REG - Cindrigo Hldgs Ltd - Final Results
22/03/2024 13:00
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RNS Number : 8670H Cindrigo Holdings Limited 22 March 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, WITHIN,
INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN.
22 March 2024
Cindrigo Holdings Limited
('Cindrigo, the 'Company' or the 'Group')
Final Results
Cindrigo (LSE:CINH) announces that its audited accounts for the year ended 31
December 2023 have been approved and extracts are attached to this
announcement and available in full on the Company's website at
www.cindrigo.com.
**ENDS**
Extracts from the Audited Accounts for the year ended 31 December 2023 are set
out below:
For more information please contact:
Cindrigo Holdings Limited
Lars Guldstrand CEO
+44 (0)
7408 861 667
Hannam & Partners (Financial Advisor & Corporate Broker)
Samuel Merlin, Sean
Urquhart
+44 (0) 20 7907 8500
St Brides Partners Ltd (PR)
Paul Dulieu
+44 (0) 20 7236 1177
CEO's Statement
Cindrigo Holdings Limited ("Cindrigo or the Company") is the Holding Company
of the Cindrigo Group which is an independent renewable energy power producer
and developer focused on clean baseload energy plants, driven by the increased
global need and demand for stable clean baseload power. Its geographical focus
is on low risk, well established governance, and stable jurisdictions
initially primarily in the EU, EU periphery or with EU business/banking ties.
Background
The Company was formed in November 2014 to undertake acquisitions in the
entertainment and leisure sectors. With none of the proposed projects coming
to fruition the Company looked for alternative activities and completed the
acquisition of Cindrigo in 2021. At the time of the acquisition Cindrigo were
concentrating on a substantial Waste to Energy ("WtE") project in Ukraine.
Due to the invasion of Ukraine by Russia, the Group suspended its projects in
Ukraine in February 2022, and re-directed its focus to its geothermal energy
developments.
Cindrigo's energy background originated out of WtE and Biomass sectors both as
a developer and EPC contractor, with advanced cooperation partners such as
China Energy, the world's largest international developer of energy. Cindrigo
and China Energy together with Sinosure had several development projects in
Ukraine, which had the support of Government and local municipalities at the
time of the Russian invasion. The projects had to be suspended as a result of
the invasion. Consequently, Cindrigo redirected its focus to the Geothermal
sector, whilst evaluating other renewable opportunities including WtE/Combined
Heat and Power production.
In June 2022 the Group via its wholly owned subsidiary Cindrigo Geothermal
Limited acquired a minority shareholding in an Icelandic geothermal developer
and 90% of the issued share capital of EES Dravacel Energetika
d.o.o.("Dravacel"), a Croatian incorporated company which holds a geothermal
exploration licence in respect of 57.9 km2 in Slatina, northern Croatia
("Slatina 3"). The site in Slatina is believed to be suitable for geothermal
development with an initial target of a plant generating 20MW. The Company
continues to evaluate other potential projects in the power and heat sector.
Strategic and Operational Review
Cindrigo's strategy is to be an active renewable energy developer,
coordinating project owner with outsourced construction and operation
supported by world class partners, both sub and on-surface. Development is
based on proven technology with a modular, replicable expansion.
The Company's aim is to build a broad diversified portfolio of clean energy
projects in various renewable energy sectors, with a special focus on the
geothermal sector. The Company's aim is to have contracts in place for
geothermal power plant projects with up to 200 MW of contracted capacity
within a year, up to 450 MW within three years and 1000 MW by 2030, in
parallel with clean energy assets in other energy sectors.
Cindrigo is well positioned to develop a substantial geothermal energy group.
Its ambitious targets are driven by Europe´s high geothermal electricity
prices, the drive to decarbonise industrial economics and the renewed focus on
European energy security.
Two major factors have converged to increase the attractiveness of geothermal
power as a compelling component in Europe's power generation portfolio. In
addition to the general necessity of increasing the electricity production and
meeting stricter net carbon targets there is a long overdue strategic shift
for many European countries to reduce their dependence on Russian energy
imports, to locally sourced and produced energy.
Cindrigo's most advanced project is the geothermal project in Slatina 3,
Croatia, (the "Project") targeted initially for production of 20 MW
electricity. Located in one of Europe's most attractive geothermal markets,
with well proven reservoir resource. The Project has already "broken ground"
for the development. All the preparatory civil site-works including conductor
drilling, well pads, roads are completed. The site is ready for commencement
of the drilling of a ca 4,000 meters deep drilling well in an area known to
have the required geothermal reservoir. Previous drilling into this reservoir
recorded water temperatures approaching 200C, exceeding the recognised minimum
thresholds for geothermal power generation. The Project is being undertaken by
ESS Dravacel Energetika doo in which the Company holds a 90% interest
("Dravacel").
Investment in the development of the Project, including the recent groundwork,
has been circa £6 million to date. £2.5 million of this amount was incurred
in 2024, the majority of which was initial costs for the deep drilling.
The Company anticipates a further 6 months extension of the exploration
license from April 2024 to be granted by the Croatian Hydrocarbon Agency,
which will allow mobilisation and start (spud-in) of the deep level drilling.
This extension is crucial to provide enough time to complete the drilling
programme and the analysis of the well data to confirm all critical
determinants including geothermal flow rates with the objective to move from
exploration phase to exploitation phase of the Project. The Project and the
GT-1 well pad is located on a property owned by Dravacel within the 55 km2
(5,500 hectare) Slatina 3 Geothermal Licence. Initial design and layouts of
the Dravacel property indicate sufficient footprint for a 20 MW power plant
and potentially several times that capacity.
In addition to the Project the company are evaluating several other
opportunities in the geothermal sector, and also other renewable sectors such
as WtE incineration. Cindrigo has recently signed an MOU regarding the
potential acquisition of a Combined Heat and Power ("CHP") plant in Kaipola
Finland.
The 110 MW CHP Plant would be held under a 50-year lease producing both heat
and power. The Plant already exists but requires circa £2.5 millions of
upgrade work, to enable the generation of early income later in 2024. The
Plant would then represent a significant asset in the Company's Balance Sheet.
Revenues are estimated initially to be €15million per annum, growing over
the years to full operational capacity of approximately €37 million
annually.
In December 2023 the Company streamlined and centralised its key people
resources, know-how, organization, administrative coordination and development
in the Holding Company or direct to the projects, and the smaller entities
have been suspended or sold. The Company's wholly owned subsidiary ECG Energy
Co-invest Global Corp ("ECG") suspended it operations, including in Iceland.
Cindrigo sold its interest in ECG for a nominal consideration and amounts due
from ECG have been written-off to the Statement of Comprehensive Income in the
current year. The Company also disposed of its Ukrainian subsidiary, Kiev
Power for a nominal consideration.
The Company is continuing the process of seeking approval of a prospectus by
the FCA to support an application for re-admission of its issued and to be
issued shares of the Company to the Standard Segment of the Official List and
to trading on the Main Market of the London Stock Exchange. If the application
for readmission to trading is successful, the Company anticipates that future
funding will be more readily available.
Board of director changes
In November 2023, Simon Fawcett the Chief Financial Officer resigned from his
office as Director of the Company. There are no other changes in Board of
Directors during the financial year 31 December 2023. Dag Andresen has been
appointed as Chief Financial Officer and is assisted by a new highly qualified
financial controller, based in London.
Other important events
Cindrigo has entered into a Framework Agreement (the "Agreement") with
Petroline Energy LLC, an Abu Dhabi based energy company ("Petroline") for the
potential financing of up to £75 million in to Cindrigo Holding's Limited to
be used for Cindrigo's development and construction of its geothermal
projects. The process has been slow, due to the delay in the readmission to
trading of the Company's share capital.
Cindrigo has entered into a Framework Agreement with Kaishan Renewable Energy
Development PTE LTD, a Singapore-registered company and member of the Kaishan
Group ("Kaishan") to develop, finance, build and operate geothermal power
plants. The first project targeted under the Framework Agreement is the 20 MW
project led by Cindrigo development companies on the Slatina 3 geothermal
license in Croatia.
The Company have signed a convertible loan agreement in a sum of £10 million
with TriRi Asset Management with agreed drawdown after the licence extension
has been granted.
Cindrigo has recently signed an MOU regarding the potential acquisition of a
110MW Combined Heat and Power ("CHP") plant in Kaipola Finland.
Lars Guldstrand
Chief Executive Officer
Date: 21 March 2024
Financial Review
Overview
The Group incurred a loss in the year under review as a result of
administrative expenses and finance costs. There was no revenue for the year
ended 31 December 2023.
Loss for the year
During the year, the Group recorded a loss of £3,076k (2022 loss: of
£2,467k) and administrative expenses of £1,651k (2022: £1,780k). The key
components of administrative expenses in the Group financial statements
include £139k of legal fees, £826k of consulting fees, £146k of
professional fees and £172k of travel costs. Finance costs in relation to the
outstanding convertible notes were £113k (2022: £97k).
Balance Sheet
The total assets on the balance sheet as per the balance sheet date is
£3,357k (2022: £1,941k). In addition, the Group shows cash and cash
equivalents of £172k (2022: £690k) and trade and other receivables of
£1,041k (2022: £402k).
A mix of equity and convertible notes has financed these assets. The equity at
the balance sheet date amounted to (£2,087k) (2022: (£779k)) and the
liabilities were £5,444k (2022: £2,720k).
Cash flow
During the year, cash used in operations totalled £2,055K (2022: £1,991k).
Closing cash
As at 31 December 2023, the Group held £172k (2022: £690k) in the bank
accounts.
Dag Andresen
Chief Financial Officer
Date: 21 March 2024
Consolidated Statement of Comprehensive Income
The statement of comprehensive income is set out below:
Year ended Year ended
31 December 31 December
2023 2022
Note £'000 £'000
Administrative expenses (1,651) (1,780)
Other operating income 226 10
Operating profit / (loss) (1,425) (1,770)
Investments written off (1,553) -
Finance costs 12 (113) (97)
Profit / (loss) before income taxes (3,091) (1,867)
Income tax expense 16 - -
Profit / (loss) after taxation (3,091) (1,867)
Profit / (loss) for the year (3,091) (1,867)
Share of profit / (loss) in associate - (603)
Share of (profit) / loss attributable to non-controlling interest 15 3
Total comprehensive profit / (loss) attributable to owners of the parent (3,076) (2,467)
Earnings / (loss) per share:
Basic from continuing operations 17 (0.022) (0.017)
Diluted from continuing operations 17 (0.022) (0.017)
Consolidated Statement of Financial Position
The statement of financial position as at 31 December 2023 is set out below:
As at 31 December 2023 As at 31 December 2022
Note £'000 £'000
Assets
Non - current assets
Property, plant and equipment 6 2,144 622
Intangible Assets 7 - 227
Current assets
Cash and cash equivalents 9 172 690
Trade and other receivables 10 1,041 402
Investments - -
Total current assets 3,357 1,941
Total assets 3,357 1,941
Equity and liabilities
Capital and reserves
Share capital account 8 12,490 12,038
Equity component of convertible instruments 4,038 3,456
Retained earnings (18,597) (16,270)
Non-controlling interests (18) (3)
Total equity attributable to equity holders (2,087) (779)
Current liabilities
Borrowings 11 4,741 2,407
Trade and other payables 13 703 313
Total current liabilities 5,444 2,720
Total equity and liabilities 3,357 1,941
Consolidated Statement of Changes in Equity
The statement of changes in equity is set out below:
Share Equity component of convertible instruments Retained earnings Non-controlling interest Total
capital account Total
£'000 £'000 £'000 £'000 £'000
As at 1 January 2022
11,879 3,275 (13,818) - 1,336
Profit for the year
Total comprehensive loss for the year (2,467) - (2,467)
Transaction with owners
Proceeds from issue of shares
Conversion of loan notes to equity instruments 181 - 181
Other movements in reserve 15 - 15
Other movements in equity 159 - 159
Amounts attributable to non-controlling interests (3) (3)
As at 31 December 2022 12,038 3,456 (16,270) (3) (779)
Consolidated Statement of Changes in Equity
Share Equity component of convertible instruments Retained earnings Non-controlling interest Total
Capital account Total
£'000 £'000 £'000 £'000 £'000
As at 1 January 2023
12,038 3,456 (16,270) (3) (779)
Profit for the year
Total comprehensive loss for the year (3,076) - (3,076)
Transaction with owners
Proceeds from issue of shares
Conversion of loan notes to equity instruments - 582 - - 582
ECG disposal (moved out from group) (13) - 1,151 - 1,138
Transfer of reserve correction 450 - (450) - -
Foreign exchange differences on currency conversion 15 - 48 - 63
Amounts attributable - - - (15) (15)
to non-controlling interests
As at 31 December 2023 12,490 4,038 (18,597) (18) (2,087)
Share capital comprises the Ordinary Shares issued by the Group.
Retained earnings represent the aggregate retained losses of the Group since
incorporation.
Equity component of convertible instruments represents the equity element of
instruments with a convertible element.
Consolidated Statement of Cash Flows
The cash flow statement is set out below:
Year ended Year ended
31 December 31 December
2023 2022
£'000 £'000
Cash flow from operating activities
Loss for the period before taxation (3,076) (2,473)
Premium paid on convertible loan note repayment
Loss on disposal of ECG 1,138 -
Interest 113 97
Operating cash flows before movements in working capital (1,825) (2,564)
(Increase)/decrease in receivables (340) 461
Decrease in accounts payable and accrued liabilities 389 112
Net cash used in operating activities (2,076) (1,991)
Fixed assets investment - Assets under construction (1,305) (849)
Payback from investments - -
Net cash outflow from investing activities (1,305) (849)
Changes in borrowings/convertible instruments 2,335 1,615
Equity component of convertible instruments 582 181
Other movements in equity/Minority interest (54) 172
Funding received from Cindrigo Limited - -
Net cash inflow from financing activities 2,863 1,968
Net decrease in cash and cash equivalents (518) (872)
Cash and cash equivalent at beginning of period 690 1,562
Cash and cash equivalent at end of period 172 690
Notes to the consolidated financial statements
1. General information
The Group was incorporated under section II of the Companies (Guernsey) Law
2008 on 24 November 2014, it is limited by shares and has registration number
59383.
The Group's registered office is located at PO Box 186, Royal Chambers, St
Julian's Avenue, St. Peter Port, Guernsey GY1 4HP, Channel Islands.
2. Significant Accounting Policies
Basis of preparation
The consolidated financial statements of Cindrigo Holdings Limited (formerly
Challenger Acquisitions Limited) for the year ended 31 December 2023 have been
prepared in accordance with International Financial Reporting Standards as
adopted by the EU (IFRS's as adopted by the EU), issued by the International
Accounting Standards Board (IASB), including interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC) applicable
to the companies reporting under IFRS.
The preparation of consolidated financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in note 3.
The financial information has been presented in British Pound (£), being the
functional currency of the Group.
Income recognition
Interest income
Interest income is recognised using the effective interest method. When a
receivable is impaired, the Group reduces the carrying amount to its
recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument and continues unwinding the
discount as interest income.
Other income
Other income is recognized when it is probable that economic benefits will
flow to the entity, and the income can be reliably measured. Income is
recognized irrespective of when the cash is received or receivable.
Basis of consolidation
The consolidated financial statement incorporates the results of the Group and
its wholly owned subsidiaries:
The Group conducts its operational business through the Company's wholly-owned
subsidiary, Cindrigo Limited (UK).
All inter-company, investments, balances, transactions, income and expenses
and profits and losses resulting from inter-company group transactions are
eliminated in full on consolidation. Unrealised losses are also eliminated
when the transaction provides evidence of an impairment of the asset
transferred.
The following companies are consolidated into the Group financial statements:
Name of Company Country of Nature of % owned Method of
incorporation Operations Consolidation
Cindrigo Limited U.K Cost Centre 100% Full consolidation
Cindrigo Geothermal Limited U.K Holding 100% Full consolidation
Company
Dravacel Energetika doo Croatia Geothermal 90% Full consolidation
Energy
Cindrigo Geothermal (Europe) Limited U.K Geothermal 100% Full consolidation
Energy
The following companies are not consolidated in the current year:
Name of Company Country of Nature of % owned
incorporation Operations
Energy Co-Invest Global Canada Holding company 100%
GEG efh Iceland Geothermal Energy 48%
Kyiv Power BTS LLC Ukraine Holding company 99%
During the year, Energy Co-Invest Global ("ECG") and GEG suspended their
operations and the shares in ECG were sold for a nominal consideration. The
investment and intercompany balance with ECG have been written off.
Kyiv Power BTS LLC would have acted as the holding company for the operations
to build and operate waste to energy plants in Ukraine. Given the invasion of
Ukraine by the Russian Federation in February 2022 all group operations in
Ukraine were suspended and the investment was fully impaired in the previous
year. In the current year, the interest in Kyiv Power BTS LLC was sold for a
nominal consideration.
Going concern
The financial information has been prepared on the assumption that the Group
will continue as a going concern. Under the going concern assumption, an
entity is ordinarily viewed as continuing in business for the foreseeable
future with neither the intention nor the necessity of liquidation, ceasing
trading or seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate, the
Directors take into account all available information for the foreseeable
future, in particular for the twelve months from the date of approval of the
financial information.
In January 2024, the Company received bridging finance of €3.3m from Danir
AB, its major shareholder, to secure the progress of the Project.
In February 2024, the Company signed a convertible loan agreement in the sum
of £10m from TriRi Asset Management, with agreed drawdown as soon as the
Licence Extension for the Project is granted.
The Group has the option to reduce costs, principally consulting fees payable
to senior executives, to preserve cash resources.
The directors have prepared cash flow forecasts to March 2025 and consider
that the company has sufficient working capital to continue as a going concern
during the period.
The Directors' objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders. At the date of this
financial information, the Group had been financed from equity and convertible
notes. In the future, the capital structure of the Group is expected to
consist of convertible notes and equity attributable to equity holders of the
Group, comprising issued share capital and reserves.
New standards, interpretations and amendments effective from 1 January 2023
There were no new standards or interpretations effective for the first time
for periods beginning on or after 1 January 2023 that had a significant effect
on the Group's consolidated financial statements.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective.
The directors do not expect that any of these standards and interpretations
will have a material impact on the consolidated financial statements of the
Group.
Segment Reporting
For the purpose of IFRS 8, the Chief Operating Decision Maker "CODM" takes the
form of the board of directors. The Directors are of the opinion that the
business of the Group comprised a single activity, being the identification
and acquisition of target companies or businesses in the energy sector.
Foreign Currency Translation
Functional and presentation currency
Items included in the consolidated financial statements are measured using the
currency of the primary economic environment in which the entity operates
('the functional currency'). The consolidated financial statements are
presented in British Pounds (GBP), which is Cindrigo Holdings functional and
presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or
loss. Foreign exchange gains and losses are presented in the statement of
profit or loss, within finance income or finance costs.
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example,
translation differences on non-monetary assets and liabilities such as
equities held at fair value through profit or loss are recognised in profit or
loss as part of the fair value gain or loss and translation differences on
non-monetary assets such as equities classified as available-for-sale
financial assets are recognised in other comprehensive income.
Fair value of assets
Assets are tested for fair value whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. A reduction in fair
value is recognised 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 and value in use. For the purposes
of assessing fair value, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill that suffered a significant
reduction in fair value are reviewed for possible reversal of the significant
reduction in fair value at the end of each reporting period.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.
Investments and other financial assets
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on
trade-date, the date on which the Group commits to purchase or sell the asset.
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.
Measurement
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 profit or
loss, transaction costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets carried at fair
value through profit or loss are expensed in profit or loss.
The Group's investments in corporate debt securities which are held within a
business model whose objective is achieved both by collecting contractual cash
flows and by selling securities are classified as held at fair value through
profit or loss (FVTPL).
Investments in equity securities have been classified as measured at FVTPL.
Interest income from financial assets at fair value through profit or loss is
included in the net gains/(losses). Interest on financial assets held at
amortised cost, calculated using the effective interest method is recognised
in the statement of profit or loss as part of revenue from continuing
operations.
Impairment of financial assets
Financial assets are assessed for indicators of decline in fair value at the
end of the reporting period. The Group recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original
effective interest rate.
For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of
the exposure, irrespective of the timing of the default (a lifetime ECL).
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor's credit
rating), the reversal of the previously recognised impairment loss is
recognised in profit or loss.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective
interest method.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using
the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the extent there is
no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity services and
amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible bond is determined
using a market interest rate for an equivalent non-convertible bond. This
amount is recorded as a liability on an amortised cost basis until
extinguished on conversion or maturity of the bonds. The remainder of the
proceeds is allocated to the conversion option. This is recognised and
included in shareholders' equity, net of income tax effects.
Employee benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits and
accumulating sick leave that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related
service are recognised in respect of employees' services up to the end of the
reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
The obligations are presented as current liabilities in the balance sheet if
the entity does not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.
Related Parties
For the purposes of these financial statements, a party is considered to be
related to the Company if:
(i) the party has the ability, directly or indirectly, through one or more
intermediaries, to control the Company or exercise significant influence over
the Company in making financial and operating policy decisions or has joint
control over the Company;
(ii) the Company and the party are subject to common control;
(iii) the party is an associate of the Company or a joint venture in which the
Company is a venturer;
(iv) the party is a member of key management personnel of the Company or the
Company's parent, or a close family member of such an individual, or is an
entity under the control, joint control or significant influence of such
individuals;
(v) the party is a close family member of a party referred to in (i) or is an
entity under the control, joint control or significant influence of such
individuals;
(vi) the party, or any member of a group of which it is part, provides key
management personnel services to the company or its parent.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity under share capital as a deduction, net of tax, from the
proceeds.
Earnings per share
Basic earnings per share is calculated by dividing:
· the profit attributable to owners of the Group, excluding any costs
of servicing equity other than ordinary shares
· by the weighted average number of ordinary shares outstanding during
the financial year.
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account:
· the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and
· the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
3. Critical estimates, judgements and errors
The preparation of consolidated financial statements requires the use of
accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the Group's
accounting policies.
This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items which are more likely to be materially
adjusted due to estimates and assumptions turning out to be wrong. Detailed
information about each of these estimates and judgements is included together
with information about the basis of calculation for each affected line item in
the consolidated financial statements. In addition, this note also explains
where there have been actual adjustments this year as a result of an error and
of changes to previous estimates.
Significant estimates and judgements
The areas involving significant estimates or judgements are:
· Going concern
See accounting policies (note 2) for details of the assessment made.
Estimates and judgements are continually evaluated. They are based on
historical experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to
be reasonable under the circumstances.
4. FINANCIAL RISK MANAGEMENT
This note explains the Group's exposure to financial risks and how these risks
could affect the Group's future financial performance. Current year profit and
loss information has been included where relevant to add further context.
Risk Exposure arising from Measurement Management
Market risk - foreign exchange Future commercial cash flows not denominated in GBP Cash flow forecasting No hedging
Recognised financial assets and liabilities not denominated in GBP Sensitivity analysis
No hedging
Credit risk Cash and cash equivalents, trade receivables, other receivables Aging analysis Diversification of bank deposits.
Credit ratings Follow-ups to loan investment
Liquidity risk Borrowings and other liabilities Rolling cash flow forecasts Availability of committed credit lines and borrowing facilities
Foreign exchange risk
The Group is especially focused on the currency pairs USD/GBP. The Group's
only active investment is denominated in GBP.
The Group's exposure to foreign currency risk at the end of the current
period, expressed in £'000 was as follows:
Currency Assets in CCY Assets in GBP 10% change Liabilities in CYY Liabilities in GBP 10% change
USD - - - - - -
EUR 1k 1k (0.1k) - - -
CHF - - - - - -
SEK - - - 18,000k 1,372k 137k
The Group's exposure to foreign currency risk at the end of the prior period,
expressed in £'000 was as follows:
Currency Assets in CCY Assets in GBP 10% change Liabilities in CYY Liabilities in GBP 10% change
USD - - - - - -
EUR 1k 1k (0.1k) - - -
CHF - - - - - -
SEK - - - 18,000k 1,429k 143k
During the year, £19k foreign-exchange related gains were recognised in
profit or loss.
As described above the Group is primarily exposed to changes in the USD/GBP
exchange rate. The sensitivity of profit or loss to changes in the exchange
rates as summarized in the above table arises mainly from the Group's SEK
denominated liability.
Interest rate risk
The Group's fixed rate borrowings are carried at amortised cost. They are
therefore not subject to interest rate risk as defined in IFRS 7, since
neither the carrying amount nor the future cash flows will fluctuate because
of a change in market interest rates.
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and
financial institutions, as well as credit exposures to customers, including
outstanding receivables. To limit the risk the Group's main cash resources are
held with banks with a minimum external rating of A.
Liquidity Risk
The Group currently holds cash balances to provide funding for normal trading
activity. Trade and other payables are monitored as part of normal management
routine.
As at 31 December 2023 all financial assets were classified at fair value. A
maturity analysis of the Group's financial assets is as follows:
As at As at
31 December 31 December
2023 2022
£'000 £'000
0 to 3 months 1,041 402
3 to 6 months - -
6 months + - -
Total 1,041 402
As at 31 December 2023 all financial liabilities were classified at amortised
cost. A maturity analysis of the Group's financial liabilities based on
contractual undiscounted payments is as follows:
As at As at
31 December 31 December
2023 2022
£'000 £'000
0 to 3 months 703 313
3 to 6 months 4,741 2,407
6 months + - -
Total 5,444 2,720
5. Business Segments
For the purpose of IFRS 8, the Chief Operating Decision Maker "CODM" takes the
form of the board of Directors. The Directors are of the opinion that the
business of the Group comprised a single activity, being the identification
and acquisition of target companies or businesses in the energy sector.
6. PROPERTY, PLANT AND EQUIPMENT
Land Assets under construction Total
£'000 £'000 £'000
At 31 December 2022 622 - 622
Foreign exchange differences (10) - (10)
Reclassification from intangible assets 227 227
Additions 1,305 1,305
At 31 December 2023 612 1,532 2,144
Land was acquired as part of new acquisition Dravacel, in June 2022, land is
in Croatia and has license to construct GEFL energy site. The land is not
depreciated. The directors have considered whether the value of the land
requires an impairment as at 31 December 2023, and due to the fact that
Dravacel has exploration rights for the land, the directors consider that
there has been no diminution in the carrying value of the land since the
acquisition.
Assets under construction include costs relating to the development of the
Slatina 3 project in Croatia and depreciation of these assets will commence
when the assets are ready for their intended use.
7. INTANGIBLE ASSETS
During the year, the balance brought forward from 31 December 2022, was
reclassified to assets under consideration, as it consisted of costs relating
to the development of the Slatina 3 project in Croatia.
Patents and licences Total
£'000 £'000
At 31 December 2022 227 227
Reclassification to assets under construction (227) (227)
At 31 December 2023 - -
8. SHARE CAPITAL
Issued and fully paid Number of shares Share capital account
£'000
At 31 December 2022 142,041,530 22,485
Issue of shares - -
At 31 December 2023 142,041,530 22,485
9. CASH AND CASH EQUIVALENTS
As at As at
31 December 31 December
2023 2022
£'000 £'000
Cash at bank and in hand 172 690
Total 172 690
10. TRADE AND OTHER RECEIVABLES
As at As at
31 December 31 December
2023 2022
£'000 £'000
Prepayments and accrued income 622 1
Trade debtors 22 23
Other debtors 397 39
TCB Investors - 339
Total 1,041 402
On 5 August 2022 CINH lent TCB Investors OU the Vendor of ECG £340,000 for a
term to 31(st) December 2023, this amount is not recoverable and written off
in Statement of Comprehensive Income in current year.
11. BORROWINGS
As at 31 December As at 31 December
2023 2022
£'000 £'000
Current
Convertible notes 4,427 2,065
Other loans 314 342
Total 4,741 2,407
Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2021 (liability) - - - - - - -
Balance at 31 December 2021(equity) 1,000 700 1,575 - - - 3,275
Issue of Note - - - 1,443 827 - 2,270
Conversion of loan to equity instrument - - - -68 -113 - - 181
Finance Charge - - - 23 1 - 24
Other movements - - - - -
Balance at 31 December 2022 (liability) - - - 1,398 715 - 2,113
Balance at 31 December 2022 (equity) 1,000 700 1,575 68 113 - 3,456
Issue of Note 1,000 515 1,289 2,804
Conversion of loan to equity instrument -216 -137 -229 - 582
Finance Charge 73 37 34 13 7 163
F/X gain/losses -72 - 72
Balance at 31 December 2023 (liability) - - - 1399 752 818 391 1067 4,427
Balance at 31 December 2023 (equity) 1,000 700 1,575 68 113 216 137 229 4,038
Note 1
On 29 January 2016, the Group issued further £1 million of secured
convertible notes. The notes were unlisted, secured, transferable and
convertible. Maturity date was 30 June 2019. The Secured Convertible Notes
were secured by one common unit of New York Wheel Investor LLC, representing a
total value US$1 million. Interest accrued at 8% per annum and was payable
quarterly. One eighth of the interest can be settled in cash or shares at the
Group's discretion. Seven eighths of the interest is settled in new
convertible notes with the same terms. The notes are convertible in cash or
shares at the option of the holder and can be converted into Ordinary Shares
at a fixed conversion price of £0.80 per Ordinary Share. The Group can redeem
the notes at a 10% premium anytime. As per the nature of this convertible
instrument, £106k has been recognised as an equity component in of
convertible instruments in statement of changes of equity, using a discount
rate of 12%.
In August 2021, the loan notes, including all accumulated but unpaid interest,
were settled by new 10-year zero coupon loan notes with a principal value of
£1m which have been reclassified as an equity instrument under IFRS.
Note 2
The last tranche of £400,000 of the £1 million funding facility announced by
the Group on 13 June 2017, was drawn on 18 January 2018 and subsequently the
Group issued convertible note for £400,000. The notes were unlisted,
unsecured, transferable and convertible. Maturity date was 8 June 2019. No
conversions could happen in the first 120 days. The maximum amount that could
be converted in any 30day period was 20% of the principal amount. The
conversion price was the lowest volume weighted average price over 10 days
prior to the conversion. Interest rate was 8% per annum and payable upon
conversion at the Group's option in cash or ordinary shares at the conversion
price. The Group could redeem in cash all or any part of the outstanding
convertible note with a 25% premium to the principal amount. Despite reaching
maturity this note was still outstanding and continued to accrue interest in
accordance with the interest terms stated
In August 2020, the loan notes, including all accumulated but unpaid interest,
were settled by new 10- year zero coupon loan notes with a principal value of
£700,000 which have been reclassified as an equity instrument under IFRS.
Note 3
On 11th October 2021, the Group created up to £1,575,000 Series 4 unlisted,
unsecured, zero-coupon, convertible and transferable loan notes 2031.
Note 4
On 6(th) September 2022, Company received funding of SEK 18,000k from Danir
AB. The loan is interest free and payable on 05 September 2025 but has an
option to convert.
Note 5
On 5th August 2022, Danir agreed to lend CINH £750,000 at an interest rate of
5% per annum. The Loan was to be convertible at a 25% discount to VWAP or
£1.25 per share which ever was the higher.
On 9th December 2022, CINH agreed with Danir to restructure the facility. A
loan of £750,000 was advanced to CINH on that date with agreements and loan
note instruments being reduced to writing in January 2023. The original
agreement was cancelled and a new issue of £3,800,000 convertible notes were
issued to Danir convertible at £0.15 per share. A further loan was advanced
in the sum of £750,000 which will be convertible at £1.25 per share.
2,000,000 warrants at £1.00 exercisable by 31 December 2023 and 3,000,000
warrants at £1.25 exercisable by 31 December 2023.
Note 6
On 26th April 2023, Danir lent CINH the sum of £1,000,000 by the subscription
for convertible loan notes, £1,573,519 unlisted, unsecured 12% convertible
loan notes. The loan is interest free and payable on 26 September 2027.
Note 7
On 15th September 2023, Danir lent CINH the further sum of £515,000 by the
subscription for convertible loan notes. The loan is with 8% interest per
annum, rolled up and paid on maturity and repayable on 31 December 2026.
Note 8
In November 2023, Danir lent sum of £1,289,145, by subscription of
zero-coupon redeemable Loan Notes. The loan is interest free and payable on 31
December 2026.
Other loans
On October 21, 2018, Cindrigo Inc borrowed US$295,600 from a group of
arm's length parties. The loans bear interest at 7% interest per annum. The
loans are convertible at the option of the lenders at any time between 6 to 30
months after the Company's listing of Cindrigo Inc on a Stock Exchange at a
conversion price that is at a 25% discount to the 30 day volume weighted
average share price. If the loans are not converted, the loans are due three
years after the Cindrigo Inc's listing. Cindrigo Inc has been dissolved
however Cindrigo Holdings Limited has indicated that subject to contract the
original terms of the loan notes will be honoured.
12. FINANCE INCOME AND COSTS
As at 31 December As at 31 December
2023 2022
£'000 £'000
Interest on convertible loan notes 91 97
Interest on other loans 22 -
Total 113 97
13. TRADE AND OTHER PAYABLES
As at 31 December As at 31 December
2023 2022
£'000 £'000
Trade payables 457 57
Other payables 124 149
Accrued expenses 122 107
Total 703 313
14. EMPLOYEE BENEFIT EXPENSE
As at 31 December As at 31 December
2023 2023
£'000 £'000
Wages and salaries - -
Share options granted to directors, employees and key advisers - -
Total - -
15. DIRECTORS' EMOLUMENTS
The Directors were paid emoluments of £83k as directors' fees during the
period under review £126k in 2022). The directors billed an additional of
£427k (2022: £327k) as consultancy fees, booked under administrative
expenses.
These details and the details for the other Directors can be found within the
Director's remuneration report on page 21.
The Directors were the key management personnel of the Group.
16. TAXATION
Cindrigo Holdings Limited is a Guernsey Corporation subject to a corporate tax
rate of nil, as of 31 December 2023.
None of the group's subsidiaries incurred any tax liabilities during the year
ended 31 December 2023.
There are no unrecognised tax losses.
17. EARNINGS PER SHARE
The calculation for earnings per share (basic and diluted) for the relevant
period is based on the profit / loss after income tax attributable to equity
holder for the period ending 31 December 2023 and is as follows:
31 December 2023
Loss from continued operations attributable to equity holders (£) (3,075,000)
Weighted average number of shares of £2.667609 each 142,041,530
Loss per share basic (£) (0.022)
Weighted average number of shares for dilutive calculation 142,041,530
Loss per share diluted (£) (0.022)
31 December 2022
Loss from continued operations attributable to equity holders (£) (2,467,000)
Weighted average number of shares of £2.667609 each 142,202,476
Loss per share basic (£) (0.017)
Weighted average number of shares for dilutive calculation 142,202,476
Loss per share diluted (£) (0.017)
Basic earnings per share is calculated by dividing the loss after tax
attributable to the equity holders of the Group by the weighted average number
of shares in issue during the year.
Diluted loss per share is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all potential dilutive
ordinary shares namely the conversion of the convertible loan note in issue.
The effect of these potential dilutive shares would be anti-dilutive and
therefore are not included in the above calculation of diluted earnings per
share.
18. RELATED PARTY TRANSACTIONS
During the period, consultancy fees of £96k (31 December 2022: £106k) were
payable to Fitzrovia Advisory Ltd, a company in which M Patel, a director, has
a material interest. A balance of £15k (31 December 2022: £nil) was
outstanding at the period end. Transactions are completed on an arm's length
basis on normal commercial terms.
During the period, consultancy fees of £120k (31 December 2022: £120k) were
payable to IMM International. At the period end, no balances were due to IMM
International (31 December 2022: £9k of amount payable). IMM International
and Cindrigo Holdings Limited are connected by virtue of common key management
personnel, L Guldstrand transactions are completed on an arm's length basis on
normal commercial terms.
During the period, consultancy fees of £170k (31 December 2022: £14K) were
payable to Treasury Core UAB. A balance of £7.5K (31 December 2022: £nil)
was outstanding at the period end. Treasury Core UAB and Cindrigo Holdings
Limited are connected by virtue of common key management personnel, J Oxley.
Transactions are completed on an arm's length basis on normal commercial
terms.
During the period, consultancy fees of £41k (31 December 2022: £44k) were
payable to Osmosis Limited. At the period end, no balances were due to Osmosis
Limited as at 31 December 2023 (31 December 2022: £4K). Osmosis Limited and
Cindrigo Holdings Limited are connected by virtue of common key management
personnel, S Fawcett. Transactions are completed on an arm's length basis on
normal commercial terms. S Fawcet resigned as director in November 2023.
Outstanding balance of loans received from Danir is £4,427K. Danir holds 29%
of the company's share capital. Loan received has option to convert to
equity.
At the balance sheet date, amounts receivable of £4,431K from Cindrigo
Limited and £105K from Dravacel, all balances are fully recoverable.
19. COMMITMENTS
The Group had not entered into any material commitments as of 31 December
2023.
20. SHARE BASED PAYMENTS
The Group does not operate share- based payment plans as of 31 December 2023.
21. SUBSEQUENT EVENTS
The Company received a further sum of £2.7M from Danir, its largest
shareholder, to fund initial costs of the deep drilling in connection with the
Project.
The Company entered into a £10 million convertible loan agreement with TriRi
Asset Management Limited, a reputable investment firm based in the USA and
Canada. The funds are to support the ongoing development of the Slatina 3
Project in Croatia.
None of these events impact the financial statements for the year ended 31
December 2023.
22. ULTIMATE CONTROLLING PARTY
As of 31 December 2023, no one entity owns more than 50% of the issued share
capital. Therefore, the Group does not have an ultimate controlling party.
Parent Company (Cindrigo Holdings Limited) Statement of Financial Position
The parent company statement of financial position as at 31 December 2023 is
set out below:
As at 31 December 2023 As at 31 December 2022
Note £'000 £'000
Assets
Current assets
Cash and cash equivalents 7 - 22
Trade and other receivables 8 4,331 3,055
Investments 9 - -
Total current assets 4,331 3,077
Total assets 4,331 3,077
Equity and liabilities
Capital and reserves
Share capital account 6 22,493 22,493
Equity component of convertible instruments 4,038 3,456
Retained earnings (26,908) (25,163)
Total equity attributable to equity holders (377) 786
Current liabilities
Borrowings 10 4,427 2,113
Trade and other payables 12 281 178
Total current liabilities 4,708 2,291
Total equity and liabilities 4,331 3,077
The notes on pages 57 to 72 form part of these financial statements.
The Company has elected to take the exemption under the Companies (Guernsey)
Law 2008 not to present the company's statement of comprehensive income. The
Company's loss for the year was £1,745K (2022: £548k).
The directors acknowledge their responsibilities for complying with the
requirements of the Companies (Guernsey) Law 2008 with respect to account
records and the preparation of financial statements.
The financial statements were approved by the Board of Directors and
authorised for issue on 21 March 2024 and are signed on its behalf by:
Lars Guldstrand
Chief Executive Officer
Parent Company (Cindrigo Holdings Limited) Statement of Changes in Equity
The statement of changes in equity is set out below:
Share Equity component of convertible instruments Retained earnings Total
Capital account
£'000 £'000 £'000 £'000
As at 1 January 2022 22,493 15,190
3,275 (10,578)
Profit for the year
Total comprehensive loss for the year - - (14,585) (14,585)
- - - -
Transaction with owners - - - -
Issue of shares - - - -
Conversion of loan notes to equity instruments - 181 - 181
Other movements in equity - - - -
As at 31 December 2022 22,493 3,456 (25,163) 786
Parent Company (Cindrigo Holdings Limited) Statement of Changes in Equity
Share Equity component of convertible instruments Retained earnings Total
Capital account
£'000 £'000 £'000 £'000
As at 1 January 2023 22,493 786
3,456 (25,163)
Profit for the year
Total comprehensive loss for the year - - (1,745) (1,745)
- - - -
Transaction with owners - - - -
Issue of shares - - - -
Conversion of loan notes to equity instruments - 582 - 582
Other movements in equity - - - -
As at 31 December 2023 22,493 4,038 (26,908) (377)
Share capital comprises the Ordinary Shares issued by the Company.
Retained earnings represent the aggregate retained losses of the Company since
incorporation.
Equity component of convertible instruments represents the equity element of
instruments with a convertible element.
Parent Company (Cindrigo Holdings Limited) Statement of Cash Flows
The cash flow statement is set out below:
Year ended Year ended
31 December 31 December
2023 2022
£'000 £'000
Cash flow from operating activities
Loss for the period before taxation (1,745) (548)
Premium paid on convertible loan note repayment - -
Interest 91 62
Operating cash flows before movements in working capital (1,654) (486)
(Increase)/decrease in receivables (1,276) (1,165)
Increase in accounts payable and accrued liabilities 103 34
Net cash used in operating activities (2,827) (1,617)
Amounts written of investments - -
Payback from investments - -
Net cash outflow from investing activities - -
New convertible loans/repayments 2,314 1,431
Issue of convertible instruments net of issue costs 582 181
Interest paid (91) -
Funding received from Cindrigo Limited - -
Net cash inflow from financing activities 2,805 1,612
Net decrease in cash and cash equivalents (22) (5)
Cash and cash equivalent at beginning of period 22 27
Cash and cash equivalent at end of period - 22
There were significant non-cash transactions being the issue of share capital
to settle convertible debt and interest. These are detailed in Note 10.
Notes to the parent company (Cindrigo Holdings Limited) financial statements
1. General information
The Company was incorporated under section II of the Companies (Guernsey) Law
2008 on 24 November 2014, it is limited by shares and has registration number
59383.
The Company's registered office is located at PO Box 186, Royal Chambers, St
Julian's Avenue, St. Peter Port, Guernsey GY1 4HP, Channel Islands.
2. Significant Accounting Policies
Basis of preparation
The financial statements of Cindrigo Holdings Limited (formerly Challenger
Acquisitions Limited) for the year ended 31 December 2023 have been prepared
in accordance with International Financial Reporting Standards as adopted by
the EU (IFRS's as adopted by the EU), issued by the International Accounting
Standards Board (IASB), including interpretations issued by the International
Financial Reporting Interpretations Committee (IFRIC) applicable to the
companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements are disclosed in note 3.
The financial information has been presented in British Pound (£), being the
functional currency of the Company.
Going concern
The financial information has been prepared on the assumption that the company
will continue as a going concern. Under the going concern assumption, an
entity is ordinarily viewed as continuing in business for the foreseeable
future with neither the intention nor the necessity of liquidation, ceasing
trading or seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate, the
Directors take into account all available information for the foreseeable
future, in particular for the twelve months from the date of approval of the
financial information.
In January 2024, the Company received bridging finance of €3.3m from Danir
AB, its major shareholder, to secure the progress of the Project.
In February 2024, the Company signed a convertible loan agreement in the sum
of £10 million from TriRi Asset Management, with agreed drawdown as soon as
the Licence Extension for the Project is granted.
The company has the option to reduce costs, principally consulting fees
payable to senior executives, to preserve cash resources.
The directors have prepared cash flow forecasts to March 2025 and consider
that the company has sufficient working capital to continue as a going concern
during the period.
The Directors' objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders. At the date of this
financial information, the Group had been financed from equity and convertible
notes. In the future, the capital structure of the Group is expected to
consist of convertible notes and equity attributable to equity holders of the
Group, comprising issued share capital and reserves.
New standards, interpretations and amendments effective from 1 January 2023
There were no new standards or interpretations effective for the first time
for periods beginning on or after 1 January 2023 that had a significant effect
on the Company's financial statements.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and interpretations have
been issued but are not yet effective.
The directors do not expect that any of these standards and interpretations
will have a material impact on the financial statements of the Company.
Segment Reporting
For the purpose of IFRS 8, the Chief Operating Decision Maker "CODM" takes the
form of the board of directors. The Directors are of the opinion that the
business of the Company comprised a single activity, being the identification
and acquisition of target companies or businesses in the energy sector.
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements are measured using the currency of
the primary economic environment in which the entity operates ('the functional
currency'). The financial statements are presented in British Pounds (GBP),
which is Cindrigo Holdings functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in profit or
loss. Foreign exchange gains and losses are presented in the statement of
profit or loss, within finance income or finance costs.
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example,
translation differences on non-monetary assets and liabilities such as
equities held at fair value through profit or loss are recognised in profit or
loss as part of the fair value gain or loss and translation differences on
non-monetary assets such as equities classified as available-for-sale
financial assets are recognised in other comprehensive income.
Fair value of assets
Assets are tested for fair value whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. A reduction in fair
value is recognised 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 and value in use. For the purposes
of assessing fair value, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill that suffered a significant
reduction in fair value are reviewed for possible reversal of the significant
reduction in fair value at the end of each reporting period.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.
Investments and other financial assets
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on
trade-date, the date on which the Company commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the
Company has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at fair
value through profit or loss are expensed in profit or loss.
The Company's investments in corporate debt securities which are held within a
business model whose objective is achieved both by collecting contractual cash
flows and by selling securities are classified as held at fair value through
profit or loss (FVTPL).
Investments in equity securities have been classified as measured at FVTPL.
Interest income from financial assets at fair value through profit or loss is
included in the net gains/(losses). Interest on financial assets held at
amortised cost, calculated using the effective interest method is recognised
in the statement of profit or loss as part of revenue from continuing
operations.
Impairment of financial assets
Financial assets are assessed for indicators of decline in fair value at the
end of the reporting period. The Company recognises an allowance for expected
credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the
Company expects to receive, discounted at an approximation of the original
effective interest rate.
For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of
the exposure, irrespective of the timing of the default (a lifetime ECL).
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor's credit
rating), the reversal of the previously recognised impairment loss is
recognised in profit or loss.
Income recognition
Interest income
Interest income is recognised using the effective interest method. When a
receivable is impaired, the Company reduces the carrying amount to its
recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument and continues unwinding the
discount as interest income.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
Company prior to the end of financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective
interest method.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using
the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the extent there is
no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity services and
amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible bond is determined
using a market interest rate for an equivalent non-convertible bond. This
amount is recorded as a liability on an amortised cost basis until
extinguished on conversion or maturity of the bonds. The remainder of the
proceeds is allocated to the conversion option. This is recognised and
included in shareholders' equity, net of income tax effects.
Employee benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits and
accumulating sick leave that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related
service are recognised in respect of employees' services up to the end of the
reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
The obligations are presented as current liabilities in the balance sheet if
the entity does not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.
Related Parties
For the purposes of these financial statements, a party is considered to be
related to the Company if:
(i) the party has the ability, directly or indirectly, through one or more
intermediaries, to control the Company or exercise significant influence over
the Company in making financial and operating policy decisions or has joint
control over the Company;
(ii) the Company and the party are subject to common control;
(iii) the party is an associate of the Company or a joint venture in which the
Company is a venturer;
(iv) the party is a member of key management personnel of the Company or the
Company's parent, or a close family member of such an individual, or is an
entity under the control, joint control or significant influence of such
individuals;
(v) the party is a close family member of a party referred to in (i) or is an
entity under the control, joint control or significant influence of such
individuals;
(vi) the party, or any member of a group of which it is part, provides key
management personnel services to the company or its parent.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity under share capital as a deduction, net of tax, from the
proceeds.
Earnings per share
Basic earnings per share is calculated by dividing:
· the profit attributable to owners of the Company, excluding any costs
of servicing equity other than ordinary shares
· by the weighted average number of ordinary shares outstanding during
the financial year.
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account:
· the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and
· the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
3. Critical estimates, judgements and errors
The preparation of financial statements requires the use of accounting
estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Company's
accounting policies.
This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items which are more likely to be materially
adjusted due to estimates and assumptions turning out to be wrong. Detailed
information about each of these estimates and judgements is included together
with information about the basis of calculation for each affected line item in
the financial statements. In addition, this note also explains where there
have been actual adjustments this year as a result of an error and of changes
to previous estimates.
Significant estimates and judgements
The areas involving significant estimates or judgements are:
· Going concern
See accounting policies (note 2) for details of the assessment made.
Estimates and judgements are continually evaluated. They are based on
historical experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to
be reasonable under the circumstances.
4. FINANCIAL RISK MANAGEMENT
This note explains the Company's exposure to financial risks and how these
risks could affect the Company's future financial performance. Current year
profit and loss information has been included where relevant to add further
context.
Risk Exposure arising from Measurement Management
Market risk - foreign exchange Future commercial cash flows not denominated in GBP Cash flow forecasting No hedging
Recognised financial assets and liabilities not denominated in GBP Sensitivity analysis
No hedging
Credit risk Cash and cash equivalents, trade receivables, other receivables Aging analysis Diversification of bank deposits.
Credit ratings Follow-ups to loan investment
Liquidity risk Borrowings and other liabilities Rolling cash flow forecasts Availability of committed credit lines and borrowing facilities
Foreign exchange risk
The Company is especially focused on the currency pairs USD/GBP. The Company's
only active investment is denominated in GBP.
The Company's exposure to foreign currency risk at the end of the reporting
period, expressed in £'000 was as follows:
Currency Assets in CCY Assets in GBP 10% change Liabilities in CCY Liabilities in GBP 10% change
USD - - - - - -
EUR 1k 1k (0.1k) - - -
CHF - - - - - -
SEK - - - 18,000k 1,372k 137k
The Company's exposure to foreign currency risk at the end of the prior
period, expressed in £'000 was as follows:
Currency Assets in CCY Assets in GBP 10% change Liabilities in CCY Liabilities in GBP 10% change
USD - - - - - -
EUR 1k 1k (0.1k) - - -
CHF - - - - - -
SEK - - - 18,000k 1,429k 143k
During the year, £1k foreign-exchange related losses were recognised in
profit or loss.
As described above the Company is primarily exposed to changes in the USD/GBP
exchange rate. The sensitivity of profit or loss to changes in the exchange
rates as summarized in the above table arises mainly from the Company's USD
denominated asset.
Interest rate risk
The Company's fixed rate borrowings are carried at amortised cost. They are
therefore not subject to interest rate risk as defined in IFRS 7, since
neither the carrying amount nor the future cash flows will fluctuate because
of a change in market interest rates.
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and
financial institutions, as well as credit exposures to customers, including
outstanding receivables. To limit the risk the Company's main cash resources
are held with banks with a minimum external rating of A.
Liquidity Risk
The Company currently holds cash balances to provide funding for normal
trading activity. Trade and other payables are monitored as part of normal
management routine.
As at 31 December 2023 all financial assets were classified at fair value. A
maturity analysis of the Company's financial assets (excluding intercompany
balances) is as follows:
As at As at
31 December 31 December
2023 2022
£'000 £'000
0 to 3 months 95 340
3 to 6 months - -
6 months + - -
Total 95 340
As at 31 December 2023 all financial liabilities were classified at amortised
cost. A maturity analysis of the Company's financial liabilities based on
contractual undiscounted payments is as follows:
As at As at
31 December 31 December
2023 2022
£'000 £'000
0 to 3 months 281 178
3 to 6 months - -
6 months + 4,427 2,113
Total 4,708 2,291
5. Business Segments
For the purpose of IFRS 8, the Chief Operating Decision Maker "CODM" takes the
form of the board of Directors. The Directors are of the opinion that the
business of the Company comprised a single activity, being the identification
and acquisition of target companies or businesses in the energy sector.
6. SHARE CAPITAL
Issued and fully paid Number of shares Share capital account
£'000
At 31 December 2022 142,041,530 22,485
Issue of shares - -
At 31 December 2023 142,041,530 22,485
7. CASH AND CASH EQUIVALENTS
As at As at
31 December 31 December
2023 2022
£'000 £'000
Cash at bank and in hand - 22
Total - 22
8. TRADE AND OTHER RECEIVABLES
As at As at
31 December 31 December
2023 2022
£'000 £'000
Prepayments and accrued income 73 1
Other receivables 22 339
Amounts due from related companies 4,236 2,715
Loan note consideration due - -
Total 4,331 3,055
The balance due from related companies represents receivable loan payments
paid into the bank account of Cindrigo Limited less expenses paid by Cindrigo
Limited on behalf of Cindrigo Holdings Limited.
9. INVESTMENTS
In July 2021 the Company acquired the Cindrigo Group. In accordance with IFRS
this is recognised as an investment within the accounts of Cindrigo Holdings
Limited.
10. BORROWINGS
As at As at
31 December 31 December
2023 2022
£'000 £'000
Current
Convertible notes 4,427 2,065
Deferred cash consideration - 48
Total 4,427 2,113
Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2021 (liability) - - - - - - - -
Balance at 31 December 2021(equity) 1,000 700 1,575 - - - - 3,275
Issue of Note - - - 1,443 827 - - 2,270
Conversion of loan to equity instrument - - - -68 -113 - - - - 181
Finance Charge - - - 23 1 - - - 24
Other movements - - - - - - - - -
Balance at 31 December 2022 (liability) - - - 1,398 715 - - - 2,113
Balance at 31 December 2022 (equity) 1,000 700 1,575 68 113 - - - 3,456
Issue of Note - - - - - 1,000 515 1,289 2,804
Conversion of loan to equity instrument - - - - - -216 -137 -229 - 582
Finance Charge - - - 73 37 34 13 7 163
F/X gain/losses - - - -72 - - - - - 72
Balance at 31 December 2023 (liability) - - - 1399 752 818 391 1067 4,427
Balance at 31 December 2023 (equity) 1,000 700 1,575 68 113 216 137 229 4,038
Note 1
On 29 January 2016, the Group issued further £1 million of secured
convertible notes. The notes were unlisted, secured, transferable and
convertible. Maturity date was 30 June 2019. The Secured Convertible Notes
were secured by one common unit of New York Wheel Investor LLC, representing a
total value US$1 million. Interest accrued at 8% per annum and was payable
quarterly. One eighth of the interest can be settled in cash or shares at the
Group's discretion. Seven eighths of the interest is settled in new
convertible notes with the same terms. The notes are convertible in cash or
shares at the option of the holder and can be converted into Ordinary Shares
at a fixed conversion price of £0.80 per Ordinary Share. The Group can redeem
the notes at a 10% premium anytime. As per the nature of this convertible
instrument, £106k has been recognised as an equity component in of
convertible instruments in statement of changes of equity, using a discount
rate of 12%.
In August 2021, the loan notes, including all accumulated but unpaid interest,
were settled by new 10-year zero coupon loan notes with a principal value of
£1m which have been reclassified as an equity instrument under IFRS.
Note 2
The last tranche of £400,000 of the £1 million funding facility announced by
the Group on 13 June 2017, was drawn on 18 January 2018 and subsequently the
Group issued convertible note for £400,000. The notes were unlisted,
unsecured, transferable and convertible. Maturity date was 8 June 2019. No
conversions could happen in the first 120 days. The maximum amount that could
be converted in any 30day period was 20% of the principal amount. The
conversion price was the lowest volume weighted average price over 10 days
prior to the conversion. Interest rate was 8% per annum and payable upon
conversion at the Group's option in cash or ordinary shares at the conversion
price. The Group could redeem in cash all or any part of the outstanding
convertible note with a 25% premium to the principal amount. Despite reaching
maturity this note was still outstanding and continued to accrue interest in
accordance with the interest terms stated
In August 2020, the loan notes, including all accumulated but unpaid interest,
were settled by new 10- year zero coupon loan notes with a principal value of
£700,000 which have been reclassified as an equity instrument under IFRS.
Note 3
On 11th October 2021, the Group created up to £1,575,000 Series 4 unlisted,
unsecured, zero-coupon, convertible and transferable loan notes 2031.
Note 4
On 6(th) September 2022, Company received funding of SEK 18,000k from Danir
AB. The loan is interest free and payable on 05 September 2025 but has an
option to convert.
Note 5
On 5th August 2022, Danir agreed to lend CINH £750,000 at an interest rate of
5% per annum. The Loan was to be convertible at a 25% discount to VWAP or
£1.25 per share which ever was the higher.
On 9th December 2022, CINH agreed with Danir to restructure the facility. A
loan of £750,000 was advanced to CINH on that date with agreements and loan
note instruments being reduced to writing in January 2023. The original
agreement was cancelled and a new issue of £3,800,000 convertible notes were
issued to Danir convertible at £0.15 per share. A further loan was advanced
in the sum of £750,000 which will be convertible at £1.25 per share.
2,000,000 warrants at £1.00 exercisable by 31 December 2023 and 3,000,000
warrants at £1.25 exercisable by 31 December 2023.
Note 6
On 26th April 2023, Danir lent CINH the sum of £1,000,000 by the subscription
for convertible loan notes, £1,573,519 unlisted, unsecured 12% convertible
loan notes. The loan is interest free and payable on 26 September 2027.
Note 7
On 15th September 2023, Danir lent CINH the further sum of £515,000 by the
subscription for convertible loan notes. The loan is with 8% interest per
annum, rolled up and paid on maturity and repayable on 31 December 2026.
Note 8
In November 2023, Danir lent sum of £1,289,145, by subscription of
zero-coupon redeemable loan notes. The loan is interest free and payable on 31
December 2026.
11. FINANCE INCOME AND COSTS
As at As at
31 December 31 December
2023 2022
£'000 £'000
Interest on convertible loan notes 91 62
Total 91 62
12. TRADE AND OTHER PAYABLES
As at As at
31 December 31 December
2023 2022
£'000 £'000
Trade payables 83 37
Other payables 100 99
Accrued expenses 98 42
Total 281 178
13. EMPLOYEE BENEFIT EXPENSE
As at As at
31 December 31 December
2023 2022
£'000 £'000
Wages and salaries - -
Share options granted to directors, employees and key advisers -
- -
Total - -
14. DIRECTORS' EMOLUMENTS
All current year directors' fees were paid for by the Company's 100%
subsidiary Cindrigo Limited and recharged to the Company.
These details and the details for the other Directors can be found within the
Director's remuneration report on page 23.
The Directors were the key management personnel of the Company.
15. TAXATION
Cindrigo Holdings Limited (formerly Challenger Acquisitions Limited) is a
Guernsey Corporation subject to a corporate tax rate of nil, as of 31 December
2023. There are no unrecognised tax losses.
16. EARNINGS PER SHARE
The calculation for earnings per share (basic and diluted) for the relevant
period is based on the profit / loss after income tax attributable to equity
holder for the period ending 31 December 2022 and is as follows:
31 December 2023
Loss from continued operations attributable to equity holders (£) (1,745,000)
Weighted average number of shares of £2.667609 each 142,041,530
Loss per share basic (£) (0.0123)
Weighted average number of shares for dilutive calculation 142,041,530
Loss per share diluted (£) (0.0123)
31 December 2022
Loss from continued operations attributable to equity holders (£)
(548,000)
Weighted average number of shares of £2.667609 each 142,202,476
Loss per share basic (£) (0.0038)
Weighted average number of shares for dilutive calculation 142,202,476
Loss per share diluted (£) (0.0038)
Basic earnings per share is calculated by dividing the loss after tax
attributable to the equity holders of the Company by the weighted average
number of shares in issue during the year.
Diluted loss per share is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all potential dilutive
ordinary shares namely the conversion of the convertible loan note in issue.
The effect of these potential dilutive shares would be anti-dilutive and
therefore are not included in the above calculation of diluted earnings per
share.
17. RELATED PARTY TRANSACTIONS
There were no related party transactions except for the transactions disclosed
in Note 14 to the accounts.
18. COMMITMENTS
The Company had not entered into any material commitments as of 31 December
2023.
19. SHARE BASED PAYMENTS
The Group does not operate share-based payment plans as of 31 December 2023.
20. SUBSEQUENT EVENTS
The Company received a further sum of £2.7M from Danir, its largest
shareholder, to fund initial costs of the deep drilling.
The Company entered into a £10 million convertible loan agreement with TriRi
Asset Management Limited, a reputable investment firm based in the USA and
Canada. The funds are to support the ongoing development of the Slatina 3
Project in Croatia.
None of these events impact the financial statements for the year ended 31
December 2023.
21. ULTIMATE CONTROLLING PARTY
As of 31 December 2023, no one entity owned more than 50% of the issued share
capital. Therefore, the Company does not have an ultimate controlling party.
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