
using valuation techniques. These valuations techniques maximize the use of observable data where it
is available and rely as little as possible on entity specific estimates.
The Group uses a market approach as part of its available valuation techniques to determine the fair
value of derivatives. The market approach uses prices and other relevant information generated from
market transactions.
The Group’s finance department performs valuation of financial assets and liabilities required for
financial reporting purposes as categorized at levels 2 and 3. The Group’s derivatives are interest rate
swaps, foreign exchange forward contracts, option contracts, commodity swap contract, fixed margin
swap in our Mexican CHP business, contract derivative recognized on acquisition of Western
Generation and cross currency swap contracts in our Cap des Biches project in Senegal.
The change in the fair value of the fixed margin swap since December 31, 2021 of $13.2 million is
driven by the movement of market inputs, in particular the CFE Tariff, accounting for $26.3 million,
the net foreign exchange differences, accounting for $12.9 million and the natural gas price,
accounting for -$23.0 million of the total variance.
The sensitivity calculations on the CHP Mexico fixed margin swap liability show that (i) for an
increase/decrease of 5% in the USD/MXN exchange rate, the fixed margin swap liability would
decrease/increase by $6.9 million (December 31, 2021: decrease/increase by $7.1 million), (ii) for an
increase/decrease of 5% in the natural gas cost, the fixed margin swap liability will decrease/increase
by $3.2 million (December 31, 2021: decrease/increase by $4.1 million), (iii) for an increase/decrease
of 25% in discount rates, the fixed margin swap liability will decrease/increase by $1.6 million
(December 31, 2021: decrease/increase by $0.9 million), and (iv) and for an increase/decrease of 5%
in the CFE tariff, the fixed margin swap liability will increase/decrease by $9.2 million (December 31,
2021: increase/decrease by $8.8 million). For the other level 3 derivative, the contract derivative
recognized on acquisition of Western Generation, there are no reasonably possible sensitivities that
could have a material impact.
Money market funds (see note 1.27) comprise investment in funds that are subject to an insignificant
risk of changes in fair value. The fair value of money market funds is calculated by multiplying the net
asset value per share by the investment held at the balance sheet date, we have measured these at level
2 in the fair value hierarchy.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
104
1.22.
Financial instruments by category
In $ millions
Financial asset category
As at December 31, 2021
Financial
assets at
amortized
costs
Assets at fair
value through
profit and loss
Derivative used
for hedging
Total net book
value per balance
sheet
Derivative financial instruments
-
0.8
15.2
16.0
Finance lease and financial concession assets
402.7
-
-
402.7
Trade and other receivables (1)
264.2
-
-
264.2
Other current assets
30.9
-
-
30.9
Other non-current assets (1)
52.6
-
-
52.6
Cash and cash equivalents
369.1
-
-
369.1
Total
1,119.5
0.8
15.2
1,135.5
In $ millions
Financial asset category
As at December 31, 2022
Financial
assets at
amortized
costs
Assets at fair
value through
profit and loss
Derivative used
for hedging
Total net book
value per balance
sheet
Derivative financial instruments
-
0.4
96.9
97.3
Finance lease and financial concession assets
369.4
-
-
369.4
Trade and other receivables (1)
311.4
-
-
311.4
Other current assets
15.8
-
-
15.8
Other non-current assets (1)
40.8
-
-
40.8
Cash and cash equivalents
411.1
98.5
-
509.6
Total
1,148.5
98.9
96.9
1,344.3
In $ millions
Financial liability category
As at December 31, 2021
Liabilities at
fair value
through profit
and loss
Other financial
liabilities at
amortized cost
Derivative used
for hedging
Total net book
value per balance
sheet
Borrowings
-
4,176.1
-
4,176.1
Derivative financial instruments
23.4
-
74.4
97.8
Trade and other payables
-
597.0
-
597.0
Other current liabilities (1)
-
134.8
-
134.8
Other non current liabilities
-
164.7
-
164.7
Total
23.4
5,072.6
74.4
5,170.4
In $ millions
Financial liability category
As at December 31, 2022
Liabilities at
fair value
through profit
and loss
Other financial
liabilities at
amortized cost
Derivative used
for hedging
Total net book
value per balance
sheet
Borrowings
-
3,824.3
-
3,824.3
Derivative financial instruments
36.6
-
1.6
38.1
Trade and other payables
-
849.0
-
849.0
Other current liabilities (1)
-
209.0
-
209.0
Other non current liabilities
-
151.2
-
151.2
Total
36.6
5,033.5
1.6
5,071.6
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
105
(1) These balances exclude receivables and payables balances in relation to taxes and deferred revenue
balance.
1.23.
Other non-current assets
December 31
In $ millions
2022
2021
Kosovo receivables (1)
21.1
22.4
Other
19.8
32.7
Total other non-current assets
40.9
55.1
(1) Mainly relates to project development costs in Kosovo. The recoverability of the contract asset has
been assessed under IFRS 9 and in the context of the arbitration disclosed in note 1.5.
1.24.
Inventories
December 31
In $ millions
2022
2021
Emission allowance
643.9
404.8
Spare parts
55.5
55.5
Fuel
22.4
14.2
Other
43.3
15.7
Total
765.1
490.2
Provision
(1.2)
(4.5)
Total inventories
763.9
485.7
Increase in inventories mainly relates to our Maritsa plant and the increase in emission allowances
during the year.
Decrease in provision relates to the reversal of historical inventory provisions following disposal of
diesel stock.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
106
1.25.
Trade and other receivables
December 31
In $ millions
2022
2021
Trade receivables - gross
165.4
106.8
Accrued revenue (unbilled)
131.3
152.6
Provision for impairment of trade receivables
(13.7)
(3.4)
Trade receivables - Net
283.0
256.0
Other taxes receivables
37.1
34.9
Other receivables
28.5
8.1
Trade and other receivables
348.5
299.0
All trade and other receivables are short term and the net carrying value of trade receivables is
considered a reasonable approximation of the fair value. The ageing of trade receivables – net is
presented in note 1.19.
All trade and other receivables are pledged as security in relation to the Group’s project financing.
1.26.
Other current assets
December 31
In $ millions
2022
2021
Prepaid expenses
20.5
19.7
Advances to suppliers
7.8
4.2
Other (1)
23.2
36.5
Other current assets
51.6
60.4
(1) Primarily corresponds to deposits in our Arrubal and Mexico CHP plants.
1.27.
Cash and cash equivalents
Certain restrictions on our cash and cash equivalents have been primarily imposed by financing
agreements or long term obligations. They mainly include short-term security deposits kept as
collateral and debt service reserves that cover short-term repayments and which meet the definition of
cash and cash equivalents. Money market funds comprise investments in funds that are subject to an
insignificant risk of changes in fair value. 76.9% of our cash and cash equivalents as of December 31,
2022 is pledged as security in relation with the Group’s project financings (December 31, 2021: 77.1%);
cash and cash equivalents includes $70.0 million as of December 31, 2022 (December 31, 2021: $81.8
million) of cash balances relating to debt service reserves required by project finance agreements and
$98.5 million in money market funds (December 31, 2021: $nil).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
107
1.28.
Equity
Issued capital
Issued capital of the Company amounted to $8.8 million as at 31 December 2022 (2021: $8.9 million).
Allotted, authorized, called up and fully
paid
Number
Nominal
value
£ million
$ million
As at 31 December 2021
670,712,920
0.01
6.7
8.9
As at 31 December 2022
663,048,789
0.01
6.6
8.8
During the year the Company paid dividends of $126.1 million (2021: $114.5 million).
Years ended December 31
In $ millions
2022
2021
Declared during the financial year:
Final dividend for the year ended 31 December 2020: 4.0591 US cents per
share
-
26.6
Interim dividends for the year ended 31 December 2021: 13.3950 US cents
per share
-
87.9
Final dividend for the year ended 31 December 2021: 4.44650 US cents per
share
29.3
-
Interim dividends for the year ended 31 December 2022: 14.7345 US cents
per share
96.8
-
Total dividends provided for or paid
126.1
114.5
Treasury shares
On 1 April 2020 the Company announced a buyback programme of up to £30 million of
ContourGlobal plc ordinary shares of £0.01 each ("Shares"), to initially run from 1 April 2020 to 30
June 2020, subsequently extended to 30 September 2020 then further extended to December 31, 2020
and then to March 31, 2021.
During the year ended December 31, 2021, the Company repurchased 2,624,774 treasury shares at an
average price of 208.4 pence per share for an aggregate amount of GBP5.5 million ($7.4 million),
representing 0.40% of its share capital and used 427,440 shares in respect of the 2018 Long Term
Incentive Plan. Since the beginning of the buyback programme, the Company repurchased a net
amount of 14,572,065 treasury shares, representing 2.17% of its share capital and a cumulative
consideration paid of $37.8 million.
During 2022, 6,907,934 treasury shares were utilized relating to accelerated vesting of long term
incentive plans. The remaining 7,664,131 shares were then cancelled, following the delisting of the
Company from the London Stock Exchange on December 21, 2022.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
108
1.29.
Non-controlling interests
The tables below provide summarized financial information for each subsidiary that has non-
controlling interests that are material to the Group.
The amounts disclosed for each subsidiary are before inter-company eliminations.
In $
millions
Year ended December 31, 2021
Non-
controlling
interest
CG assets
Accumul
ated NCI
(Loss)/Profit
allocated to
NCI
Dividends
paid to NCI
Distribution
paid to NCI
Contribution
received from
NCI
Proportionate
adjusted
EBITDA
NCI(1)
Electrobras
(49%)
Chapadas I
(Wind
Brazil)
15.0
(5.2)
-
-
-
5.2
Electrobras
(49%)
Chapadas
II (Wind
Brazil)
32.0
(2.8)
-
-
-
6.9
NEK (27%)
Maritsa
(Bulgaria)
53.3
-
19.32
-
34.5
CG Aguila
Holdings
(20%)
Brazil Hydro
and Brazil
Solution
10.5
6.6
1.0
-
12.3
EIP Energy
Infrastructure
Holding
(49%)
Italy Solar
18.1
-
-
15.0
17.5
17.1
EIP Energy
Infrastructure
Holding
(49%)
Spain CSP
17.0
(2.0)
-
55.8
-
57.6
Energie
Burgenland
and DH
Energie (38%)
Deutsch
Haslau
(Austria
Wind)
6.9
0.3
0.1
0.4
-
1.7
Other
8.7
4.5
2.4
8.0
-
13.9
Total
161.5
1.4
3.5
98.5
17.5
149.2
(1) Represents the non-controlling interest portion included in the Adjusted EBITDA, i.e., the
difference between the Adjusted EBITDA and Proportionate adjusted EBITDA.
(2) Only reflects the payments of the Debt to NCI in our Maritsa asset disclosed in note 1.31.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
109
In $
millions
Year ended December 31, 2022
Non-
controlling
interest
CG assets
Accumul
ated NCI
(Loss)/Profit
allocated to
NCI
Dividends
paid to NCI
Distribution
paid to NCI
Contribution
received from
NCI
Proportionate
adjusted
EBITDA
NCI(1)
Electrobras
(49%)
Chapadas I
(Wind
Brazil)
17.9
(2.0)
-
-
3.9
7.6
Electrobras
(49%)
Chapadas
II (Wind
Brazil)
35.4
(1.1)
-
-
2.2
8.0
NEK (27%)
Maritsa
(Bulgaria)
53.3
-
-
16.62
-
32.9
CG Aguila
Holdings
(20%)
Brazil Hydro3
and Brazil
Solution
20.7
13.9
17.6
-
2.3
EIP Energy
Infrastructure
Holding
(49%)
Italy Solar
6.8
0.4
1.3
6.2
-
19.8
EIP Energy
Infrastructure
Holding
(49%)
Spain CSP
13.4
1.2
4.7
53.0
-
53.6
Energie
Burgenland
and DH
Energie (38%)
Deutsch
Haslau
(Austria
Wind)
7.1
0.5
0.3
0.7
-
1.9
Other
1.5
2.5
3.3
24.4
-
14.8
Total
135.4
22.2
23.5
118.5
6.1
140.9
(1) Represents the non-controlling interest portion included in the Adjusted EBITDA, i.e., the
difference between the Adjusted EBITDA and Proportionate adjusted EBITDA.
(2) Only reflects the payments of the Debt to NCI in our Maritsa asset disclosed in the note 1.31.
(3) Disposed during 2022.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
110
Set out below is summarized financial information for each subsidiary that has non-controlling
interests that are material to the Group. The amounts disclosed for each subsidiary are before inter-
company eliminations.
In $ millions
Year ended December 31, 2021
Non-controlling
interest
CG assets
Non-
current
assets
Current
assets
Non-
current
liabilities
Current
liabilities
Revenue
Profit
or
(Loss)
Electrobras (49%)
Chapadas I
(Wind Brazil)
137.0
21.0
86.5
42.2
18.5
(10.5)
Electrobras (49%)
Chapadas II
(Wind Brazil)
148.9
20.0
71.6
31.5
23.2
(5.7)
NEK (27%)
Maritsa
(Bulgaria)
253.1
509.2
55.7
481.7
706.9
49.6
CG Aguila Holdings (20%)
Brazil Hydro and
Brazil Solution
165.8
22.3
131.1
22.1
67.1
24.9
EIP Energy Infrastructure
Holding (49%)
Italy Solar
268.6
47.5
246.5
36.8
41.2
0.1
EIP Energy Infrastructure
Holding (49%)
Spain CSP
981.0
88.3
997.2
33.1
152.9
(4.1)
Energie Burgenland and
DH Energie (38%)
Deutsch Haslau
(Austria Wind)
20.8
3.3
17.1
3.4
5.1
0.8
In $ millions
Year ended December 31, 2022
Non-controlling
interest
CG assets
Non-
current
assets
Current
assets
Non-
current
liabilities
Current
liabilities
Revenue
Profit
or
(Loss)
Electrobras (49%)
Chapadas I
(Wind Brazil)
140.9
33.8
6.4
133.0
23.7
(4.1)
Electrobras (49%)
Chapadas II
(Wind Brazil)
154.0
28.8
10.8
99.4
24.4
(2.1)
NEK (27%)
Maritsa
(Bulgaria)
204.2
709.0
24.6
677.6
910.0
64.7
EIP Energy Infrastructure
Holding (49%)
Italy Solar
221.4
50.7
210.7
51.9
48.4
(1.2)
EIP Energy Infrastructure
Holding (49%)
Spain CSP
860.8
87.5
862.7
54.0
141.7
3.4
Energie Burgenland and
DH Energie (38%)
Deutsch Haslau
(Austria Wind)
19.8
2.7
15.0
3.4
5.5
1.4
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
111
In $ millions
Year ended December 31, 2021
Non-controlling interest
CG assets
Net cash generated by
operating activities
Net cash generated by
investing activities
Net cash generated by
financing activities
Electrobras (49%)
Chapadas I (Wind
Brazil)
16.6
(3.2)
(15.5)
Electrobras (49%)
Chapadas II
(Wind Brazil)
16.5
(2.8)
(14.3)
NEK (27%)
Maritsa
(Bulgaria)
97.4
(11.3)
(90.9)
CG Aguila Holdings (20%)
Brazil Hydro and
Brazil Solution
14.1
(17.9)
1.4
EIP Energy Infrastructure
Holding (49%)
Italy Solar
35.8
(23.0)
(6.1)
EIP Energy Infrastructure
Holding (49%)
Spain CSP
140.5
(4.6)
(111.0)
Energie Burgenland and DH
Energie (38%)
Deutsch Haslau
(Austria Wind)
4.0
-
(4.1)
In $ millions
Year ended December 31, 2022
Non-controlling interest
CG assets
Net cash generated by
operating activities
Net cash generated by
investing activities
Net cash generated by
financing activities
Electrobras (49%)
Chapadas I (Wind
Brazil)
19.0
(0.1)
(9.4)
Electrobras (49%)
Chapadas II
(Wind Brazil)
18.1
(1.9)
(10.3)
NEK (27%)
Maritsa
(Bulgaria)
97.4
(11.3)
(93.4)
EIP Energy Infrastructure
Holding (49%)
Italy Solar
33.2
33.7
(71.5)
EIP Energy Infrastructure
Holding (49%)
Spain CSP
144.2
(11.6)
(123.1)
Energie Burgenland and DH
Energie (38%)
Deutsch Haslau
(Austria Wind)
4.9
-
(5.0)
Considering the different natures of cash transactions with Non controlling interests (“NCI”), different
categories are presented in the Consolidated statement of cash flows:
- Cash distribution to non-controlling interests: only reflects the payments done as payment of the
Debt to NCI in our Maritsa asset disclosed in the Note 1.31.
- Dividends paid to NCI: reflects the payments to NCI in the form of dividends payments.
- Transactions with NCI (cash received): reflects the cash received from NCI usually in the form of
capital contributions and proceeds from sell down transactions.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
112
- Transactions with NCI (cash paid): reflects the payments/distributions to NCI in a form other than
dividends (principally as capital reduction, shareholders’ loans principal and interest repayments or
payment for acquisition of non controlling interests).
Transactions with NCI are presented as financing activities in accordance with IAS 7.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
113
1.30.
Borrowings
Certain power plants have financed their electric power generating projects by entering into external
financing arrangements which require the pledging of collateral and may include financial covenants
as described below. The financing arrangements are generally non-recourse (subject to certain
guarantees) and the legal obligation for repayment is limited to the borrowing entity.
The Group’s principal borrowings with a nominal outstanding amount of $3,877.2 million in total as of
December 31, 2022 (December 31, 2021: $4,192.2 million) primarily relate to the following:
Type of borrowing
Currency
Project
Financing
Issue
Maturity
Outstanding
nominal
amount
December 31,
2022
($ million)
Outstanding
nominal
amount
December 31,
2021
($ million)
Rate
Corporate bond (1)
EUR
Corporate
Indenture
2020
2026
2028
760.1
807.5
2.75%, 3.125%
Corporate bond (1)
EUR
Corporate
Indenture
2018
2025
428.2
454.9
4.125%
Loan Agreement
USD
Mexican CHP
2019
2026
438.6
475.4
USD-LIBOR + 2.5%
Loan Agreement (2)
USD
US and
Trinidad and
Tobago
2022
2027
305.5
186.5
SOFR 3M + 2.0%
Loan Agreement
EUR
Spanish CSP
2018
2026
2038
283.5
338.8
Fixed 5.8% and 6.7%
Loan Agreement
EUR
Spanish CSP
2018
2036
267.4
305.2
3.438%
Project bond
USD
Inka
2014
2034
157.9
165.8
6.0%
Loan agreement
EUR
Solar Italy
2019
2030
152.9
181.7
EURIBOR 6M + 1.7%
Loan Agreement (3)
EUR
Spanish CSP
2021
2028
2034
140.1
159.1
EURIBOR + 1.8%
Fixed + 2.5%
Loan Agreement
EUR
Austria Wind
2013
2020
2027
2033
129.6
109.6
EURIBOR 6M +
2.45% and 4.305% /
EURIBOR 3M+1.95%
and 4.0% / EURIBOR
6M +1.55%
Loan Agreement /
Debentures (4)
BRL
Chapada I
2015
2032
2029
106.8
103.7
TJLP + 2.18% / IPCA
+ 8%
Loan Agreement
USD
Vorotan
2016
2034
105.8
116.2 USD-LIBOR + 4.625%
Loan Agreement (5)
USD
French
Caribbean
2022
2027
102.2
115.3
SOFR 3M + 3.5%
Loan Agreement
USD
Cap des
Biches
2015
2033
85.5
91.0
USD-LIBOR BBA
(ICE)+3.20%
Loan Agreement (4)
BRL
Chapada II
2016
2032
70.2
72.1
TJLP + 2.18%
Loan Agreement (5)(6)
BRL
Asa Branca
2021
2032
63.9
58.9
TJLP+ 6.25%
Loan Agreement
USD
Togo
2008
2028
63.2
72.3
7.16% (Weighted
average)
Loan Agreement
EUR
Vorotan
2016
2034
44.3
51.4
0.75% - 4.12%
Loan Agreement
EUR
Maritsa
2006
2022
-
69.2
EURIBOR + 0.125%
Other Credit facilities
(individually < $50
million)
Various
Various
2012 -
2021
2021 -
2034
171.5
257.6 Mix of fix and variable
rates
Total
3,877.2
4,192.2
(1) Corporate bond issued by ContourGlobal Power Holdings S.A. in July 2018 for €750 million dual-
tranche, includes €450 million bearing a fixed interest rate of 3.375% maturing in 2023 and €300
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
114
million bearing a fixed interest rate of 4.125% maturing in 2025. In July 2019, a new €100 million
corporate bond tap was added to the €300 million tranche bearing the same fixed interest rate of
4.125% maturing also in 2025. On December 17, 2020 two new Corporate bonds were issued by
ContourGlobal Power Holdings S.A. for €410 million aggregate principal amount of 2.75% senior
secured notes due in 2026 and €300 million aggregate principal amount of 3.125% senior secured
notes due in 2028. On January 6, 2021 the Group redeemed the €450 million ($549.7 million)
aggregate principal amount of its 3.375% senior secured notes due 2023.
(2) On February 18, 2021, the Group acquired a Thermal portfolio in the United States of America and
Trinidad and Tobago representing a total of 1,502 MW. The legal entity Lea Power acquired as per this
transaction issued 6.595% Senior Secured Notes under an indenture dated July 24, 2007 which are
due to mature in June 2033. On June 15, 2022, Lea Power Partners, LLC entered into a $410.6 million
credit facilities consisting of (a) a term facility in an aggregate principal amount of $313.5 million (b) a
revolving facility in an aggregate principal amount of $83.5 million and (c) a letter of credit facility for
debt service reserve, in an amount equal to $13.6 million. The Facility bears interest at SOFR + 2.0%
per year and matures in 2027.
(3) On May 14, 2021, Termosolar Alvarado entered into a €161.6 million ($195.2 million) facilities
agreement with Unicredit Bank AG, Banco De Crédito Social Cooperativo, S.A., Rivage Euro Debt
Infrastructure 3, Rivage Richelieu 1 Fcp, L7 Investment Holdings LP, refinancing the Alvarado facility.
The Facility bears interest at EURIBOR plus 1.8% and fixed 2.5% per year and matures in 2028 and
2034.
(4) Taxa de Juros de Longo Prazo (“TJLP”) represents the Brazil Long Term Interest Rate, which was
approximately 7.2% at December 31, 2022 (December 31, 2021: 5.32%).
(5) On September 29, 2021, ContourGlobal Luxembourg Sarl entered into a $120.0 million loan
agreement with the Bank of Nova Scotia refinancing the Caribbean assets. The agreement bears
interest at LIBOR plus 3.5% and matures in 2026. On May 31, 2022 ContourGlobal Luxembourg Sarl
entered into a first amendment to the previous credit agreement with the Bank of Nova Scotia
amending the maturity to 2027 and interest rate to SOFR 3M +3.5% from the original credit
agreement.
(6) On July 12, 2021, Asa Branca Holding S.A. entered into a R$315.0 million ($59.9 million)
debentures agreement refinancing the Asa Branca loan agreement. The loan agreement bears interest
at TJLP plus 6.25% and matures in 2032.
With the exception of our corporate bond and revolving credit facility, all external borrowings relate to
project financing. Such project financing are generally non-recourse (subject to certain guarantees).
The carrying amounts of the Group’s borrowings are denominated in the following currencies:
Years ended December 31
Restated
In $ millions
2022
2021
US Dollars
1,266.8
1,331.2
Euros
2,280.5
2,590.0
Brazilian Reals
261.2
254.9
Other
15.8
-
Total
3,824.3
4,176.1
Non-current borrowings
3,399.5
3,809.1
Current borrowings
424.8
367.0
Total
3,824.3
4,176.1
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
115
The carrying amounts of the Group’s borrowings denominated in foreign currencies at December 31,
2021 have been restated to reclassify two loans previously misclassified.
The carrying amounts and fair value of the current and non-current borrowings are as follows:
Carrying amount
Fair Value
Years ended December 31,
Years ended December 31,
In $ millions
2022
2021
2022
2021
Credit facilities
2,482.5
2,750.6
2,474.8
2,876.6
Bonds
1,341.8
1,425.5
1,240.5
1,456.8
Total
3,824.3
4,176.1
3,715.3
4,333.4
Net debt as of December 31, 2022 and 2021 is as follows:
Years ended December 31
In $ millions
2022
2021
Cash and cash equivalents
509.6
369.1
Borrowings - repayable within one year
(411.8)
(349.0)
Borrowings - repayable after one year
(3,465.4)
(3,843.2)
Interest payable, deferred financing costs and other
52.9
16.1
IFRS 16 liabilities
(35.2)
(30.2)
Net debt
(3,349.9)
(3,837.2)
Cash and cash equivalents
509.6
369.1
Borrowings - fixed interest rates (1)
(3,562.8)
(3,762.6)
Borrowings - variable interest rates
(314.4)
(429.6)
Interest payable, deferred financing costs and other
52.9
16.1
IFRS 16 liabilities
(35.2)
(30.2)
Net debt
(3,349.9)
(3,837.2)
(1) Borrowings with fixed interest rates taking into account the effect of interest rate swaps.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
116
In $ millions
Cash and
cash
equivalents
Borrowings
IFRS 16
liabilities
Total net
debt
As of January 1,2021
1,396.9
(4,830.3)
(32.9)
(3,466.3)
Cash-flows
(995.7)
-
-
(995.7)
Acquisitions / disposals
25.5
(277.4)
-
(251.9)
Proceeds of borrowings
-
(790.7)
-
(790.7)
Repayments of borrowings
-
1,304.2
-
1,304.2
Repayments of borrowings and interests to NCI(1)
-
60.4
-
60.4
Liabilities held for sale
-
136.5
-
136.5
Currency translations differences and other
(57.6)
221.2
-
163.6
IFRS 16 liabilities net movement(2)
-
-
2.7
2.7
As of December 31,2021
369.1
(4,176.1)
(30.2)
(3,837.2)
Cash-flows
77.7
-
-
77.7
Acquisitions / disposals
17.3
(15.8)
-
1.5
Proceeds of borrowings
-
(396.4)
-
(396.4)
Repayments of borrowings
-
565.6
-
565.6
Repayments of borrowings and interests to NCI(1)
-
35.4
-
35.4
Liabilities held for sale
-
-
-
-
Currency translations differences and other
45.5
163.0
-
208.5
IFRS 16 liabilities net movement(2)
-
(5.0)
(5.0)
As of December 31,2022
509.6
(3,824.3)
(35.2)
(3,349.9)
(1) Refers to repayment of shareholders loans principal and interest with NCI included in the
consolidated statement of cash flows on the line “Transactions with non-controlling interest holders,
cash paid” related to CSP Spain (note 1.29).
(2) IFRS 16 liabilities net movement includes nil million for assets acquired through business
combination (2021 -$1.4 million), -$12.8 million lease additions (2021: -$1.4 million), $6.9 million
lease payments (2021: $6.0 million), nil million for assets recognized as held for sale (2021: -$0.3m)
and $0.9 million currency translation adjustment (2021: -$0.2 million).
Debt Covenants and restrictions
The Group’s borrowing facilities are subject to a variety of financial and non financial covenants. The
most significant financial covenants include debt service coverage ratio; leverage ratio; debt to equity
ratio; equity to assets ratio; loan life coverage ratio and decreasing senior debt to total debt ratio.
Non-financial covenants include the requirement to maintain proper insurance coverage, enter into
hedging agreements, maintain certain cash reserves, restrictions on dispositions, scope of the
business, and mergers and acquisitions.
These covenants are monitored appropriately to ensure that the contractual conditions are met.
A technical breach in a minor condition regarding the number of authorized offshore bank accounts
has been identified in relation to the financing of our Cap des Biches asset. The Company has
performed a technical analysis and concluded that it has an unconditional right to defer payment for at
least 12 months and hence $79.9 million of debt is presented as non current in line with the contracted
repayment schedule.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
117
The Company has a financing agreement with the Brazilian Development Bank (BNDES) which has
covenants clauses. As established in this agreement, the Company calculated the Debt Service
Coverage Ratio (DSCR) for the closing of December 31st, 2022 and the minimum ratio required was
not reached. The Company requested the Waiver Letter from the BNDES, however this document has
not yet been received. Therefore, $163.7 million of debt was classified in current liabilities on
December 31st, 2022.
Securities given
The Corporate bond, Revolving Credit Facility, HSBC LC facility and UniCredit LC facility at CG Power
Holdings level are secured by pledges of shares of certain subsidiaries (ContourGlobal LLC,
ContourGlobal Spain Holding Sàrl, ContourGlobal Bulgaria Holding Sàrl, ContourGlobal Latam
Holding Sàrl, ContourGlobal Hummingbird UK Holdco I Limited, ContourGlobal Hummingbird US
Holdco Inc., ContourGlobal Terra Holdings Sàrl and ContourGlobal Worldwide Holdings Sàrl), and
guarantees from ContourGlobal Limited, and the above subsidiaries.
Guarantees are also given to Goldman Sachs, Credit Suisse International, Citibank Europe plc, HSBC
Bank USA National Association, JP Morgan Securities plc, and Mizuho Capital Markets LLC in
relation to the hedging instruments existing at ContourGlobal Power Holdings S.A.
Project
financing
Facility
Maturity
Security / Guarantee given
CSP Spain
(excluding
Alvarado)
Long Term
Facility
2036 First ranking security interest in the shares of all the entities in the borrower group plus
pledge of receivables and project accounts. Assignment of insurances.
Alvarado 2021
Long Term
Facility
2034
Pledge over all the shares of the Borrower, Pledge over the Borrower's Accounts, Pledge
over all credit rights of the Borrower under Major Project Documents and the Hedging
Agreements to which it is a party, Promissory mortgage over the Project assets.
ContourGlobal Limited guarantee in case of Tax Group Exit.
Asa Branca 2021
Debentures
2033 Chattel mortgage of shares of the Issuer and the SPE, fiduciary assignment of all
dividends as a result of Issuer's and the SPE's shares.
Austria Wind
Refinancing 2020
Long Term
Facility
2033 Share pledge on the Borrower and each Obligor, pledge of receivables, pledge over
accounts, step in rights agreements in Project Contracts.
Berg 2021
Long Term
Facility
2035
First ranking security over the shares held in the Borrower, Assignment over the
Borrower's rights under Project Documents, pledge over project accounts, pledge over
the windfarm superstructures (Superädifikate).
Caribbean 2021
Long Term
Facility
2026
Pledge of shares, Pledge over project accounts, Pledge of Receivables
ContourGlobal Limited guarantee on Debt service reserve facility and Working Capital
facility.
Inka
Senior secured
notes
2034 Pledge of shares of Energia Eolica SA, EESA assets, accounts, assignment of receivables
of the project contracts and insurances.
Chapada I
Long Term
Facility
2032
Pledge of shares of Chapada I SPVs and Holding, SPVs assets, accounts, assignment of
receivables of the project contracts and insurances.
ContourGlobal Limited guarantee to LC providers in case Chapada I cannot serve debt.
Maritsa
Long Term
Facility (fully
repaid in 2022)
n/a
Whilst the facility was fully repaid in 2022, the pledge of the shares was still in place at
year end and is expected to be released in 2023. Pledge includes any dividends on the
pledged shares and the entire commercial enterprise of ME-3, including the receivables
from the ME-3 PPA.
Vorotan
Long Term
Facility
2034 Pledge of shares of ContourGlobal HydroCascade CSJC assets and project accounts,
assignment of receivables arising from the project contracts and insurances.
Chapada II
Long Term
Facility
2032 Pledge of shares of Chapada II SPVs and Holding, SPVs assets, accounts, assignment of
receivables of the project contracts and insurances.
Cap des Biches
Credit Facility
2033
Pledge over CG Senegal and CG Cap des Biches Sénégal shares, pledge over the project
accounts, charge over the assets of CG Cap des Biches Sénégal, assignment of receivables
of CG Cap des Biches Sénégal and the insurance policies, direct agreement on the project
contracts.
Togo
Loan agreement
2028
ContourGlobal Limited guarantee on cash shortfall for Debt service, and (i) a pledge of
CG Togo LLC and CG Togo SA capital stock, (ii) a charge on equipment, material and
assets of CG Togo SA, (iii) the assignment of receivables of CG Togo SA, (iv) the
assignment of insurance policies, and (v) a pledge on the project accounts.
Kivuwatt
Financing
Arrangement
2026
- Secured by, among others, (i) KivuWatt Holdings’ pledge of all of the shares of
KivuWatt held by KivuWatt Holdings, (ii) certain of KivuWatt’s bank accounts and (iii)
KivuWatt’s movable and immovable assets.
- ContourGlobal Limited $1.2 million guarantee for the benefit of KivuWatt under the
PPA and Gas
Concession to the Government of Rwanda and to Electrogaz (outside of the loan
guarantee).
- $8.5million ContourGlobal Limited guarantee to cover DSRA as of December 31,2019.
Chapada III
Long Term
Facility
2032
Pledge of shares of Chapada III SPVs and Holding, SPVs assets, accounts, assignment of
receivables of the project contracts and insurances.
Corporate guarantee from ContourGlobal do Brazil Holding Ltda until Financial
Completion.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
118
Hobbs
Long Term
Facility
2027 Pledge over shares of the borrower, pledge over the project accounts, mortgage over the
assets, assignment of the insurance policies.
Mexican CHP
Long Term
Facility
2026
Pledge of the CGA I and CELCSA shares, assets and accounts, assignment of receivables
and insurance policies. $35.0m ContourGlobal Limited guarantee for the Debt Service
Reserve Account.
Raiffeisen
Windparks
Long Term
Facility
2026 Pledge of Project Accounts. Pledge of shares. Pledge of rights under Project Contracts.
Solar Italy
Long Term
Facility
2030 Pledge over Project Accounts. Pledge over shares. Assignement of Receivables of
Borrower and CG Energetica.
Solar Slovakia
Long Term
Facility
2025 Pledge over receivables. Pledge over movables. Pledge of ownership interest. Mortgage
over real estate property.
Trautsmannsdorf
Long Term
Facility
2034 Pledge of Project Accounts. Pledge of shares. Pledge of rights under Project Contracts.
Waterside
Long Term
Facility
2024
Assignment of membership interests. Assignment of rights under the Operating
Agreement. Assignment of '' Additional Membership Interests ''. Assignment of rights
appurtenant to property. Assignment of proceeds from collateral.
WGP
Long Term
Facility
2023 Pledge of stock. Pledge of Debt Securities. Pledge of receivables. Pledge of shares.
Mortgage of property.
Zistersdorf
Long Term
Facility
2027
Pledge of share. Pledge of Project property or Trumpet Area. Pledge of DSRA.
Assignment of the retention of title to the privileged portions of the Wind Turbine
Systems. Assignement of rights under Project Agreements.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
119
1.31.
Other non-current liabilities
December 31
In $ millions
2022
2021
Debt to non-controlling interest (1)
10.6
21.8
Deferred payments on acquisitions (2)
29.7
47.9
IFRS 16 lease liabilities
29.8
26.2
Other (3)
88.4
72.1
Total other non-current liabilities
158.5
168.0
(1) Debt to non-controlling interests: in 2011, the Group purchased a 73% interest in the Maritsa power
plant. NEK owns the remaining 27% of the Maritsa power plant. The shareholders’ agreement states
that all distributable results available should be distributed to shareholders, with no unconditional
right to avoid dividends. Consequently and in accordance with IAS 32 ‘Financial Instruments:
presentation’, shares held by NEK do not qualify as equity instruments and are recorded as a liability
to non-controlling interests in the Group’s consolidated statement of financial position. The debt to
non-controlling interests was recorded at fair value at the date of acquisition (in accordance with IFRS
3) using a discounted cash flow method based on management’s best estimate at that date of the future
distributable profits to the minority shareholder NEK over the period of the PPA. This debt is
discounted using a European risk free rate adjusted for the credit default swap (CDS) spread for
Bulgaria. The debt is subsequently held at amortized cost.
(2) As of December 31, 2022, deferred payments and earn-outs on acquired entities relate to deferred
payments to be made to initial developers of certain Brazil Wind assets for $12.0 million (31 December
2021: $14.7 million) and $17.7 million (31 December 2021: $16.1 million) earn out relating to the
acquisition of our Borger assets in the United States. For the Brazil Wind assets, the liability is
reviewed at each reporting date and is based on a percentage of the projected revenue generated under
the current power purchase agreements.
(3) Mainly relates to $44.9 million at 31 December 2022 (31 December 2021: $33.5 million) in relation
to Spain CSP, which represents the excess cash received based on the net market price compared to the
pre-established prices for the current regulatory period, which will be settled over future regulatory
periods. Also includes contractual obligations in Brazil, including shortfall and penalties when wind
asset generation falls below contracted PPA for $23.0 million in 31 December 2022 (31 December
2021: $14.7 million).
The change in the debt to Maritsa non-controlling interest is presented below:
December 31
In $ millions
2022
2021
Beginning of the year
32.6
46.3
Dividends paid
(16.6)
(19.3)
Unwinding of discount
-
0.9
True up of forecasted dividend
7.2
7.4
Currency translation adjustments
(2.1)
(2.7)
End of the year
21.1
32.6
Current liabilities
10.5
10.8
Non-current liabilities
10.6
21.8
As of December 31
21.1
32.6
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
120
1.32.
Provisions
In $ millions
Decommissioning /
Environmental / Maintenance
provision
Legal and
other
Total
As of January 1, 2021
45.8
18.3
64.1
Acquired through business
combination
32.8
3.1
35.9
Additions
0.7
3.3
4.0
Unused amounts reversed
(2.7)
(1.9)
(4.6)
Amounts used during the period
(1.1)
(0.7)
(1.8)
Assets held for sale
(2.6)
(2.6)
(5.2)
Currency translation differences
and other
(0.6)
(1.3)
(1.9)
As of December 31, 2021
72.3
18.3
90.6
Additions
5.5
2.9
8.4
Unused amounts reversed
(21.8)
(1.4)
(23.2)
Amounts used during the period
(3.3)
(0.4)
(3.7)
Currency translation differences
and other
2.4
(0.8)
1.6
As of December 31, 2022
55.0
18.6
73.6
Provisions have been analyzed between current and non-current as follows:
In $ millions
Decommissioning /
Environmental / Maintenance
provision
Legal and
other
Total
Current liabilities
1.2
11.7
12.9
Non-current liabilities
71.1
6.6
77.7
As of December 31, 2021
72.3
18.3
90.6
Current liabilities
0.1
12.3
12.4
Non-current liabilities
54.9
6.3
61.2
As of December 31, 2022
55.0
18.6
73.6
Site decommissioning provisions are recognized based on assessment of future decommissioning costs
which would need to be incurred in accordance with existing legislation to restore the sites and
expected to occur between 1 and 23 years.
Legal and other provisions include amounts arising from claims, litigation and regulatory risks which
will be utilized as the obligations are settled and includes sales tax and interest or penalties associated
with taxes.
Legal and other provisions have some uncertainty over the timing of cash outflows.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
121
1.33.
Share-based compensation plans
ContourGlobal long-term incentive plan
On 11 August 2022, a fifth grant of performance shares was made under the long term incentive plan
(“LTIP”) with awards over a total of 2,111,090 ordinary shares of 1 pence in ContourGlobal Limited
granted to eligible employees (the “participants”). Given the transaction was in progress at the point of
issuing these LTIPs, only one third of the plan shares would vest on completion of the KKR
transaction. The performance conditions were consistent with historical LTIPs:
i)
EBITDA condition: 50.0 % of award to the compounded annual growth rate of the Company’s
EBITDA over the Performance Period.
ii)
IRR condition: 25.0 % of award to the internal rate of return on qualifying Company projects
over the Performance Period.
iii)
LTIR condition: 25.0 % of award to the lost time incident rate of the Company over the
Performance Period.
The LTIPs are considered to be equity-settled share-based incentives, presented within selling, general
and administrative expenses in the consolidated statement of income.
The likelihood of these conditions was estimated internally taking into consideration the performance
of the business during the year and the expectation of whether or not the conditions would be met.
Awards granted during the period included dividend equivalents and hence their fair value was
estimated as being equal to the share price ($3.14) on grant date with no other assumptions being
incorporated into the valuation.
Including this grant, restricted shares were granted under the “LTIP” with awards over a total of
234,920 ordinary shares of 1 pence in ContourGlobal Limited to eligible employees (the
“participants”). These shares will vest on 11 August 2025 subject to the participant’s continued service.
The Group’s charge for equity-settled share-based incentives for the year of $2.1 million (2021: $1.9
million) has been included within Selling, general and administrative expenses in the consolidated
statement of income.
In connection with the recommended cash acquisition by Cretaceous Bidco Limited of the entire
issued and to be issued ordinary share capital of ContourGlobal, on 16 December 2022 (or 20
December 2022 in respect of Joseph C. Brandt's deferred bonus award), the performance share awards
granted for the grant periods 2020 to 2023, for 2021 to 2024, and for 2022 to 2025 granted on 11
August 2020, 17 May 2021 and 11 August 2022 respectively under the Company's Long Term Incentive
Plan (the 'Plan'), and the deferred bonus awards granted under the Plan, were subject to accelerated
vesting over such number of shares in the Company.
As a consequence, the Group recorded an accelerated vesting impact of $3.7 million recorded in
“acquisition and other transactions related items” in the consolidated statement of income.
The movements on awards made under the LTIP are as follows:
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
122
Number of shares
Outstanding as of December 31, 2020
5,427,566
Granted during the year
2,606,267
Forfeited
(425,480)
Vested
(1,170,322)
Outstanding as of December 31, 2021
6,438,031
Granted during the year
2,160,085
Forfeited
(1,524,969)
Vested
(7,073,147)
Outstanding as of December 31, 2022
-
1.34.
Trade and other payables
December 31
In $ millions
2022
2021
Trade payables
105.5
92.8
Accrued expenses
743.5
504.2
Trade and other payables
849.0
597.0
The increase mainly comes from Maritsa CO2 liabilities.
1.35.
Other current liabilities
December 31
In $ millions
2022
2021
Deferred revenue
8.1
6.4
Deferred payment on acquisition (1)
16.9
-
Other taxes payable
52.7
43.9
IFRS 16 lease liabilities
5.4
3.9
Other (2)
186.6
130.8
Other current liabilities
269.8
185.0
(1) As of December 31, 2022, deferred payments and earn-outs on acquisition relate to inventories
acquired by Spain CSP from their previous owner for $16.4 million (31 December 2021: $17.1 million
in other non-current liabilities).
(2) Mainly relates to contractual obligations in Brazil, including shortfall and penalties when wind
asset generation falls below contracted PPA for $94.8 million at December 31, 2022 (December 31,
2021: $69.4 million), Maritsa current portion of the non-controlling interest debt for $10.5 million at
December 31, 2022 (December 31, 2021: $10.8 million); Maritsa CO2 quota for $6.9 million at
December 31, 2022 (December 31, 2021: $8.6 million) and Arrubal CO2 quota for $40.9 million at
December 31, 2022 (December 31, 2021: $22.5 million).
In the case of the shortfall and penalties for the Brazilian Wind assets, there is limited estimation
uncertainty as the shortfall and penalties are calculated based on factual information, the actual power
generated.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
123
1.36.
Group undertakings
ContourGlobal Limited owns (directly or indirectly) only ordinary shares of its subsidiaries.
ContourGlobal Limited
United Kingdom
55 Baker Street, London, United Kingdom, W1U 8EW
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
ContourGlobal Hydro Cascade CJSC
100%
Armenia
AGBU building; 2/2 Meliq-Adamyan str.,0010
Yerevan, Armenia
ContourGlobal erneuerbare Energie
Europa GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
Windpark HAGN GmbH
95%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
Windpark HAGN GmbH & Co KG
95%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
Windpark Deutsch Haslau GmbH
62%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Windpark Zistersdorf
Ost GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Windpark Berg GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Windpark Scharndorf
GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Windpark
Trautmannsdorf GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Windpark Velm GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Management Europa
GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Wind Holding GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Development GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
ContourGlobal Beteiligung GmbH
100%
Austria
Fleischmarkt 1, Top 01, Vienna 1010, Austria
Carib Power SRL
100%
Barbedos
The Corporate Secretary Ltd, White Park House,
Bridgetown, Barbedos
ContourGlobal Maritsa East 3 AD
73%
Bulgaria
48 Sitnyakovo Blvd; 9-th fl., Sofia 1505, Bulgaria
ContourGlobal Operations Bulgaria AD
73%
Bulgaria
TPP ContourGlobal Maritsa East 3, Mednikarovo
village 6294, Galabovo District, Stara Zagora Region,
Bulgaria
ContourGlobal Management Sofia
EOOD
100%
Bulgaria
Serdika offices, 48 Sitnyakovo Blvd; 9-th fl., Sofia 1505,
Bulgaria
Contour Global Do Brasil Holding Ltda
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana IX Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana X Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana XI Energias
Renováveis S.A
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana XII Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana XIII Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana XV Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana XVI Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca Holding S.A.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
124
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
Tespias Geração de Energia Ltda.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca IV Energias Renováveis SA
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca V Energias Renováveis SA
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca VI Energias Renováveis SA
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca VII Energias Renováveis SA
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Asa Branca VIII Energias Renováveis
SA
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana I Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana III Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana IV Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana V Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santa Joana VII Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santo Augusto IV Energias
Renováveis S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Chapada do Piauí I Holdings S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santo Augusto III Energias
Renováveis S.A.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Ventos de Santo Augusto V Energias
Renováveis S.A.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Desenvolvimento S.A.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Chapada do Piauí II Holding S.A.
51%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
Chapada do Piauí III Holding S.A.
100%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Solutions Balsa Ltda
80%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Solutions Rio Ltda
80%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Solutions Mogi Ltda
80%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Solutions Holding Ltda
80%
Brazil
Rua James Joule, 65, conj. 161– Cidade Monções – São
Paulo -SP- BR - CEP 04576-080, Brasil
ContourGlobal Riptide Chile Holdco
SpA
100%
Chile
Av. Apoquindo 3721, Las Condes, Chile
ContourGlobal LATAM S.A.
100%
Colombia
Carrera 7 No. 74-09, Bogota, Colombia
Compañía Eléctrica de Sochagota S.A.
E.S.P.
100%
Colombia
Carrera 14 No. 20-21 Local 205A, Plaza Real, Tunja,
Colombia
ContourGlobal Solutions Holdings Ltd
100%
Cyprus
Capital Center, 2-4 Arch, Makarios III Avenue, 9th
Floor, Nicosia 1065, Cyprus
ContourGlobal Solutions Ltd
100%
Cyprus
Capital Center, 2-4 Arch, Makarios III Avenue, 9th
Floor, Nicosia 1065, Cyprus
Selenium Holdings Ltd
100%
Cyprus
Capital Center, 2-4 Arch, Makarios III Avenue, 9th
Floor, Nicosia 1065, Cyprus
ContourGlobal La Rioja, S.L
100%
Spain
Arrúbal Power Plant, Polígono Industrial El Sequero,
26150 Arrúbal, La Rioja, Spain.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
125
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
Contourglobal Termosolar Operator
S.L.
100%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
ContourGlobal Termosolar, S.L.
51%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Rústicas Vegas Altas, S.L.
51%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Termosolar Majadas, S.L.
51%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Termosolar Palma Saetilla, S.L.
51%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Termosolar Alvarado, S.L.
51%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Crasodel Spain SL
100%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
ContourGlobal CA&C Holdings S.L.
100%
Spain
Calle Orense, número 34, 7° piso - 28020 Madrid,
Spain
Energies Antilles
100%
France
8, Avenue Hoche 75008 Paris
Energies Saint-Martin
100%
France
8, Avenue Hoche 75008 Paris
ContourGlobal Saint-Martin SAS
100%
France
5 Rue du Gal de Gaulle, 8 Immeuble le Colibri
Marigot,97150 Saint-Martin
ContourGlobal Management France
SAS
100%
France
Immeuble Imagine
20-26 boulevard du Parc 92200 Neuilly-sur-Seine
ContourGlobal Worldwide Holdings
Limited
100%
Gibraltar
Hassans, Line Holdings Limited, 57/63 Line Wall
Road, Gibraltar
ContourGlobal Helios S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Solar Holdings (Italy)
S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Oricola S.r.l.
100%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Solutions (Italy) S.R.L.
100%
Italy
Via T. Grossi 2, Milan 20121, Italy
Portoenergy S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Officine Solari Barone S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Officine Solari Camporeale S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Contourglobal Mediterraneo S.r.l
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Officine Solari Aquila S.r.l.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Energetica S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Eight Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Green Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Industrial Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Light Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal One Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Sole Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Solar 6 S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
BS Energia New S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Management Italy S.R.L.
100%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Horus srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Green Hunter Group Spa
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Green Hunter Spa
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Actasol 5 S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Actasol 6 S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Cinque S.R.L.
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
126
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
Marche Solare 1 Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Spf Energy Uno Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Spf Energy Due Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
Spf Energy Tre Srl
51%
Italy
Via T. Grossi 2, Milan 20121, Italy
ContourGlobal Kosovo L.L.C.
100%
Kosovo
Anton çeta 5a 1000 Pristina Republic of Kosovo
ContourGlobal Luxembourg S.àr.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
Kani Lux Holdings S.à r.l.
80%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Africa Holdings S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Bulgaria Holding S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Spain Holding S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Latam Holding S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
Vorotan Holding S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Terra 2 S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Terra 3 S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Development Holdings
S.à r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Terra 5 S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Terra 6 S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Solutions Holdings
S.a.r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Senegal Holdings S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Terra Holdings S.à r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Power Holdings S.A.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Worldwide Holdings S.à
r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Mirror 1 S.à.r.l
51%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Mirror 2 S.à.r.l
51%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Mirror 3 S.à.r.l
51%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Spain O&M HoldCo S.à
r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Intermediate O&M S.à
r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Ursaria 3 S.à r.l.
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Mirror 7 S.à.r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Mirror 4 S.à.r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Africa Topoco S.à.r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Africa Energy S.à.r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
ContourGlobal Arrubal S.à.r.l
100%
Luxembourg
5 Rue de Strasbourg, L-2561 Luxembourg, Grand
Duchy of Luxembourg
Aero Flash Wind, S.A.P.I. DE C.V.
75%
Mexico
Boulevard agua caliente 10611, Tijuana, Baja California,
Mexico
ContourGlobal holding de generación
de energía de México
100%
Mexico
Av. Ricardo Margain Zozaya, Torre 2, Piso 12, No. ext.
335, Col. Valle del Campestre, San Pedro Garza García,
Nuevo León, C.P. 66265
ContourGlobal Servicios
Administrativos de generación
100%
Mexico
Av. Ricardo Margain Zozaya, Torre 2, Piso 12, No. ext.
335, Col. Valle del Campestre, San Pedro Garza García,
Nuevo León, C.P. 66265
ContourGlobal Servicios Operacionales
de México
100%
Mexico
Av. Ricardo Margain Zozaya, Torre 2, Piso 12, No. ext.
335, Col. Valle del Campestre, San Pedro Garza García,
Nuevo León, C.P. 66265
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
127
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
Cogeneración de Altamira, S.A. DE C.V.
100%
Mexico
Highway Tampico – Mante km 17.5, postal code 89603
- Colony Name - Puerto Industrial de Altamira, Mexico
Cogeneración de Energía Limpia De
Cosoleacaque S.A De C.V.
100%
Mexico
Building Buena Vista de Torres, without number postal
code 96340 - Colony Name - Cosoleacaque. Mexico
KivuWatt Holdings
100%
Mauritius
4th Floor, Tower A, 1CyberCity, c/o Citco (Mauritius)
Limited, Ebene, Mauritius
ContourGlobal Solutions (Nigeria) Ltd
100%
Nigeria
2nd Floor, Moji Brimmo Akewusola House, No. 4
Salvation Road Opebi, Ikeja, Nigeria
Contourglobal Bonaire B.V.
100%
Netherlands
Kaya Carlos A. Nicolaas 3 , Bonaire, Netherlands
Energía Eólica S.A.
100%
Peru
Av. Ricardo Palma 341, Office 306, Miraflores, Lima
18, Peru
ContourGlobal Peru SAC
100%
Peru
Av. Ricardo Palma 341, Office 306, Miraflores, Lima
18, Peru
Energía Renovable Peruana S.A.
100%
Peru
Av. Ricardo Palma 341, Office 306, Miraflores, Lima
18, Peru
Energía Renovable del Norte S.A.
100%
Peru
Av. Ricardo Palma 341, Office 306, Miraflores, Lima
18, Peru
ContourGlobal Solutions (Poland) Sp. Z
o.o.
100%
Poland
Warsaw (00-133) on Aleja Jana Pawła II, Poland
ContourGlobal Solutions (Ploiesti)
S.R.L.
100%
Romania
Ploeisti, 285 Gheorge Grigore, Cantacuzino street,
Prahova County, Ploeisti, Romania
Petosolar S.R.L.
100%
Romania
7 Ghiocei street, ap. 1, Panciu locality, Panciu city,
Vrancea county, Romania
Kivu Watt Ltd
100%
Rwanda
Plot 9714, Nyarutarama, P. O. Box 6679, Kigali,
Rwanda
RENERGIE Solarny Park Holding SK I
a.s.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
PV Lucenec S.R.O.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Rimavské
Jánovce s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Dulovo s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Gemer s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Hodejov s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Jesenské s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Nižná
Pokoradz s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Riečka s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Rohov s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Starňa s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Včelince 2
s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Hurbanovo
s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
AlfaPark s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Druhá slnečná s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
SL03 s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Bánovce nad
Ondavou s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Bory s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Budulov s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
128
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
RENERGIE Solárny park Kalinovo s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
ZetaPark Lefantovce s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny Lefantovce s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Michalovce
s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Nižný Skálnik
s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Otročok s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Paňovce s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Gomboš s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Rimavská
Sobota s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Horné
Turovce s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Uzovská
Panica s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
RENERGIE Solárny park Zemplínsky
Branč s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
ZetaPark s.r.o.
51%
Slovak
Republic
Pribinova 25, 811 09 Bratislava,Slovakia
ContourGlobal Cap des Biches Senegal
S.à r.l.
100%
Senegal
2, Place de L'Indépendance, Dakar, BP 23607, Senegal
ContourGlobal Togo S.A.
100%
Togo
Route D'Aného, Baguida, BP 3662 , Lomé - Togo
ContourGlobal Trinity Power Ltd
100%
Trinidad and
Tobago
P.O. BAG 498, Railway Road, Dow Village, Couva,
Trinidad and Tobago, W.I.
ContourGlobal Solutions Ukraine LLC
100%
Ukraine
32, Konstantiniska street, 04071 Kiev, Ukraine
ContourGlobal Solutions (Northern
Ireland) Limited
100%
United
Kingdom
6th Floor Lesley Tower, 42-26 Fountain Street, Belfast
BT1 5EF, Ireland
ContourGlobal Europe Limited
100%
United
Kingdom
55 Baker Street, London, United Kingdom, W1U 8EW
Contour Global Hummingbird UK
Holdco I Ltd
100%
United Kingdom
55 Baker Street, London, United Kingdom, W1U 8EW
Contour Global Hummingbird UK
Holdco II Ltd
100%
United Kingdom
55 Baker Street, London, United Kingdom, W1U 8EW
Contour Global LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Contour Global Management Inc
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
ContourGlobal Services Brazil LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
ContourGlobal Togo LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
ContourGlobal Senegal Holdings LLC
100%
US
2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808
ContourGlobal Senegal LLC
100%
US
1209 Orange Street, Corporation Trust Center,
Wilmington, Delaware 19801
CG Solutions Global Holding Company
LLC
100%
US
Corporation Trust Center, 1209 Orange Street,
Corporation Trust Center, Wilmington, Delaware
19801
Lea Power Partners, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
129
Consolidated subsidiaries
Ownership
Country of
incorporation
Registered address
Borger Energy Associates, LP
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Waterside Power, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Badger Creek Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Bear Mountain Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Chalk Cliff Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Live Oak Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
McKittrick Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Kern Front Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Double C Generation Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
High Sierra Limited
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
WCAC Operating Company California,
LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
WGP Holdings II, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
WG Partners Holdings, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
WG Partners Acquisition, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
ContourGlobal Hummingbird US
HoldCo Inc.
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
ContourGlobal US Holdco Inc.
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Hobbs Power Funding, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Waterside Power Funding, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
WGP Redwood Holdings, LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
LSP-Borger, Inc
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Juniper Generation LLC
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Live Oak Cogen, L.L.C.
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Brea Canyon Cogen, L.L.C.
100%
US
888 Westheimer, Suite 300, Houston, TX 77006,
United States of America
Investments in associates accounted
under the equity method:
Ownership
Country of
incorporation
Registered address
TermoemCali I S.A. E.S.P.
37%
Colombia
Carrera 5A Nº 71-45, Bogotá, Colombia
Evacuacion Villanueva des Rey, S.L.
18%
Spain
Calle Orense 34, 7ª planta, 28020 Madrid, Spain
Consolidated subsidiaries disposed
of during the year
Ownership
Country of
incorporation
Registered address
Contour Global Do Brasil Participações
Ltda
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
Galheiros Geração de Energia Elétrica
S.A.
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
130
Santa Cruz Power Corporation Usinas
Hidroelétricas S.A.
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
Afluente Geração de Energia Eletrica
S.A.
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
Goias Sul Geração De Energia S.A.
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
RIO PCH I S.A.
56%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
Bahia PCH I S.A.
80%
Brazil
Rua James Joule, 65 - Andar 16 Sala 161 Parte E -
Cidade Monções - CEP 04576-080 - São Paulo - SP
During the year the only change in ownership are related to ContourGlobal Togo (previous ownership
80%) and Compañía Eléctrica de Sochagota S.A. E.S.P. (previous ownership 49%).
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
131
1.37.
Related party disclosure
ContourGlobal L.P. and Kohlberg Kravis Roberts & Co. L.P.
As of December 31, 2022 ContourGlobal Limited and its subsidiaries have no significant trading
relationship with the Group’s main shareholder, Cretaceous Bidco Limited and Kohlberg Kravis
Roberts & Co. L.P. which ultimately controls ContourGlobal Limited. It is the Directors’ expectation
that the smallest and largest group of undertakings which ContourGlobal Limited forms part of
Cretaceous Holdco 1 S.à r.l and these consolidated accounts will be lodged with the Luxembourg trade
and business register where they are publicly available.
Key management personnel
Compensation paid to key management (executive and non-executive committee members) amounted
to $15.3 million in December 31, 2022 (December 31, 2021: $9.6 million).
Years ended December 31
In $ millions
2022
2021
Salaries and short term employee benefits
5.4
5.1
Termination benefits
0.2
-
Post employment benefits
-
0.2
Profit-sharing and bonus schemes
4.9
2.0
Non-executive Directors' emoluments
0.8
0.9
Other share based payments
4.0
1.4
Total
15.3
9.6
Directors emolument note
Years ended December 31
In $ millions
2022
2021
Aggregate emoluments
6.2
4.2
Total
6.2
4.2
The emolument to the highest paid director in the year amounts to $7.0 million (2021: $2.9 million).
The highest paid director also received and exercised shares in respect of qualifying services under the
Long Term Incentive Plan (see note share-based compensation plans 1.33).
No director received payments into a defined benefit contribution plan in 2022 (2021: one director)
Two directors exercised shares under the long term incentive plan during the year (2021: none)
Two directors received shares under the long term incentive plan in 2022 (2021: two directors).
Legacy arrangements
On 30 June 2022 we completed the sale of the Brazilian Hydro assets (see note 1.6). This may trigger a
payment under the legacy carried interest arrangement for the highest paid director, subject to the
requirements of the relevant contractual arrangement between the highest paid director and the
counterparty, a minority co-owner of the Brazilian Hydro assets. The Company is not party to the
carried interest and has no financial obligation in relation to the interest, and any payment will be
made by the counterparty. Any payment to the highest paid director is still to be calculated by the
counterparty, but we estimate the amount to be paid would not be material to the Company.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
132
1.38.
Financial commitments and contingent liabilities
a) Commitments
The Group has contractual commitments with, among others, equipment suppliers, professional
service organizations and EPC contractors in connection with its power projects under construction
that require payment upon reaching certain milestones.
As of December 31, 2022, the Group has completed its Maritsa construction projects and had $0.4
million of firm purchase commitments of property plant and equipment outstanding in connection
with its facilities. The Group also has contractual arrangements with Operating and Maintenance
(O&M) providers and transmission operators in relation to certain of its operating assets. Maritsa has
a long-term Lignite Supply Agreement (LSA) with Maritsa Iztok Mines (MMI) for the purchase of
lignite. According to the agreement, Maritsa has to purchase minimum monthly quantities, amounting
to 6,187 thousand standard tons per calendar year. The total commitment through the remaining term
of the LSA (February 2024) is 7,218 thousand standard tons, equal to $74.0 million at December 2022
prices ($10.25 per standard ton), as compared to 12,890 thousand standard tons equal to $123.7
million at the end of 2021 ($9.59 per standard ton). In the event of a failure on the part of CG Maritsa
East 3 AD (ME-3) to take a minimum monthly quantity in any month, ME-3 shall, except in cases
caused by Force Majeure and certain actions of Bulgarian authorities as described in the contract, pay
to MMI an amount equal to the difference between (i) the aggregate amount paid or payable in respect
of lignite delivered during such month and (ii) the aggregate amount that would have been payable
had the minimum monthly quantity been taken during such month.
The Group also has agreements related to our Austria Wind project repowering started in 2017. As of
December 31, 2022 we are committed to purchase €3.9 million ($4.2 million) worth of equipment and
installation during 2023.
b) Contingent liabilities
The Group has contingent liabilities in respect of legal and tax claims arising in the ordinary course of
business. The Group reviews these matters in consultation with internal and external legal counsel to
make a determination on a case-by-case basis whether a loss from each of these matters is probable,
possible or remote. These claims involve different parties and are subject to substantial uncertainties.
Togo
ContourGlobal Togo received in late December 2020 a notification from CEET (offtaker of the power
purchase agreement) and the Republic of Togo regarding certain alleged breaches of the power
purchase agreement and concession agreement, respectively, questioning the performance of the Togo
plant and alleging overpayment of $58 million under “take or pay” provisions. The breaches alleged by
CEET relate to generation by the plant using heavy fuel oil (‘HFO’) and gas. The risk of a liability to
CEET relating to generation using gas is assessed as possible and no provision has been recognized as
of 31 December 2022. The risk of liability relating to generation using HFO has been assessed as
remote.
Taxes
Judgement is sometimes required in determining how to account for indirect or direct tax positions
where the ultimate tax determination is uncertain. These positions include areas such as the tax
deductibility or treatment of certain costs (in particular, of one-off items that might arise on an
acquisition, disposal or internal restructuring), the pricing of goods or services provided between
Group companies and the application of local tax law within each territory in which the Group
operates. Liabilities are recognized in accordance with relevant accounting standards based on
management's best estimate of the outcome, having taken advice where it is considered appropriate to
do so. However, if the Group is challenged by local tax authorities, it is possible that the final outcome
of these matters may be different from the amounts recorded and additional expenses may be
recognized in later periods. The Group is not currently subject to any tax audit where it is considered
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
133
there is a more than remote probability of a material tax adjustment where we have not provisioned
and the risk of a material adjustment to tax provisions within the next 12 months is not considered to
be significant.
c) Leasing activities
Operating lease as a lessor
The Group is lessor under non-cancellable operating leases. The future aggregate minimum lease
payments receivable under non-cancellable operating leases are as follows:
Years ended December 31
In $ millions
2022
2021
Minimum lease payments receivable
No later than 1 year
153.8
166.5
Later than 1 year and no later than 5 years
478.7
537.6
Later than 5 years
419.0
513.8
Total
1,051.5
1,217.9
The property, plant and equipment related to the assets as the operating lease as a lessor relates to
Solutions plants, Energie Antilles, Bonaire, Hobbs and Trinity for the year ended December 31, 2022
as follows.
In $ millions
Land
Power plant
assets
Construction
work in
progress
Right of use
of assets
Other
Total
Cost
6.0
923.3
2.3
1.8
34.2
967.6
Accumulated depreciation and
impairment
-
(234.1)
-
(0.7)
(2.1)
(236.9)
Carrying amount as of
January 1, 2022
6.0
689.2
2.3
1.1
32.1
730.7
Additions
-
19.1
12.6
0.9
0.8
33.4
Disposals
-
(0.3)
-
-
(0.5)
(0.8)
Reclassification
-
4.9
(4.4)
-
(0.5)
-
Effect of change in classification of
contract (1)
(2.6)
(90.5)
-
(0.8)
-
(93.9)
Currency translation differences
-
0.9
(2.2)
-
(1.1)
(2.4)
Depreciation charge
-
(45.2)
-
(0.4)
(16.5)
(62.1)
Closing net book amount
3.4
578.1
8.3
0.8
14.3
604.9
Cost
3.4
833.6
8.3
1.3
22.7
869.3
Accumulated depreciation and
impairment
-
(255.5)
-
(0.5)
(8.4)
(264.4)
Carrying amount as of
December 31, 2022
3.4
578.1
8.3
0.8
14.3
604.9
(1) The effect of change in classification of contract corresponds to the end of the operating lease of
Five Brothers on the year ended December 31, 2022.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
134
The property, plant and equipment related to the assets as the operating lease as a lessor relates to
Solutions plants, Energie Antilles, Bonaire, Hobbs, Five Brothers and Trinity on the year ended
December 31, 2021 as follows.
In $ millions
Land
Power plant
assets
Construction
work in
progress
Right of use
of assets
Other
Total
Cost
0.1
263.5
1.6
0.9
9.3
275.4
Accumulated depreciation and
impairment
-
(169.2)
-
(0.5)
(8.0)
(177.7)
Carrying amount as of
January 1, 2021
0.1
94.3
1.6
0.4
1.3
97.7
Additions
-
2.1
2.3
-
2.0
6.4
Disposals
-
(1.0)
-
-
-
(1.0)
Reclassification
-
1.2
(1.4)
0.1
0.1
-
Acquired through business
combination (1)
5.9
624.0
-
0.9
30.2
661.0
Currency translation differences
-
(2.7)
(0.2)
-
0.1
(2.8)
Depreciation charge
-
(28.7)
-
(0.3)
(1.6)
(30.6)
Closing net book amount -
restated
6.0
689.2
2.3
1.1
32.1
730.7
Cost
6.0
923.3
2.3
1.8
34.2
967.6
Accumulated depreciation and
impairment
-
(234.1)
-
(0.7)
(2.1)
(236.9)
Carrying amount as of
December 31, 2021 - restated
6.0
689.2
2.3
1.1
32.1
730.7
(1) Assets acquired through business combination relate to our United States of America and Trinidad
and Tobago portfolios detailed in note 1.7. These amounts have been restated by $412.6 million to take
into accounts the fair value adjustments on the property, plant and equipment following the
acquisition.
Finance lease as a lessor
The future aggregate minimum lease payments under non-cancellable finance leases (relating to our
operation of Energies Saint Martin) are as follows:
Years ended December 31
In $ millions
2022
2021
Minimum lease payments receivable
No later than 1 year
5.3
5.6
Later than 1 year and no later than 5 years
-
5.6
Later than 5 years
-
-
Gross investment in the lease
5.3
11.2
Less: unearned finance income
(0.4)
(1.3)
Total
4.9
9.9
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
135
Years ended December 31
In $ millions
2022
2021
Analysed as:
Present value of minimum lease payments receivable:
No later than 1 year
4.9
5.2
Later than 1 year and no later than 5 years
-
4.7
Later than 5 years
-
-
Total
4.9
9.9
1.39.
Guarantees and letters of credit
The Group and its subsidiaries enter into various contracts that include indemnification and guarantee
provisions as a routine part of the Group’s business activities. Such contracts generally indemnify the
counterparty for tax, environmental liability, litigation, and other matters, as well as breaches of
representations, warranties, and covenants set forth in the agreements. In many cases, the Group’s
maximum potential liability cannot be estimated, since some of the underlying agreements contain no
limits on potential liability. The Group considers outflow relating to these guarantees to be remote and
therefore no fair value liability has been recognized.
The Group also acts as guarantor to certain of its subsidiaries and obligor with respect to some long-
term arrangements contracted at project level.
For the financial guarantees and letters of credit, refer to note 1.30.
CONTOURGLOBAL LIMITED (FORMERLY CONTOURGLOBAL PLC) AND SUBSIDIARIES
Notes to the consolidated financial statements
For the year ended December 31, 2022
136
1.40.
Statutory Auditors’ fees
Years ended December 31
In $ millions
2022
2021
Fees payable to the Group's auditors for the audit of the Group's annual
accounts and consolidated financial statements
1.5
1.7
Fees payable to the Group's auditors and its associates for other services:
- The audit of the Group's subsidiaries
1.3
1.5
- Audit- related assurance services
0.6
0.4
- Other assurance services
0.8
1.3
- Tax compliance services
-
-
- Tax advisory services
-
-
- Other non-audit services
-
-
Total (net of out of pocket expenses)
4.2
4.9
1.41.
Subsequent events
In February and March 2023 the following took place:
•
ContourGlobal Limited acceded as a borrower to KKR’s bridge facility agreement in the
amount of €400 million ($428 million). These proceeds were transferred to ContourGlobal
Power Holdings S.A through an intercompany loan agreement and subsequently used to repay
in full the outstanding €400 million ($428 million) principal on the 2025 Corporate Bonds.
•
The KKR acquisition loan of €509.7 million ($546 million) was novated to ContourGlobal
Limited.
•
ContourGlobal Limited declared a dividend of €509.7 million which will be used to fully settle,
on a non cash basis, the intercompany receivable relating to the novation of the KKR
acquisition loan.
CONTOURGLOBAL LIMITED
Notes to the company financial statements
Year ended December 31, 2022
138
Notes to the Company financial statements
1. General information
On the 21st of December 2022 ContourGlobal plc was delisted from the London Stock Exchange. Subsequently on the 29th of
December 2022 the Company was re-registered as a private company resulting in a change in name to ContourGlobal Limited. The
Company is limited by shares and domiciled in the United Kingdom and incorporated in England and Wales.
2. Statement of compliance
The financial statements of ContourGlobal Limited have been prepared in compliance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102, ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of
Ireland’ (‘FRS 102’) and the Companies Act 2006.
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. The policies have been
consistently applied throughout the period presented.
3.1. Basis of preparation
The Company financial statements have been prepared under the historical cost convention. The current year financial information
presented is for the year ended 31 December 2022, and the comparative year financial information presented is for the year ended 31
December 2021.
The preparation of the financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are set
out below. The financial statements have been prepared on the going concern basis under the historical cost convention.
As permitted by Section 408 of the Companies Act 2006, an entity profit and loss account is not included as it is part of the published
consolidated financial statements of ContourGlobal Limited.
3.2 Exemptions for qualifying entities under FRS 102
The Company has taken advantage of the following FRS 102 disclosure exemptions available to qualifying entities:
●
The requirements of Section 4 Statement of Financial Position 4.12 (a) (iv);
●
The requirements of Section 7 Statements of Cash Flows;
●
The requirements of Section 3 Financial Statement Presentation paragraph 3.17 (d); and
●
The requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41 (f), 11.42, 11.44, 11.47,
11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
●
The requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23,
●
The requirements of Section 33 Related Party Disclosures paragraph 33.7.
3.3 Foreign currency
(i) Functional and presentation currency
The Company’s functional and presentation currency is the US Dollar.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rate at the dates of the transactions.
At each period end foreign currency non-monetary items measured at historical cost are translated using the exchange rate on the date
of the transaction.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at period end exchange rates are recognized in profit or loss.
3.4 Investments in subsidiaries
Investments in subsidiaries are held at cost, less any provision for impairment. Annually, the Directors consider whether any events or
circumstances have occurred that could indicate that the carrying amount of fixed asset investments may not be recoverable. If such
circumstances do exist, a full impairment review is undertaken to establish whether the carrying amount exceeds the higher of fair value
less costs of disposals or value in use. If this is the case, an impairment charge is recorded to reduce the carrying value of the related
investment.
3.5 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction from the proceeds.
CONTOURGLOBAL LIMITED
Notes to the company financial statements
Year ended December 31, 2022
139
The premium received on the issue of shares in excess of the nominal value of shares is credited to the share premium account and
included within equity.
Treasury shares
The Group’s treasury shares are included under “Treasury shares” in the consolidated statement of financial position and are measured
at acquisition cost.
The treasury shares are removed from Other reserves when utilised or cancelled. This results in a reclassification of the carrying value
to Retained Earnings.
The Group buys and sells treasury shares in accordance with the prevailing law and the resolutions of the General Shareholders’
Meeting. Such transactions include sale and purchase of company shares.
3.6 Taxation
UK corporation tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax arises from timing differences that are differences between taxable profits and profit for the year as stated in the financial
statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those
in which they are recognised in financial statements. A deferred tax asset is recognised only to the extent that it is probable that future
taxable profits will be available against which the asset can be utilised. Unrecognized deferred tax assets as at 31 December 2022 were
$17.2 million ($6.2 million in 2021).
3.7 Financial instruments
The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
a) Financial assets
Financial assets including amounts owed by group undertakings and other receivables and cash at bank and in hand are initially
recognised at transaction price and are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an
asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows
discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is
reversed.
The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment
not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled; or (b)
substantially all the risks and rewards of the ownership of the asset are transferred to another party; or (c) despite having retained some
significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to
unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
b) Financial liabilities
Financial liabilities include trade and other payables (including from intercompany Group companies).
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current
liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective
interest method.
3.8 Dividend distribution
Dividends to the Company’s shareholders are recognised as a liability in the Company’s financial statements in the period in which the
dividends are approved by the Company’s shareholders in the case of final dividends. In respect of interim dividends, these are
recognised in the period in which they are paid.
CONTOURGLOBAL LIMITED
Notes to the company financial statements
Year ended December 31, 2022
140
3.9 Critical accounting judgements and estimation uncertainty
The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also
requires management to exercise their judgement in the process of applying the Company’s accounting policies. The area involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements is:
●
Carrying value of investments.
The Company considers annually whether there is any indication of impairment in the carrying value of investments in accordance with
the accounting policy stated.
In the event that there is an indicator of impairment, the Company performs an impairment assessment to determine if the carrying
value of the investment is supported by its recoverable amount. The determination of the recoverable amount requires estimation to be
applied. The recoverable amount is the higher of (i) an investment’s fair value less costs of disposal (market value), and (ii) value in use
determined using estimates of discounted future net cash flows (“DCF”) of the investment. Refer to Note 6 regarding the impairment
assessment performed in the current year. The Company uses a fair value less costs of disposal model in estimating the recoverable
value. The completed acquisition of the Group by KKR in December 2022 for a cash acquisition price of $2.14 billion less estimated
cost to dispose provides an indicative value of the Group. Given the proximity of the transaction closing to the year end there is
limited estimation uncertainty of the fair value. The Directors do not consider the value in use would result in a materially higher value
and in accordance with FRS 102, the asset's fair value less costs to sell may be used as its recoverable amount. The key assumption
relates to the estimated costs to sell however this is unlikely to be material based on transaction costs for comparable entities.
As at December 31, 2022 the fair value less cost to sell was estimated at $2.13 billion, which is below the carrying value of investments
of $2.2 billion and accordingly an impairment charge of $75.3 million has been recorded.
4. Directors’ Emoluments and employees
The Company had two Directors, seven non-executive directors and an average of one employee in the year to 31 December 2022 (the
Company had two Directors, seven non-executive directors and an average of two employees in the year to 31 December 2021). In each
year, of the two directors, one was remunerated by the Company. The other director was remunerated by another company in the group.
In each year the non-executive directors were remunerated by the company. The amount of employee charges recognized in the
Company’s profit and loss statement in 2022 amounted to $3.5 million (2021: $3.4 million).
in $ millions
2022
2021
Wages and salaries
0.7
1.3
Social security costs
0.7
0.2
Share-based payments1
2.1
1.9
Total employee costs
3.5
3.4
1The $2.1 million share based payments charge relates to all employees in the LTIP plan for the Group (2021: $1.9 million).
No director received payments into a defined benefit contribution plan in 2022 (2021: one director).
One director exercised shares under the Long Term Incentive Plan during the year (2021: none).
One director received shares under the Long Term Incentive Plan in 2022 (2021: one director).
5. Auditors’ fees
The amount payable to the Company’s auditors in respect of the statutory audit were $24,000 (2021: $24,000).
6. Investments in Subsidiaries
in $ millions
2022
2021
At 1st January
2,148.0
1,642.1
Capital increase of CG Worldwide Holdings SARL
57.3
-
Creation of CG Hummingbird UK Holdco I limited
-
505.9
Impairment
(75.3)
-
At 31 December
2,130.0
2,148.0
In 2022 the Company received $162.5 million of dividends from ContourGlobal Worldwide Holdings SARL (2021: $628.4 million)
and $59.8 million of dividends from ContourGlobal Hummingbird UK Holdco I limited (2021: nil).
The Company’s directly wholly owned subsidiaries are ContourGlobal Worldwide Holdings S.à.r.l and ContourGlobal Hummingbird
UK Holdco I limited that was created in 2021 for the acquisition of the Western Generation portfolio in February 2021. A full list of
indirect subsidiaries and other undertakings as required by Section 409 of the Companies’ Act 2006 is shown on pages 123 to 130 of
the Group’s financial statements.
The Company recorded an impairment of $75.3 million on the value of the investments following the acquisition of the Company by
KKR, which closed in December 2022 and valued the group at $2.14 billion, less the Company's best estimate of costs of disposal.
CONTOURGLOBAL LIMITED
Notes to the company financial statements
Year ended December 31, 2022
141
7. Debtors
In $ millions
2022
2021
Amounts owed by Group undertakings
4.5
3.2
VAT recoverable
6.4
0.4
Prepayments and accrued income
0.5
0.6
11.4
4.2
Amounts owed by Group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
8. Creditors: amounts falling due within one year
In $ millions
2022
2021
Trade payables
4.9
0.4
Accrued expenses
3.6
1.9
Amounts owed to Group undertakings
16.2
0.4
Other
-
0.2
24.7
2.9
Amounts owed to Group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
9. Called-up share capital
Issued capital of the Company amounted to $8.8 million as at 31 December 2022 and $8.9 million as at 31 December 2021.
As of 31 December 2022, the Company has issued 663,048,789 shares of £0.01 each (2021: 670,712,920), corresponding to an allotted,
called up and fully paid capital of £6.7 million, or $8.8 million. There has been no change in the called-up share capital in either year.
10. Treasury shares
On 1 April 2020 ContourGlobal Plc announced a buyback programme of up to £30 million of ContourGlobal plc ordinary shares of
£0.01 each ("Shares"), to initially run from 1 April 2020 to 30 June 2020, subsequently extended to 30 September 2020 then further
extended to December 31, 2020 and then to March 31, 2021.
During the year ended December 31, 2021, the Company repurchased 2,624,774 treasury shares at an average price of 208.4 pence per
share for an aggregate amount of GBP5.5 million ($7.4 million), representing 0.40% of its share capital and used 427,440 shares in
respect of the 2018 Long Term Incentive Plan. Since the beginning of the buyback programme, the Company repurchased a net amount
of 14,572,065 treasury shares, representing 2.17% of its share capital and a cumulative consideration paid of $37.8 million.
During 2022, 6,907,934 treasury shares were utilized relating to accelerated vesting of long term incentive plans. The remaining
7,664,131 shares were then cancelled, following the delisting of the Company from the London Stock Exchange on December 21,
2022.
11. Contingent Liabilities
The Company acts as a guarantor to certain of its subsidiaries with respect to various financial obligations and project financing
agreements entered into by its subsidiaries. The Company considers outflow relating to these guarantees to be remote and therefore no
fair value liability has been recognised. The main financial obligations are listed below:
●
$8.5 million guarantee to cover Kivuwatt debt service reserve account;
●
Guarantee on cash shortfall for debt service in ContourGlobal Togo; the loan balance as at 31 December 2022 is $72.3
million;
●
Guarantee to Goldman Sachs, Credit Suisse International, Citibank Europe plc, HSBC Bank USA National Association, JP
Morgan Securities plc, and Mizuho Capital Markets LLC in relation with the hedging instruments existing at ContourGlobal
Power Holdings S.A. As at 31 December 2022 this related to instruments with a nominal value of $4.7 million and a fair
value as at year-end of $0.4 million.
●
Parent guarantor (as defined in the indenture) under the €850 million bond indenture dated 19 July 2018 (out of which €400
million is outstanding) and under the €710 million bond indenture dated 17 December 2020. It was released as of 15 February
when the debt was repaid.
●
Guarantor under the corporate level revolving credit facility of €120 million dated 10 December 2020 undrawn as of 31
December 2022;
●
Guarantor under the corporate level letter of credit facility of €75.75 million dated 29 March 2019;
●
Guarantor under the corporate level letter of credit facility of €50 million dated 10 March 2020;
●
BRL 71.0 million guarantee to Chapada I letters of credit providers corresponding to 25% of the debt;
●
Guarantor under the Mexican CHP $35 million letter of credit signed on February 5, 2021. Maturity is in February 2023.
●
$12.0 million guarantee to cover Caribbean refinancing debt service reserve letter of credit.
12. Related Parties
In 2021 and 2022 none of the Company or its subsidiaries have contracted with related parties. As of 31 December 2022 and 31
December 2021, the Company has no balance due to or receivables from related parties other than amounts due to and from subsidiary
undertakings.
CONTOURGLOBAL LIMITED
Notes to the company financial statements
Year ended December 31, 2022
142
13. Controlling party
The recommended cash acquisition (the "Transaction") of ContourGlobal plc by Cretaceous Bidco Limited (a newly formed company
indirectly owned by funds advised by Kohlberg Kravis Roberts & Co. L.P. and its affiliates) ("KKR") announced on May 17, 2022 was
approved by the required majority of shareholders at the Court and General meeting of shareholders held on 6 July 2022. The scheme
of arrangement became effective on 20 December 2022.
14. Subsequent events
In February and March 2023 the following took place:
•
ContourGlobal Limited acceded as a borrower to KKR’s bridge facility agreement in the amount of €400 million ($428
million). These proceeds were transferred to ContourGlobal Power Holdings S.A through an intercompany loan
agreement and subsequently used to repay in full the outstanding €400 million ($428 million) principal on the 2025 Corporate
Bonds.
•
The KKR acquisition loan of €509.7 million ($546 million) was novated to ContourGlobal Limited.
•
ContourGlobal Limited declared a dividend of €509.7 million which will be used to fully settle, on a non cash basis, the
intercompany receivable relating to the novation of the KKR acquisition loan.