Directa Plus Plc
3rd Floor
11-12 St. James’s Square
London
SW1Y 4LB
United Kingdom
www.directa-plus.com
Graphene is the
material of the future
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Annual Report & Accounts 2021
Directa Plus
Annual Report & Accounts 2021
Directa Plus
Annual Report & Accounts 2021
Directa Plus in 2021
Discover how we are using graphene to help customers’
revolutionise the performance of their products.
Directa Plus is one of the largest producers and suppliers
worldwide of graphene nanoplatelets-based products for use
in consumer and industrial markets.
Our graphene nanoplatelets-based products are natural, chemical-free and
sustainably produced. Our production process is designed to meet large
supply chains' requirements for volume, cost and quality control.
By incorporating Directa Plus’s unique graphene blends, identified by
the G+® brand, our customers can revolutionise the performances
of their own end products in commercial applications such as
textiles, composite materials and environmental solutions.
We partner with our customers to enable them to
offer the high-performance benefits of G+® in
their own products.
Our company has a unique and patented
technology process and a scalable and portable
manufacturing model. We produce graphene
nanoplatelets-based products at our own
factory near Milan, Italy, and can set up
additional production at customer locations to
reduce transport costs, waste and time-to-
utilisation. We are strongly committed to
environmental sustainability and abided by a strong
Code of Ethics in all aspects of our business practice.
Contents
01 Highlights
02 Chairman’s review
03 At a glance
04 Target market progress
06 Our strategy and business model
08 Market review
10 Chief Executive Officer’s review
16 Chief Financial Officer’s review
18 Directors’ biographies
20 Section 172
21 Directors’ report
24 Corporate governance report
28 Directors’ remuneration report
30 Audit Committee report
31 Remuneration Committee report
32 Independent auditor’s report
38 Consolidated statement of comprehensive income
39 Consolidated and Company statement of financial position
40 Consolidated statement of changes in equity
40 Company statement of changes in equity
41 Consolidated and Company statement of cash flows
42 Notes to the consolidated financial statements
IBC Directors, secretary and advisers
Directors, secretary and advisers
Directors
Sir Peter Middleton – Non-Executive Chairman
Giulio Cesareo – CEO and Founder
Giorgio Bonfanti – Chief Financial Officer
David Gann – Non-Executive Director
Neil Warner – Non-Executive Director
Richard Hickinbotham – Non-Executive Director
Company Secretary
Giorgio Bonfanti
Registration number
04679109
Registered office
3rd Floor
11-12 St James’s Square
London SW1Y 4LB
United Kingdom
Principal place of business
Directa Plus Plc
ComoNExT Science Park
Via Cavour 2
22074 Lomazzo (Co)
Italy
Nominated adviser and joint broker
Cenkos Securities
6.7.8 Tokenhouse Yard
London EC2R 7AS
United Kingdom
Joint broker
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
United Kingdom
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Legal advisers
Fox Williams LLP
10 Finsbury Square
London EC2A 1AF
United Kingdom
Registrar
Link Market Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Financial PR adviser
Tavistock
1 Cornhill
London EC3V 3ND
United Kingdom
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Printed sustainably in the UK
by Pureprint, a CarbonNeutral®
company with FSC® chain
of custody and an ISO 14001-
certified environmental
management system recycling
over 99% of all dry waste.
Directa Plus
Annual Report & Accounts 2021
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Overview
Strategic Report
Governance
Financial statements
Additional information
Highlights
Proven, successful strategy maintained
• Target existing products and markets that can be significantly improved with the
addition of Directa Plus products
• Working with established manufacturers and vendors worldwide, we are able to
gain market insight and access, further develop our technologies, bring products
to market faster, and capture maximum value from the supply chain by providing
expertise, know-how and services as well as materials
• Focus on those markets in which the Company can gain strong traction –
environmental remediation, textiles, composites, paints and other verticals
Financial and operational highlights
• Product sales and service revenue increased by 33.9% to €8.62m (2020: €6.43m),
slightly above market expectations
• Total income (including grants) increased by 39.3% to €9.45m (2020: €6.78m)
• LBITDA* improved to €1.99m (2020: €2.62m)
• Reported (basic) loss per share was €0.06 (2020: €0.07)
• Cash and cash equivalents at year end of €11.13m (2020: €7.08m)
• Total patents granted at year end of 72 (2020: 38)
• Approximately 29k of cubic meters of sludge treated and 7k metric tonnes of
hydrocarbons recovered **
• 63k metres of textile printed, dyed and laminated in 2021
* LBITDA represents loss from operating activities before tax, interest, depreciation and amortisation
** Only with reference to the main project with OMV Petrom
Product sales and service revenue
increased by 33.9% to €8.62m
(2020: €6.43m).
Total income (including grants) increased
by 39.3% to €9.45m (2020: €6.78m).
Cash and cash equivalents at year end
of €11.13m (2020: €7.08m).
€8.62 million
€9.45 million
€11.13 million
63k metres of textile printed, padded
and laminated in 2021.
Approximately 29k of cubic meters
of sludge treated and 7k metric tonnes
of hydrocarbons recovered. **
Total patents granted at year end 72
(2020: 38).
63k metres
c.29k
cubic meters
72 patents
02
Directa Plus
Annual Report & Accounts 2021
Chairman’s review
“Our robust and sustainable strategy remains at the centre
of our operations. With strong foundations, laid over the
last few years, we are well positioned for further growth
and increased traction in all areas. We are encouraged by
increased levels of interest in the Directa Plus offering,
and we continue to gain wider recognition for our proven
innovative products.”
The macro economic challenges of 2020
continued into 2021 and 2022 with the
Covid-19 pandemic and the war in Ukraine.
However, Directa Plus has continued to
execute against its strategy and deliver growth,
and continues to take actions to mitigate cost
increases through price increases, expected
productivity gains and cost reductions, whilst
accelerating investments in key capabilities.
Our teams have continued to perform above
expectations throughout this prolonged
period of volatility and I would like to share the
Board’s appreciation for their hard work and
dedication. 2021 saw further strategic progress
for the Company as new partnerships and new
markets were established, supporting our
long-term growth ambitions. I am pleased
with the progress the business is making in
refining the strategic plan to prioritise the
verticals with higher potential in terms of
commercialisation and financial returns.
2021 saw continued growth for the business
with revenues from products and services
increased by 33.9% to €8.62 million (2020:
€6.43 million), and total income by 39.3%
to €9.45 million (2020: €6.78 million).
In December 2021 we successfully raised
£7 million from our supportive shareholder
base to accelerate our goal to commercialise
our graphene-based products with an ever
increasing and diverse customer base.
We enter the new financial year well
capitalised and ready to continue executing
on our strategy.
Giorgio Bonfanti joined the Company in
May 2021 and we welcomed him to the Board
in November. He brings with him a wealth
of experience and has already delivered
significant contributions to the Company in
his first year of service.
In recognition of our strong environmental
credentials and contribution to sustainable
business practices, the London Stock Exchange
awarded the Company the Green Economy
Mark in November of 2021. This award is given
to businesses across all industries that make
significant contributions to the transition to
a sustainable, low carbon economy.
Innovation remains at the heart of our
product development and as an example, in
December 2021 we were granted an EU-wide
patent covering the use of the Company’s G+®
pristine graphene nanoplatelets to boost the
performance of rubber-based shoe outsoles.
Our IP portfolio now comprises 19 patent
families with 72 patents granted and 27 patents
pending and we continue to grow the portfolio.
We started the new financial year announcing
that Oxfordshire County Council had started
its second trial of a patented asphalt concrete
modifier developed by Iterchimica and
enhanced by the Company’s G+®. This trial
followed a successful pilot scheme in
Curbridge, Oxfordshire in 2019.
At the end of March 2022, we announced that
Grafysorber®, our patented decontamination
technology had been granted authorization
for use in the United States by the US
Environmental Protection Agency, paving the
way for entry into one of the world’s largest
markets for decontamination of oil spills.
Our robust and sustainable strategy remains
at the centre of our operations. With strong
foundations, laid over the last few years,
we are well positioned for further growth
and increased traction in all areas. We are
encouraged by increased levels of interest
in the Directa Plus offering, and we continue
to gain wider recognition for our proven
innovative products. We have partnered with
a number of new organisations in the year
and we are confident in our future
commercial opportunities.
I would like to take this opportunity to thank
our team, customers and shareholders for
their continued support. The Board looks
forward to the new financial year and
beyond with optimism, albeit tempered by
the potential economic consequences of
war and commodity price spikes.
Sir Peter Middleton
Chairman
4 May 2022
Overview
Strategic Report
Governance
Financial statements
Additional information
At a glance
Directa Plus
Annual Report & Accounts 2021
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Our graphene nanoplatelets-based products are natural, chemical-free
and sustainably produced. Our production process is designed to meet
large supply chains' requirements for volume, cost and quality control.
Our vision is to produce nanoplatelets-based products that are
natural, chemical-free and sustainable.
G+® Technology
Under our G+® brand, we offer a range of graphene nanoplatelets-based products – either
ready-to-use or custom-blended to meet customers' specific technical requirements.
Benefits of our products
• Chemical-free • Certified as non-toxic • High purity • Consistent quality
• Taylor-made particles shape • Abundant, safe and non-toxic raw material
Target vertical markets
1
Environmental
remediation
Using our Grafysorber®
technology to help the oil
& gas industry to tackle
environmental issues from
hydrocarbon pollution.
1
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Textiles
Other verticals
Printing our nanoplatelets
on fabrics, and enhanced
membranes for the sports,
luxury, fashion, workwear and
military markets.
Exploring and launching a wide
range of other applications for our
technology such as composites,
paints and batteries.
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04
Directa Plus
Annual Report & Accounts 2021
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Environmental remediation (76% of revenue (2020: 68%))
• In March 2021, completed the draining, cleaning and washing of a first oil storage unit for Petrotel Lukoil S.A.
for a total amount of c. €0.4 million of services revenue.
• In early 2021, secured an extension and increase of the contract with OMV Petrom for the provision of
decontamination and oil recovery services using Grafysorber® technology.
• In July 2021, won an additional tender with OMV Petrom for a four-year contract, with a total value of more
than €3.2 million, to treat approximately 80,000 cubic meters of sludge and waste produced during the first
upstream separation process.
• In April 2022, received authorisation from the United States Environment Protection Agency for the Company's
Grafysorber® technology to be used on any oil contamination on US territory.
• In April 2022, received the first order of Grafysorber® based absorbent materials from a UK company.
• Established a pipeline of active contract tenders across Europe, including a number of high value opportunities.
2
Textiles (21% of revenue (2020: 30%))
• In the first half of 2021, launched Directa Plus’ own line of performance sportswear, the Cosmic Collection,
which provides a showcase for the versatility of G+® and increases brand awareness.
• In November 2021, won a project tender from the state of Lombardy's TECH FAST, for a total duration of
12 months and a total value of c. €0.3 million, of which 50 per cent is non-refundable. The programme
will support the Company in developing applications for G+® graphene in industrial filtration, such as for
air-conditioning or transportation filters.
• In December 2021, signed a Letter of Intent with Radici Group, an Italian-based global chemicals and materials
group and a major player in the non-woven materials industry to collaborate on an exclusive basis to develop
specific products for the global air and water filtration markets.
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April 2022, authorisation from the United
States Environment Protection Agency for
the Company's Grafysorber® technology to be
used on any oil contamination on US territory.
Won an additional tender with OMV Petrom
for a four-year contract, with a total value
of more than €3.2m, to treat approximately
80,000 cubic meters of sludge and waste.
Grafysorber®
€3.2 million
Left: Grafysorber®-based absorbing boom for oil
recovery spills.
Right: Our technology is chemical free and has
been fully demonstrated to have significant
anti-viral properties without any issue or potential
damage on the human body.
Directa Plus
Annual Report & Accounts 2021
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Overview
Strategic Report
Governance
Financial statements
Additional information
3
Other verticals
• In February 2021, signed a 3-year supply agreement and joint R&D collaboration with NexTech for the
supply and development of new grades of G+® graphene nanoplatelets for the production of
Lithium-Sulphur batteries.
• In March 2022, Oxfordshire County Council began its second trial of a patented asphalt concrete
modifier enhanced by the Company's G+® graphene. Half of a 700-metre stretch of the road will be
laid with Gipave®, while the rest will be resurfaced using conventional asphalt, so that the two
surfaces can be compared.
• In June 2021, NexTech’s European subsidiary was established in Italy with the initial objective being to
evaluate the feasibility of producing cathode active materials in Italy, using G+® graphene nanoplatelets.
4
Awards
• Awarded the London Stock Exchange's Green Economy Mark, which recognises Directa Plus as
contributing to the global green economy.
• The Company received a special mention for Directa Plus as a Rising Star in the 2021 Company Excellence
Awards hosted by the Italian Stock Exchange and sponsored by Harvard Business Review Italy, the
management consultants GEA and the Milan based fund managers ARCA.
“I believe that Directa Plus is now at an inflection point – we are successfully transitioning
from a research focused company into a commercial company with a number of exciting
opportunities in our targeted markets. The Company operates in fast changing
environment, and it is currently refining its strategic plan to prioritise the verticals with
higher potential in terms of commercialisation and financial returns. The fundraise
completed in December 2021 will allow us to accelerate growth in the most promising of
these areas, where the Group continues to build an active pipeline of contract tenders.”
Giulio Cesareo, Founder and CEO of Directa Plus
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Above: A picture taken during the resurfacing of
a 700-metre stretch of Marsh Lane in Oxford that
will be laid with Gipave®, a graphene-enhanced
supermodifier for asphalt pavements, with the
rest resurfaced using conventional asphalt,
so that the two can be accurately compared.
Above right: Graphene nanoplatelets.
In June 2021, establishment of NexTech’s
European subsidiary in Italy with the initial
objective being to evaluate the feasibility of
producing cathode active materials in Italy,
using G+® graphene nanoplatelets.
NexTech
Award of the London Stock Exchange's Green
Economy Mark, which recognises Directa Plus
by London Stock Exchange as contributing to
the global green economy.
Green
Economy Mark
06
Directa Plus
Annual Report & Accounts 2021
Our strategy
Welcome to the Graphene Age.
G+® graphene is not just a material. It's a vision. Our vision.
It's the way we are changing everything in the world.
Our vision is for a world that is cleaner and healthier by producing graphene
products that not only are natural and chemical free but help achieve
this and enhance clients own products.
Directa Plus has developed a proprietary scalable, modular manufacturing
process to produce and supply high quality engineered graphene materials –
marketed under its ‘Graphene Plus’ (G+®) brand – which can be used by third
parties in a wide variety of industrial and commercial applications.
Our Core Values
1. DIVERSITY Directa Plus has always invested in diversity. The desire to differentiate
ourselves has been reflected over the years in our product: G+® – Graphene Plus, a unique
and inimitable creation whose main features are its purity and sustainability. The uniqueness
of this material, in all its forms, comes directly from the production method: at Directa Plus
we transform every single gram of graphite into a gram of graphene, through a process
based entirely on the principles of physics, without any chemical processing.
2. QUALITY Graphene Plus is a different material, unique and absolutely pure. In order to
guarantee the highest quality of our products and of the services we provide, Directa Plus has
developed innovative working methods, and we have organised the Advanced Development
Area, a lab specialised in the applications of G+® graphene.
3. SAFETY For Directa Plus, safety has always been a core value. Over the years we have invested
effort and resources in the creation of a material that is able to ensure maximum safety, both for
those who use it and for those who work on it. The safety of our G+® graphene is proven by the
independent certifications of non-toxicity and non-cytotoxicity of all G+® products.
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Directa Plus
Annual Report & Accounts 2021
07
Directa Plus has a unique and proven process for the production
of pristine, chemical free graphene nanoplatelets, tailored to
our partners’ and customers’ requirements, which is both
flexible and scalable. Production is located at our factory near
Milan, Italy, and we have a Grafysorber® production unit in our
subsidiary Setcar in Romania, but can also be set up at customer
locations to reduce transport costs, waste and lead times.
We are strongly committed to environmental sustainability
and abide by a strong Code of Ethics in all aspects of our
business practice.
We create value through partnering with leading industrial
entities with large international footprints that provide
significant growth opportunities, but also important reference
customers to support the roll out of graphene enhanced
products and services globally. The success of this strategy can
be seen in our progress in the environmental remediation and
textiles markets, and other areas where we see great potential.
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Brand
strength and
endurance
Sector-
specialist
knowledge
Flexible
approach
®
Operational
excellence
International
reach
Exceptional
service
+ Integrating our intellectual property into
new products allows our customers to gain
significant competitive advantage.
+ The commercialisation model we
follow is based on capturing for our
shareholders a proportion of customers’
additional revenues and profits.
+ This could be royalty payments, upfront
enabling licence payments, joint-ventures
to get closer to end-users or a combination
of all three.
+ As a company, we are committed to sharing
in the proceeds of customers’ growth from
new products, rather than merely supplying
an essential ingredient.
08
Directa Plus
Annual Report & Accounts 2021
Market review
Our graphene nanoplatelets-based products are natural, chemical-free
and sustainably produced. Our production process is designed to meet
large supply chains’ requirements for volume, cost and quality control.
Our vision is to produce nanoplatelets-based products that are natural,
chemical-free and sustainable.
By incorporating Directa Plus’s unique graphene blends, identified by the
G+® brand, our customers can revolutionise the performances of their own
end products in commercial applications such as textiles, tyres, asphalts and
environmental solutions. We partner with our customers to enable them
to offer the high-performance benefits of G+® in their own products.
Our company has a unique and patented technology process and a scalable
and portable manufacturing model. We produce graphene nanoplatelets-
based products at our own factory near Milan, Italy, and can set up
additional production at customer locations to reduce transport costs,
waste and time-to-utilisation.
We are strongly committed to environmental sustainability and abided
by a strong Code of Ethics in all aspects of our business practice.
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Left : G+® nanoplatelets, our production
process uses a unique technique we call Plasma
Super Expansion. Starting from natural graphite,
each step of the process – expansion, exfoliation
and drying – creates graphene nanoplatelets-
based materials.
Nano-platelets
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
09
G+® Technology
Patented, modular process
We offer a range of graphene nanoplatelets-based
products – either ready-to-use or custom-blended
to meet customers’ specific technical requirements.
Benefits of our products:
+ Chemical-free
+ Certified as non-toxic
+ High purity
+ Consistent quality
+ Taylor-made particles shape
+ Abundant, safe and non-toxic raw material
Our production process uses a unique technique we
call Plasma Super Expansion. Starting from natural
graphite, each step of the process – expansion,
exfoliation and drying – creates graphene
nanoplatelets-based materials ready for a variety
of uses and available in different forms such as
powder, liquid and paste.
Our production process produces a highly consistent
graphene nanoplatelets product – an important
factor for commercial customers – and does not
need any chemical or solvent additives.
Tailor-made for customer needs
Scalable, portable production
When used in consumer and industrial applications,
G+® enables end-products to perform better while
remaining affordable.
We partner with customers to develop bespoke
graphene blends that have just the right
morphology for their particular application. We
produce the precise ingredient to make our
customer’s product stand out from the competition.
Our factory near Milan can produce industrial
quantities of graphene nanoplatelets-based
products each year to supply large supply chains.
In addition, we can set up production directly at
customer locations, thus adding scalable
capacity and reducing transport costs, waste
and time-to-utilisation.
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Our production process is designed to
meet the clients' requirements for volume,
cost and quality control.
Unique patented
technology
Left: Thermal camera attached to a pad
to demonstrate the properties of our G+® Planar
Thermal Circuit®.
Above: Printed denim used for aesthetic
pursposes by the designer Romy Calzado during
the 2021 Milan Fashion Week.
10
Directa Plus
Annual Report & Accounts 2021
Chief Executive Officer’s review
Introduction
Directa Plus continued to grow during 2021
despite the headwinds created by the
worldwide pandemic and associated
lockdowns. The Company has become an
acknowledged global leader in the production
of graphene and its applications in existing
and new products for consumers and industry.
We expect global graphene demand to
continue to increase significantly and intend
to position Directa Plus at the forefront of
development using our patented process for
the production of pristine, chemical free
graphene nanoplatelets, tailored to partners’
and customers’ requirements. We expect to
build a substantial business by positioning
Directa Plus in the verticals where technology
capabilities, at attractive costs, meet with
market opportunities and growing customer
acceptance.
The fundraise we completed at the end
of the year under review will allow the
Company to undertake the next phase of
growth and to take advantage of existing
and new opportunities both in Europe and
further afield.
Strategy and business model
Our strategy is primarily to target existing
products and markets that can be
significantly improved with the addition of
Directa Plus products. The Company works
with key partners, benefitting from their
knowledge of the market, strong reputation
and commercial channels.
Our proprietary scalable, modular
manufacturing process to produce and
supply high quality engineered tunable
Giulio Cesareo
CEO
“I believe that Directa Plus is now at an inflection point –
we have many opportunities across many different vertical
markets, diversifying our business risks. The recent fundraise
will allow us to accelerate growth in the most promising of
these vertical markets and to keep investing in high potential
opportunities in other areas.”
Overview
Strategic Report
Governance
Financial statements
Additional information
Annual Report & Accounts 2021 11
Directa Plus
The Company operates in fast changing
environment, and it is currently refining its
strategic plan to prioritise the verticals with
higher potential in terms of commercialisation
and financial returns.
Environmental remediation
The Group’s Setcar subsidiary has again
delivered strong growth. It is leading the
expansion of Directa Plus’ Grafysorber®
technology into new markets and is rapidly
gaining traction in the global oil & gas
industry as a step change improvement from
existing water treatment products and
services. Setcar has integrated well into the
Group and is now examining opportunities
to expand its service offering, based on our
Grafysorber® products, internationally.
Reusable and sustainably produced,
Grafysorber® is five times more effective
at hydrocarbon clean-up than competitor
products and allows for the recovery of
financially valuable oils and sludges.
In addition, Grafysorber® is sustainably
produced, non-flammable and reusable, with
the adsorbed hydrocarbons recoverable.
The Group continues to build an active
pipeline of contract tenders, including high
value opportunities.
In March 2021 we completed the draining,
cleaning and washing of a first oil storage unit
for Petrotel Lukoil S.A. for a total amount of
c. €0.4 million of services.
In early 2021, the contract with OMV Petrom
was extended and increased. Initially
awarded in July 2019, the contract was for
the provision of decontamination and oil
recovery services using Grafysorber®
technology. The initial value of the contract
graphene materials at low production costs
and 100% chemical free puts sustainability
at the heart of our operations and acts as a
powerful differentiator from competitors.
We have amassed 43 certifications over the
years, all reporting the absence of negative
impacts on biological systems. We consider
the health and safety of all stakeholders and
environmental protection as top priorities
and we have implemented a proactive
approach by continuously monitoring our
production process and products.
We currently target four key markets in which
we already have cornerstone customers
and partners:
• Environmental remediation – through our
successful Setcar subsidiary, using Directa
Plus’ Grafysorber® technology to help the
oil and gas industry to tackle environmental
issues from hydrocarbon pollution;
• Textiles – printing nanoplatelets on fabrics,
and graphene enhanced membranes for
the sports, luxury, fashion, workwear and
military markets;
• Composites – introducing the next
generation of graphene-enhanced asphalts
that are recyclable for a lower carbon
world; and
• Lithium-Sulphur batteries – the
development of a Lithium-Sulphur battery
using the Directa Plus’ G+® pristine graphene
nanoplatelets as a key cathode component.
In addition to these key verticals, we
continuously monitor other high potential
markets where we believe that for a relatively
small investment we can develop products
that can generate high commercial traction
and which have a fast time to market, such as
paints, consumer electronics and filtration.
c.+50% revenue from the environmental
remediation services in 2021. Our subsidiary
Setcar is playing a key role in expanding
the Grafysorber applications, bringing
significant value to the Group.
c.+50% revenue
Right: Reusable and sustainably produced,
Grafysorber® is five times more effective at
hydrocarbon clean-up than competitor products
and allows for the recovery of financially valuable
oils and sludges.
Above: Setcar has again delivered strong growth,
leading the expansion of Directa Plus’
Grafysorber® technology into new markets.
was €150,000 and this was increased to
€410,000 for a six-month services period.
In July 2021, an additional tender with OMV
Petrom was won for a four-year contract,
with a total value of more than €3.2 million,
to treat some 80,000 cubic meters of sludge
and waste produced during the first upstream
separation process. Up to 20,000 tons of crude
oil with impurities below 1% will be recovered
and sent to the refinery. At current oil prices
(c. $700-800 per ton) this is generating
significant value for the client. Directa Plus will
supply a total of 700 high-performance
adsorbent devices containing Grafysorber®
to OMV Petrom. As at the time of writing, we
have treated 36,000 cubic meters of sludge
and recovered 8,900 tons of crude oil.
We believe that Grafysorber® has significant
export potential overseas and the Company
continues to evaluate opportunities in
discussion with possible partners focused on
decontamination from hydrocarbons. A vital
first step in addressing the US market was
achieved in late March 2022 with the grant
of authorisation by the United States
Environment Protection Agency to use
Grafysorber® at any oil spill on US territory.
Directa Plus will supply a total of 700 high-
performance adsorbent devices containing
Grafysorber® to OMV Petrom. So far we have
treated 36,000 cubic meters of sludge and
recovered 8,900 tons of crude oil.
700 devices
An additional tender with OMV Petrom was
won for a four-year contract, with a total
value of more than €3.2m, to treat 80,000
cubic meters of sludge and waste produced
during the first upstream separation process.
€3.2 million
12
Directa Plus
Annual Report & Accounts 2021
Chief Executive Officer’s review continued
In April 2022, the Company signed a first order
of Grafysorber® based absorbing products
with a major UK reselling company, with the
aim to initially target mainly the northern
European markets.
As announced at the time of the Fundraise in
December, we plan to invest in the further
development of Grafysorber® technology to
broaden the number of applications we can
offer. This will involve constructing a water
treatment plant as well as providing
dedicated equipment for in-house treatment
of industrial water and for the removal of
hydrocarbons and other organic pollutants.
The Company also has recently located
a Grafysorber® production unit in Sectar’s
premises in Romania, close to existing
customers, and launched the production
of absorbent materials such as
Grafysorber®-made booms, pillows, socks
and pads for the oil and gas industry.
Textiles
In 2020, the Covid-19 pandemic led Directa
Plus to rapidly respond to the global crisis
by developing the Co-mask™, a product to
alleviate the effects of the pandemic by
helping to reduce transmission of the virus.
The development and commercialisation of
the Co-mask™ accelerated studies around the
filter applications of G+® technology, which is
proven to have anti-viral properties, is non-
toxic and has no negative impacts on human
skin. This work is now producing additional
applications which leverage the antimicrobial
and antiviral properties of G+®and provides
the basis for entry into the large global
filter market.
human skin. A total of eight in vitro test results
now show that Pure G+® has no potential
negative impact on human health.
In April 2021, the new G+® graphene coating
for fabrics was tested by an independent
third-party laboratory and found to be
suitable for human skin contact. The results
showed zero erythema and oedema reactions
across all subjects participating in the test and
the G+® coated fabric was reported to be
‘dermatologically tested’ and non-irritating.
In July 2021, the peer-reviewed interdisciplinary
open-access journal iScience published a
scientific paper titled “Graphene Nanoplatelet
and Graphene Oxide Functionalization of Face
Mask Materials Inhibits Infectivity of Trapped
SARS-CoV-2”. The paper provides scientific
evidence that the Company’s G+® graphene
nanomaterials and those from graphene
oxide present a critical opportunity to
significantly increase face mask efficacy. In
relation to the anti-SARS-CoV2 capability of
Directa Plus’ G+® graphene, the paper certifies
that G+® filter fabric treated with PU G+® can
inactivate 97% of the virus while G+® cotton
can inactivate 99% of the virus.
The antibacterial and antiviral properties of
the Company’s G+® pristine graphene
nanoplatelets represent significant
opportunities for Directa Plus in textile and
biomedical applications. The efficacy of G+®
and its non-toxic and sustainable production
characteristics overcome the problems of the
current state-of-the-art solutions that are
based on metal-ion or halogen treatments,
which could be dangerous to human health
and detrimental to the environment.
In March 2021, Directa Plus announced a
further test result relating to the absence of
absorption of its pristine graphene
nanoplatelets powder (Pure G+®) through
As a result of the fundraise we plan to
advance the application of G+® technology to
non-woven fabrics to confer antibacterial and
antiviral properties for the industrial filtration
Above: In July 2021 Annemiek van Vleuten from
the Netherlands team about to win the golden
medal in the individual time trail.
Above: Grafylon® 3D. The 3D printing filament,
enhanced with G+®, is used by Playcast to
produce customised medical casts.
market. In December, Directa Plus signed a
Letter of Intent with Radici Group, an Italian-
based global chemicals and materials group
and a major player in the non-woven
materials industry, to collaborate on an
exclusive basis for an initial period of 12 months.
The collaboration will see G+® technologies
combined with those of the Radici to develop
specific products for the global air and water
filtration markets. If the technical results
envisaged are achieved, the two companies
will negotiate a technical and commercial
partnership agreement with Directa Plus to
benefit from a revenue-sharing business model.
In July 2021 members of the Dutch and
Belgian cycling teams won four medals at the
Tokyo Olympics (one gold, two silver and one
bronze) in the road race event wearing a shirt
printed with Directa Plus’ patented and
proprietary technology, the G+® Planar Thermal
Circuit®. The shirts for the national cycling
teams at the Games were made by premium
cycling brand, Bioracer, using fabric supplied
by Italian company, Taiana, with the unique
and high-performance print made using
Directa Plus’ sustainable graphene. This is an
additional illustration of how the Company’s
G+® graphene supports the natural
In the UK, Oxfordshire County Council has
started its second Gipave® trial. Half of
a 700-metre stretch of the road will be
laid with Gipave®, while the rest will be
resurfaced using conventional asphalt,
so that the two surfaces can be compared.
700 metre trial
Directa Plus launched its own line of
performance sportswear, the Cosmic
Collection, in the first half of 2021. The
collection offers consumers advanced
technology, which is also sustainable and
provides a showcase for the versatility of
G+® and its applications.
Cosmic collection
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Additional information
Annual Report & Accounts 2021 13
Directa Plus
G+® membrane which is integrated into the
Dyneema® one-piece woven upper lining in
the toe box of the shoes. This provides the
runner with additional comfort due to the
thermal conductivity and abrasion resistance
of the graphene G+® membrane while adding
almost zero additional weight. Gear Patrol,
the influential buying magazine, ranked
norda™ 001 the most innovative trail running
shoe of 2022.
We continue to strengthen our relationships
with existing important customers in the
workwear and luxury segments and to
promote our presence in the textiles vertical
Directa Plus launched its own line of
performance sportswear, the Cosmic
Collection, in the first half of 2021. This
collection aims to offer consumers advanced
technology, which is also sustainable. The
Cosmic Collection provides a showcase for
the versatility of G+® and its applications and
will help to increase awareness of the
Company and our technologies.
Composites
The asphalt and bitumen applications of
G+® graphene technology is generating
considerable traction, and the interest in the
market for Iterchimica’s Gipave® product,
developed with Directa Plus, is growing
internationally. We have signed a three-year
agreement with Iterchimica for the exclusive
supply of G+® graphene products for the
sector worldwide and have extended the
partnership with a significant pipeline of
opportunities.
In the UK, Oxfordshire County Council has
now started its second trial to further test the
benefits that Gipave® can bring. The new trial
will see two identical stretches of Marsh Lane
in Oxford, which carries around 10,000
vehicles a day along a key city route,
Above: Microfiber substrate coated with G+®
Graphene Plus coating, presented by Plinio il
Giovane at the Milan Design Week 2021.
resurfaced with different materials. Half of a
700-metre stretch of the road will be laid with
Gipave®, while the rest will be resurfaced
using conventional asphalt, so that the two
surfaces can be compared. This second trial
follows a successful first pilot scheme in
Curbridge, Oxfordshire in 2019. Analysis of
this scheme showed Gipave® increases the
lifespan of the surface by up to 70% compared
to conventional resurfacing methods.
Lithium-Sulphur Batteries
Next generation Lithium-Sulphur battery
chemistry offers advantages over Lithium-Ion
as it has a superior energy density, significant
cost advantages and a superior safety profile.
Our collaboration with NexTech, a leading
company in the field of Lithium-Sulphur
batteries based in Nevada, USA, is making
strong progress.
In November 2020, a memorandum of
understanding was signed with NexTech.
In February 2021, both parties agreed to
form a stronger partnership, with a
three-year supply agreement for the
provision of a specific grade of G+® pristine
graphene nanoplatelets and a joint R&D
collaboration to develop new specific
Above: G+® coating on microfiber substrate for
vegan leather applications.
Left: Grafyshield ® is a semi-finished product:
an additive for the paint production.
thermoregulation of the body, providing
athletes with a competitive advantage.
In September 2021 Directa Plus’ new G+®
graphene coatings have being shown in two
collections at the prestigious Milan Design
Week. The Company’s revolutionary new
covering material has been selected for
inclusion in collections being shown by two
Italian companies. Plinio il Giovane is a central
Milan based producer of high-end furniture
and upholstery and is showcasing a collection
of chairs and sofas with G+® coverings.
Danese Milano, a subsidiary of lighting
company Artemide S.p.A., is an innovative
producer of interior design accessories and
is showing a desk pad covered with the G+®
coating. Plinio il Giovane and Danese Milano
both selected Directa’s innovative material
technology as a result of its disruptive
performance compared to traditional
upholstery fabrics and coatings. G+® coatings
on organic and non-organic fabrics are
antibacterial and antiviral against SARS-CoV2;
resistant to abrasion and wear and tear;
resistant to UV light, and; thermally conductive
for achieving the highest thermal comfort.
In April 2022 Directa Plus has signed a
non-binding Letter of Intent with a leading
worldwide supplier of automotive interiors
to Tier 1 manufacturers. The partners intend
to develop a suite of new products for the
automotive industry based on the
antimicrobial properties (antibacterial and
antiviral), thermal comfort and electrical
conductivity properties of the Company’s
G+® enhanced fabrics.
In November 2021, the Company announced
that a specially developed graphene
membrane is integrated into the lining of the
norda™ 001 G+® Spike high performance trail
shoes. Directa Plus was responsible for the
Directa Plus continues to invest in Italdesign,
(part of Volkswagen AG) a global leader in
automotive design and engineering to jointly
develop a wide range of automotive
components. In April 2022 Directa Plus signed
a LOI with a leading worldwide supplier of
automotive interiors to Tier 1 manufacturers.
Automotive
applications
The Company is close to starting to
commercialise graphene-based paints with
significant anti-flame and anti-corrosion
properties.
Paints
14
Directa Plus
Annual Report & Accounts 2021
Chief Executive Officer’s review continued
Automotive
Directa Plus continues to invest in the
technical and commercial agreement with
Italdesign, part of Volkswagen AG, a global
leader in automotive design and engineering.
The agreement will see Directa Plus and
Italdesign jointly develop a wide range of
automotive components enhanced by the
Company’s graphene expertise.
Paints
In February 2021, research undertaken by
scientists at the Polytechnic of Turin was
published in an article in the journal Polymers
showing that the use of water-based G+®
graphene ink to coat polymeric foam confers
significant flame-retardant properties.
A simple application of G+® ink to the external
faces of the foam provided good flame-
retardant properties, tested in both horizontal
and vertical planes.
Using this study as a base, the Company is
close to starting the commercialisation of
graphene-based paints with significant
anti-flame and anti-corrosion properties
compared to normal paints. We see great
potential in this developing technology.
Intellectual property
As at March 2022, the Group’s patent portfolio
comprised 72 patents granted and 27 pending,
grouped into 19 families.
In March 2021, Directa Plus was granted an
EU-wide patent covering the use of its G+®
graphene in golf ball applications. The patent
covers a family of formulations and compounds
containing G+® graphene nanoplatelets.
Using these compounds at different loadings
provides the basis for developing a new
generation of high-performance golf balls
aimed at both the professional and
recreational markets.
Above: Sport jersey made by EE Sport, pinnacle
for cycing technolgies with an integrated app
for SOS emergency calls.
In May 2021, Directa Plus was granted an
EU-wide patent covering the production
process for its G+® graphene nanoplatelets.
The patent, titled ‘Process for Preparing
Graphene Nanoplatelets’ covers the use of
Directa Plus’ unique water-based exfoliation
technology for converting super-expanded
graphite to pristine graphene nanoplatelets
using no chemicals and with a very high
conversion yield.
In December 2021 the Company has been
granted an EU-wide patent covering the use
of the Company’s G+® pristine graphene
nanoplatelets to boost the performance of
rubber-based shoe outsoles. The patent,
titled ‘Shoe sole comprising graphene’,
covers G+® graphene embedded in outsoles.
The specific formulation of G+® graphene
for soles provides the ability to balance
opposite performance characteristics such
as durability and grip, in both dry and wet
conditions. This ability to balance opposing
performance traits is unique to Directa Plus’
G+® graphene and becomes markedly
apparent on rubber-based technical shoe
soles such as those used for running, trail
grades of nanoplatelets. A joint laboratory
has been established in Lomazzo, where
Directa Plus is located and both parties will
dedicate selected scientists from their
respective R&D teams.
We continue to support NexTech in the
development of this disruptive technology,
in which G+® will play a key role in terms of
technical properties and the supply of our
product at the scale necessary to satisfy
the needs of the market. In June 2021,
NexTech established its European subsidiary
in Italy (“NexTech Italia SpA”), with the initial
objective being to evaluate the feasibility of
producing cathode active materials in Italy,
using our G+® graphene nanoplatelets, for
the manufacture of Lithium-Sulphur (Li-S)
batteries throughout Europe.
The Company is now ready to target other
Lithium-Sulphur battery producers to
accelerate the technology’s commercialisation.
Other verticals
Consumer electronics
In December 2020, Directa Plus signed a
development agreement with the soft goods
division of a major international developer
and manufacturer of consumer electronics
and related services. The agreement covers
the potential application of G+® graphene
as a protective covering for consumer
devices, exploiting the antiviral-antibacterial
properties of G+® graphene as well as its
thermal and electrical conductivity. The
partnership has delivered exceptional results
to date. In 2021 we received some promising
orders for our G+® graphene and this
collaboration continues to demonstrate the
potential for significant volumes in the
coming years.
A specially developed graphene membrane
is integrated into the lining of the norda™
001 G+® Spike high performance trail shoes.
Gear Patrol, the influential buying magazine,
ranked norda™ 001 the most innovative trail
running shoe of 2022.
norda™ trainers
Above: Directa Plus membrane integrated into the
Dyneema® one-piece woven upper lining in the
toe box of the shoes. Providing the runner with
additional comfort due to the thermal conductivity
and abrasion resistance of the graphene G+®.
Right: Printed with the G+® Planar Thermal Circuit®.
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Additional information
Annual Report & Accounts 2021 15
Directa Plus
Above: A desk pad designed by Giulio Iacchetti,
well known designer from Danese, realised
with a G+® coating for antibacterial property
and aesthetic effect.
running, hiking, and on motorbikes. The
patent covers both the formula for the
compound and the final product outsole
made with the compound.
Environmental, Social and
Governance policies
Environmental sustainability is at the heart
of Directa Plus’ business – our research,
manufacturing, commercialisation, and
purpose – and we have been ISO 14001 certified
since 2016, which have been recently renovated.
From the earliest stages of our research into
graphene applications we were determined
to design manufacturing processes for our
pristine nanoplatelets that would avoid the
need for chemical processes and so avoid
wasteful by-products. We continue this
approach now – always seeking to design
the most efficient manufacturing and
proving the safety and sustainability of our
products working with recognised
environmental organisations.
When deciding our commercialisation
strategy, we made it a priority to work only
with environmentally responsible industrial
The Company's G+® graphene coatings are
being shown in two collections at the
prestigious Milan Design Week held from
5 to 10 September 2021.
Milan
Fashion Week
Right: Dress created by the designer Romy
Calzado for the 2021 Milan Fashion Week.
This dress was named Naomi 1.5 in honour
of Naomi Campbell who wore it during
the exhibition.
partners, and to seek to improve on products
in existing markets. This means that we can
help produce and sell better quality products
than are currently available, with better
performance and longer life for end-users.
We monitor all applicable performance
indicators. In our production process we
consider raw materials supply chains, energy
consumption, water and wastewater,
atmospheric emissions, the production
of waste and any effect on biodiversity.
Our commitment to sustainability is also
demonstrated by our Grafysorber® based
technology and products, which are
environmentally friendly solutions aimed at
solving both historical pollution problems
and oil spills.
In Social and Governance, Directa Plus has
held certifications ISO 9001 (for quality
management standards) and ISO 14001
(environmental management systems) since
2016, successfully renewed annually. We are
also committed to identifying suppliers and
partners who share the same sensitivity on
sustainability issues as we do. We carefully
consider all aspects of employee rights, equal
opportunities, health and safety at work and
training and education.
Finally, with respect to our local community,
Directa Plus is well-known and deeply rooted
in the Milan area. We promote our regional
economy by identifying local suppliers, with
whom it is possible to structure lasting
partnerships. We believe it is essential to
actively contribute to initiatives that can have
a positive impact on the social fabric of the
area and in 2021, through the sale of
CO-Mask™ face masks, we financed the
Christmas meal for the Opera San Francesco
in Milan.
Outlook
I believe that Directa Plus is now ready to
enter into a new stage of growth. We have
many opportunities across different vertical
markets, diversifying our business risks.
The recent fundraise will allow us to
accelerate growth in the most promising of
these vertical markets and to keep investing
in high potential opportunities in other areas.
We are closely monitoring and assessing
possible impacts from the war in Ukraine and
will adjust our strategy if necessary. We do no
business in Russia or Ukraine and so we are
not directly exposed to this region, and we
believe the rise in the oil prices may increase
demand for our decontamination and
recovery services.
Year to date, the Company is trading in line
with FY2021, with an expected acceleration
through the second quarter and into the
second half of the year. Accordingly, we are
confident of the Company’s continued
growth trend, and we remain comfortable
with current consensus forecasts for FY2022.
In addition, we are waiting on the final
decision on the award of a significant
tender in Romania for our Environmental
Remediation services, which is expected to
be communicated shortly and, if awarded,
to start in the second half of 2022.
In summary, despite the challenges faced by
all businesses, we retain a positive outlook
for growth and our future success.
Giulio Cesareo
Chief Executive Officer
4 May 2022
Directa Plus is well-known and deeply rooted
in the Como area. We believe it is essential to
contribute to initiatives that have a positive
impact on the social fabric of the area and in
2020, through the sale of CO-Mask™ face
masks, we financed the Christmas meal for
the Opera San Francesco in Milan.
CO-Mask™
16
Directa Plus
Annual Report & Accounts 2021
Chief Financial Officer’s review
Key Performance Indicators
The Board measures the performance of the
Group through a number of important
financial and non-financial KPIs. In a young
business with a number of different vertical
markets, identifying measurable data that will
provide useful insight year-on-year is not
always straightforward but the KPIs below
should help shareholders understand the
Group’s progress. Our financial KPIs show
significant improvement compared to 2020.
The table below summarises the financial
KPIs with further details contained later in
this report.
• Product sales and service revenue
increased by 33.9% to €8.62m (2020:
€6.43m), slightly above market expectations.
• Total income (including grants) increased
by 39.3% to €9.45m (2020: €6.78m).
• LBITDA* improved to €1.99m (2020:
€2.62m).
• Reported (basic) loss per share was €0.06
(2020: €0.07).
• Cash and cash equivalents at year end
of €11.13m (2020: €7.08m).
* LBITDA represents loss from operating activities
before tax, interest, depreciation and amortisation.
Giorgio Bonfanti
Chief Financial Officer
“I am pleased to report the results of another important year
of progress for the Group. During 2021, the finance team has
worked hard to support our strategic decision-making and to
manage efficiently our financial resources. The successful
capital raise in December 2021 will be key in accelerating our
business growth in the Group’s next phase of development
in 2022 and beyond.”
Overview
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Financial statements
Additional information
Annual Report & Accounts 2021 17
Directa Plus
– produce absorbent materials such as
Grafysorber®- made booms, pillows,
socks and pads.
• advance the application of Directa Plus’
G+® technology to non-woven fabrics to
confer antibacterial and antiviral
properties. The Company has signed a
Letter of Intent with Radici Group to
collaborate on an exclusive basis to
develop specific products for the global
air and water filtration markets.
• providing the financial strength necessary
to fund the Company’s continued
investment in exploring and developing
new growth opportunities;
• providing the balance sheet strength to
support the Company and its subsidiaries
in responding to significant new tenders
currently in progress; and
• providing additional liquidity for its general
working capital purposes.
In the short term, the Group’s priorities
continue to be focused on the reduction of
cash consumption and improving
profitability.
A description of the principal risks and
uncertainties facing the Group is set out in
the Directors’ Report. The war in Ukraine in
particular creates new, unforeseen risks.
In summary, the Directors believe that
overall, the conflict will not affect the going
concern of the Group and although we are
seeing some inflation of costs (principally
energy), the Company is keeping the
margins under control.
Giorgio Bonfanti
Chief Financial Officer
4 May 2022
Financial review
2021 represented another year of continued
growth for the business. Revenues from
products and services increased by 33.9% to
€8.62m (2020: €6.43 million), and total income
+39.3% to €9.45m (2020: €6.78 million).
The increase in revenues was mainly driven
by growth in the environmental remediation
services of 50% to €6.56m. The Group’s
Romanian subsidiary Setcar, acquired in
November 2019, is playing a key role in the
growth of our environmental services offering
and is delivering excellent results for the Group.
Other income increased by 140% to €0.83m.
This result was positively affected by a €0.50
million one-off income from Setcar, as a result
of the release of an undue obligation. The
remainder consists of grants and R&D
expenditure credits, specific incentives and
financing schemes that support the Group
in its R&D activities.
The EBITDA loss for the period was €1.99m,
decreasing by 24.1% compared to 2020 (loss
of €2.62 million). The Group is closely
monitoring increases in energy and
transportation costs and the effects of
increased inflation were seen in the second
half of 2021 and this trend is intensifying into
2022, as a consequence of the war in Ukraine.
The Group is taking all possible measures to
avoid margin reduction and is reacting
promptly to increase product prices to reduce
any impact on profitability.
Net loss for the period was reduced by 24.3%
to €3.43m (2020: €4.53m).
At the end of 2021 the Group strengthened its
funding position, and cash and cash
equivalents at year end were €11.13m (2020:
€7.08m). In addition, during the year, Directa
Plus raised a total of €1 million of bank loans,
provided by two major Italian banks, under
the Italian Government’s Covid-19 Recovery
Plan. The loans are 80-90% guaranteed by the
Italian Government and have allowed the
Company to take advantage of the low-cost
liquidity offered.
In December 2021, the Group completed a
fundraising with gross proceeds of £7 million,
by way of a placing and subscription. Directa
Plus issued 4,666,667 new Ordinary Shares at
a price of 150p each, with almost no discount
to the market price at the time of transaction.
The proceeds from the capital raise will be
used for:
• funding two significant future growth
opportunities in the main existing verticals;
• development of Grafysorber® to broaden
the number of applications offered.
The Group is locating a Grafysorber®
production unit in Setcar’s premises in
Romania to:
– construct a water treatment plant,
providing dedicated equipment for
in-house treatment of industrial water
and for the removal of hydrocarbons
and other organic pollutants using its
Grafysorber® technology, and
KEY PERFORMANCE INDICATORS & FINANCIAL SUMMARY 2021 2020
Revenue from product and service sales (€’m) 8.62 6.43
Total income* (€’m) 9.45 6.78
LBITDA** (€’m) (1.99) (2.62)
Loss after tax*** (€’m) (3.43) (4.53)
Reported basic loss per share (€) (0.06) (0.07)
Cash and cash equivalents (€’m) 11.13 7.08
Total number of patents granted**** 72 38
* Total income comprises revenue from product and service sales (€8.62m), and other income mainly including windfall profits
(€0.50m) government grants (€0.17m) and RDEC – Research and Development Expenditure Credit (€0.03m).
** LBITDA represents results from operating activities before depreciation and amortisation of €1.54m (2020: €1.69m).
Management believes that LBITDA provides a better reflection of operational performance by removing interest, tax,
depreciation and amortisation. EBITDA is a non-GAAP measure.
*** The loss for the year of €3.43m is split between a €3.65m loss owned by the Company and a €0.22m profit in respect of
non-controlling interests.
**** Number of grants in portfolio at the end of the period.
18
Directa Plus
Annual Report & Accounts 2021
Directors’ biographies
Sir Peter Middleton
Non-Executive Chairman
Relevant strengths
•
Track record and credentials in
financial markets
•
•
Deep financial expertise
Corporate governance and
investors relations
Giulio Cesareo
CEO and Founder
Giorgio Bonfanti
CFO
Relevant strengths
•
Industry knowledge and credentials
Relevant strengths
•
Financial reporting and accounting
•
•
Strategic and business expertise
Engineering expertise
•
•
Budget and business plan
M&A and funding
Giorgio is a professional with corporate
finance, M&A, and accounting experience.
Before joining Directa Plus in May 2021,
Giorgio was a Senior Manager at PwC, in their
Deals practice. He supported national and
international clients in M&A transactions, such
as acquisitions, disposal, joint ventures, IPOs
and business plans. He also has a previous
experience at KPMG as an auditor.
Giorgio holds a degree in Business
Administration and a Master of Science in
Accounting, Finance and Control from
Bocconi University.
Sir Peter Middleton GCB is Chairman of Burford
Capital. He was Chairman of Marsh Ltd
between 2005 and 2013, UK Chairman of
Marsh & McLennan Companies between 2007
and 2014 and Chairman of Mercer Ltd between
2009 and 2014. He was also previously
Chairman of Camelot Group plc and Chairman
of the Centre for Effective Dispute Resolution.
He was a Director, Chairman and Deputy
Chairman of United Utilities from 1994-2007,
a Board member of OJSC Mobile Telesystems
from 2005-2007 and a board member of Bass
plc from 1992-2001 and General Accident (later
CGU) from 1992-1995.
Sir Peter spent nearly 30 years at HM Treasury,
working closely with nine Chancellors, and
was Permanent Secretary from 1983 to 1991.
Sir Peter became Group Chairman of Barclays
Bank plc in April 1999 and retired in August
2004. He joined Barclays in 1991 as Group
Deputy Chairman and Executive Chairman of
BZW, became Chairman of Barclays Capital
following the reorganisation of BZW in
October 1997 and was Group Chief Executive
from November 1998 until October 1999.
He was also President of the British Bankers
Association from 2004-2006 and a member
of the National Institute for Economic
Research from 1996-2007.
Giulio Cesareo is one of the founders of
Directa Plus. He began his professional career
in 1982 in Italy working for Falck and Techint.
From 1986 to 2004, he worked in the carbon
and graphite business for Union Carbide,
UCAR and Graftech, reaching the positions of
the President and CEO of the Italian company
and Vice President and General Manager of
the worldwide Advanced Carbon and Graphite
business unit. In his role at Union Carbide,
Giulio managed business units in USA, France
and Italy. Giulio is Advisory Board member
and member of the Industry Council of the
US National Graphene Association
Giulio Cesareo was awarded a degree in
Mechanical Engineering from the Polytechnic
University of Milan, an MBA and an Executive
MBA from Bocconi University of Milan and
attended Strategic and Financial Management
Programs at Stanford University (USA). He
serves as a board member of Fondazione
Quarta, a non-profit organisation focused on
scientific research in areas of social activity
and was also Board Member of: Centro di
cultura scientifica “Alessandro Volta”, an
organisation aimed at promoting the practical
applications of a scientific culture.
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
19
David Gann
Non-Executive Director
Relevant strengths
•
Innovation management
•
•
Business strategy
Engineering expertise
Neil Warner
Non-Executive Director
Richard Hickinbotham
Non-Executive Director
Relevant strengths
•
Financial reporting and accounting
Relevant strengths
•
Deep understanding of AIM markets
•
•
Growing businesses and M&A
Corporate governance
•
Investor relations and financial
communication
•
Growing businesses and funding
David Gann CBE CEng FICE FCGI is a
renowned expert on technological innovation
and an accomplished business and academic
leader. He is Chairman, UK Atomic Energy
Authority. He is Pro-Vice-Chancellor,
Development and External Affairs, at Oxford
University. He was Professor of Innovation &
Technology Management, Imperial College
London and was Vice-President (Innovation)
and member of the College’s Executive Board.
He has deep experience mentoring start-ups,
supporting fast growth technology businesses
and developing long-term strategic
partnerships with multinational technology
corporations. He has a PhD in Industrial
Economics and is a Chartered Civil Engineer,
a Fellow of the Institution of Civil Engineers,
an Honorary Fellow of the Royal College of Art
and Fellow, City & Guilds Institute. He was
appointed Commander of the Order of the
British Empire (CBE) in the 2010 Queen’s
Birthday Honours for services to engineering,
and received the 2014 Tjalling C. Koopmans
Asset Award for extraordinary contributions to
the economic sciences. David is a senior
government advisor. His industrial experience
includes serving as Laing O’Rourke plc’s Group
Executive for research and innovation
between 2007 and 2011. He advises executives
and boards on innovation and technology
management, including Citigroup, IBM,
McLaren, NEC and Tata Group.
Neil Warner has strong financial and
managerial experience in multinational
businesses. He recently served as the senior
independent Director and Chairman of the
Audit Committee at Trifast plc and as a Non-
Executive Director and Audit Committee
Chairman of Vectura Group plc. He previously
served as the senior independent Director and
Audit Committee Chairman of Dechra
Pharmaceuticals plc, and was Non-Executive
Chairman of Enteq Upstream plc. He was
Finance Director at Chloride Group plc, a
position he held for 14 years until its acquisition
by Emerson Electric. Prior to this, Neil spent six
years at Exel plc (formerly Ocean Group plc and
now part of DHL following its acquisition by
Deutsche Post) where he held a number of
senior posts in financial planning, treasury and
control. He has also held senior positions in
Balfour Beatty plc (formerly BICC Group plc),
Alcoa and PricewaterhouseCoopers.
Richard Hickinbotham is an experienced City
professional and Head of Equity Research at
Singer Capital Markets, having served
previously as Head of Equity Research at
Cantor Fitzgerald Europe and Charles Stanley.
He has also held a number of senior positions
at Investec, including Global Head of Research
and Co-Head of UK Investment Banking and
as Head of Pan-European Small and Midcap
Research at S.G. Warburg & Co. (acquired by
UBS). Richard is a Non-Executive Director of
AB Dynamics Plc where he is Chairman of the
Remuneration Committee and a member of
the Audit and Nomination Committees.
Richard holds a BSc. in Mechanical
Engineering from Imperial College and is
a qualified Chartered Accountant.
®
20
Directa Plus
Annual Report & Accounts 2021
Section 172
Section 172(1)(a) to (f) of the Companies Act 2006 requires Directors to
take into consideration the interests of stakeholders in their decision
making, to this effect the Board of Directors of Directa Plus Plc consider
that they have acted in such a way that would be most likely to
promote the success of the company in the long term, taking into
consideration the interests of all the stakeholders (investors,
employees, customers, suppliers and local communities).
a) The likely consequences of any decision in the long-term. Annually
the company reviews its medium to long term plan, which focuses on
the strategic direction of the Group as well as looking at the threats,
and opportunities it is facing. This plan is designed to ensure the long-
term optimal direction of the company, ensuring, at the same time,
the consideration of long-term requirements of the stakeholders.
b) The interests of the company’s employees. The Board considers
the employees as one of the key stakeholders within the Group and
as such welcomes any feedback to ensure the alignment of both
party’s interests and given the nature of the business their greatest
asset. The interests of the employees are always considered when
determining the strategic direction and vision of the Group.
Details of the Company’s process to obtain feedback from
employees are listed in the section “Stakeholder and social
responsibilities” of Corporate Governance Statement at page 24.
c) The need to foster the company’s business relationships with
suppliers, customers and others. The Board recognises that the
success of the Company is reliant on the stakeholders of the
business and, to this effect, the Company engages with these
stakeholder groups on a regular basis. Details of the Company’s
process to obtain feedback from customers and supplier are listed
in the section “Stakeholder and social responsibilities” of
Corporate Governance Statement at page 24.
d) The impact of the company’s operations on the community and
environment. The Board has always considered the health and safety
of people and environmental protection as top priorities. In order to
seek to manage its environmental responsibilities in a systematic and
proactive manner both Directa Plus S.p.A. and Setcar implemented
the ISO 14001 certification that helps the Group to achieve the
intended outcomes of its environmental management system which
provide value for the environment, the organization and the
interested parties. The Board recognises its responsibilities with
regards the environment and wider community and takes actions to
reduce the risk of any potential negative impact the provision of its
services and products could have in this area. In 2020 the Covid-19
pandemic encouraged the Board to strengthen its security and health
measures towards its employees and community in general. The
Group implemented an anti-contamination protocol shared with all
its employees, foreseeing the provision of protection tools, constant
disinfection of all areas and common rooms, safety distancing and
body temperature controls. As the pandemic evolved, the Group
maintained the same protocol also for the entire 2021.
e) The desirability of the company maintaining a reputation for high
standards of business conduct. In order to ensure that the business
maintains its reputation and integrity, the Board promotes a
corporate culture based on sound ethical values and behaviours,
which are essential to maximise shareholder value. Those core
values serve as a common language that allows all members of staff
to work together as an effective team and, it is these values and our
shared long-term business vision and strategy that we believe will
drive growth in shareholder value over the long term. Ethical code
and whistleblowing process are in place and reviewed regularly.
Further details of the Company’s Ethical value and behaviours are
listed in the section “Ethical values and behaviours” of the Corporate
Governance Statement at page 24.
f) The need to act fairly as between members of the company.
The Group’s Board currently consists of four Non-Executive Directors,
and two Executive Directors. The Board considers it collectively has an
appropriate balance of skills and experience, as well as an appropriate
balance of personal qualities and capabilities to ensure that all decisions
are made such that the impact toward the stakeholders is fairly and
equal, so they too may benefit from the successful delivery of our plan.
We define principal decisions as both those that have long-term
strategic impact and are material to the Group, but also those that are
significant to our key stakeholder groups. In making the following
principal decisions, the Board considered the outcome from its
stakeholder engagement, the need to maintain a reputation for high
standards of business conduct and the need to act fairly between the
members of the Company.
Global graphene demand is expected to increase significantly over
the next 10 years. The Group is well positioned to benefit from this
market growth and to play a key role in its near-term development.
The Group’s strategy is to target existing products and markets that can
be significantly improved with the addition of Directa Plus products.
The Company works with key partners, benefiting from their knowledge
of the market, strong reputation and commercial channels.
The Group is currently targeting two key markets (Environmental
remediation and Textiles – including air and water filtration), currently
at an advance stage of products and services commercialisation, and
keeps developing and monitoring other verticals such as Composites,
Lithium-Sulphur batteries, and Paints.
The Group operates in a fast-changing environment, and it its currently
reshaping its strategic plan with the support of external advisors. The
Group will exploit the competitive advantage gained so far and it will
prioritise the verticals with a faster commercial traction and higher
financial returns.
In December 2021 the Group raised £7 million of gross proceeds to:
•
•
•
Fund specific projects in the two key existing verticals. A water
treatment plant and absorbent materials to develop Grafysorber® and
broaden the number of applications offered, and air and water filters
to advance the application of Directa Plus’ G+® technology to non-
woven fabrics to confer antibacterial and antiviral properties;
Keep investing in exploring and developing new growth
opportunities, and
Provide the balance sheet strength to support the Company and its
subsidiaries in responding to significant new tenders currently in
progress, and to provide additional liquidity for its general working
capital purposes.
Giulio Cesareo
Chief Executive Officer
4 May 2022
Overview
Strategic Report
Governance
Financial statements
Additional information
Directors’ report
Directa Plus
Annual Report & Accounts 2021
21
Principal activities
Directa Plus is a technological Group pursuing the development of
innovative manufacturing processes to produce and supply high
quality engineered graphene-based products which can be used by
third parties in a wide variety of industrial and commercial applications.
With the acquisition of the majority stake in Setcar SA, completed in
November 2019, Directa Plus entered the environmental service market
with the aim to supply a complete range of services, from chemical
analysis for waste identification to water and soil treatment, leveraging
on the unique properties of the graphene-based products in our
portfolio. The Group’s strategy is to partner with potential customers at
an early stage and work with them to develop tailor-made graphene
forms that have the desired morphology for each potential customer’s
specific applications to enable them to capitalise on the high-
performance benefits of graphene.
The Group’s main country of operation and place of business is Italy
and its registered office address is 11-12 St. James’s Square, London,
SW1Y 4LB, UK. Setcar is based in Romania, which is also its main
country of operations, and its registered office address is 6 Gradinii
Publice Street, 810022, Braila.
Business and strategic review
The information that fulfils the requirements of the strategic report and
business review, including details of the results for the year ended 31
December 2021, research and development, KPIs and the outlook for
future years, are set out in the Chairman’s Statement, Chief Executive
Officer’s Review and Chief Financial Officer’s Review on pages 2 to 17
(The Strategic Report), and in this Directors’ Report, together with the
description of principal risks and uncertainties. Going concern
assessment is set out in the Corporate Governance report and is
reported on page 27. Post balance sheet events are reported in Note 27.
Dividends
The Directors’ current intention is that for the foreseeable future, all future
earnings at the Group level will be reinvested in the business in order to
fund the ongoing growth strategy. In the future, if it is commercially
prudent to do so, the Board may consider the payment of a dividend.
Directors’ indemnity
The Company has arranged appropriate Directors’ and officers’
insurance to indemnify the Directors against liability in respect of
proceedings brought by third parties. Such provisions remain in force
at the date of this report.
Directors
The following Directors held office as indicated below for the year
ended 31 December 2021 and up to the date of signing this report
(where not specifically mentioned):
•
•
•
Sir Peter Middleton
Giulio Giuseppe Cesareo
Marco Ferrari (resigned from the BoD on 19 March 2021)
•
•
•
•
Giorgio Bonfanti (appointed as a board member on
16 November 2021)
David Michael Gann
Neil William Warner
Richard Hickinbotham
Directors’ Remuneration and Interests
The Directors’ Remuneration Report is set out on pages 28 to 29. It
includes details of Directors’ remuneration, interests in the ordinary
shares of the Company and share options.
Corporate Governance
The Chairman’s Corporate Governance Statement is set out on
pages 24 to 27.
Share Capital and Substantial shareholdings
Details of the share capital of the Company as at 31 December 2021 are set
out in Note 17 to the consolidated financial statements. At 31 December
2021, a total of 66,032,126 ordinary shares were outstanding. The
following Shareholders own 3% or more of the ordinary shares:
Percentage of
Number of issued ordinary
Shareholder ordinary shares share capital
Nant Capital / Patrick Soon-Shiong 18,963,652 28.72
Dompè Group 8,091,873 12.25
Unicorn Asset Management 5,873,333 8.89
Dr. Jean Marc Droulers /
Finanziaria Le Perray * 4,466,449 6.76
Galbiga Immobiliare S.r.l.** 3,958,228 5.99
Schroders Investment Management 3,857,247 5.84
Ruffer 2,406,666 3.64
* Finanziaria Le Perray S.p.A. is a company owned and controlled by Dr. Jean Marc Droulers.
** Galbiga Immobiliare S.r.l. is a company owned and controlled by Giulio Cesareo,
the CEO of Directa Plus.
Risk management
The Group’s financial risk management is discussed in Note 22 to the
financial statements. The Directors continually considers how to
identify and mitigate the key business risks. Directors ensure that the
management of Company prides leadership and direction to
employees so that our overall risk-taking activity is kept within the
desired risk appetite. The Group’s tolerance for risk in the area of Health
Safety and Environmental Protection (HSEP) is low. Directa Plus
dedicates significant resources to managing and monitoring these
risks on a daily basis. The following list considers those could have
a serious adverse impact on Group’s performance.
®
22
Directa Plus
Annual Report & Accounts 2021
Directors’ report
continued
Risk
Mitigation and management strategy
Likelihood*
Impact (on
the Group)**
Ukrainian conflict
Directors are monitoring the conflict in Ukraine and
assessing all the potential impacts on the Group’s
business, and consequently re-adjusting – where
necessary – its strategy and operational priorities.
The Group will be likely impacted by inflation
trends (as a consequence of the increase in energy
and transportation costs) and, presumably, by
some contracts slowdown.
Covid-19
Covid 19 pandemic is materially affecting the
worldwide market, causing a general deterioration
of the economic outlook.
Changes in government policy and legal
and regulatory compliance
The Group operates in highly regulated industry
(Environmental services and waste disposal)
through its controlled subsidiaries Setcar SA.
Any changes to government policy, standards
or regulatory requirements could affect the
Group’s operations and results.
M&A strategy and delivery
Directa Plus, after the acquisition in 2019, considers
that integration risks and issues could arise
impacting the delivery of the expected benefit.
Technological risk
Directa Plus operates in an industry where
competitive advantage has a certain dependency
on the technology adopted. It is possible that
future technological development or potential
substitute materials may affect the acceptance of,
and the attribution of value to the Group’s
graphene production technology and Group’s
graphene based products.
Certain
Major
Certain
Moderate
The Group does not have any contracts with
Russian or Ukrainian clients, or companies that
could be subject to international sanctions.
Moreover, the Group has c. 15-20 major long-term
clients and additional c. 150-200 minor clients.
The major clients’ business activity appears –
in general – not to be currently at risk.
Overall, Directors believe that the conflict will not
affect the going concern of the Group, and – under
certain circumstances – it will create some
potential opportunities. In fact, the value increase
of the oil and waste recovered or the opening of
other kind of applications of G+® could have
positive out-turns for the Group.
The Board and the Management are constantly
monitoring the situation. Management has
undertaken scenario based analysis on future
financial projections. To mitigate the adverse effect
of Covid-19 on revenues in 2020 Management
decided to target the personal protective equipment
market, leveraging on graphene G+® properties.
In 2022 the health emergency is giving the first
signs of slowdown, and the Company seems to
have overcome the difficult macro-economic
period with limited adverse effects.
Regulatory framework is constantly monitored
by Management, trying to have prompt
understanding of proposed changes.
Possible
Major
An integration plan and skilled resources have
been deployed to manage the post-acquisition
integration. Setcar has operated in the Group over
the last two years and the Board of Directors
believes that the integration has reached a good
level of effectiveness. The Board of Directors is
constantly considering how to improve the
integration and is kept promptly up to date.
Directa Plus continually monitors the market and
its competition and has resources to invest in
technological development and product
development as appropriate.
Unlikely
Moderate
Possible
Critical
Intellectual property protection risks
Failure to protect the Group’s IP may result in
another party copying, using or taking advantage
from Group’s proprietary content and technology
without authorization. There may not be adequate
protection for IP in every country in which the
Group’s products are or will be made available.
The Group monitors scientific papers, news flow
and graphene products brought to the market as
far as reasonably possible and will take cost-
effective legal action if required. The Group is
advised by suitably qualified and experienced
patent agents and meetings with the patent
agents are scheduled regularly.
Possible
Moderate
Key employees risks
The Group depends upon the continued service
and performance of the Executive Officers and key
employees. The loss of the services of any of
Executive Officers or other key employees could
have an adverse impact on the Group’s operations,
reputation and business activities.
Risks is mitigated by providing share options to key
employees, building a motivated management
team, together with significant opportunities for
carrier development.
Possible
Major
Change***
New
↓
→
↓
→
→
→
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
23
Risk
Mitigation and management strategy
Likelihood*
Impact (on
the Group)**
Change***
Funding risk
The Group’s growth requires access to funding.
It is possible that the Group will need to raise extra
capital in the future to continue to develop the
Group’s business or to take advantage of future
acquisition opportunities. No assurance can be
given that any such additional financing will be
available or that, if available, it will be available on
terms favourable to the Group or to the Group’s
shareholders.
Risk is mitigated by maintaining good
relationships with the Group’s main shareholders.
The Company successfully concluded a capital
raise in December 2021.
In addition, the Group has access to potential
additional sources of debt funding with major Italian
banks, which could lessen any further funding risk.
In 2021 the Group raised €1m additional debt
funding backed by the Italian Government.
* Unlikely, Possible, Likely, Certain
** None, Minor, Moderate, Major, Critical
*** Defines the direction on the change in the risk: new risk (New), risk increased (↑), risk decreased (↓), no change (→)
Possible
Major
→
The Group’s policies, procedures and practices used to identify,
monitor and control a variety of risks may, in some cases, not be
effective. The Group’s risk management methods rely on a combination
of internally developed technical controls, standard practices,
observation of market behaviour and human supervision.
Annual general meeting
The notice for the convening of the AGM 2022 together with the
proposed resolutions will be contained in a Notice of AGM sent to all
shareholders and available via the Company’s website.
Statement of Directors responsibilities
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to
prepare the Group and Company financial statements in accordance
with the UK adopted international accounting standards. Under
company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the Group
for that period. The Directors are also required to prepare financial
statements in accordance with the rules of the London Stock Exchange
for companies trading securities on the AIM.
In preparing these financial statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with UK
adopted international accounting standards, subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and the Company will
continue in business.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the
financial statements are made available on the corporate website.
Financial statements are published on the Company’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the Directors. The
Director’s responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Auditors
Each of the persons who is a Director at the date of approval of this
annual report confirms that:
•
•
so far as the Director is aware, there is no relevant audit information
of which the Company’s auditors are unaware; and
the Director has taken all the steps that he ought to have taken as a
Director in order to make himself aware of any relevant audit
information and to establish that the Company’s auditors are aware
of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of Section 418 of the Companies Act 2006.
BDO LLP have expressed their willingness to continue in office as
auditors and a resolution to reappoint them will be proposed at the
forthcoming Annual General Meeting.
For and on behalf of the Board of Directors
®
4 May 2022
24
Directa Plus
Annual Report & Accounts 2021
Corporate governance report
Chairman’s corporate governance statement
The Board of Directa Plus plc (the “Company”) fully supports good corporate governance and recognises that it enhances
its decision-making processes by improving the success of the Company and increasing shareholder value over the
medium to long-term. The Quoted Companies Alliance corporate governance code (the “QCA Code”) sets out a minimum
best practice standard for small and mid-sized quoted companies, particularly AIM companies. The Company complies
with the QCA Code and the Directors propose that the Company should continue to do so having regard to the Company’s
size, board structure, stage of development and resources. There have been no significant changes in governance
arrangements during the 2021 financial year.
In 2020 we started a review process of the Company’s culture and how it is consistent with our strategy, objectives and
business model. We have identified some opportunities of improvement in our daily operations. In 2021 we have focused
our efforts on upgrading some operations in the accounting and finance division, which is playing a central role in facilitating
the collaboration and alignment among all the Company’s divisions. In doing so, we have appointed a university professor
as a consultant to support us in this process. In 2022 we are focusing our efforts in redesigning the sales and marketing
division. In front of increasing opportunities ahead of us, but also increasing complexities, we have engaged a consulting
company that will support us in better defining which are our strategic priorities, key verticals and products to dedicate most
of our efforts. Compliance with each of the principles set out in the QCA code is summarized in this section.
Role of the Chairman
The Board as a whole is responsible for effective corporate governance.
As Chairman of the Board, I have overall responsibility for the corporate
governance arrangements of the Company in addition to ensuring
that corporate governance arrangements are fully adopted within
the Company.
In addition, my role as Chairman is to lead the Board, ensuring its
smooth running and the effective contribution of all Board members.
Strategy and business model
The Company’s business model, strategy and key markets are set out in
the Chief Executive Officer’s review on pages 10 to 15.
Relations with shareholders
The Chief Executive Officer and Chief Financial Officer are responsible
for shareholder liaison and have regular dialogue with institutional
investors in order to develop an understanding of their views.
Meetings with analysts and institutional shareholders of the Company
take place following the interim and annual results announcements as
well as on an ad hoc basis. These presentations are given by the Chief
Executive Officer and the Chief Financial Officer, updating on relevant
matters and in particular, on the progress of the Company in terms of its
operational performance, financial and strategic direction.
The Annual Report and accounts are published on the Company’s
website, www.directa-plus.com, and can be accessed by shareholders
and non-shareholders. Shareholders have the opportunity to meet
members of the Board at the Annual General Meeting of the Company
where Board members will be happy to respond to questions.
Due to the Covid-19 pandemic all the interactions with shareholders
have been carried out through virtual meetings. However, this appears
not to have interfered with the effectiveness of the discussions.
The Board believes that its current approach to shareholder
engagement is successful, based on the feedback received and the
Proactive Investor interviews publicly available. In addition, as
Chairman, I remain available to talk to shareholders whenever required.
Stakeholder and social responsibilities
The Board considers its key stakeholder groups to include:
•
•
•
•
workforce – we are a responsible employer, compliant with relevant
human resources legislation and recommended practices, as well as
Health, Safety and Environmental Protection regulations. In 2020 the
Covid-19 pandemic encouraged the Board to strengthen its security
and health measures towards its employees and community in
general. Being the pandemic still a serious threat at the time of this
report, those measures have been carried out also in 2021. The Group
implemented an anti-contamination protocol shared with all its
employees, foreseeing the provision of protection tools, constant
disinfection of all areas and common rooms, safety distancing and
body temperature controls;
customers – deep and wide relationships with our customers are
crucial for the success of our business in developing novel solutions
with our customers and in developing their next generation of products;
suppliers – we aim to develop strong relationships with our suppliers
based on trust, understanding and respect; and
partners – we engage with commercial and scientific partners and we
work with them to develop new applications, building strong and
long-lasting relationships.
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
25
The Company obtains feedback from stakeholder groups by way of:
•
•
•
•
informal meetings and consultation with employees’ representatives,
and reports received through the Group’s Whistleblowing policy;
regular meetings with main suppliers and undertaking a formal
assessment at least once a year;
formal survey sent at least once a year to the main customers to
assess our level of service; and
maintaining a social media presence in order to understand the
sentiment of and obtain feedback from the our stakeholders.
Directors
The Directors continue to remain satisfied that the Board is well
balanced and that the Directors possess the sufficient breadth of skills,
relevant experience, variety of backgrounds and knowledge to ensure
the Board functions appropriately, without being dominated by any
one Director. Details of qualities and capabilities that each Director
brings to the Board are added in the Director biography section. The
Board acknowledges that there are currently no appointed female
Directors, however, it will continue to review this moving forwards.
Moreover, diversity will be strongly considered in further recruiting
process ensuring the appropriate balance of the Board is developed.
The Company has always considered the health and safety of people
and environmental protection as top priorities. We take a proactive
approach to health, safety and environmental protection by monitoring
our production process and products and continuously reviewing our
policies. Further information about the Company’s approach to
sustainability is set out in the Health, Safety and Environmental
Protection section of the Company’s website.
Full biographies of each Director can be found on pages 18 and 19.
The Board keeps under review the skills required to effectively pursue
the Company’s strategy and discharge its duties. The Chief Financial
Officer is also the Company Secretary; the Board does not feel that a
full time Company Secretary is currently required but will keep this
under review.
Risk management
The Directors are responsible for establishing and maintaining the
Company’s system of internal control and reviewing its effectiveness.
Pages 21 to 23 set out the Company’s approach to risk management
and lists those risks which are considered to have a serious adverse
impact on the Company’s performance.
Page 27 includes additional information about the Company’s internal
control system.
The Board
The primary function of the Board is to provide effective leadership and
direction to enhance the long-term value of the Company to its
shareholders and other stakeholders. The Board has overall
responsibility for reviewing the strategic plans and performance
objectives, financial plans and annual budget, key operational
initiatives, major funding and investment proposals, financial
performance reviews, and corporate governance practices.
The Chief Executive ensures that the Directors’ knowledge is kept up to
date on key issues and developments pertaining to the Group, its
operational environment and to the Directors’ responsibilities as
members of the Board. During the course of the year, Directors received
updates from the Company Secretary and, if required, from external
advisers on a number of corporate governance matters.
The Board consists in two Executive Directors and four Non-Executive
Directors. The Board considers all the Non-Executive Directors to be
independent.
The number of meetings attended by the Board are disclosed on
page 26.
Board performance
The Board continually reflects on its performance to identify potential
areas for improvement.
Ethical values and behaviours
The Board is committed to ensuring the highest legal and ethical
standards and acknowledges its responsibilities in relation to
corporate governance.
The Board has produced an Ethical Code which aims to ensure that the
Company’s employees conduct themselves respectfully and honestly
in all their dealings with other employees as well as third parties
including clients, suppliers, public institutions, the media, competitors
and legal authorities.
Governance structure and processes
Delivering growth and long-term shareholder value with effective and
efficient decision-making is of high importance to the Board.
There is a clear division of responsibilities between the Chairman, who
is responsible for the effective leadership and smooth running of the
Board, and the Chief Executive Officer who, with the other Executive
Director, is responsible for the running of the Company.
The Company has established an Audit Committee and a
Remuneration Committee. Both committees meet at least twice a year.
Details of both committees and a report of the activities undertaken
during the 2021 financial year can be found on page 30.
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26
Directa Plus
Annual Report & Accounts 2021
Corporate governance report
continued
Board
The Board consists of two executive Director and four Non-Executive Directors. The Board considers all the Non-Executive Directors to be
independent. The current members of the Board and their membership on the Board committees of the Company are as follows:
Board committees as
Board appointments Chairman or member
Non- Non-
Executive Executive Independent independent Audit Remuneration
Name of Director Director Director Director Director Committee Committee
Sir Peter Middleton 3 3 – –
Giulio Cesareo 3 – –
Giorgio Bonfanti 3 – –
David Michael Gann 3 3 Member Member
Neil William Warner 3 3 Chairman Member
Richard Hickinbotham 3 3 Member Chairman
The Board recognises the importance of ensuring the flow of complete,
adequate and timely information on an ongoing basis to enable decisions
to be made on an informed basis and to enable the Board to effectively
discharge their duties and responsibilities. To allow Directors sufficient
time to prepare for the meetings, all Board and board committee papers
are distributed to Directors a week in advance of the meetings, with any
additional material or information provided on request. Directors have
unrestricted access to management and receive briefings from them,
which enable the Directors to keep abreast of the latest developments.
Furthermore, the Company has implemented the appropriate
procedures to support Directors in obtaining independent professional
advice at the expense of the Company as and when required. Directors
receive regular updates in relation to changes in UK adopted accounting
standard and regulation.
Committees
The Board has delegated certain functions to its two committees, the Audit
Committee and the Remuneration Committee. These committees have
their own written terms of reference and their actions are reported to and
monitored by the Board. The Board accepts that while these committees
have the authority to examine particular issues and will report back to the
Board with their decisions and/or recommendations, the ultimate
responsibility on all matters lies with the Board. The functions typically
refer to the Nomination Committee currently remain with the Board.
Time commitments
The Directors devote a sufficient amount of time in order to discharge
their duties to the Company both at and outside of Board Meetings. In
order to ensure continue this commitment the Board meet at least 6
times a year. In addition to the formal Board Meetings the Board will
meet throughout the year as and when required for specific matters.
The time commitments of the Non-executive Directors are carefully
reviewed by the Board and it is noted that Peter Middleton, David Gann,
Neil Warner and Richard Hickinbotham devote at least 2 days a month
to the Company. Details of the Directors’ attendance at each of the
scheduled Board and Committee Meetings for the 2021 financial year
are listed below:
Board meetings Audit Committee meetings Remuneration Committee meetings
Name of Director No. held No. attended No. held No. attended No. held No. attended
Sir Peter Middleton 9 9 N/A N/A N/A N/A
Giulio Cesareo 9 9 N/A N/A N/A N/A
Giorgio Bonfanti 1 1 N/A N/A N/A N/A
Marco Ferrari 2 2 N/A N/A N/A N/A
David Michael Gann 9 9 4 4 2 2
Neil William Warner 9 9 4 4 2 2
Richard Hickinbotham 9 9 4 4 2 2
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
27
Internal control
The Directors are responsible for establishing and maintaining the
Company’s system of internal control and reviewing its effectiveness.
The system of internal control is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and can only
provide reasonable but not absolute assurance against material
misstatement or loss.
The main features of the internal control system are as follows:
•
•
•
Close management of the business by the Executive Director. There
are clearly delineated approval limits throughout the Company and a
well-defined organisational structure. Controls are monitored at the
appropriate level;
monthly management accounts are prepared and reviewed by the
Board, including reviewing variances against prior months and
against budgets;
clear segregation of duties within the Company’s finance function
help ensure the Company’s assets are safeguarded and that proper
financial records are maintained; and
•
a list of matters is reserved for the approval of the Board.
The Company has adopted a share dealing code for the Directors and
certain applicable employees, which is appropriate for a company
whose shares are admitted to trading on AIM (particularly relating to
dealing during close periods in accordance with Rule 21 of the AIM
Rules for Companies) and the Company takes all reasonable steps to
ensure compliance by the Directors and any relevant employees.
Going concern
The Group meets its working capital requirements through the receipt
of revenues from the provision of its services and sale of products
mainly in Europe, the management of capital and operating
expenditure, from the working capital and other borrowing facilities
available to it and from the issue of equity capital.
The COVID-19 pandemic has had a significant, immediate impact on the
global economies and on the operations and operational funding of
participants in international supply chains. Moreover, the recent events
in connection with the conflict in Ukraine constitute and additional
cause of uncertainty on the macro-economic scenario that most likely
will significantly affect the political and business environment.
b) the inflation trend, mainly driven by the increase in the
transportation and energy costs, could make pressures on the
Group’s margins. However, a careful control and monitoring over the
industrial administrative costs, and the fact that the Company has a
relatively low energy consumption production process, could allow
the Group not to be negatively affected.
Management believes that the Group has the systems and protocols in
place to address these challenges. At the date of approval of these
financial statements it is not clear how long the current circumstances
are likely to last and what the long-term impact will be.
In December 2021 the Group successfully completed a £7m gross
capital raise, fully subscribed by current and new investors, to deploy
new projects with a high growth potential and sustain working capital.
As of 31 December 2021, the Group had net assets of €16.03m (2020:
€10.66m) and cash and cash equivalent of €11.13m (2020: €7.08m).
The Directors prepare the 2 years plan 2022-2023 in order to ensure
that they have sufficient liquidity in place in the business. In addition,
the Directors, in formulating the plan and strategy for the future
development of the business, considered even a stress scenario with
a reduction in forecast revenues from c10% to 15%. The Group is
projected to have the financial capacity to support its viability until at
least the end of 2023.
The Directors review regularly updates to the scenario planning such
that it can put in place mitigating actions and maintain the viability of
the company and will keep stakeholders informed as necessary.
The Directors have taken steps to use the various support mechanisms,
such us redundancy funds or equivalent and soft loan specifically
foreseen by governments to support companies during the general
global economy slowdown due to COVID-19. Moreover, the Directors
consider several options in terms of regional and European grants able
to provide funding in the following months to sustain the R&D activities.
Having regard to the above, and based on their latest assessment of the
budgets and forecasts for the business of the Company, the Directors
consider that there are sufficient funds available to the Group and
Company to enable it to meet its liabilities as they fall due for a period of
not less than twelve months from the date of approval of the financial
statements. The Directors therefore consider it appropriate to adopt the
going concern basis of accounting in preparing the financial statements.
The Directors are aware that the current situation could have an impact
on the Group’s operations, as of today still difficult to assess. Further
details of the current assessment of the impact on the business are set
out in the strategic report.
Sir Peter Middleton
Non-Executive Chairman
4 May 2022
Based on very recent projections, the Directors believe that:
a) the demand for graphene products will be volatile, although the
positive outlook and general market appetite is confirmed;
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28
Directa Plus
Annual Report & Accounts 2021
Directors’ remuneration report
The Company is not required to prepare a Directors’ remuneration
report for each financial year and so the Company makes the following
disclosure voluntarily.
The Remuneration Committee is responsible for recommending the
remuneration and other terms of employment for the Executive
Directors of Directa Plus plc.
In determining remuneration for the year, the committee has given
consideration to the requirements of the QCA code.
Remuneration policy
The objective of the remuneration policy is to attract, retain and
motivate high calibre executives to deliver outstanding shareholder
returns and at the same time maintain an appropriate compensation
balance with the other employees of the Group.
Directors’ remuneration
The normal remuneration arrangements for Executive Directors consists of
base salary, performance bonuses and other benefits as determined by
the Remuneration Committee. Each of the Executive Directors has a
service agreement that can be terminated at any time by either party
giving notice, the length of such notice period being determined pursuant
to the applicable National Collective Bargaining Agreement (NCBA),
governed by Italian law, depending upon accrued length of service.
Non-Executive Directors are remunerated solely in the form of Director
fees determined by the Board and are not entitled to pensions, annual
bonuses or employee benefits. Each of the Non-Executive Directors’
appointment may be terminated by either party giving three months’
prior written notice.
Directors are not involved in specific discussions on their own
remuneration.
The remuneration of the Directors, in Euros, for the year ended
31 December 2021 was as follows and is audited:
National Total
Insurance Pension emoluments
Salary/Fees Bonus contributions contributions 2021
2021 €’000 €’000 €’000 €’000 €’000
Non-Executive Chairman
Sir Peter Middleton 71 – – – 71
Executive
Giulio Cesareo 292 129 11 95 527
Giorgio Bonfanti* 14 29 1 3 47
Non-Executive
David Gann 43 – – – 43
Neil Warner 43 – – – 43
Richard Hickinbotham 43 – – – 43
Total 506 158 12 98 774
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
29
National Total
Insurance Pension emoluments
Salary/Fees Bonus contributions contributions 2020
2020 €’000 €’000 €’000 €’000 €’000
Non-Executive Chairman
Sir Peter Middleton 56 – – – 56
Executive
Giulio Cesareo 291 111 11 82 495
Marco Ferrari** 133 15 8 28 184
Non-Executive
David Gann 34 – – – 34
Neil Warner 34 – – – 34
Richard Hickinbotham 34 – – – 34
Total 582 126 19 110 837
* Giorgio Bonfanti was appointed as a Director on 16 November 2021. The emoluments shown refer to the period of Directorship between 16 November 2021 and 31 December 2021.
** Marco Ferrari resigned as a Director on 18 March 2021
Total emoluments for Giulio Cesareo (CEO) increased by 6.5% over the prior year mainly due to an annual bonus award reflecting the achievement
of both financial and personal objectives. Total emoluments for Giorgio Bonfanti (CFO) refer to the period of Directorship from 16 November 2021
to the year end and include an annual bonus that is payable in respect of the period since joining the Company on 31 May 2021, assessed against
financial and personal objectives. The CEO and CFO bonus payments represented 42% and 57% respectively of the maximum bonus opportunity.
In June 2021, the Company increased the annual fees for Non-Executive Directors. The Chairman’s fee increased from £50,000 to £65,000 per year,
while the other Non-Executive Directors received an increase in fees from £30,000 to £40,000 per year. This is the first increase in annual fees since
the Company’s IPO in 2016 and followed a benchmarking exercise against companies of similar size and complexity.
At 31 December 2021 Directors’ interest were the following:
Directors’ interests
Number of Number of
Percentage vested ordinary unvested ordinary
Number of of issued shares under shares under
Director ordinary shares share capital option option
Sir Peter Middleton 51,333 0.08 100,000 –
Giulio Cesareo* 3,958,228 5.99 200,000 400,000
Giorgio Bonfanti – – – 150,000
David Gann 121,693 0.18 60,000 –
Neil Warner 26,730 0.04 60,000 –
Richard Hickinbotham 100,000 0.15 60,000 –
* Giulio Cesareo and his family are the sole beneficiaries of 3,863,589 ordinary shares held by Galbiga Immobiliare S.r.l. that are included in the above holding of ordinary shares.
In aggregate, Non-Executive Directors hold a total of 280,000 vested ordinary shares under a previous share option plan, a legacy from the initial
remuneration package assigned to Non-Executive Directors in the context of the Company’s IPO in 2016 and following the appointment of a
Director in 2017. There have been no additional option awards under the NED share scheme which was subject only to market conditions, with
an exercise price of 75 pence/share. The Remuneration Committee and the Board of Directors have no intention of issuing share options to
Non-Executive Directors in the future.
The terms of the share options plans in place are reported in Note 24.
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30
Directa Plus
Annual Report & Accounts 2021
Audit Committee report
Membership
The Board has established an Audit Committee with the appropriate
Terms of Reference, which is comprised of Neil Warner (chairman),
David Gann and Richard Hickinbotham. The Committee reports to the
Board in respect of its responsibilities.
Responsibilities
The Committee met four times in 2021 to discuss its ongoing
responsibilities, including such matters as the existing risk
management and internal control systems in place, its financial
reporting obligations and external audit findings.
An outline of the key responsibilities undertaken by the Committee
in the year are set out below:
•
•
•
•
•
•
review of the Annual and Interim Accounts;
review of the Auditor’s Report and meeting with the Auditor;
review of the going concern assumption in line with management’s
cash flow forecasts;
performance of sensitivity analysis on the assumptions included
within the forecast;
matching results against management forecasts for the year ended
31 December 2021; and
meeting with management to discuss the Directors’ plans for future
actions in relation to its going concern assessment, taking into
account any relevant events subsequent to the balance sheet date.
Internal Controls
The Committee continues to monitor and review the Company’s
financial reporting and internal control procedures. It has been
concluded that a separate internal audit function is not justified at this
time because of the size and scope of the Company’s business
activities. However, as the company continues to grow the need for
this function will be regularly assessed.
External Audit
The Board understands the importance of engaging with the external
auditors and in order to support this relationship the external auditor is
invited to attend at least one meeting of the Audit Committee each year.
The Committee maintains the responsibility of making
recommendations to the Board in respect of the appointment,
reappointment and removal of the external auditors. In the
reappointment of the Committee the Board carefully considers their
performance in discharging the audit, the terms of engagement,
and their independence.
Neil Warner
Chair of the Audit Committee
Overview
Strategic Report
Governance
Financial statements
Additional information
Remuneration Committee report
Directa Plus
Annual Report & Accounts 2021
31
Membership
The Board has established a Remuneration Committee with approved
Terms of Reference, which is comprised of Richard Hickinbotham
(Chairman), Neil Warner, and David Gann. The Committee reports to
the Board in respect of its responsibilities.
Responsibilities
The Committee met twice in 2021 to discuss its ongoing
responsibilities, including such matters as recommendations to the
Board on all aspects and policies relating to the remuneration of
Executive Directors and Senior Managers of the Company.
An outline of the key responsibilities undertaken by the Committee
in the year are set out below:
•
•
•
•
The setting of financial and personal performance targets for the
Executive Directors and Senior Managers of the Company;
Approval of annual bonus awards, determined against Company
(60% of total) and individual performance targets (40% of total);
An annual review of remuneration for all Executive Directors and
Senior Managers of the Company; and
Approval of the grant of awards for an Executive Director of
the Company under the 2020 Employees’ Share Scheme.
Richard Hickinbotham
Chair of the Remuneration Committee
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32
Directa Plus
Annual Report & Accounts 2021
Independent auditor’s report
to the members of Directa Plus Plc
Opinion on the financial statements
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 December 2021
and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
the Parent Company financial statements have been properly
prepared in accordance with UK adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
•
the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Directa Plus Plc (the
‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2021 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statement of
Financial Position, the Consolidated Statement of Changes in Equity,
the Company Statement of Changes in Equity, the Consolidated and
Company Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and UK adopted international accounting
standards and, as regards the Parent Company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s 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 remain independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
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. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
•
•
•
•
•
•
Critically assessing the Directors’ going concern assessment,
including the reasonableness of assumptions applied, specifically
the revenue growth year on year, gross margins, working capital
movements and downside stress case sensitivities using both our
underlying knowledge of the business and with regard to scenarios
being applied across the market.
Challenging the potential impact of the Ukrainian conflict on going
concern with the Directors and the Audit Committee including the
impact on operations to date and their assessment of continued risks
and uncertainties associated with areas such as the ability to obtain
new revenue contracts in the pipeline, deliver into those contracts to
realise the forecast operating results and maintain margins, meet
committed spend and repay loan interest and principle as and when
they fall due. We considered this against our own assessment of risks
and uncertainties developed through our understanding of the
business and the sector.
Agreeing the opening cash position of the Group to support the
opening cash position applied by Directors in their cash flow forecast.
Comparing performance against budget in FY2021 and FY2022 year
to date to assess the quality of the Directors’ budgeting process.
Considering the key sensitivities applied in the cash flow model
pertaining to revenue and cost base in regards to current trading since
January 2022, the overall contract pipeline in place and management
of the Group’s and Parent Company’s cost base.
Assessing the completeness and accuracy of the matters covered in
the going concern disclosure with reference to the Directors’ going
concern assessment.
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 and the
Parent 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.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Overview
Strategic Report
Governance
Financial statements
Additional information
Overview
Coverage
Key audit
matters
•
•
•
99% (2020: 99%) of Group profit before tax
100% (2020: 100%) of Group revenue
97% (2020: 98%) of Group total assets
2021 2020
Revenue Recognition X X
Going Concern X
Going Concern is no longer considered to be a
key audit matter following the fundraise in
December 2021 and our risk assessment.
Materiality
Group financial statements as a whole
2021: €129,000 based on 1.5% of revenue.
(2020: €210,000 based on 2% of net assets)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was
evidence of bias by the Directors that may have represented a risk
of material misstatement.
The Group comprises of the UK Parent Company and a number of
subsidiaries, which are incorporated in Italy and Romania. Full scope
audits were performed over the Group’s significant components
comprising Directa Plus PLC, Directa Plus S.p.A and Sectar S.A. Specific
audit procedures on significant risks were carried out on Directa Textiles
Solutions Srl by a local BDO network member firm in Italy under our
instructions. The audits of the Italian and Romanian significant
components were performed in Italy and Romania respectively by local
BDO network member firms. The audits of the Parent Company and
Group consolidation were performed in the United Kingdom by the
Group audit team. The procedures performed in these audits provided
the coverage set out in the table above.
Directa Plus
Annual Report & Accounts 2021
33
The remaining component of the Group was considered non-significant
and its financial information was principally subject to analytical review
procedures and obtaining bank confirmations which was performed by
the Group audit team.
Our involvement with component auditors
For the work performed by component auditors, we determined the
level of involvement needed in order to be able to conclude whether
sufficient appropriate audit evidence has been obtained as a basis for
our opinion on the Group financial statements as a whole. Our
involvement with component auditors included the following:
•
•
•
The Group audit team was actively involved in the direction and
supervision of the audits performed by the component auditors
along with the consideration of findings and determination of
conclusions drawn;
As part of our audit strategy, we issued detailed group instructions
to component auditors detailing the our risk assessment and audit
procedures to be performed;
We held virtual meetings with management and component
auditors during the planning and execution phases of the audit as
well as held clearance meetings; and
•
We performed a detailed review of the component auditor
working papers.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our 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)
that we identified, 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 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.
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34
Directa Plus
Annual Report & Accounts 2021
Independent auditor’s report
continued
Key audit matter
How the scope of our audit addressed the key audit matter
Revenue recognition
The applicable accounting policies are detailed in note 1 (j) and disclosures in note 3.
The Group earned revenue of €8.6m (2020: €6.4m) in the year ended
31 December 2021.
A significant portion of the revenue generated relates to two
components, Directa Plus S.p.A and Setcar S.A.
In accordance with applicable auditing standards, revenue recognition
was presumed to be a matter giving rise to significant risk of material
misstatement in the financial statements. This consideration was
further heightened by the fact that there are various revenue streams,
being the sale of goods and the provision of environmental services,
which exist within the Group as well as the wide geographic
dispersion of sales.
Due to the fact that there are multiple revenue streams and revenue is
recognised both at a point in time and over time, revenue recognition
represented a significant audit risk and a key focus area for our audit.
Our procedures included the following:
•
•
•
•
In respect of Directa Plus S.p.A., we agreed a sample of sales in the
year to sales invoices issued to customers and goods delivery notes
and site acceptance sign offs to check revenue was recognised
appropriately.
In respect of Sectar S.A., we reviewed the key revenue contracts to
check that the underlying performance obligations has been
appropriately accounted for according to the Group’s revenue
recognition policy by agreeing to the confirmation of services
performed from the customer.
In respect of the sale of residual goods by Setcar S.A. we agreed a
sample of sales in the year to sales invoices issued to customers and
goods delivery notes to check revenue was recognised appropriately.
We selected a sample of recorded sales from either side of the year-
end for purposes of cut-off testing and agreed these to sales invoices,
transport and delivery documents, site acceptance sign off and
customer confirmation of service completed, as applicable, to
check that sales were recognised in the correct period. Contract
terms were reviewed to determine whether the point in time sales
made around the year end should be recognised at the port of
departure or port of arrival.
Inspected a sample of credit notes issued during the year and post
year end, and agreed this to the related revenue documentation to
check that where this related to revenue for the current year, it was
appropriately adjusted for.
Key observations
Based on our procedures performed we did not identify any matters to suggest that the recognition of revenue was not appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing
our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements
as a whole.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
Overview
Strategic Report
Governance
Financial statements
Additional information
Directa Plus
Annual Report & Accounts 2021
35
Group financial statements
Parent company financial statements
2021
Materiality
€129,000
2020
€210,000
2021
€55,000
2020
€120,000
Basis for determining
materiality
Rationale for the
benchmark applied
Performance
materiality
Basis for determining
performance
materiality
1.5% of revenue
2% of net assets
Revenue has been selected
as we consider it to be the
most relevant benchmark
as the Group has entered
into mainstream trading
and service related
business activities.
Net assets had been
selected as we considered
it to be the most relevant
benchmark as the Group
was still in a development
stage and the net assets
benchmark reflected
a key measure of
shareholder value.
2% of net assets capped
at 43% of Group
Materiality
2% of net assets capped
at 57% of Group
Materiality
Directa Plus Plc is a holding company with investments
in subsidiaries. We have therefore considered net assets
to be the most appropriate benchmark.
Materiality was capped at a percentage of Group
materiality given the assessment of aggregation risk.
€100,000
€160,000
€41,000
€90,000
75% of materiality and considering factors such as the nature of activities and historic audit adjustments.
Component materiality
We set materiality for each component of the Group based on a
percentage of between 43% and 93% of Group materiality dependent
on the size and our assessment of the risk of material misstatement of
that component. Component materiality ranged from €55,000 to
€120,000. In the audit of each component, we further applied
performance materiality levels of 75% of the component materiality to
our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all
individual audit differences in excess of €3,000 (2020: €5,000). We also
agreed to report differences below this threshold that, in our view,
warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other
information comprises the information included in the Consolidated
financial statements other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. 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 course of the
audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatement
in the financial statements themselves. 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 in this regard.
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Independent auditor’s report
continued
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed
during the course of the audit, we are required by the Companies Act
2006 and ISAs (UK) to report on 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 the Directors’ report for the financial year
for which the financial statements are prepared
is consistent with the financial statements; and
the Strategic report and the Directors’ report
have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding
of the Group and Parent Company and its
environment obtained in the course of the audit,
we have not identified material misstatements
in the strategic report or the Directors’ report.
Matters on which
we are required
to report by
exception
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to
you if, in our opinion:
•
•
•
•
adequate accounting records have not been
kept by the Parent Company, or returns
adequate for our audit have not been received
from branches not visited by us; or
the Parent Company financial statements are
not in agreement with the accounting records
and returns; or
certain disclosures of Directors’ remuneration
specified by law are not made; or
we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities,
the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view,
and for such internal control as the Directors 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 Parent 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 Parent Company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s 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 auditor’s 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.
Extent to which the audit was capable of detecting
irregularities, including fraud
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:
•
•
•
Holding discussions with management and the audit committee to
consider any known or suspected instances of non-compliance with
laws and regulations or fraud identified by them;
Gaining an understanding of the legal and regulatory framework
applicable to the Group and the industry in which it operates,
through discussion with management and the audit committee
and our knowledge of the industry;
Considering the significant laws and regulations of Italy, Romania
and the UK to be those relating to the industry, financial reporting
framework, tax legislation and the listing rules;
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Annual Report & Accounts 2021
37
A further description of our responsibilities is available on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the
Parent Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to
anyone other than the Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Peter Acloque (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kindgom
4 May 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
•
•
•
•
•
•
•
•
Assessing the susceptibility of the Group’s financial statements to
material misstatement, including how fraud might occur and
determined these areas to be management override of control and
the risk of fraud in revenue recognition;
In response to the risk of fraud in revenue recognition, the procedures
set out in the key audit matters section above;
Testing the appropriateness of journal entries made through the year
by applying specific criteria to detect possible irregularities and fraud
and agreeing to supporting documentation;
Performing a detailed review of the Group’s year-end adjusting entries
and investigating any that appear unusual as to nature or amount and
agreeing to supporting documentation;
For significant and unusual transactions, particularly those occurring
at or near year-end, obtaining evidence for the rationale of these
transactions and the sources of financial resources supporting the
transactions;
Assessing whether the judgements made in accounting estimates
were indicative of a potential bias;
Reviewing minutes from board meetings of those charges with
governance to identify any instances of non-compliance with laws
and regulations; and
Directing the work of the significant component auditors to ensure
an assessment is performed on the extent of the components
compliance with the relevant local and regulatory framework.
Reviewing this work and work performed in respect of the above
mentioned fraud risk areas and holding meetings with relevant
internal management and external third parties to form our own
opinion on the extent of Group wide compliance including any
incidents of suspected and/or fraudulent activity.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that 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, misrepresentations
or through collusion. There are inherent limitations in the audit
procedures performed and the further removed non-compliance with
laws and regulations is from the events and transactions reflected in
the financial statements, the less likely we are to become aware of it.
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Consolidated statement of comprehensive income
for the year ended 31 December 2021
31 Dec 2021 31 Dec 2020
Note € €
Continuing operations
Revenue 3 8,615,098 6,434,480
Other income 3/4 831,405 345,826
Changes in inventories of finished goods and work in progress 12,960 213,229
Raw materials and consumables used 6 (3,634,311) (2,564,317)
Employee benefits expenses 7 (4,296,955) (3,769,274)
Depreciation and amortisation 11/12 (1,543,567) (1,690,872)
Other expenses 8 (3,516,424) (3,279,927)
Results from operating activities (3,531,794) (4,310,855)
Finance Income 9 221,622 1,175
Finance expenses 9 (74,681) (347,707)
Net finance costs 146,941 (346,532)
Loss before tax (3,384,853) (4,657,387)
Tax (expense)/income 10 (44,620) 124,414
Loss after tax from continuing operations (3,429,473) (4,532,973)
Loss of the year (3,429,473) (4,532,973)
Other comprehensive income items that will not be reclassified to profit or loss
Defined Benefit Plan re-measurement gains and losses 20 (6,457) 7,821
Other comprehensive income/(expense) for the year (net of tax) (6,457) 7,821
Total comprehensive (expense)/income for the year (3,435,930) (4,525,152)
Loss attributable to
Owner of the Parent (3,652,364) (4.195,011)
Non-controlling interests 222,891 (337,962)
(3,429,473) (4,532,973)
Total comprehensive (expense)/income attributable to:
Owners of the Company (3,658,821) (4,187,190)
Non-controlling interests 222,891 (337,962)
(3,435,930) (4,525,152)
Loss per share
Basic loss per share 23 (0.06) (0.07)
Diluted loss per share 23 (0.06) (0.07)
The notes on pages 42 to 70 form part of these financial statements.
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Consolidated and Company statement of financial position
for the year ended 31 December 2021
Group Company
31 Dec 21 31 Dec 20 31 Dec 21 31 Dec 20
Note € € € €
Assets
Intangible assets 11 1,792,277 2,042,767 – –
Investments 13 – – 25,680,336 23,680,336
Property, plant and equipment 12 3,982,966 4,209,267 – –
Other receivables 14 185,623 140,649 – –
Non-current assets 5,960,866 6,392,683 25,680,336 23,680,336
Inventories 5 1,370,875 1,375,947 – –
Trade and other receivables 14 3,305,493 2,857,460 205,291 166,262
Cash and cash equivalent 16 11,130,468 7,080,492 9,430,364 4,283,625
Current assets 15,806,836 11,313,899 9,635,655 4,449,887
Total assets 21,767,702 17,706,582 35,315,991 28,130,223
Equity
Share capital 17 205,393 190,996 205,393 190,996
Share premium 17 39,159,027 31,395,612 39,159,027 31,395,612
Foreign currency translation reserve 17 (23,109) (7,015) – –
Retained earnings 17 (25,352,139) (21,824,229) (4,220,247) (3,573,130)
Equity attributable to owners of Group 13,989,172 9,755,364 35,144,173 28,013,478
Non-controlling interests 17 2,041,938 906,885 – –
Total equity 16,031,110 10,662,249 35,144,173 28,013,478
Liabilities
Loans and borrowings 18 2,403,881 1,017,716 – –
Lease liabilities 19 463,047 627,138 – –
Employee benefits provision 20 500,535 444,483 – –
Other payables 21 64,357 65,397 – –
Deferred tax liabilities 15 89,497 8,423 – –
Non-current liabilities 3,521,317 2,163,157 – –
Loans and borrowings 18 65,840 981,065 – –
Lease liabilities 19 217,537 214,935 – –
Trade and other payables 21 1,931,898 3,685,176 171,818 116,745
Current liabilities 2,215,275 4,881,176 171,818 116,745
Total liabilities 5,736,592 7,044,333 171,818 116,745
Total equity and liabilities 21,767,702 17,706,582 35,315,991 28,130,223
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own
statement of comprehensive income in these financial statements. The Company loss after tax for the year was €709,825 (2020: €956,408).
The financial statements were approved and authorized for issue by the board and were signed on its behalf by:
Giulio Cesareo
Chief Executive Officer
4 May 2022
The notes on pages 42 to 70 form part of these financial statements.
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Directa Plus
Annual Report & Accounts 2021
Consolidated statement of changes in equity
for the year ended 31 December 2021
Foreign
currency Non-
Share Share translation Retained controlling Total
capital premium reserve earnings Total interests equity
€ € € € € € €
Balance at 31 December 2019 190,512 31,395,612 4,147 (17,656,325) 13,933,946 1,240,194 15,174,140
Total comprehensive (expense)/income for the year
Loss of the year – – – (4,195,011) (4,195,011) (337,962) (4,532,973)
Total other comprehensive (expense)/income – – – 7,821 7,821 – 7,821
Total comprehensive (expense)/income for the period – – – (4,187,190) (4,187,190) (337,962) (4,525,152)
Capital raised 484 – – – 484 – 484
Translation reserve – – (11,162) – (11,162) – (11,162)
Share-based payment – – – 19,286 19,286 – 19,286
Increase in share capital of Directa Textile Solutions – – – – – 4,653 4,653
Balance at 31 December 2020 190,996 31,395,612 (7,015) (21,824,229) 9,755,364 906,885 10,662,249
Total comprehensive (expense)/income for the year
Loss of the year – – – (3,652,364) (3,652,364) 222,891 (3,429,473)
Total other comprehensive (expense)/income – – – (6,457) (6,457) – (6,457)
Total comprehensive (expense)/income for the period – – – (3,658,821) (3,658,821) 222,891 (3,435,930)
Capital raised 14,397 8,306,293 .- – 8,320,690 – 8,320,690
Expenditure related to the issuance of shares – (542,878) – – (542,878) – (542,878)
Translation reserve (167) – (16,094) – (16,094) – (16,094)
Share-based payment – – – 130,910 130,910 – 130,910
Increase in share capital of Setcar – – – – – 912,162 912,162
Balance at 31 December 2021 205,393 39,159,027 (23,109) (25,352,139) 13,989,172 2,041,938 16,031,110
Company statement of changes in equity
for the year ended 31 December 2021
Share Share Retained Total
capital premium earnings equity
€ € € €
Balance at 31 December 2019 190,512 31,395,612 (2,616,722) 28,969,402
Loss for the year – – (956,408) (956,408)
Capital raised 484 – – 484
Expenditure related to the issuance of shares – – – –
Share-based payment – – – –
Balance at 31 December 2020 190,996 31,395,612 (3,573,130) 28,013,478
Loss for the year – – (709,825) (709,825)
Capital raised 14,397 8,306,293 – 8,320,690
Expenditure related to the issuance of shares – (542,878) – (542,878)
Share-based payment – – 62,708 62,708
Balance at 31 December 2021 205,393 39,159,027 (4,220,247) 35,144,173
The notes on pages 42 to 70 form part of these financial statements.
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Consolidated and Company statement of cash flows
for the year ended 31 December 2021
Group Company
31 Dec 21 31 Dec 20 31 Dec 21 31 Dec 20
Note € € € €
Cash flows from operating activities
Loss for the year before tax (3,384,853) (4,657,387) (709,825) (956,408)
Adjustments for:
Depreciation 12 994,021 1,020,387 – –
Amortisation of intangible assets 11 549,547 670,485 – –
Share-based payment expense 7 130,910 19,286 62,708 –
Finance income 9 (221,622) (1,175) (211,056) (867)
Finance expense 56,524 326,118 988 227,367
Interest of lease liabilities 9 18,157 21,589 – –
(1,857,316) (2,600,697) (857,185) (729,908)
Increase/decrease in:
– inventories 5,072 (280,011) – –
– trade and other receivables 14 (493,008) 179,292 (39,029) 37,142
– trade and other payables (1,207,601) (1,398,380) 55,073 33,047
– provisions and employee benefits 37,457 24,844 – –
Net cash from operating activities (3,515,396) (4,074,952) (841,141) (659,720)
Cash flows from investing activities
Interest received 9 1,616 1,175 – 867
Investment in intangible assets (299,056) (434,898) – –
Investment in subsidiary 13 – – (2,000,000) (2,500,000)
Contingent consideration 21 (572,268) (208,097) – –
Acquisition of property, plant and equipment (767,719) (195,991) – –
Net cash used in investing activities (1,637,427) (837,811) (2,000,000) (2,499,133)
Cash flows from financing activities
Proceeds from Capital raise 17 8,320,690 484 8,320,690 484
Expenditure related to the issuance of shares 17 (542,878) – (542,878) –
Interest paid 9 (45,426) (45,647) (988) (2,148)
New Borrowings 18 1,511,719 1,874,243 – –
Repayment of borrowings 18 (81,666) (360,164) – –
Repayment of lease liabilities (179,646) (100,235) – –
Net cash from/(used in) financing activities 8,982,793 1,368,681 7,776,824 (1,664)
Net increase/(decrease) in cash and cash equivalent 3,829,970 (3,544,082) 4,935,683 (3,160,516)
Cash and cash equivalent at beginning of the year 7,080,492 10,906,076 4,283,625 7,669,360
Exchange (losses)/gains on cash and cash equivalents 220,006 (281,502) 211,056 (225,219)
Cash and cash equivalent at end of the year 11,130,468 7,080,492 9,430,364 4,283,625
The notes on pages 42 to 70 form part of these financial statements.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
for the year ended 31 December 2021
1. Basis of preparation
a) Statement of compliance
These consolidated and Parent Company financial statements have been prepared in accordance with UK-adopted International Accounting
Standards (IFRSs). The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the
preceding year, unless otherwise stated.
All notes, except as otherwise indicated, are presented in Euros (“€”).
I. Going Concern
As of 31 December 2021, the Group (including the Company) had net assets of €16.03m (2020: €10.66m) and cash and cash equivalent of €11.13m
(2020: €7.08m).
The Directors are aware that there is an ongoing need to monitor the cash flow requirements of the Company and Group for the upcoming months,
particularly in light of the recent developments in the markets due to the COVID-19 pandemic, the recent war in Ukraine and inflation trends, which
have had a significant, impact on global economies and more likely will affect the upcoming months. In this regard, the Group prepares annual
budgets and forecasts in order to ensure that they have sufficient liquidity to meet liabilities and commitments as they fall due. The Directors
regularly review updates to the scenario planning such that the Board can put in place appropriate mitigating actions within their control.
Considering the recent capital raise undertaken in December 2021, which resulted in £7 million of additional gross funds, and based on the most
recent cash flow projections, the Directors believe that the Group will have sufficient funds in place, up to a period of 12 months from the approval
date of the financial statements, to meet liabilities as and when they fall due. Despite this, given the current global economic status, the Directors
have carried out a downward sensitivity analysis stressing the base financial projections by applying a further material reduction in forecast
revenues, and modelling mitigation or deferral of capital and operational expenditure within the control of Management and the Board. Based
on these downward scenarios, the Directors believe that the Company will still have the funds to support the Group as a going concern until the
end of 2023.
The Directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
b) Basis of consolidation
I. Business combination
The Group accounts for business combination using the acquisition method of accounting. The cost of the business combination is measured as
the aggregate of the fair value of the assets acquired, liabilities incurred or assumed, and equity instruments issued. Costs attributable to the
business combination are expensed as incurred.
The acquiree’s identifiable assets and liabilities which meet the recognition conditions are recognised at the fair values at the acquisition date.
Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition
date that arises from past events and its fair value can be measured reliably.
Any difference arising between the fair value and the tax base of the acquiree’s assets and liabilities that give rise to a taxable or deductible
difference results in the recognition of a deferred tax liability or asset.
Non-controlling interest arising from a business combination is measured at their share of the fair value of the assets and liabilities of the acquiree.
Goodwill is not amortised, but it is tested on an annual basis for impairment.
II. Subsidiaries
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements
are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
The total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in
proportion to their relative ownership interests.
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1. Basis of preparation continued
III. Transactions eliminated on consolidation
The consolidated financial statements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group companies are therefore eliminated in full.
IV. Non-controlling interest
Non-controlling interest in the net assets of the consolidated subsidiaries are identified separately from the Group’s equity. Non-controlling
interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share
changes in equity since the date of the combination. The non-controlling interest’s share of losses, where applicable, are attributed to the non-
controlling interests irrespective of whether the non-controlling shareholders have a binding obligation and are able to make an additional
investment to cover the losses.
c) Functional and presentation currency
These financial statements are presented in Euro (“€”) and is considered by the Directors to be the most appropriate presentation currency to assist
the users of the financial statements. The functional currency of the Company and of the Italian operating subsidiaries is Euro (“€”). The functional
currency of the Romanian subsidiary is RON.
d) Use of estimates and judgements
The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to be reasonable under the circumstances and the results of which form
the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimates are revised if the revision affects only that period.
Critical estimates and judgements that have the most significant effect on the amounts recognised in the financial statements and/or have a
significant risk of resulting in a material adjustment within the next financial year are as follows.
Estimates
I. Valuation of share based payments
The estimation related to share based payment expenses includes the selection of an appropriate valuation option pricing model, consideration
as to the inputs necessary for the valuation model chosen, and the estimation of the number of awards that will ultimately vest. Inputs subject to
estimation relate to the future volatility of the share price which has been estimated based on the historical observed volatility from trading in the
Company’s shares, over a historical period of time between the date of the grant and the date of exercise. Management has used a Monte-Carlo
model to calculate the fair value of the awards which include market based performance conditions. Further disclosure of inputs relevant to the
calculations is set out in Note 24 to the financial statements.
II. Carrying value of goodwill
The carrying value of goodwill, and the cash generating units (CGUs) to which it relates, is assessed annually for impairment through comparing
the recoverable amount to the CGU’s carrying value. The value in use calculations require estimates in relation to uncertain items, including
management’s expectations of future revenue growth, operating costs, profit margins, operating cash flows and the discount rate applied. Future
cash flows used in the value in use calculations are based on our latest two-year financial plans. Expectations about future growth reflect
expectations of growth in the markets applicable to the Group. The future cash flows are discounted using a pre-tax discount rate that reflects
current market assessments of the time value of money. The discount rate used is adjusted for the specific risk to the Group, including the
countries to which cash flows will be generated. Further disclosure of evaluations is set out in Note 11 to the financial statements.
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Notes to the consolidated financial statements
continued
1. Basis of preparation continued
III. Valuation of inventory
Inventories are stated at the lower of cost or net realisable value. The cost of inventories comprises of net prices paid for materials purchased,
production labour cost and factory overhead. Net realisable value represents the estimated selling price less all estimated costs of completion and
costs to be incurred in marketing, selling and distribution. Inventory provisions are recognised for slow-moving, obsolete or unsaleable inventory
and are reviewed on a six-monthly basis. The valuation of Inventory includes key estimates and judgments made by Management including
normal production capacity, market demand and selling opportunities. If actual demand or usage were to be lower than estimated, inventory
provisions for excess or obsolete inventory may be required.
2. Significant accounting policies
a) Functional currency
The financial statements of each Group company are measured using the currency of the primary economic environment in which that company
operates (the functional currency). The consolidated financial statements record the results and financial position of each Group company in Euro,
which is the functional currency of the Company and the presentational currency for the consolidated financial statements.
I. Transaction and balances
Transactions in foreign currencies are converted into the respective functional currencies at initial recognition, using the exchange rates at the
transaction date. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling at the reporting date. Non-
monetary assets and liabilities are not retranslated. All exchange differences are recognised in profit or loss. On consolidation, the results of
overseas operations not in Euro are translated at the rates approximating to those ruling when the transactions took place. All assets and liabilities
of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at
closing rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
b) Financial instruments
There are no other categories of financial assets other than those listed below:
I. Trade and other receivables and amounts due from subsidiaries
Trade and other receivables and amounts due from subsidiaries are recognised and carried at the original invoice amount less any provision
for impairment.
The Group recognises a loss allowance for expected credit losses (“ECL”) on financial assets that are measured at amortised cost which comprise
mainly of trade receivables. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Group always recognises lifetime ECL on trade receivables. The expected credit losses on these financial assets are estimated using a provision
matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
II. Cash and cash equivalents
Cash and cash equivalents comprise demand deposits with an original maturity of up to 3 months which are readily convertible to a known
amount of cash and are subject to an insignificant risk of change in value.
There are no other categories of financial liabilities other than those listed below:
III. Trade and other payables
Trade payables are stated at their amortised cost.
IV. Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. At initial
recognition, financial liabilities are measured at their fair value, minus transaction costs that are directly attributable, and are subsequently
measured at amortised cost.
An equity instrument is any contract that evidences a residual interest in the asset of the Group after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
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2. Significant accounting policies continued
V. Leases
On commencement of a contract which gives the Group the right to use assets for a period of time in exchange for consideration, the Group recognises
a right-of-use asset and a lease liability. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any
initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payment
made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also
assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the
present value of the lease payment unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the
Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments, variable
payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably
certain to be exercised. Subsequent to initial measurement, the liability will be reducing for payment made and increased for interest. It is remeasured
to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the
corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
c) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are netted off against share premium.
d) Property, plant and equipment
I. Recognition and measurement
Property, plant and equipment are measured at cost less accumulated depreciation, Government grants received (where applicable) and
accumulated impairment losses.
Costs capitalised include expenditure that are directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components)
of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and
the carrying amount of the item) are recognised in profit or loss.
II. Subsequent costs
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the
Group. Ongoing repairs and maintenance are expensed as incurred.
III. Depreciation
Items of property, plant and equipment are depreciated on a straight-line basis in the statement of comprehensive income over the estimated
useful lives of each component.
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally
constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives of significant items of property, plant and equipment are as follows:
•
•
IT equipment from 3 to 5 years.
Industrial equipment, office equipment and plant and machinery from 5 to 10 years.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted where appropriate.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
e) Intangible assets
Intangible assets are measured at cost less accumulated amortisation and Government grants received (where applicable). The carrying value of
intangible assets is reviewed annually for impairment.
Patent rights acquired and development expenditure are recognised at cost.
Expenditure on internally developed products is capitalised if it can be demonstrated that:
•
•
•
•
•
•
it is technically feasible to develop the product;
adequate resources are available to complete the development;
there is an intention to complete and sell the product;
the Group is able to sell the product;
sale of the product will generate future economic benefits; and
expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the period the Group expects to benefit from selling the products developed (Useful Economic
Life). The amortisation expense is included within the cost of sales in the consolidated statement of comprehensive income.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in the
consolidated statement of comprehensive income as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses.
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and
accumulated impairment losses.
I. Amortisation
Intangible assets are amortised on a straight-line basis in profit or loss over their estimated useful lives, from the date that they are available for use.
The estimated useful lives of significant intangible assets are as follows:
•
•
•
•
Patents concerning G+® technology generate significant value to the Group over a period of 20 years, in line with the legal duration of the patent
and their useful lives. However, on a conservative basis, such costs are amortised over a period of 10 years.
Brand: 5 years.
Development costs concerning personnel capitalised: 5 years.
Others: 5 years.
f) Inventories
Inventories are stated at the lower of cost or net realisable value. The cost of inventories comprises of net prices paid for materials purchased,
production labour cost and factory overhead. Net realisable value represents the estimated selling price less all estimated costs of completion and
costs to be incurred in marketing, selling and distribution. Inventory provisions are recognised for slow-moving, obsolete or unsaleable inventory
and are reviewed on a six months basis.
g) Goodwill
Goodwill represents the excess of the cost of a business combination over the Group’s interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests
in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent
consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability,
remeasured subsequently through profit or loss.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of
comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid,
the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
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2. Significant accounting policies continued
h) Impairment
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end.
Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may
not be recoverable. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (CGUs). The Group’s CGUs generally
align with each subsidiary. The recoverable amount is then estimated. The recoverable amount of an asset or a CGU is the greater of its net present
value and its fair value less costs to sell.
Net present value is generally computed as the present value of the future cash flows, discounted to present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or a CGU exceeds its estimated recoverable amount. Impairment losses are
recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior years are assessed at each
reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been recognised.
i) Employee benefits
Defined benefit scheme surpluses and deficits are measured at:
•
•
•
•
the fair value of plan assets at the reporting date; less
plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate
bonds that have maturity dates approximating to the terms of the liabilities; plus
unrecognised past service costs; less
the effect of minimum funding requirements agreed with scheme trustees.
Remeasurements of the net defined obligation are recognised directly within equity. The remeasurements include:
•
•
•
Actuarial gains and losses.
Return on plan assets (interest exclusive).
Any asset ceiling effects (interest exclusive).
Service costs are recognised in profit or loss and include current and past service costs as well as gains and losses on curtailments.
Net interest expense (income) is recognised in profit or loss and is calculated by applying the discount rate used to measure the defined benefit
obligation (asset) at the beginning of the annual period to the balance of the net defined benefit obligation (asset), considering the effects of
contributions and benefit payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in profit or loss.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
For more information please see Note 20.
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Directa Plus
Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
j) Revenues
The Group operates diverse businesses and accordingly applies different methods for revenue recognition, based on the principles set out in IFRS 15.
The revenue and profits recognised in any reporting period are based on the delivery of performance obligations and an assessment of when
control is transferred to the customer. In determining the amount of revenue and profits to record, and associated balance sheet items,
management is required to review performance obligations within individual contracts. This may involve some judgemental areas.
Revenue is recognised either when the performance obligation in the contract has been performed (so ‘point in time’ recognition) or ‘over time’ as
control of the performance obligation is transferred to the customer.
For each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully depicts the Group’s
performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature of the goods or
services that the Group has promised to transfer to the customer.
•
Revenues from sale of graphene based products are typically recognised at a point in time when goods are delivered to the customer as with this,
the customer gains the right of control over the goods. However, for export sales, control might also be transferred when delivered either to the
port of departure or port of arrival, depending on the specific terms of the contract with a customer.
•
Revenues from sale of equipment (such as Mobile Production Units) are typically recognised at point in time when goods are delivered to the
customers and site acceptance test is successfully performed.
•
Revenues from services relates mainly to environmental services provided by Setcar which are recognised:
– at a point in time basis when contracts include an obligation to process waste once the process occurred according with the contract in place;
– at the point in time when the waste is delivered to our platform with no further performance obligations; and
– over time in accordance with agreed project milestones being delivered.
Where cost has been incurred to undertake a performance obligation but this has not been realised at the year end the attributable costs are
carried forward as work in progress
k) Government grants
Government grants are recognised when there is reasonable assurance that the entity will comply with the relevant conditions and the grant will
be received. Grants are recognised in profit or loss on a systematic basis where the Group has recognised the initial expenses that the grants are
intended to compensate. Where a grant has been received as a contribution for property, plant and equipment, or capitalised development costs,
the income received has been credited against the asset in the statement of financial position.
l) Finance income and finance costs
Finance income comprises interest income on funds invested. Interest income is recognised in the profit or loss, using the effective interest
method. Finance costs comprise interest expense on borrowings.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss
using the effective interest method.
m) Investments in subsidiaries (Company only)
Investments are stated at their cost less any provision for impairment (for details refer to Note h).
n) Taxation
Tax expense comprises current and deferred tax. Current and deferred tax is recognised in the profit or loss except to the extent that it relates to a
business combination, or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
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2. Significant accounting policies continued
Deferred tax is not recognised for:
•
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss;
temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not
reverse in the foreseeable future; and
•
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
A deferred tax asset is recognised for deductible temporary differences to the extent that it is probable that future taxable profits will be available
against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Adoption of new and revised standards
New standards, interpretations and amendments effective from 1 January 2021
The IFRS financial information has been drawn up on the basis of accounting policies consistent with those applied in the financial statements for
the year to 31 December 2020, except for the following:
•
Interest Rate Benchmark Reform – Amendment to IFRS 7, IFRS 9, IFRS 16 and IAS 39.
The application of the above standards has had no impact on the disclosures or the amounts recognised in the Group’s consolidated financial
statements.
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future
accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2022:
•
•
•
•
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
References to Conceptual Framework (Amendments to IFRS 3).
The following amendments are effective for the period beginning 1 January 2023:
•
•
•
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
Definition of Accounting Estimates (Amendments to IAS 8); and
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
2. Significant accounting policies continued
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified as current or
non-current. These amendments clarify that current or non-current classification is based on whether an entity has a right at the end of the
reporting period to defer settlement of the liability for at least twelve months after the reporting period. The amendments also clarify that
‘settlement’ includes the transfer of cash, goods, services, or equity instruments unless the obligation to transfer equity instruments arises from
a conversion feature classified as an equity instrument separately from the liability component of a compound financial instrument. The
amendments were originally effective for annual reporting periods beginning on or after 1 January 2022. However, in May 2020, the effective date
was deferred to annual reporting periods beginning on or after 1 January 2023. In response to feedback and enquiries from stakeholders, in
December 2020, the IFRS Interpretations Committee (IFRIC) issued a Tentative Agenda Decision, analysing the applicability of the amendments
to three scenarios. However, given the comments received and concerns raised on some aspects of the amendments, in April 2021, IFRIC decided
not to finalise the agenda decision and referred the matter to the IASB. In its June 2021 meeting, the IASB tentatively decided to amend the
requirements of IAS 1 with respect to the classification of liabilities subject to conditions and disclosure of information about such conditions
and to defer the effective date of the 2020 amendment by at least one year. The Group is currently assessing the impact of these new UK adopted
accounting standards and amendments. The Group will assess the impact of the final amendments to IAS 1 on classification of its liabilities once
the those are issued by the IASB.
The Group does not believe that the amendments to IAS 1, in their present form, will have a significant impact on the classification of its liabilities,
as the conversion feature in its convertible debt instruments is classified as an equity instrument and therefore, does not affect the classification
of its convertible debt as a non-current liability.
3. Operating segments
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed
by the chief operating decision makers (CEO, CFO, COO and CTO), as defined in IFRS 8, in order to allocate resources to the segments and to
assess its performance.
For management purposes, also considering the materiality the Group is organized into the following segments:
•
•
•
Textile.
Environmental.
Others.
Textile and Environmental were considered by Management the strategic segments able to sustain the growth. Management’s strategic needs are
constantly monitored and an update of the segments will be provided if required. Any further update of the segment analysis will be reflected in
this section.
Segment profit/(loss) represents the profit/(loss) earned by each segment, including all the direct costs that are directly correlated with the
segment. Overhead, assets and liabilities not directly attributable to a specific segment have been allocated as Head Office.
As the business evolves this is an area that will be assessed on a regular basis and additional segmental reporting will be provided at the
appropriate time.
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51
3. Operating segments continued
Textile Environmental Others Head office Consolidated
2021 € € € € €
Revenue 1,843,506 6,560,771 210,821 – 8,615,098
Cost of sales* (1,002,845) (3,030,602) (107,310) – (4,140,757)
Gross profit 840,661 (3,530,169) 103,511 – 4,474,341
Other income 174,484 607,049 – 49,872 831,405
Other expenses:
– R&D expense (317,422) (45,450) (25,966) – (388,838)
– Advisory (50,004) (481,992) – (887,722) (1,419,718)
– Operating expenses (536,615) (2,519,008) (135,782) (2,294,012) (5,485,417)
– Depreciation and amortisation (331,492) (1,177,445) (34,630) – (1,543,567)
Operating loss (220,388) (86,677) (92,867) (3,131,862) (3,531,794)
Net financial costs – – – 146,941 146,941
Tax – (44,620) – – (44,620)
Loss of the year (220,388) (131,297) (92,867) (2,984,921) (3,429,473)
Total assets 5,642,443 15,086,933 1,038,326 – 21,767,702
Total liabilities 1,746,301 3,739,745 250,546 – 5,736,592
Textile Environmental Others Head office Consolidated
2020 € € € € €
Revenue 1,943,924 4,360,864 129,692 – 6,434,480
Cost of sales* (1,221,579) (1,971,859) (74,872) – (3,268,310)
Gross profit 722,345 2,389,005 54,820 – 3,166,170
Other income 85,980 204,450 27,206 28,189 345,826
Other expenses:
– R&D expense (96,915) (25,500) – – (122,415)
– Advisory (50,752) (335,248) – (905,021) (1,291,022)
– Operating expenses (1,332,294) (2,214,108) (138,874) (1,033,266) (4,718,541)
– Depreciation and amortisation (508,331) (1,143,250) (39,291) – (1,690,872)
Operating loss (1,179,967) (1,124,652) (96,138) (1,910,098) (4,310,855)
Financial costs – – – (346,532) (346,532)
Tax – – – 124,414 124,414
Loss of the year (1,179,967) (1,124,652) (96,138) (2,132,216) (4,532,973)
Total assets 5,609,005 11,083,261 1,014,317 – 17,706,582
Total liabilities 2,443,527 2,680,121 1,920,685 – 7,044,333
*Includes changes in inventories of finished goods.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
3. Operating segments continued
2021 2020
€ €
Sale of products 2,898,224 2,137,289
Sale of services 5,716,874 4,297,191
Government grants 166,112 159,815
Other 665,293 186,011
Total income 9,446,503 6,780,306
Geographical breakdown of revenues is:
2021 2020
€ €
Italy 1,755,329 1,555,622
Romania 6,563,839 4,495,661
Rest of the world 295,930 383,197
Total 8,615,098 6,434,480
The Group has transacted with 3 main customers in 2021, which accounted for more than 10% of Group revenues for sales of products and services.
This largest customer accounted for 16% of revenues (€1,349,981), the second largest to 12% (€1,006,649), whilst the third for 11% (€907,323).
Other Income of €831,405 mainly includes the release of an undue obligation for €503,904, as the former shareholders of Setcar renounced to
dividends not paid yet, Government Grants for €166,112, and R&D Expenditure Credit (RDEC) for €33,425. The RDEC is an Italian incentive scheme
(art.3 DL 145/2013) designed to encourage companies to invest in research and development. The credit can be used to reduce corporation tax or
to offset outstanding payables related to social security.
4. Government grants
Information regarding government grants:
2021 2020
€ €
Innodriver 25,000 –
Inno4covid 99,889 –
Green.Tex 30,616 54,278
COVID-19 government grants – 103,536
Techfast 10,607 –
Total 166,112 157,814
During 2021, the Company took part in Inno4Covid, a European project for fostering innovation, prevention and surveillance in response to
Covid-19. The project was 100% financed for a total amount of €99,889, of which 50% was collected during the year.
Directa Plus keeps investing in the activities related to the Green.Tex project, whose deadline was extended up until April 2022.
In 2021, the Company was also awarded with the inclusion in the Tech Fast project, with an overall value of approximately €290,000, financed at
50%. The tender, concerning eco-innovation for industrial antimicrobial and antiviral filtration through the use of graphene, will end in 2022.
Directa Plus also obtained the Innodriver grant (€25,000) to support the study of new products in the textile sector.
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4. Government grants continued
The key terms of government grants are:
Green.Tex Tech fast Inno4covid Innodriver Ecopave
Starting date 2020 2021 2021 2021 2017
Ending date 2022 2022 2021 2021 2021
Duration (months) 21 12 8 n.a. 37
Total amount 96,192 147,028 99,889 25,000 214,000
Final report submitted on-going on-going Yes Yes Yes
There are no capital commitments built into the ongoing grants. Government grants have been recognised within other income.
5. Inventory
2021 2020
€ €
Finished products 1,141,372 1,071,173
Spare parts 76,663 110,808
Raw material 93,798 97,712
Working in progress 59,042 96,254
Total 1,370,875 1,375,947
As of 31 December 2021, total inventory value is in line with 2020;the finished products mainly referred to Directa Plus SpA. Spare parts inventory
was required to enhance maintenance efficiency and is composed of a small number of critical items with a material cost per unit.
6. Raw materials and consumables
2021 2020
€ €
Raw material and consumables 2,711,528 1,670,305
Textile products 922,783 894,012
Total 3,634,311 2,564,317
The increase in raw materials is in line with the business growth.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
7. Employee benefits expenses
2021 2020
€ €
Wages and salaries 3,525,876 3,264,227
Social security costs 559,856 496,428
Employee benefits 111,964 89,169
Share option expense 130,910 19,286
Other costs 103,877 62,099
Total 4,432,483 3,931,208
Capitalised cost in “Intangible assets” (135,528) (161,935)
Total charged to the Income Statement 4,296,955 3,769,274
The average number of employees (excluding Non-Executive Directors) during the period was as follows:
2021 2020
Sales and Administration 30 27
Engineering, R&D and production 165 166
Total 195 193
The total average number of employees of the Group as at 31 December 2021 was 195 (2020: 193), of which 166 employed by Setcar.
The Directors’ emoluments (including Non-Executive Directors) are as follows:
2021 2020
€ €
Wages and salaries 773,683 836,709
Total 773,683 836,709
The aggregate emoluments (wages, salaries and social contributions) of the highest paid Director totalled €527k (2020: €495k).
Share-base payment expenses were €130,910, of which €62,708 accounted for in the Parent Company accounts as directly attributable to the
Executive Directors.
A detailed analysis of the remuneration of the Directors is detailed within the Directors’ Remuneration Report on pages 28 to 29.
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55
Overview
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Additional information
8. Other expenses:
Other expenses include:
2021 2020
€ €
Audit of the Group and Company financial statements 81,991 79,347
Audit of the subsidiaries’ financial statements 36,230 37,968
Other non-audit services provided by Group’s auditor 5,978 4,422
Tool manufacturing 296,965 508,363
Analyses & tests 377,028 128,152
Travel 69,659 78,012
Technical consultancies 277,117 223,732
Shipping and logistic expenses 260,014 365,317
Insurance 165,347 112,122
Marketing 32,989 27,866
Legal, tax and administrative consultancies 915,234 962,365
Analyses & tests expenses (€377,028) and technical consultancies refer to R&D activities outsourced to external labs and universities. Both cost
categories have increased over the last year in line with the business growth.
The increase in the insurance expenses (€165,347) was mainly driven by the hard market conditions, which led to a general increase in premiums.
9. Net finance expenses
Finance expenses include:
2021 2020
€ €
Interest Income (1,616) (1,175)
Interest on loans and other financial costs 45,426 45,719
Interest on lease liabilities 18,157 21,589
Interest cost for benefit plan 11,098 10,131
Foreign exchanges losses/(gains) (220,006) 270,268
Total (146,941) 346,532
Foreign exchange income of €220,006 (2020: -€270,268) includes €211,056 of Sterling to Euro movement in the Group’s Sterling bank accounts.
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Notes to the consolidated financial statements
continued
10. Taxation
2021 2020
€ €
Current tax (expense)/income (1,727) 404
Deferred tax expense/(recovery) (42,893) (124,818)
Total tax expenses (44,620) (124,414)
Reconciliation of tax rate
2021 2020
€ €
Loss before tax (3,384,853) (4,657,387)
Italian statutory tax rate 24% 24%
(812,365) (1,117,773)
Impact of temporary differences 4,431 155,430
Losses recognised (49,052) (31,016)
Impact of tax rate in foreign jurisdiction (35,491) 47,820
Losses not utilised 847,857 1,069,953
Total tax expenses (44,620) (124,414)
Tax losses carried forward have been recognised as a deferred tax asset up to the point that they are recoverable against taxable temporary
differences. All other tax losses are carried forward and not recognised as a deferred tax asset due to the uncertainty regarding generating future
taxable profits. Tax losses carried forward are €31,494,057 (€27,762,446 in 2020).
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11. Intangible assets
Development
cost Patents Goodwill Others Brands Total
€ € € € € €
Cost
Balance at 31/12/2019 2,765,023 437,933 303,552 249,580 384,124 4,140,213
Additions 379,998 111,151 – 35,814 – 526,963
Currency translation differences (218) (3,344) (5,204) (289) (7,107) (16,162)
Balance at 31/12/2020 3,144,804 545,740 298,348 285,105 377,017 4,651,014
Additions 135,527 172,307 – (1,063) – 306,771
Currency translation differences (184) – (4,391) (3,059) (5,996) (13,630)
Balance at 31/12/2021 3,280,147 718,047 293,957 280,983 371,021 4,944,154
Amortisation
Balance at 31/12/2019 1,731,795 145,349 – 54,214 6.402 1,937,760
Amortisation 2020 357,746 218,247 – 18,593 75,899 670,485
Balance at 31/12/2020 2,089,541 363,596 – 72,807 82,301 2,608,245
Amortisation 2021 389,299 71,829 – 13,797 74,621 549,547
Currency translation differences (271) – – (3,313) (2,330) (5,914)
Balance at 31/12/2021 2,478,569 435,425 – 83,291 154,592 3,151,877
Carrying amounts
Balance 31/12/2019 1,033,228 292,584 303,552 196,811 377,722 2,202,452
Balance 31/12/2020 1,055,262 182,145 298,348 213,743 294,715 2,042,767
Balance 31/12/2021 801,578 282,623 293,957 199,137 216,428 1,792,277
As disclosed in Note 1(d) development costs capitalised in the year are mainly based on time spent by employees who are directly engaged in
the development of the G+® technology.
Management, throughout the support of external experts, carried out an impairment test on goodwill accounted following the acquisition of
Setcar S.A. in 2019.
The CGU is represented by Setcar itself, whose carrying amount as of 31 December 2021 was estimated equal to €5.1m.
The impairment review of the CGU is based on an assessment of the CGU’s value in use (“VIU”). In calculating VIU, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate of 10.9% that reflects current market assessments of the time value of money
and the risks specific to the asset/CGU and a perpetual annual growth rate of 1.6%.
Based on such assumptions, the recoverable amount was estimated equal to €27.4m. In addition, a sensitivity analysis was performed,
assuming a +/- 0.5% variation in the discount rate and a +/- 0.5% variation in the perpetuity growth rate. This led to a recoverable amount
estimated in the range of €26m and €29m.
As a conclusion, the verifications have shown that the book values can be fully recovered and no goodwill impairment is required as of
31 December 2021.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
12. Property, plant and equipment
Industrial Computer Office Plant & ROU Under
equipment equipment equipment machinery Land assets construction Total
Cost € € € € € € € €
Balance at 31/12/2019 1,235,693 56,554 179,469 4,202,028 608,395 456,819 2,445 6,741,402
Additions 52,825 17,967 9,391 171,819 – 322,309 – 574,356
Disposals – – – (23,343) – – – (23,343)
Currency translation differences (21,101) – (16,232) (53,298) (11,257) – – (101,934)
Balance at 31/12/2020 1,267,415 74,521 172,627 4,297,207 597,138 779,128 2,445 7,190,481
Additions 392,141 10,095 13,934 416,922 – – – 833,092
Disposals (6,435) – (3,143) (31,124) – – – (40,703)
Currency translation differences (32,070) – (2,228) (50,895) (9,498) – (38) (94,728)
Balance at 31/12/2021 1,621,051 84,616 181,189 4,632,110 587,640 779,128 2,407 7,888,141
Depreciation
Balance at 31/12/2019 193,331 36,113 67,587 1,637,482 – 76,136 – 2,010,649
Depreciation 2020 378,873 7,693 35,432 517,406 – 80,984 – 1,020,388
Currency translation differences (17,894) – (2,356) (30,851) – – – (51,101)
Balance at 31/12/2020 556,309 43,807 100,663 2,123,314 – 157,120 – 2,981,213
Depreciation 2021 287,741 9,312 49,791 544,774 – 102,402 – 994,021
Currency translation differences (21,983) – (4,986) (43,089) – – – (70,059)
Balance at 31/12/2021 822,067 53,119 145,468 2,624,999 – 259,522 – 3,905,175
Carrying amounts
Balance 31/12/2019 1,042,362 20,440 111,882 2,564,546 608,395 380,683 2,445 4,730,752
Balance 31/12/2020 711,106 30,714 71,965 2,173,892 622,008 597,138 2,445 4,209,268
Balance 31/12/2021 798,985 31,496 35,722 2,007,110 519,606 519,606 2,407 3,982,966
Asset held under financial leases with a net book value of € 557,243 are included in the above table within Plant & Machinery.
13. Investments in subsidiaries
Details of the Company’s subsidiaries as at 31 December 2021 are as follows:
Shareholding
Subsidiaries Country Principal activity 2021 2020
Directa Plus S.p.A. Italy Producer and supplier of graphene-based 100% 100%
materials and related products
Directa Textile Solutions Srl Italy Commercialise textile membranes, 73.5% 73.5%
including graphene-based technical and
high-performance membranes
Setcar S.A. Romania Waste management and decontamination 52% 51%
services business
Subsidiaries Place of Business Registered Office Place of Business
Directa Plus Spa Italy Via Cavour 2, Lomazzo (CO) Italy See registered office
Directa Textile Solutions Srl Italy Via Cavour 2, Lomazzo (CO) Italy See registered office
Setcar S.A. Romania Str. Gradinii Publice 6, Braila Romania See registered office
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Annual Report & Accounts 2021
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13. Investments in subsidiaries continued
The Company’s investment as capital contributions in Directa Plus S.p.A. are as follows:
Directa S.p.A.
At 31 December 2019 21,180,336
Additions 2,500,000
At 31 December 2020 23,680,336
Additions 2,000,000
At 31 December 2021 25,680,336
14. Trade and other receivables
Group Company
2021 2020 2021 2020
Current € € € €
Account receivables 2,339,369 2,174,967 – –
Tax Receivables 465,953 443,857 49,539 23,265
Other receivables 500,171 238,636 155,752 142,997
Total 3,305,493 2,857,460 205,291 166,262
Group Company
2021 2020 2021 2020
Non-current € € € €
Other receivables 185,623 140,649 – –
Total 185,623 140,649 – –
Group account receivables of €2,339,369 are mainly composed by seven major clients, covering 60% of the total amount.
Group Tax Receivables are composed of Italian VAT receivables of €278,812, UK VAT receivables of €49,539, Romanian VAT receivables of €50,785,
RDEC Tax Credit receivables of €73,894 and other Italian Tax receivables of €12,923.
Other receivables are mainly composed of governments grants for €213,160 and prepayments for €277,089.
Non-current other receivables of €185,623 refer to specific projects where the collection of a certain amount, although due, is postponed to the
end of the project itself.
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Directa Plus
Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
14. Trade and other receivables continued
As at 31 December 2021 the ageing of account receivables was:
2021 2020
Days overdue € €
0-60 1,771,113 1,895,323
61-180 251,458 50,372
181-365 101,450 231,109
365 + 215,348 57,786
Total 2,339,369 2,174,967
As at 31 December 2021 the Group recognised provision for €46,892€ mainly referred to Setcar’s overdue debts.
15. Deferred tax liabilities
2021 2020
€ €
Deferred tax liabilities 174,158 138,147
Deferred tax assets – losses (84,661) (129,724)
Total 89,497 8,423
Deferred tax assets have been recognised on losses brought forward to the extent that they can be offset against taxable temporary differences
in line with the requirements of IAS 12.
The deferred tax liabilities arise from the capitalisation of development costs and defined benefit scheme are detailed below:
2021 2020
€ €
Deferred tax liabilities – cost capitalised 86,313 121,504
Deferred tax liabilities – other (1,652) 8,220
Deferred tax liabilities arising from acquisition 89,497 8,423
Deferred tax assets – losses exc. Setcar (84,661) (129,724)
Total 89,497 8,423
16. Cash and cash equivalents
Group Company
2021 2020 2021 2020
€ € € €
Cash at bank 11,126,683 7,075,447 9,430,364 4,283,625
of which restricted cash 40,000 – – –
Cash in hand 3,785 5,045 – –
Total 11,130,468 7,080,492 9,430,364 4,283,625
The Company holds €40,000 of restricted cash as a guarantee for a performance bond provided by a bank for a major contract in the
Environmental vertical.
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17. Equity
2021 2020
€ €
Share capital 205,393 190,996
Share premium 39,159,027 31,395,612
Foreign currency translation reserve (23,109) (7,015)
Retained earnings (25,352,139) (21,824,229)
Non-controlling interests 2,041,938 906,885
Balance at 31 December 16,031,110 10,662,249
Number of Share
Share capital ordinary shares capital (€)
At 31 December 2019 60,998,983 190,512
Share issue on 26 June 111,980 309
Share issue on 30 June 63,624 175
At 31 December 2020 61,174,587 190,996
Share issue on 14 January * 190,872 535
Share issue on 29 December – capital raise ** 1,670,518 4,962
Share issue on 30 December – capital raise ** 2,996,149 8,900
At 31 December 2021 66,032,126 205,393
* On 14 January 2021, 190,872 ordinary shares with a nominal value of £0.0025 each were issued as effect of the exercise of options of ordinary shares for Directors and Senior Managers.
** On 29 and 30 December 2021, 4,666,667 ordinary shares with a nominal value of £0.0025 each were issued as effect of the Company’s capital raise.
Share premium
Share premium €
At 31 December 2019 31,395,612
Shares issued –
Expenditure relating to the raising of shares –
At 31 December 2020 31,395,612
Shares issued 8,306,293
Expenditure relating to the raising of shares (542,878)
At 31 December 2021 39,159,027
On 29 and 30 December 2021, as a result of the Company’s capital raise, 4,666,667 ordinary shares were issued at a price of £1.5 each. The Company
accounted for €8,306,293 of gross share premium reserve, net of €542,878 of expenditure directly referred to the transaction.
Share capital
Financial instruments issued by the Directa Plus Group are treated as equity only to the extent that they do not meet the definition of a financial
liability. The Directa Plus Group’s ordinary shares are classified as equity instruments.
Share premium
To the extent that the company’s ordinary shares are issued for a consideration greater than the nominal value of those shares (in the case of the
company, £0.0025 per share), the excess is deemed Share Premium. Costs directly associated with the issuing of those shares are deducted from
the share premium account, subject to local statutory guidelines.
Foreign currency translation reserve
Exchange differences resulting from the consolidation process of Setcar are recognised in the translation reserve for an amount of € 7,183.
Non- controlling interest
Non-controlling interest refers to the minority shareholders of the company who own less than 50% of the overall share capital.
As of 31 December 2021, non-controlling interest is composed by 48% of Setcar S.A. and 26.46% of Directa Textile Solutions Srl.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
18. Loans and borrowings
Group Company
2021 2020 2021 2020
€ € € €
Non-current Loans and borrowings 2,403,881 1,017,716 – –
Current Loans and borrowings 65,840 981,065 – –
Total 2,469,721 1,998,781 – –
2021 Current Non current
€ € € Repayment Interest rate
Bank of Transilvania 660,328 – 660,328 36-months Variable
4.7% ROBOR
3M + 2,5%/year
Bank of Transilvania IMM INV 464,143 – 464,143 60-months Variable
4.11% ROBOR
3M +2.11%/
year+2%
GVC Investment Company LMT 16,630 16,630 – 12-months 1.5%/year
Intesa San Paolo 300,000 18,393 281,607 72-months 1.5%/year
+ EURIBOR 3M
Intesa San Paolo 25,000 3,076 21,924 72-months 1.5%/year
+ EURIBOR 3M
Intesa San Paolo 500,000 – 500,000 72-months 1.5%/year
+ EURIBOR 3M
Banca Popolare di Sondio 500,000 24,121 475,879 72-months 1.5%/year
+ EURIBOR 3M
Reconciliation of liabilities arising from financing activities
Cash flows Non cash flows
1 January Capital Liabilities Accrued Liabilities 31 December
2021 repayment acquired interest acquired 2021
€ € € € € €
Borrowings 1,998,781 (81,666) 1,511,719 1,642 (960,755) 2,469,721
Total 1,998,781 (81,666) 1,511,719 1,642 (960,755) 2,469,721
19. Leases liabilities
The following table details the movement in the Group’s lease obligations for the period ended 31 December 2021:
2021 2020
€ €
Non-current lease liabilities 463,047 627,138
Current lease liabilities 217,537 214,935
Total 680,584 842,073
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Annual Report & Accounts 2021
63
20. Employee benefits provision
2021 2020
€ €
Employee benefits 500,535 444,483
Total 500,535 444,483
Provisions for benefits upon termination of employment primarily related to provisions accrued by Italian companies for employee retirement,
determined using actuarial techniques and regulated by Article 2120 of the Italian Civil code. The benefit is paid upon retirement as a lump sum,
the amount of which corresponds to the total of the provisions accrued during the employees’ service period based on payroll costs as revalued
until retirement. Following the changes in the law regime, from January 1 2007 accruing benefits have been contributing to a pension fund or a
treasury fund held by the Italian administration for post-retirement benefits (INPS). For companies with less than 50 employees it will be possible to
continue this scheme as in previous years. Therefore, contributions of future TFR provisions to pension funds or the INPS treasury fund determines
that these amounts will be treated in accordance to a defined contribution scheme, not subject to actuarial evaluation. Amounts already accrued
before 1 January 2007 continue to be accounted for a defined benefit plan and to be assessed on actuarial assumptions.
The breakdown for 2020 and 2021 is as follows:
€
Amount at 31 December 2019 406,534
Service cost 57,081
Interest cost 10,131
Actuarial gain/losses (7,821)
Past service cost –
Benefit paid (21,442)
Amount at 31 December 2020 444,483
Service cost 47,536
Interest cost 11,098
Actuarial gain/losses 6,457
Benefit paid (9,039)
Amount at 31 December 2021 500,535
Variables analysis
Detailed below are the key variables applied in the valuation of the defined benefit plan liabilities.
2021 2020
Annual rate interest 2.30% 2.30%
Annual rate inflation 1.10% 1.10%
Annual increase TFR 7.41% 7.41%
Tax on revaluation 17.00% 17.00%
Social contribution 0.50% 0.50%
Increase salary male 1.20% 1.20%
Increase salary female 1.15% 1.15%
Rate of turnover male 1.70% 1.70%
Rate of turnover female 1.50% 1.50%
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Directa Plus
Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
20. Employee benefits provision continued
Sensitivity analysis
Detailed below are tables showing the impact of movements on key variables:
Actuarial hypothesis – 2021
Decrease 10% Increase 10%
Variation Variation
Rate DBO € Rate DBO €
Increase salary Male 1.08% (4,767) 1.32% 1,277
Female 1.04% 1.27%
Turnover Male 1.53% (4,962) 1.87% 1,325
Female 1.35% 1.65%
Interest rate 2.07% 11,788 2.53% (14,631)
Inflation rate 0.99% (6,032) 1.21% 2,546
21. Trade and other payables
Group Company
2021 2020 2021 2020
Non-current € € € €
Other payables 64,357 65,397 – –
Total 64,357 65,397 – –
Group Company
2021 2020 2021 2020
Current € € € €
Trade payables 946,694 1,364,787 93,332 54,725
Employment costs 609,397 519,466 – –
Other payables 375,807 1,228,655 78,486 62,020
Contingent consideration at fair value through P&L – 572,268 – –
Total 1,931,898 3,685,176 171,818 116,745
In 2021 Setcar released an obligation to its former shareholders for a total amount of €504k, accounted as other income in the Consolidated
statement of comprehensive income. As of December 2020, this amount was accounted within other payables.
Over 2021 the Group paid the last tranches of contingent consideration to the former shareholders of Setcar for a total amount of €572,268.
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65
22. Financial instruments
Financial risk management
The Group’s business activities expose the Group to the following financial risks:
a) Market risk
Market risk arises from the Group’s use of interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value of
future cash flow of a financial instrument will fluctuate because of changes in interest rates or foreign exchange rates. As at 31 December 2021 the
Group is exposed to variable interest rate risk for a short term revolving loan and for the loans recently issued by Directa Plus SpA under the Italian
Government Covid-19 Recovery Plan. Those loans, being 90% guaranteed by the Italian Government, bear a low interest rate (1.5% + EURIBOR)
and, if the interest rate had increased or decreased by 100 basis points during the year the reported loss after taxation would not have been
materially different to that reported.
b) Capital Risk
The Group’s objectives for managing capital are to safeguard the Group’s ability to continue as going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders and to provide an adequate return to shareholders by pricing products and services
commensurately with the level of risk. There were no changes in the Group’s approach to capital management during the year.
c) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
The Group’s credit risk is primarily attributable to its trade receivables that the Company consider defaulted if any instalment is unpaid more than
sixty (60) days past its original due date or where there is evidence that identifies the debtor’s state of insolvency.
The Group’s cash and cash equivalents and restricted cash are held with major financial institutions. The Group monitors credit risk by reviewing
the credit quality of the financial institutions that hold the cash and cash equivalents and restricted cash.
The Group’s trade receivables consist of receivables for revenue mainly in Italy and Romania. Management believes that the Group’s exposure to
credit risk is manageable and currently the Group’s standard payment terms are 30 to 60 days from date of invoice are largely met from the clients.
At the end of the period, 74% of account receivables have an ageing less of 60 days and refers to orders delivered close to the year end. As at
31 December 2021 the Group recognised a cumulated bad debt provision for €46,893.
Every new customer is internally analysed for creditworthiness before the Group’s standard payment and delivery terms and conditions are
offered. Advance payment usually applies for the first order and the exposure to credit risk is approved and monitored on an ongoing basis
individually for all significant customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in
the statement of financial position. The Group does not require collateral in respect of financial assets.
d) Exposure to credit risk
2021 2020
Group Note € €
Trade receivables 14 2,339,369 2,174,967
Cash and cash equivalent 16 11,130,468 7,080,492
Total 13,469,837 9,255,459
The largest customer within trade receivables account for 13% of debtors. Management continually monitors this dependence on the largest
customers and are continuing to develop the commercial pipeline to reduce this dependence, spreading revenues across a variety of customers.
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Notes to the consolidated financial statements
continued
22. Financial instruments continued
e) Liquidity risk
It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk arises from the Group’s
management of working capital and the finance charges and principal repayments on its debt instruments. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities and by continuously monitoring forecast and actual cash flows. The Board reviews regularly
the cash position to ensure there are sufficient resources for working capital requirements and to meet the Group’s financial commitments.
Carrying amount Up to 1 year 1-5 years
2021 € € €
Financial liabilities
Trade payables 946,694 946,694 –
Lease liabilities 680,584 217,537 463,047
Loans 2,469,721 65,840 2,403,881
Total 4,096,999 1,230,071 2,866,928
Carrying amount Up to 1 year 1-5 years
2020 € € €
Financial liabilities
Trade payables 1,364,787 1,364,787 –
Lease liabilities 842,073 214,935 627,138
Loans 1,998,781 959,520 1,064,310
Total 4,205,641 2,539,242 1,691,448
f) Currency risk
The Group usually raises money issuing shares in pounds, it follows that the Group usually holds sterling bank accounts as result of capital raise.
Sterling bank accounts are mainly used to manage expenses of the Company (such as UK advisors, LSE fees and costs related to the Board) in UK.
The cash held in Sterling continues to be subject to currency risk.
EUR
Cash held in GBP 9,159,734
As of January 2022, to reduce the exposure to liquidity risk, Directors decided to translate GBP 4.5 million into EUR. As at 24 March 2022 the total
cash held in GBP is equal to £3.5 million. If the exchange rate EUR/GBP increase by 10% the impact on P&L would be a loss equal to €0.4 million
(if decrease by 10% would be a profit equal to €0.4 million).
The Group holds accounts also in other currency (such as USD and RON) but just for business purposes and for not material amount.
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23. Earnings per share
Change in Weighted
number of Total number number of
ordinary shares of ordinary shares Days ordinary shares
At 31 December 2020 175,604 61,174.587 365 61,087,158
Existing shares – 61,174,587 13 2,178,821
Issued on 14 Jan 2021 190,872 61,365,459 349 58,675,466
Issued on 29 Dec 2021 1,670,518 63,035,977 2 345,403
Issued on 30 Dec 2021 2,996,149 66,032,126 1 180,909
At 31 December 2021 4,857,539 66,032,126 365 61,380,599
Basic Diluted
2021 2020 2021 2020
€ € € €
Loss attributable to the owners of the Parent (3,652,364) (4,195,011) (3,652,364) (4,195,011)
Weighted average number of ordinary shares
in issue during the year 61,380,599 61,087,158 – –
Fully diluted average number of ordinary shares
during the year – – 61,649,085 61,477,110
Loss per share (0.06) (0.07) (0.06) (0.07)
The effect of anti-dilutive potential ordinary shares is ignored in calculating the diluted loss per share.
24. Share schemes
The 2020 Employees’ Share Scheme is administered by the Remuneration Committee.
The Directors are entitled to grant awards over up to 10 per cent of the Company’s issued share capital from time to time.
Under the 2020 Employees’ Share Scheme, in November 2020 1,801,000 options over Ordinary Shares were granted to key employees and
additional 150,000 options were granted to an Executive Director in June 2021 under the same Scheme. As of 31 December 2021, the total number
of outstanding Ordinary Shares awards is 1,184,000, of which 517,000 vested after the first year and 250,000 were revoked.
At the date of this report, an additional 539,080 share options had vested in 2020 under the 2016 Employees’ and NED Share Schemes that have
not yet been exercised.
The main terms of the 2020 Employee’s Share Schemes are set out below:
Eligibility
All persons who at the date on which an award is granted under the Employees’ Share Scheme are employees (or employees who are also office-
holders) of a member of the Group and are eligible to participate. The Remuneration Committee decides to whom awards are granted under the
Employees’ Share Scheme, the number of Ordinary Shares subject to an award, the exercise date(s) (subject to the below) and the conditions
which must be achieved in order for the award to be exercisable.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
24. Share schemes continued
Types of award
Awards granted under the Employees’ Share Scheme have the form of market value share options. “Market value share options” are share options
with an exercise price equal to the market value of a share at the date of grant. The right to exercise the award is generally dependent upon the
participant remaining an officer or employee throughout the performance period. This is subject to the good leaver provisions described below.
Awards granted under the Share Schemes will not be pensionable.
Individual limits
The value of Ordinary Shares over which an employee or Executive Director may be granted awards under the Employees’ Share Scheme in any
financial year of the Company shall not exceed 200 per cent of his basic rate of salary at the date of grant.
Variation of share capital
Awards granted under the Share Schemes may be adjusted to reflect variations in the Company’s share capital.
Vesting of awards
Outstanding awards will vest over three years in equal one third tranches on each anniversary of the grant date to the extent that the market-based
performance targets have been met. Vested awards may generally be exercised between the third and tenth anniversaries from the date of grant.
75% of vested shares can be exercised after the third anniversary, while the remaining 25% from the fourth.
The inputs to the Monte-Carlo simulation were as follows:
Monte-Carlo simulation Market value shares
Share price 60p
Exercise price 66p
Expected volatility 54%
Compounded Risk-Free Interest Rate 0.10%
Expected life 6 years
Number of options issued* 1,801,000
*Number of options issued is an input of the Monte-Carlo simulation and refers to the total options granted by the Company in November 2020. This is not representing any
option issued in the period.
Details of the number of share options outstanding are as follows:
Granted Cancelled Expired Vested Outstanding Exercisable
Outstanding at during the during the during the during at end of period Exercisable
start of period period period period period period option price Grant date date
31 December 2019 1,639,877 – (25,523) (733,066) (821,288) 60,000 75p 12 May 2017 12 May 2020
31 December 2020 60,000 1,801,000 – – (60,000) 1,801,000 66p 12 Nov 2020 12 Nov 2023
31 December 2021 1,801,000 150,000 (250,000) – (517,000) 1,184,000 66p – 118p 12 Nov 2020 – 12 Nov 2023 –
15 Jun 2021 15 Jun 2023
Cancellation of share options during the period relates to the resignation of employees. Share options expired over the period refers to those
performance share options that did not meet the performance criteria on the third anniversary of their granting. Vested share options are Market
share options that met the criteria on the third anniversary.
As of 14 January 2021, two Directors and two Senior Managers of the Company had exercised 190,872 ordinary shares, originally vested under the
2016 Employees Share Scheme.
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25. Related parties
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note.
Remuneration of key management personnel
The below figures represent remuneration of key management personnel for the Group, who are part of the Executive Management Team
but not part of the Board of Directa Plus PLC. The remuneration is set out below in aggregate for each of the categories specified in IAS 24
‘Related Party Disclosures’.
2021 2020
€ €
Short-term employee benefits and fees 407,451 278,619
Social security costs 102,469 68,576
509,920 347,195
The increase in 2021 is mainly explained by the fact that during the year an employee was appointed as part of the Executive Management Team
of Directa Plus SpA.
For Directors remuneration please see Director’s Remuneration Report.
Transactions with shareholders
The following sales with shareholder of the Group were recorded, excluding VAT, during the year:
2021 2020
€ €
Sale of products – 3,948
Products are sold on normal commercial terms and conditions.
Other transaction Group
Other related party transactions during the year under review are shown in the table below:
2021 2020
€ €
Sale of products 19,395 15,886
Products are sold on normal commercial terms and conditions.
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Annual Report & Accounts 2021
Notes to the consolidated financial statements
continued
26. Contingent liabilities and commitments
The Group has the following contingent liabilities relating to bank guarantees on operating lease arrangements and government grants.
2021 2020
€ €
Bank guarantees 163,340 141,553
27. Post balance sheet events
At the date of this report, it is still unrealistic to properly assess the potential impacts of the Ukrainian conflict on the Group. Directors are
monitoring the evolution of the macro-economic scenario and consequently re-adjusting, where necessary, the Group’s strategy and operational
priorities. The Group is likely to be hit by inflation trends (as a consequence of the increase in energy and transportation costs) and, presumably,
by some contracts slowdown. However, Directors believe that overall, the conflict will not affect the going concern of the Group, and, under certain
circumstances, it will create some potential opportunities, such as from the price increase of oil and other materials could generate significant out-
turns for the Group and its clients.
On 15th March 2022, Directa Plus S.p.A. granted its subsidiary Setcar SA a loan of €1 million, payable in 1 year with an annual interest rate of 4.5%.
Those funds, raised in the context of the capital increase completed in December 2021, will support Setcar in responding to significant new tenders
and provide additional liquidity for its general working capital purposes.
Directa Plus
Annual Report & Accounts 2021
Directa Plus
Annual Report & Accounts 2021
Directa Plus in 2021
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supply chains' requirements for volume, cost and quality control.
By incorporating Directa Plus’s unique graphene blends, identified by
the G+® brand, our customers can revolutionise the performances
of their own end products in commercial applications such as
textiles, composite materials and environmental solutions.
We partner with our customers to enable them to
offer the high-performance benefits of G+® in
their own products.
Our company has a unique and patented
technology process and a scalable and portable
manufacturing model. We produce graphene
nanoplatelets-based products at our own
factory near Milan, Italy, and can set up
additional production at customer locations to
reduce transport costs, waste and time-to-
utilisation. We are strongly committed to
environmental sustainability and abided by a strong
Code of Ethics in all aspects of our business practice.
Contents
01 Highlights
02 Chairman’s review
03 At a glance
04 Target market progress
06 Our strategy and business model
08 Market review
10 Chief Executive Officer’s review
16 Chief Financial Officer’s review
18 Directors’ biographies
20 Section 172
21 Directors’ report
24 Corporate governance report
28 Directors’ remuneration report
30 Audit Committee report
31 Remuneration Committee report
32 Independent auditor’s report
38 Consolidated statement of comprehensive income
39 Consolidated and Company statement of financial position
40 Consolidated statement of changes in equity
40 Company statement of changes in equity
41 Consolidated and Company statement of cash flows
42 Notes to the consolidated financial statements
IBC Directors, secretary and advisers
Directors, secretary and advisers
Directors
Sir Peter Middleton – Non-Executive Chairman
Giulio Cesareo – CEO and Founder
Giorgio Bonfanti – Chief Financial Officer
David Gann – Non-Executive Director
Neil Warner – Non-Executive Director
Richard Hickinbotham – Non-Executive Director
Company Secretary
Giorgio Bonfanti
Registration number
04679109
Registered office
3rd Floor
11-12 St James’s Square
London SW1Y 4LB
United Kingdom
Principal place of business
Directa Plus Plc
ComoNExT Science Park
Via Cavour 2
22074 Lomazzo (Co)
Italy
Nominated adviser and joint broker
Cenkos Securities
6.7.8 Tokenhouse Yard
London EC2R 7AS
United Kingdom
Joint broker
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
United Kingdom
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Legal advisers
Fox Williams LLP
10 Finsbury Square
London EC2A 1AF
United Kingdom
Registrar
Link Market Services Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Financial PR adviser
Tavistock
1 Cornhill
London EC3V 3ND
United Kingdom
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Printed sustainably in the UK
by Pureprint, a CarbonNeutral®
company with FSC® chain
of custody and an ISO 14001-
certified environmental
management system recycling
over 99% of all dry waste.
Directa Plus Plc
3rd Floor
11-12 St. James’s Square
London
SW1Y 4LB
United Kingdom
www.directa-plus.com
Graphene is the
material of the future
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Annual Report & Accounts 2021