Annual Report
2023
Syngas technology innovation for
sustainable energy and biofuels
Contents
04
Directors and advisors
05
Strategic pivot at a glance
06
Strategic reports
07
Chairman’s statement
13
Chief Executive’s report
22
Corporate governance statement
36
Directors’ report
10
EQTEC in focus
10
EQTEC track record
18
EQTEC R&D
32
EQTEC Italia MDC
44
EQTEC team and Board of Directors
49
Independent Auditor’s report
56
Financial statements
57
Consolidated statement of profit or loss
58
Consolidated statement of comprehensive income
58
Consolidated statement of financial position
61
Consolidated statement of changes in equity
62
Consolidated statement of cash flows
64
Company statement of financial position
65
Company statement of changes in equity
66
Company statement of cash flows
67
Notes to the financial statements
Image change – Shane
Waste is a ubiquitous and limitless resource. EQTEC’s
mission is to cleanly and sustainably transform it into
energy and biofuels that replace the world’s fossil fuel
legacy with a local-for-local, circular, renewable future.
Where there is waste, there is a potential for clean energy. EQTEC’s
patented and proprietary technology cleanly converts the widest
variety of waste types to syngas, an intermediate fuel that
enables production of the widest range of bioenergy and biofuels,
including combined heat and power (CHP), renewable natural gas
(RNG), hydrogen, liquid fuels including sustainable aviation fuel
(SAF) and other chemicals such as bioethanol and biomethanol.
EQTEC plc Annual Report 2023 | 03
Directors
and advisors
Strategic pivot
at a glance
IAN PEARSON
Non-Executive Chairman
DAVID PALUMBO
Chief Executive Officer
DR. YOEL ALEMÁN MÉNDEZ
Chief Technical Officer
JEFFREY VANDER LINDEN
Chief Operating Officer
TOM QUIGLEY
Non-Executive Director
REGISTERED OFFICE:
Building 1000, City Gate, Mahon, Cork
T12 W7CV, Ireland
NOMINATED ADVISOR:
Strand Hanson Limited, 26 Mount Row, Mayfair,
London W1K 3SQ, United Kingdom
BROKERS:
Global Investment Strategy UK Ltd, 200
Aldersgate St, Barbican, London EC1A 4HD,
United Kingdom
Fortified Securities, 162 Buckingham Palace Rd,
London SW1W 9TR, United Kingdom
LEGAL ADVISORS:
Philip Lee, 7-8 Wilton Terrace, Dublin D2, Ireland
Fieldfisher LLP, Riverbank House, 2 Swan Lane,
London EC4R 3TT, United Kingdom
Fieldfisher Jausas, Passeig de Gràcia, 103,
Planta 7. 08008 Barcelona, Spain
Isern Patentes y Marcas, Avda. Diagonal,
463 Bis, 2ª, 08036 Barcelona, Spain
AUDITOR:
Grant Thornton, 13-18 City Quay, Dublin 2,
D02 ED70, Ireland
REGISTRAR:
Link Asset Services, 2 Grand Canal Square,
Dublin 2, D02 A342, Ireland
The Company is incorporated in Ireland
with registration number: 462861
Share of revenue
Development
Engineering and equipment
Operations support
Revenue
Revenue-earning engagements
H1 revenues
Business development
Operating plants
Plants under construction
Plants under design
Business operations
Non-engineering staff
ISO certifications
Monthly run costs (index 2023)
From
2023
To
H1 2024 (est.)
42%
58%
-
-
85%
15%
3
€0.1 million
8
€1.4 million
1
2
2
14
-
-
2
3
4
6
3
-21%
Financial performance
Revenue €2.5 million
(FY2022: €8 million)
Cash €0.3 million
(31 December 2022:
€1.7 million)
Net assets €21.2 million
(31 December 2022:
€37.1 million)
Reference plants
EQTEC Italia MDC
Operational from
08 March 2023
Croatia Waste-to-Syngas
Closing funding in 2024
France Mixed Waste-to-Syngas
Sold to Idex; FEED completed
Other projects
Gardanne (France)
€1 million public grant;
pre-FEED completed
SEL Hawaii (USA)
FEED in 2024 toward build
in 2025
BMEC (USA)
Contract December 2023
worth c. €10 million
Driving the pivot
ISO certification
Achievement of 9001,
14001, 45001
Strategic focus
Withdrawal from non-core,
high-risk projects
Cash management
Opex rationalisation; pursuit
of accounts receivable
EQTEC plc Annual Report 2023 | 05
Strategic
reports
Crystal clear skies and clean air in California’s Sierra will
remain so even with integration of EQTEC-enabled
forestry waste-to-power (and biochar) plants there.
Chairman’s
statement
INTRODUCTION
As the Company’s
management heralded at
the end of the previous year,
2023 was a year of strategic
transition for EQTEC and
one I believe puts the
Company on a firmer
footing for growth in years
to come, following the
unexpected tightening of
capital markets and a period
of growing ambivalence
in some markets about
the future of cleantech. In
the first half of 2024, the future is again
looking bright for EQTEC.
And this will be a different EQTEC. The
Company will not own its own projects
or hold project-wide risks or liabilities,
but it will continue driving R&D and
innovation with syngas technology and
will serve the leading Industrial, Utility
and Waste Management players to drive
awareness of its unique capabilities and
support adoption of its technology and
growth of its business.
The Company’s strategic transition was
announced by management in 2021
and accelerated in 2022, but it was only
in 2023 that the biggest decisions and
hardest announcements hit home. I am
pleased with the brave decisions taken
by management and satisfied with their
execution thus far, but the Board remains
keenly aware that the Company’s share
price has suffered through this strategic
‘pivot’. More work remains to restore the
market’s confidence in EQTEC’s unique
technology and in the newly emerging
business platform that will bring it to
the world.
INDICATORS OF CHANGE
The Company’s management accounts
for 2024 appear very different to those
from previous years. First, there is a bias
toward consistent and reliable revenue
generation, with a healthy conservatism
challenging every revenue stream.
The Company is no longer dependent
on specific projects, but focuses on
revenues per se; whether clients drive
pace and quality through their projects
is less a concern than the matter of
ensuring that EQTEC is paid on time
and in full for all the client work it does
at every stage of the project.
Second, to complement the stringent
revenue delivery and recovery focus,
management has executed successive
reviews of operational expenditure and
is now completing its third round of
reductions since Q3 2023. The operating
model of the business is being refined to
minimise non-core activity, with a focus
on getting EQTEC technology to market
at the lowest possible cost.
Third, the Company is targeting margins.
In years past, EQTEC pursued growth
through revenue capture and inclusion
in a large number of projects—a sort
of early-stage pursuit of market share.
Now, however, in a world where cash is
dearer, every revenue opportunity is an
opportunity for cash, if only the business
protects that cash. From 12% gross
margins in 2020, the Company achieved
a 15% gross margin in 2023 and is
targeting mid-20% for 2024. Healthier
margins will create more fertile ground
for growth in coming years.
IAN PEARSON
Non-Executive Chairman
27 June 2024
06 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 07
Chairman’s statement
SHEDDING BALLAST
The Company’s balance sheet at the end
of 2023 indicates a smaller, more focused
Company. The management, supported
by the Board, took the brave decision
to impair several of its assets and write
down liabilities that were holding the
business back from its intended future
as a pure-play technology company.
These were non-core assets, usually
projects that did not fit with the target
business model or that were too large
and unlikely to secure project funding
in an environment characterised by
higher costs of capital.
The updated balance sheet better
reflects the streamlined business,
built around a core of innovative
design engineering and technology
deployment into client projects held
by others.
SHAPE OF THINGS TO COME
This ‘asset-light’ approach to business
will put an emphasis on intellectual
property that can be licensed to client
plants running EQTEC technology,
where highly talented and uniquely
qualified EQTEC designers and
deployment engineers support the
integration of EQTEC know-how into
future waste management and new
energy infrastructure. The Company
will generate one-off revenues through
professional services for design, build
and commissioning of plants, and
eventually, recurring, annual revenues
through license fees for use of EQTEC
proprietary technology.
On paper and throughout this report,
2023 might appear to be a year we
would like to forget, with disappointing
revenue results and a series of asset
impairments. However, I believe it might
ultimately be the year that EQTEC and
its shareholders remember most, as the
one that reset the business for successful
growth as a key player in clean energy
and waste management of the future.
EQTEC staff meeting in Barcelona, one of
the Company’s regular, all-staff Town Halls.
Chairman’s statement
The updated balance
sheet better reflects the
streamlined business, built
around a core of innovative
design engineering and
technology deployment into
client projects held by others.
IAN PEARSON
Non-Executive Chairman
08 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 09
EQTEC in focus
EQTEC track record
innovating in gasification since 1997, with a range
of patented and proprietary differentiators
PLANT
LOCATION
WASTE
FEEDSTOCK
CAPACITY
(INPUT)
GASIFICATION
TYPE
CAPACITY
(OUTPUT)
OFFTAKE
APPLICATION
STATUS
U. OF
EXTREMADURA
Spain
Biomass
50 kg/hr
Air-blown
-
(R&D plant)
Live (since 2010)
MOVIALSA
Spain
Agricultural
3 tonnes/hr
Air-blown
5.9 MWe
CHP
Live (since 2011)
EQTEC in focus
U. OF LORRAINE
(LERMAB)
EQTEC ITALIA
MDC
France
Biomass, RDF
100 kg/hr
Air-blown &
Steam-oxygen
-
(R&D plant)
Live (since 2015)
Italy
Agricultural
& forestry
1+ tonne/hr
Air-blown
1.0 MWe
CHP, biochar
EQTEC is a technology innovation
and engineering company at heart
and a world leader in gasification. The
Company’s chemical process engineers
solved the notorious ‘tar problem’ well
over a decade ago and nearly 20 years
ago developed its kinetic model that
recalculates complex reactions inside the
gasifier every three microns, for a highly
accurate sense-and-respond capability
for modelling the gasification process
during design, as well as for managing
the gasification process throughout live
operation of EQTEC-equipped plants.
The Company currently maintains
four patents for its gasification process
design and specific vessels deployed
in that process. Further its, proprietary
modelling and control systems are
all programmed in house, ensuring
that the process EQTEC designs is the
one that becomes live and operates
consistently and effectively throughout
the lifetime of its syngas plants.
The Company anticipates pursuing
several more patents in the near
future, for more elements of its unique
gasification capabilities and across
multiple geographies.
EQTEC has commissioned six plants
since 2010, two of which are full, end-
to-end mini-plants for R&D and two of
which are currently decommissioned.
Two other plants are close to being
commissioned and fully operational and
several others are due to be operational
within the coming years.
At the heart of the challenge for so
many of the world’s new infrastructure
for waste management and energy
transition lies the problem of managing
carbon and other emissions so that an
endless supply of waste can become a
clean, sustainable substitute for fossil
fuels. EQTEC is unique in its ability to
offer truly clean waste conversion for the
highest quality syngas to support the
world’s energy plants of the future.
EQTEC Proprietary, End-to-End Process Design, Integration and Management
KARLOVO
Bulgaria
Agricultural
4 tonnes/hr
Air-blown
5.0 MWe
CHP
BELISCE
Croatia
Industrial
2 tonnes/hr
Air-blown
1.5 MWe
CHP, biochar
NORTH FORK
USA
Forestry
3 tonnes/hr
Air-blown
2.0 MWe
CHP, biochar
AGRIGAS
Greece
Agricultural
500 kg/hr
Air-blown
0.5 MWe
Electricity
GRANDE-COMBE
France
Mixed wood
& RDF
8 tonnes/hr
Air-blown
6.5 MWe
CHP
BLUE
MOUNTAIN
USA
Wood
3 tonnes/ hr
Air-blown
3.0 MWe
CHP, biochar
GARDANNE
France
Wood
9 tonnes/hr
Steam-oxygen
3,000 Nm3
LIMOGES
France
Wood
6 tonnes/hr
Steam-oxygen
2,500 Nm3
COLIBRI PLANTS
(x4)
SIMONPIETRI
ENTERPRISES
TRESCA
ENERGÍA
Italy
USA
Mixed
14 tonnes/hr
Steam-oxygen
8,000 Nm3
Mixed
3 tonnes/ hr
Air-blown
3.0 MWe
Spain
Biomass TBC
6 tonnes/hr
Steam-oxygen
2,500 Nm3
RNG
RNG
RNG
CHP
RNG
Start-up (2015);
Re-start (2023)
Start-up 2015
(now decommissioned)
Start-up (2016);
Re-start (2025)
Completing
construction
Under
commissioning
Completing
development
Completing
development
Under
development
Under
development
Under
development
Under
development
Under
development
Forestry
Waste
Agricultural
Waste
Industrial
Waste
Municipal
Waste
Raw
syngas
GASIFICATION
Fluidized Bed Gasifier
750 – 900˚C
PATENT
HOT GAS
CONDITIONING
Cyclone, Thermal Cracking Reactor
Hydrocarbon removal
COLD GAS
CONDITIONING
Scrubbing, condensers
Water-soluble pollutant removal
Pure
syngas
PATENT
PATENT
CHAR
BIOCHAR
Fertiliser
Carbon
sequestration
Water
filtration
Electricity
& Heat
Liquid
Biofuels
Renewable
Natural Gas
(RNG)
Hydrogen
Proprietary
PATENT
PATENT
PATENT
Kinetic simulation
for plant design
Gasification of organic solids
Inventor: Dr Yoel Alemán
Date granted: 11-Oct-2017
Thermal Cracking Reactor
Inventor: Dr Yoel Alemán
Date granted: 27-Dec-2017
Cogeneration plant configuration
Inventor: Dr Yoel Alemán
Date granted: 04-Nov-2016
Proprietary
Control systems
for process control
and remote
management
EQTEC is unique
in its ability to
offer truly clean
waste conversion
for the highest
quality syngas to
support the
world’s energy
plants of the
future.
10 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 11
Chief Executive’s
report
INTRODUCTION
In 2023, EQTEC reaffirmed our
capabilities with syngas for
new energy applications; we
demonstrated our advanced
engineering at our LERMAB
R&D centre and at our EQTEC
Italia MDC reference plant;
we transitioned our business
away from risk and cost
toward greater predictability
and sustainability. Crucially,
we weathered a storm of
interest rate increases, geo-
political tensions and shifts
in investor sentiment over
cleantech investments.
As trying a year as it was for the
Company, we ended 2023 with
reasonable revenues of €2.5 million,
with a declining operating loss versus
the previous year (-€3.5 million vs.
-€4.9 million in 2022) and a financial
restructuring that provided the
Company with additional funding
of up to £3 million (c. €3.5 million).
We witnessed other companies in the
sector struggling to remain viable, with
some of them exiting or relocating to
more fertile markets. EQTEC endured,
and now in 2024 we see our recovery
starting to unfold.
2023 was a year of business transition
for EQTEC. As committed the previous
year, we pivoted away from project
ownership and development, toward
provision of our unique technology
and engineering capabilities to projects
owned and managed by others. We
took some difficult and painful decisions
in 2023, as our updated balance sheet
attests, but these decisions have
reshaped the business for more
focused, reliable and sustainable
growth starting in 2024.
SUSTAINING INNOVATION
EQTEC is a technology innovation
company and its R&D activities
continued throughout 2023 on the
basis of considerable R&D investment
efforts made by the Company up to the
end of 2022. The Company completed
commissioning of its EQTEC Italia MDC
reference plant, leveraged the advanced
gasification capabilities at its R&D facility
at the University of Lorraine’s LERMAB
facility in France and exercised its
relationships with technology partners
on project work.
In March 2023, the Company completed
commissioning of its first co-owned
reference plant, the EQTEC Italia
MDC in Tuscany, Italy. The 1 MWe
plant exported its first electricity to
the national grid on 08 March. As
announced in May 2024, the plant
experienced difficulties establishing a
sustainable team throughout most of
2023, making continuous operations of
the plant difficult to achieve. However,
with the stabilisation of the team and
management by the end of 2023, the
plant is now working through Year
1 ramp-up, optimisation and active
maintenance. The Company expects
the plant to achieve stable, continuous
operations in 2024. Throughout 2023
and into 2024, the plant has supported
a number of visits by prospective clients,
some of which have already led to
contracted work for EQTEC.
DAVID PALUMBO
Chief Executive Officer
27 June 2024
EQTEC’s proprietary design of the syngas
filter includes dozens of microporous
filter ‘candles’ as seen in this aerial view
of the open filter component.
12 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 13
Chief Executive’s report
Also in 2023, we applied the steam-
oxygen capabilities installed at LERMAB
in late 2022 to a series of tests as part
of feasibility work toward a large-scale
RNG project supported by the French
national government. Importantly, the
tests confirmed that results achieved
with EQTEC steam-oxygen gasification
technology at the LERMAB facility could
be directly applied at commercial scale
for plants seeking to produce advanced
biofuels. This indicates that the LERMAB
facility is a smaller-scale facsimile of a full-
scale EQTEC-enabled plant and therefore
highly valuable in the processes of plant
design and project financial modelling.
Additionally, the tests further validated
the highly accurate nature of EQTEC’s
proprietary kinetic process design model.
From an R&D perspective, this work in
turn will support a number of other
advanced biofuels projects in France
and beyond.
Finally, EQTEC continued working with
technology partners, including Wood,
whose VESTA methanation technology
is a key part of the EQTEC proposition
for RNG opportunities across France
and the USA. Once France announces
its RNG tariffs, EQTEC expects to be in
a leading position in that country to
exploit its considerable expertise with
RNG from syngas to the benefit of a
number of customers and communities
in that country and others across Europe
and around the world. Also in 2023, and
based on a collaboration announced in
2022, EQTEC formed with gas-to-liquids
expert CompactGTL a formal, 50/50 joint
venture to bring EQTEC into the market
for liquid fuels, including transport fuels.
The JV partners are in 2024 undertaking
pilot work at LERMAB on an integrated,
syngas-to-liquid solution and pursuing
funding for a full-scale reference plant
for that solution.
BUILDING THE BUSINESS
EQTEC was awarded five new pieces
of work in 2023, achieved three ISO
certifications and launched three
collaboration agreements with
new routes to market in Italy, Ireland
and Spain.
In France, the Company won a grant
of €1 million supplied by the national
government through the Provence-
Alpes-Côte d’Azur regional authority,
for a feasibility on a prospective site in
Gardanne, to replace legacy fossil fuel-
based and incineration-based solutions
there. The Company mobilised a team of
experts including S3D Ingénierie, Suez
Group, Sofresid Engineering and Wood
to collaborate on a holistic feasibility
report and early-stage engineering.
The feasibility work completed in
September 2023 and pre-front-
end engineering design (pre-FEED)
continued into early 2024, toward a
high-level design for a mid-sized waste
wood-to-RNG plant that could be built
at Gardanne or another site.
@
J
e
ff
r
e
y
V
a
n
d
e
r
L
n
d
e
n
i
Mixed wood waste from demolition and
other sources will go into EQTEC-enabled
plants in Doubs, France and Hawaii, USA.
EQTEC was
awarded five new
pieces of work in
2023, achieved
three ISO
certifications and
launched three
collaboration
agreements
with new routes
to market in Italy,
Ireland and Spain.
DAVID PALUMBO
Chief Executive Officer
As an important indicator of the
Company’s move away from owning
and developing projects, the Company
successfully sold its Grande-Combe
project in Doubs, France to Idex. In
addition to the sale of the project, the
Company won from Idex a contract for
front-end engineering design (FEED)
for the 6.5 MWe syngas-to-electric
power plant that will be fuelled by
mixed feedstock of wood waste,
contaminated wood waste and refuse-
derived fuel (RDF) from municipal solid
waste (MSW). EQTEC completed the
FEED in December 2023 and expects
Idex to place its first equipment order
in the second half of 2024.
Extending its relationship with Idex,
the two companies together won a
competition for a project in Limoges,
Nouvelle-Aquitaine, France. The
project, to be developed by Idex with
engineering and technology from
EQTEC, is expected to result in a plant
able to convert up to 45,000 tonnes
per year of mixed waste, including
contaminated wood waste, into up
to nine million normal cubic metres
per year of RNG. Continuation of this
project, as with others in France, remains
dependent upon France’s release of RNG
tariffs, which has been delayed for some
time but is expected in 2024.
electrical power facilities, one in
Hawaii, the other in California. The
Hawaii facility, under development by
Simonpietri Enterprises, would convert
approximately 15,000 tonnes per year of
wood waste into syngas, which in turn
would be used to generate up to 2 MWe
to power an organic fertilizer production
facility and demolition waste sorting
and recycling operation. The California
facility, under development by Phoenix
Biomass Energy Inc., would convert
approximately 25,000 tonnes per year of
wood waste into syngas for production
of c. 3.0 MWe and c. 2,400 tonnes per
year of biochar.
In the USA, the Company was awarded
two contracts for wood waste-to-
In line with EQTEC’s dedication to
engineering excellence, best-in-
Chief Executive’s report
class gasification process design and
technology innovation, the Company
prepared for and successfully achieved
certification against three groups of
standards set by the International
Organisation for Standardisation
(ISO), comprising ISO 9001 for
Quality Management, ISO 14001 for
Environmental Management and ISO
45001 for Occupational Health & Safety.
The certifications support the Company’s
execution capabilities and establishment
of a standard platform for more rapid
growth and scale in future.
Finally, the Company signed
collaboration agreements with three
go-to-market partners. First, Italy-based
Poseidon LNG Hub Srl is a sister company
Partner spotlight
Francisco Carro
Chief Executive Officer
Tresca Energía S.A., based in León,
Spain, is an engineering, project
development and project management
company with the mission of supporting
its clients in responding to industry
challenges, by anticipating and managing
change. Founded in 2001, Tresca has
several offices in Spain, with projects
across Europe, South America, Africa,
the Middle East and Asia.
Tresca’s clients include investment
funds, large-scale industrials, chemical
& pharmaceutical companies, owner-
operators in the energy sector, oil & gas
companies, glass & ceramics companies,
cement & mining businesses, metallurgy
and steel manufacturers, hydrogen
producers and biotech companies.
Tresca’s services include feasibility
work, project development, financial
modelling, procurement management,
project management, balance of plant
engineering, site and construction
management, commissioning services
and a range of digital technology services
across the project lifecycle.
In recent years, Tresca has become one
of the main actors in terms of projects
associated with decarbonisation and
new energy technologies on the Iberian
Peninsula, based on its particular
expertise with designing and developing
plants that extract methane from
syngas to produce biomethane or RNG
or reform it into methanol. This focus
is especially relevant for EQTEC, whose
advanced syngas technology produces
an especially high-quality syngas that can
maximise the methane component from
a wide variety of feedstocks.
EQTEC and Tresca will collaborate
on opportunity generation, but more
specifically on qualification, development
and commissioning of advanced biofuels
plants that utilise EQTEC’s patented and
proprietary syngas technology.
14 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 15
Chief Executive’s report
of Belleli Group, an energy technology
project developer with extensive global
expertise in engineering, construction
and operations of large petrochemical
and power plants, with interests in
the LNG, RNG and green fuels sectors.
Second, Domi Ost Limited of Ireland
is an Irish development and project
management company dedicated to
bringing advanced biofuel production
to Ireland, other European markets and
the UK. Third, Tresca Energía S.A. of Spain
is an engineering group, infrastructure
developer and project manager with
a particular interest in applying EQTEC
technology to advanced biofuels
solutions. All three have one or more
specific projects in view that the
partner is developing and driving with
the intent of engaging EQTEC as core
technology provider.
EXECUTING THE PIVOT
In parallel with its R&D and innovation
work and with building the business,
the Company reduced its operational
expenditure by 20%, refinanced the
Group and the EQTEC Italia MDC and
maintained business continuity through
its pivot out of development-led
revenues to services- and equipment-led
revenues.
In addition to selling the Grande-Combe
project to Idex, EQTEC discontinued its
Billingham, UK project and took legal
action against Logik Developments
in the UK for unpaid fees and loan
repayments due for work on the Deeside,
UK project. In early 2024, it recovered
a small amount from monies paid by
the Company but unused by its grid
connection supplier at Billingham,
and on Deeside it expects to recover
£2 million (c. €2.35 million) from a
settlement with Logik Developments.
With this annual report, the Company
is applying impairments to a number
of its legacy projects including the
Billingham project, the North Fork
project in California, USA, the Southport
and Deeside projects in the UK.
Additionally, impairments are applied
to outstanding debts owed the
Company by MetalNRG and ewerGy
GmbH. These write-downs indicate
16 | EQTEC plc Annual Report 2023
The existing plant at Grande-Combe in Doubs, France will be retrofit with EQTEC technology.
FEED work is completed and construction work could commence as early as end 2024.
that even if the company continues to
pursue recovery of these monies,
it chooses to focus its management
effort on growing the business on the
basis of a stronger portfolio of work and
a transitioned approach toward its target
model of pure-play technology provider
and licensor.
The Company raised £3.5 million in
March 2023 to support its working
capital through transition and followed
up with two rounds of working capital
reductions to further support business
continuity. In Q4 2023, the Company
negotiated a financial restructuring with
its lenders, which included the provision
of a new syndicated facility of up to
a total of £3.0 million of financing for
the Company, with an initial, advance
of £950,000. In May 2024, the Company
also refinanced the historic secured debt
facilities with its main lenders, with a
new a 24-month bullet term loan, with
no fixed payments during the period.
The refinance evidences the increased
confidence from EQTEC secured lenders
in the business model of the Company
through the implementation of its
strategic pivot.
Additionally, the Company and its fellow
shareholders helped EQTEC Italia MDC
Srl secure a loan facility of €2.9 million
to refinance that business through its
first year of operation and into steady,
operational continuity. The facility has
a term of 48 months and is provided
by Banca del Fucino S.p.A. a historic
private banking group based in Rome.
The loan is guaranteed up to 80% by
MedioCredito Centrale S.p.A., which
is controlled by the Italian Ministry
of Economy.
Throughout 2023, the Company
refocused its engineering capabilities
on paid work with strong contracts
with companies able to pay their bills
on time and in full. The Company also
reviewed and updated its rate card for
engineering services and tested it with
current and prospective buyers, bringing
the Company’s rates more closely in line
with other innovation companies. The
updated rate card will help EQTEC deliver
healthier margins from its services work.
FIT FOR THE FUTURE
The target model set in 2021, followed
by the strategy developed in 2022
and the decisive decisions enacted in
2023 have reset the Company’s focus
and provided it a stronger platform
for future growth. Starting in Q4 2023
and continuing into 2024, we now
see several indications that the new
approach to business is working:
Revenues. Starting in Q4 2023 and
continuing through Q1 2024 and into
Q2 2024, we are delivering steady,
month-on-month revenues, out-
delivering what we forecast. We are
targeting specific services at specific,
client projects during specific stages
of their project lifecycles. If one client
project slows, we reprioritise and
shift our focus and resources toward
others. As we gradually allow our
list of client projects to grow again,
this risk of project dependency
will be further mitigated. We out-
delivered versus our forecasts for Q1
and Q2 2024 and we are forecasting
continued, strong, steady revenue
in H2 2024, also adding some
equipment sales, which deliver
significantly larger numbers.
Margins. Steady revenues from
services, equipment and eventually
licensing are the basis for profitability,
but only if we protect our margins.
Our reworked rate card for EQTEC
engineers acknowledges that ours
are not run-of-the-mill engineers
but process engineers trained and
capable with a unique and much
sought-after technology. Additionally,
we are continually reviewing our
operational expenditures and take a
zero-based approach to justifying any
and all spend. As we grow, we will
maintain this discipline and protect
our margins.
Chief Executive’s report
to deliver EQTEC technology to
their Industrial customers. In the
US, we have the interest of some
major players and will grow there
in due course and in a measured
way. In the meantime, we are
mitigating the risk of working
with small players by installing
high quality project management
and ensuring our contracts
protect EQTEC from holding any
liability on the project beyond
our direct scope and capability.
Clients and routes to market. We
said we would ‘pivot’ away from the
small, underequipped developers
and contractors and move toward
working with the biggest, the best
and the best funded. In Europe, we
are talking to at least half a dozen
of the leading Utilities, and we are
also working with a number of major
Industrial businesses with interest in
deploying our technology. We are
also talking with Utilities who want
EQTEC is now showing much
stronger signs than ever that it will
get to profitability without much
additional investment. Our longer-
term forecasts remain strong and
we intend to drive success through
our transitioned business model..
With these improvements, we see
EQTEC getting back to growth, now
on a solid and resilient base, from
which to build the global scalable
business our technology deserves.
Partner spotlight
Idex is a full-service owner-operator
and energy provider that develops,
designs, finances, builds and operates
local energy and carbon-free
infrastructures, which provide renewable
heat and local electricity supply to
buildings, cities & industry.
energy from local and low-carbon energy
resources (geothermal, solar, biomass,
waste), the distribution of this energy
through district heating and cooling
networks, to its final use in industrial,
residential and tertiary buildings and
other applications.
generation, EQTEC and Idex explored
opportunities for joint work on biomass
and non-recyclable waste conversion
into a range of solutions for sustainable,
combined heat and power (CHP),
renewable natural gas (RNG) and other
offtake applications.
Founded in France in 1963, now with over
6,300 employees and revenues of €2.3
billion in 2023, Idex is the only vertically
integrated market operator delivering
the complete value chain for local energy
provision. The Group is involved in the
production of thermal or electrical
EQTEC and Idex were acquainted in
2020, when they together explored
some of the largest and most complex of
the projects in EQTEC’s portfolio. In the
same year that the French government
made explicit its intent to move baseload
power completely away from coal-based
At present, the two partners are
collaborating on the Grande-Combe
project in eastern France, a project Idex
purchased from EQTEC in 2023 and for
which front-end engineering design
(FEED) was completed at the end of
that year.
EQTEC plc Annual Report 2023 | 17
EQTEC in focus
EQTEC R&D
at the University of Lorraine’s
LERMAB facility in Épinal, France
Yann Rogaume
Professor and Head of Research,
LERMAB, Université de Lorraine
The ERBE (Équipe de Recherche sur
la Biomasse Énergie) and LERMAB
(Laboratoire d’Études et de Recherche
sur le Matériau Bois) team and laboratory
form a research centre at the Université
de Lorraine built around EQTEC syngas
technologies.
syngas that can support methanation for
renewable natural gas (RNG), hydrogen
separation, Fischer-Tropsch (FT) gas-to-
liquid process for sustainable aviation
fuel (SAF) and other liquid fuels and even
transformation into chemicals such as
methanol or ethanol.
For the past 20 years, ERBE has worked
on thermochemical conversion of
biomass and waste-to-energy. The
work has led to the team’s developing
greater understanding of precise mass
and energy balances of a wide variety
of waste types, including forestry,
agricultural, industrial and municipal.
This growing understanding of the
performance of a wide variety of
feedstocks in thermochemical processes
has then been applied to optimisation
of processes for energy efficiency and
reduction of environmental impacts.
For the past 10 years, the team has
worked with EQTEC to co-develop
a gasification pilot plant based on
EQTEC’s bubbling fluidized bed
Advanced Gasification Technology and
especially, EQTEC’s air-blown gasification
capabilities for producing syngas for
traditional, combined heat and electric
power (CHP).
At the end of 2022, a wide range of
new opportunities for both EQTEC
and LERMAB was made possible with
upgrade of the facility for steam-oxygen
gasification, which supports advanced
syngas applications. Now, beyond
testing a wide range of waste feedstocks
for combined heat and power (CHP)
applications, we are able to also test for
Because the EQTEC installation at
LERMAB is an end-to-end plant at
small scale, rather than simply a test
facility for part of the process, it is the
ideal environment within which EQTEC
can both test customer feedstocks
and gasification processes as part of
plant design and innovate its own
technologies at speed.
Today, this partnership between
EQTEC and LERMAB allows both
parties to further test the gasification
of biomass and waste for different
uses. Its annual schedule of tests
and trials for EQTEC clients is always
full, and every test further refines
EQTEC’s and LERMAB’s capabilities
and builds its library and readiness
to accelerate designs for current
and future plants.
STEAM-OXYGEN GASIFICATION
TRIALS
One of the greatest challenges for
steam-oxygen gasification is efficient
distribution of oxygen across the
fluidised bed in the gasification reactor.
Historically, most trials of this approach
by a range of research institutes and
companies have failed to achieve this,
resulting in lower feedstock conversion
efficiency, a lower quality syngas
EQTEC in focus
The EQTEC R&D facility at LERMAB is in increasingly
active use, with air-blown gasification capabilities for CHP
applications and steam-oxygen gasification capabilities for
RNG, hydrogen, liquid fuel and other advanced applications.
Beyond testing a wide range of waste feedstocks
for combined heat and power (CHP) applications,
we are able to also test for EQTEC syngas that can
support methanation for renewable natural gas (RNG),
hydrogen separation, Fischer-Tropsch (FT) gas-to-liquid
process for sustainable aviation fuel (SAF) and other
liquid fuels and even transformation into chemicals
such as methanol or ethanol.
18 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 19
EQTEC in focus
EQTEC in focus
Partner spotlight
CT3 Ingeniería S.L. has worked closely
with EQTEC for over 10 years, leading the
mechanical engineering work for most of
the Company’s projects, past and present,
including at North Fork in California, USA,
Larissa in Thessalia, Greece, the EQTEC
Italia MDC in Tuscany, Italy and all of
EQTEC’s work in France.
With EQTEC leading the process
engineering at the core of EQTEC’s
solutions, CT3 provides world-class
design, development and construction
advisory services, including civil,
mechanical and electrical engineering
as well as Instrument & Control (I&C) and
electrical services, across an increasing
number of EQTEC-enabled plants.
Based in Madrid, Spain and operating
for nearly 35 years, CT3 employs
dozens of engineers deployed to EQTEC
and a range of other new energy
businesses, with the ability to scale
up rapidly based on its Europe-wide
database of engineering talent and
flexible contracting arrangements.
CT3 is increasingly a core part of
EQTEC’s platform for design, delivery
and future growth.
Marian Sarti
General Manager
Partner spotlight
Anar Asgarov
Chief Executive Officer
Compact GTL, with headquarters in
the UK, is one of the world’s leading,
small scale, modular gas-to-liquid (GTL)
companies. Since its inception in 2006,
CompactGTL has focused its technology
development and commercialisation
programme on the upstream oil & gas
sector but now sees a huge opportunity
to transition the company toward a focus
on biogenic feedstocks such as residual
biomass, refuse-derived fuels (RDF) and
municipal solid waste (MSW) that can
be turned into valuable and sustainable
liquid fuels.
CompactGTL has developed a unique,
patent protected and proven GTL process
utilising Fischer-Tropsch (FT) catalytic
conversion. The CompactGTL small-scale
technology has been proven to work for
conversion of gas into synthetic liquids at
the point of production. The technology
has powerful oil company endorsement
by Petrobras, who successfully
operated CompactGTL’s Commercial
Demonstration Plant for 3 years in Brazil.
EQTEC and CompactGTL established
a collaboration framework agreement
in 2022 and on the basis of business
development and pilot work undertaken
together under that agreement,
announced in January 2024 a new,
50/50 joint venture (JV) now known as
CompactWTL (for “waste-to-liquids”).
The CompactWTL JV will pursue
implementation of an integrated,
waste-to-liquid fuel solution based
on EQTEC syngas technology and
CompactGTL gas-to-liquid conversion
technology.
The partners intend that the JV become
an innovator and licensor of technology
for liquid fuels produced from waste,
including transport fuels such as
sustainable aviation fuel (SAF). The
JV’s immediate objective is formation
of a consortium of investors to fund a
commercial-scale, first-of-a-kind reference
plant that proves the viability of an
integrated technology solution.
The EQTEC R&D facility at LERMAB is not a typical
test facility, but a full, end-to-end process plant
and thus representative of commercial plant
capabilities, on a smaller scale.
and thus a lower production and/or
efficiency of hydrogen, methane or
other offtake.
The tests by EQTEC with ERBE have
been very successful, with strong
stability in fluidisation and gasification
temperature, which together indicate
highly efficient oxygen distribution and
feedstock conversion.
Critically, syngas analysis indicates a clear
increase in hydrogen concentration
relative to that for air-blown gasification.
The capability of EQTEC’s advanced
gasification technology to increase
hydrogen production in this way
indicates it is able to manipulate the
thermochemical conversion process
so as to maximise specific components
of the syngas for greater production of
advanced biofuels and chemicals.
These tests, analyses and data
generated support refinements to
EQTEC’s proprietary process design,
computational modelling and control
systems in the interest of supporting a
range of offtake applications.
AIR-BLOWN GASIFICATION
OF RDF TRIALS
EQTEC’s air-blown gasification process
technology follows similar, successful
tests with RDF completed by the
Company and ERBE in 2021, as well
as successful tests with contaminated
plastics completed in December 2021.
The specific RDF used for the tests was
provided by a prospective customer
of EQTEC technology. Throughout the
entirety of the air-blown gasification
testing period, EQTEC technology
Air-blown gasification supports
electrical power and thermal energy
applications, where the ratios of
hydrogen, methane and carbon
dioxide in the syngas is less critical
for the offtake application. The
LERMAB facility has had EQTEC air-
blown gasification capabilities since
its inception in 2015, and numerous
trials are undertaken every year
to validate and inform EQTEC’s
and LERMAB’s capabilities and
understanding.
Steam-oxygen gasification
supports chemical applications such
as hydrogen, renewable natural gas
(RNG) and other advanced biofuel
applications, where optimisation
of the hydrogen, methane and
carbon dioxide mix ratios is critical
for efficiency and productivity of
the offtake.
provided consistently strong conversion
results. The tests achieved their two
primary goals of establishing and
maintaining efficient gasification and
smoothing the RDF feeding-in system.
The analyses and results they produced
provide further validation of EQTEC’s
proprietary, kinetic simulation model
and support continuous improvement
of EQTEC’s patented and proprietary
process designs and control systems.
20 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 21
Corporate governance
statement
The Board of Directors is committed
to the highest standards of corporate
governance and has adopted the
principles outlined in the Quoted
Companies Alliance’s Corporate
Governance Code (the QCA Code).
Chairman Ian Pearson, in his capacity
as an independent director, has
ultimate accountability for application
of corporate governance standards
aligned to these principles, by the
Board and across the Group.
STRATEGY AND BUSINESS MODEL
The Company’s strategic intent is to
be the leading technology innovator
and licensing partner of syngas
solutions for production of renewable,
baseload energy and biofuels. The
Company’s business strategy focuses
on development of the market for
syngas solutions, positioning of EQTEC
as a leading innovator within it and
scale-up of the business through
replicable solution design, integration
and maintenance support for Industrials,
Utilities, Municipalities and remote
communities. Critical for success with
this strategy are: (1) establishment of
reference centres that demonstrate
EQTEC solutions in live, commercial-
scale plants; (2) partnership with the
best developers, builders and operators
of new energy infrastructure; and
(3) continuous improvement and
innovation of EQTEC core technology
and customer solutions.
EQTEC’s success with
waste-to-syngas
conversion was
established over a
decade ago. The
Company is focused now
on developing a range of
syngas-based solutions
with advanced biofuels
such as renewable natural
gas (RNG), hydrogen and
liquid fuels.
EQTEC’s syngas solutions target specific market segments for advanced waste-to-energy facilities
Industrial
Syngas to electron or molecule
Circular, industrial waste-to-value
On-premise or near-premise
Utility
Syngas to electron or molecule
Decarbonisation of estate
Future business models
Reference: Belišće, Croatia
Reference: Grande-Combe, France
Municipal
Syngas to electron or molecule
Municipal, mixed waste
Circular and local
Reference: (work in progress)
Agricultural
Biomass to syngas
Remote, autonomous
Circular and local
Reference: Gallina, Italy
Agrigas Energy S.A. plant nearly ready for commissioning in Larissa, Greece following remediation works in light of severe flooding in the area.
The Company generates income
through three revenue streams:
Services. This includes solution
design and engineering, cost
estimation, plant commissioning,
performance testing and operational
training & handover support to the
plant operations team.
Equipment Delivery. This includes
equipment specification, contract
manufacturing, quality assurance,
logistics handling, and on-site
inspection & construction advisory
during plant build.
Licencing and Support. This
includes provision of IP rights with
data-based monitoring, ongoing
training & support for operations,
extended maintenance support or
other live plant support.
Given that the Company has a growing
but relatively small number of plants
in operation, current revenues are
primarily from Services and, increasingly,
Equipment Delivery. As more plants
applying EQTEC technology come
online, the Company anticipates growing
revenues from Licensing and Support.
EQTEC technology is advanced
gasification technology. Gasification
has been well established for decades
in the fossil fuel industry for conversion
of homogenous fuel with high-calorific
value such as coal into a synthesis
gas (syngas) to be applied largely
in industrial process such as steel or
concrete manufacturing. However,
conversion of often heterogenous
biomass, industrial waste or municipal
waste into syngas has been a challenge
for aspiring companies in the waste
management and clean energy sectors.
EQTEC’s success with waste-to-syngas
conversion was established over a
decade ago. The Company is focused
now on developing a range of syngas-
based solutions with advanced biofuels
such as renewable natural gas (RNG),
hydrogen and liquid fuels, to add to its
existing solutions for electrical power
generation, thermal energy generation
and biochar production.
an Industrial customer might target
an on-premises facility, right-sized
to its forecast volumes of industrial
waste and able to generate
sufficient energy to power its
on-site production processes
a Utility customer might target
decarbonisation of an existing, legacy
power plant with augmentation of
that plant with an EQTEC syngas
solution that supports gradual
transition from the legacy to future
infrastructure
a Municipal client might see the
potential for eliminating transport
of municipal waste over distance,
by building a right-sized EQTEC
facility on the site of its local waste
management centre, to eliminate
waste locally and convert it into a
valuable source of energy for the
local community.
The Company’s solutions are defined by
the overall objectives for the plant under
development by a customer. Specifically,
this includes the size, location, local
community and the type of biomass or
waste conversion targeted. For example:
The Company recognises patterns
in requirements from customers and
seeks to establish a limited catalogue
of solutions that appeal across these
sectors and allow the Company to
scale its licensing business.
22 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 23
Corporate governance statement
Corporate governance statement
EQTEC’s technologies are in demand
from markets around the world and can
be applied equally well to Industrial,
Utility and other customers in any of
those geographies. On the other hand,
supply market differences and tariffs,
incentives and regulatory regimes make
some markets more attractive to the
Company than others. The Company
continues to review the changing
conditions across markets and to
prioritise the application of its limited
resources to the most attractive markets.
As the Company grows, it looks forward
to making its technologies available to
more customers in more markets.
In the near term, the Company is
focused on establishing credibility with
target customer segments through its
reference plants and with its growing,
reliable partner network. The Board
believes that near-term shareholder
value will be delivered through greater
market recognition and an increasing
market capitalisation as the Company
executes its business strategy.
EQTEC plc is quoted on the AIM market
of the London Stock Exchange (LSE),
bears the Green Economy Mark awarded
by the LSE, and trades as AIM:EQT.
STAKEHOLDER RESPONSIBILITIES
EQTEC’s technology and services have a
positive impact on societies, economies
and the environment. We strive to deliver
sustainable outcomes for businesses
and communities through use of our
technology, and to always deliver to the
highest environmental, regulatory and
business standards and practices.
Through transforming non-recyclable
wastes into clean syngas for application
to baseload energy and biofuels, we
reduce the need for less environmentally
friendly methods such as incineration
and landfill. As a result, EQTEC solutions
will contribute substantially to reduction
of greenhouse gas (GHG) emissions and
thus to meeting local and global Net
Zero targets. Because EQTEC’s solutions
support autonomous plants of small,
medium or large scale, we also support
localised power or biofuel production
in remote locations, thus supporting
EQTEC technology supports plants built where the waste is located, to minimise
transport. EQTEC’s clean technology supports environmentally sustainable
waste management and energy generation in the most remote locations.
the UK’s levelling-up agenda and
similar agendas for energy security
and independence.
In 2023, the Company successfully
achieved certification against
three groups of standards set by
the International Organisation for
Standardisation (ISO): ISO 9001 for
Quality Management, ISO 14001 for
Environmental Management and ISO
45001 for Occupational Health & Safety.
The Board recognises that the ongoing
and long-term success of the Group is
significantly influenced by the efforts
and commitment of the Group’s
employees, strategic partners (including
but not limited to those with expertise
in funding, technology, operational
delivery and go-to-market), contractors
and suppliers and on the Group’s
relationships with these and other
stakeholders including customers,
investors, industry associations, political
and media organisations, analysts,
communities, the wider public and the
regulators. The Board has put in place
a range of processes and systems to
ensure that there is close Board oversight
and contact with its key resources and
relationships.
CODE OF CONDUCT
The Group maintains and applies its
own Code of Conduct. In alignment
with the various legal and regulatory
frameworks governing companies in
the jurisdictions where the Company
operates, EQTEC recognises its ethical
and social responsibilities regarding
how it conducts business in any and all
markets. The EQTEC Code of Conduct is a
summary of EQTEC’s expectations for all
Group-related business conduct, which it
requires of its Group directors (executive
and non-executive), its permanent
employees, its contractors and
consultants, its joint venture directors &
employees and its partner organisations.
The Code of Conduct represents EQTEC’s
summary of its minimum expectations
for how its people and partners conduct
any EQTEC-related business in any
situation, in any part of the world. These
expectations are non-negotiable and
must be addressed by all EQTEC people
and partners. The code covers six areas
of business conduct: (1) health, safety
and environment; (2) discrimination
and harassment; (3) safeguarding and
company assets; (4) conflicts of interest;
(5) anti-bribery and corruption; and (6)
competition and trade control.
ENGAGING AND COMMUNICATING
WITH SHAREHOLDERS
The Board is committed to constructive
communication with its shareholders. In
line with the AIM Rules for Companies,
EQTEC publishes the most relevant news
for shareholders through the Regulatory
News Services (RNS) of the London Stock
Exchange. It does this in consultation
with its Nominated Advisor and other
advisors. The Company posts on social
media and its website provides direct
channels for communication with
the Company from a variety of
stakeholder groups.
From time to time, the leadership of the
Company joins video interview sessions
that are posted on the internet for access
by shareholders and other interested
stakeholders. These typically focus on
recent Company news but offer deeper
insights from EQTEC leadership into
the decisions of the business and
how these align to execution of the
Company’s strategy.
All shareholders are invited to attend
the Company’s Annual General Meeting
(AGM) where they have the opportunity
to pose questions directly to the
directors of the Company. Investors
also have access to current information
on the Company though its website,
www.eqtec.com.
CORPORATE RISK MANAGEMENT
Identification, management and
mitigation of risk is critical to the
Company’s achievement of its strategic
objectives. Corporate risk management
controls have been integrated by the
Board to support its assessment of
EQTEC’s exposure to risk and to drive
active mitigation, focused first on high
probability/high impact risks. In addition,
the Group has defined and implemented
EQTEC’s technologies
are in demand from
markets around the
world and can be
applied equally well
to Industrial, Utility
and other customers
in any of those
geographies.
a variety of policies across the Group to
proactively mitigate any risks associated
with bribery, share dealing and insider
trading legislation.
Given the current size of the organization
and close, day-to-day control exercised
by the executive directors, the Board
takes the view that an internal audit
function is not necessitated at this stage.
However, the Board will continue to
monitor the need for an internal audit
function and take steps should it be
necessary to do so.
The principal risks to achievement of the
Company’s strategic business objectives
are outlined below, together with
their potential impacts and mitigation
measures in place. The Board believes
these risks to be currently the most
significant with the potential to impact
delivery of the business strategy, financial
and operational performance and
ultimately, the Company’s reputation.
The Board reviews and updates its
risk register on a regular basis as part
of its commitment to effective risk
management.
24 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 25
Corporate governance statement
Corporate governance statement
Key areas for on-going risk management
KEY AREA
MITIGATION
Reliance on material counterparties
EQTEC has one or more specific roles in the value chain for
development, construction and operation of plants running its
technology. Successful completion of large-scale infrastructure
projects depends on a wide range of other players including
developers, funders, government agencies at all levels, EPC or other
Contractors, insurers, banks and a range of subcontractors. EQTEC’s
ability to commission and support plants running its technologies
is dependent therefore on these third parties as well as the owner-
operator clients behind them. Successive project failures due to
matters beyond EQTEC’s own control could materially impact
Company revenues and potentially limit our ability to trade.
One of the three pillars of EQTEC’s business strategy is the
establishment and maintenance of strong partnerships with the
world’s most reliable and respectable funding, development, EPC,
operations and technology partners. Avoiding less experienced
partners with limited track record will significantly reduce the
chances of project failure and ensure that EQTEC’s technology can be
commissioned for the long-term operational and financial success of
the plant. EQTEC vets its prospective partners and favours credit-rated
partners with strong internal capability and reliable supply chains.
Additionally, EQTEC contracts for a very clear scope of supply with
guarantees focused on variables within its direct control.
Attracting and retaining talent
The paradox of being a small and early-stage business is that
the Company requires highly experienced, autonomous and
entrepreneurial directors and staff even more than it requires
younger talent. Despite such experienced leaders being few and
highly sought after, the Company must compete with larger, better
funded companies for them. Failure to attract the right leaders or to
maintain the right balance between capable leaders and talented
staff could impact the Company’s ability to achieve its strategic
objectives in good time. As we continue to grow and diversify into
new areas, this risk will continue to be a focus for the RemCo and
Board of Directors.
The Company targets upper-quartile candidates for directors and
engineers and upper-half candidates for business development
and other non-engineering roles. Remuneration is aligned to this,
and includes base pay, performance bonus (currently paused) and
incentives for employees to own the business (currently being
redefined). The Board of Directors seeks to engender a culture of
supported leadership, which includes a high degree of autonomy
for self-motivating performers, with team collaboration and backup
from highly capable leaders in key management roles. The Company
benchmarks its remuneration and employment policies with others
in the market.
Attracting and retaining skilled people
Attracting and retaining the best skilled people at all levels of the
business is critical. This is particularly the case in ensuring we have
access to a diverse range of views and experience, and in attracting
specific expertise at both managerial and operational levels where
the market may be highly competitive. Failure to attract new talent,
or to develop and retain our existing employees, could impact our
ability to achieve our strategic growth objectives. As we continue to
grow and diversify into new areas, this risk will continue to be a focus
for the Board.
Political and regulatory risk
Our business model has created a pipeline of opportunities for staff
at every level of the business. This will continue to be the case as
the Group develops. Our focus on competency at all levels of the
business continues to ensure that we develop our people and enable
them to successfully manage the changing profile of our business.
A robust performance management framework coupled with a
balanced incentive programme allows the business to mitigate this
risk ensures that key individuals are retained.
EQTEC’s technology is by its nature generally geography-agnostic.
That creates a broad scope for application to a range of waste
and energy needs in a wide range of markets. However, as the
world transitions from traditional waste management and energy
generation approaches, some regulatory environments provide
greater incentives for investment and implementation of new energy
infrastructure solutions including EQTEC’s solutions. At the same time,
regulatory terms and conditions are changing rapidly, both in favour
of and sometimes against the progress of new energy infrastructure
including EQTEC. Ultimately, the risk of regulatory support or
difficulty is held not by the Company but by the client that owns the
project. However, the knock-on impact is that EQTEC may commit
significant work to progress the project, only to find that the project
is unable to proceed.
The Company selects its target markets and target clients based
upon the stability and policy direction apparent in the regulatory
market where they operate and/or where they intend to implement
a project with EQTEC technology. The Company also finds itself
focusing increasingly on market environments where public and/
or private funding is increasingly inclined or specifically allocated for
investments in new energy infrastructure. The Company mitigates
the risks of delay, disruption or abandonment of client projects by
increasing its pipeline of projects and allocating resource to those
moving forward, as it awaits further progress from clients on slower-
moving projects. The Company anticipates that its portfolio will grow
as demand increases, but also as such risks are seen to increase. The
Company employs local expertise for local client relationships and to
drive and monitor progress.
KEY AREA
Reputational risk
MITIGATION
Especially as a small company with an as-of-yet underdeveloped
brand recognition, every deployment of EQTEC capability and
technology is risky in terms of establishing EQTEC’s reputation for
quality of delivery, sustainable operation and commercial success.
Association with a badly managed or slow-moving project, even
if such issues have nothing to do with EQTEC’s performance, will
inevitably reflect on EQTEC’s market reputation. This in turn could
turn away potential clients, investors, employees, suppliers or other
key stakeholders. Additionally, issues within the Company’s own
control related to financial control, statutory compliance or other
such obligations would call into question the good intentions of the
Board of Directors, even if such matters were simply mishandled by
the management of the business.
For matters directly within the control of the Company, strong
corporate governance, policies and procedures are in place,
communicated to all staff and continuously improved to maximise
the Board of Directors’ visibility and direct control of critical decisions
and toward best business outcomes for the Company and its
stakeholders. With regard to reputational risk undertaken by the
business through engagement with clients and others in projects, the
Company has invested in stringent contracts that minimise the scope
of risk taken on by the Company and maximise its ability to withdraw
from projects it views as highly risky, even after the contract has been
executed. Additionally, the Company has focused its engagement
on a small number of key clients, suppliers and partners so that it
can deepen relationships and broaden the range of projects the
Company undertakes with others aligned to its approach to business.
Funding of the business
The Company’s strong intent is to become a revenue-funded
business as soon as possible. Until revenues are sufficient to fund
the Company’s working capital including payroll, fixed costs and
essential suppliers, the Company must generate a mix of debt
financing and equity investment to support its ambition to become
a sustainable, growth business. Capital markets, particularly for
small-cap companies tightened in early 2022 and although they
are now starting to look again at small-cap, market sentiment
toward renewable energy stocks is not as strong as in recent years.
The Company faces hardship in raising capital in the market until
its market position and/or market sentiment returns for small-cap
renewable stocks.
The Company has pursued both debt and equity solutions from
known and/or reliable small-cap investors for tactical, short-
term funding. In addition, the Company is pursuing one or more
strategic investors able to take a longer-term view of the Company’s
potential and to support it through the coming months and years
of potentially low-return growth. The Company in 2023 did a full
review of its cost base and significantly reduced its working capital
requirements. We oversee and monitor financial performance and
cash conversion rigorously, at leadership level. This includes daily
monitoring of bank balances, weekly cash review, and maximum
monthly financial performance and balance sheet reviews.
EQTEC’s David Le Saint [left] joins Idex CEO
Benjamin Fremaux, Limoges Métropole’s
Guillaume Guérin and others at an event
celebrating efforts to install an EQTEC-
enabled plant in the area.
26 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 27
Corporate governance statement
Corporate governance statement
GOVERNANCE STRUCTURES AND
PROCESSES
Authority for all aspects of the Group’s
activities rests with the Board. The
respective responsibilities of the
Chairman and Chief Executive Officer
arise as a consequence of delegation by
the Board. The Board has adopted two
statements; the first sets out matters
reserved for the Board and the second
establishes the policy on delegation of
authority. The Chairman is responsible
for the effectiveness of the Board, while
management of the Group’s business
and primary contact with shareholders
has been delegated by the Board to the
Chief Executive Officer.
DIRECTOR EMPLOYMENT AND
SHARE OWNERSHIP
Director employment and remuneration
are governed by the Remuneration
Committee and the standards agreed
and decisions taken by the RemCo are
handed over to Executive Directors for
implementation.
Executive Directors are employed under
service contracts specifying three to six
months’ notice of intention to resign.
Non-Executive Directors including
the Chairman are contracted through
appointment letters that are terminable
by three months’ notice. Directors’
emoluments, including Directors’
interests in share options over the
Group’s share capital, are set out in the
Annual Report.
The Board encourages the ownership
of shares in the Company by Executive
and Non-Executive Directors alike and in
normal circumstances does not expect
Directors to undertake dealings of a
short-term nature. The Board considers
ownership of Company shares by Non-
Executive Directors to be a positive
alignment of personal interest with
shareholder interest. The Board will
periodically review the shareholdings
of the independent, Non-Executive
Directors and will seek guidance
from its advisors if, at any time, it is
concerned that the shareholding of any
independent Non-Executive Director
may, or could appear to, conflict with
their duties as independent, Non-
Executive Director of the Company.
NON-EXECUTIVE DIRECTORS
The Board has adopted guidelines for
the appointment of Non-Executive
Directors. These provide for the orderly
and constructive succession and rotation
of the Chairman and Non-Executive
Directors insofar as both are appointed
for an initial term of three years and
Partner spotlight
Giampiero Servetti
President
CosMi provides Engineering,
Procurement and Construction (EPC)
services and project management
services for renewable energy plants.
It employs professionals from the
engineering sector with decades of
developed experience in industries
including steel, petrochemical and
renewable energy.
Within its portfolio of projects, CosMi
designs and provides construction
resources, piping made by expert
technicians and specialised welders
and assembly of metal structures for
industrial production lines, waste-to-
energy plants and industrial warehouses.
It also provides industrial, engineering
and mechanical maintenance so that
clients like EQTEC receive improved
performance and better plant usage
rate from their projects.
EQTEC and CosMi have worked
together for nearly a decade on a wide
range of projects where high-quality
fabrication, installation and other
construction and maintenance services
are required. This includes collaboration
at the EQTEC Italia MDC in Tuscany, Italy
and all of EQTEC’s projects in France.
28 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 29
Visitors to the EQTEC Italia MDC reference plant
in Tuscany, Italy in May 2024, examining the
EQTEC gasification reactor from above.
Corporate governance statement
may, at the Board’s discretion and best
interests of the Company, be appointed
for subsequent terms. The Chairman may
serve as a Non-Executive Director before
commencing a first term as Chairman.
In accordance with the Companies Act
2014 of Ireland, the Board complies with
the following duties:
Promoting the success of the
company and acting in good faith
in the interests of the company;
Exercising independent judgment;
Exercising reasonable care, skill
and diligence;
Acting honestly and responsibly in
relation to the conduct of the affairs
of the company;
his or her powers only for the
purposes allowed by law;
Not using the company’s property,
information or opportunities for his
or her own or anyone else’s benefit
(except in specific cases outlined in
the aforementioned Acts);
Avoiding conflicts of interest, for
example between the director’s
duties to the company and the
director’s other (including personal)
interests unless the director is
released from his or her duty to the
company in relation to the matter
concerned, whether in accordance
with provisions of the company’s
constitution in that behalf or by a
resolution of it in general meeting;
Acting in accordance with the
Exercising the care, skill and diligence
company’s constitution and exercise
which would be exercised in the
same circumstances by a reasonable
person having both the knowledge
and experience that may reasonably
be expected of a person in the same
position as the director and the
knowledge and experience which
the director has;
Exercising regard to the interests of
its employees in general and to the
interests of its members;
Not accepting benefits from third
parties; and
Declaring interest in proposed
transaction or arrangement.
Additionally, the Board and its individual
members comply with EQTEC’s
obligations as a publicly traded entity on
the London Stock Exchange Alternative
Investment Market (AIM), addressing all
of the AIM Rules for Companies.
Partner spotlight
Marko Slunjski
Managing Director
SenseESCO is a Croatia-based project
development company founded in 2014
by Marko Slunjski, with financial and
technical partners from Croatia, Germany
and USA. With headquarters in Zagreb,
the SenseESCO team researches, designs,
finances, implements, operates and
maintains energy efficiency, renewable
energy and biomass waste-to-energy
projects in Southeast Europe.
SenseESCO implements energy efficiency
projects. It positions itself in the lead
coordination role, to interconnect
all requirements, commitments and
activities of energy efficiency projects,
including engineering and consulting,
financing, equipment manufacturers
and works contractors and energy
supply. The company leads planning,
implementation and financing of energy
efficiency projects, bringing capabilities
and local connections to the partnership
with EQTEC.
EQTEC and SenseESCO have worked
together since 2015, identifying and
qualifying opportunities in Croatia and
elsewhere. More recently, SenseESCO has
been instrumental in preparing for and
ramping up operational capability and
commercial management at the EQTEC
Italia MDC in Tuscany. This showcase plant
is important for prospective investors
looking at SenseESCO and EQTEC
opportunities in Croatia and beyond.
The partners continue to pursue
opportunities at Belišće and Karlovaç
in Croatia, with at least two other
prospective opportunities foreseen.
Corporate governance statement
COMPANY SECRETARY
The CFO acts as Company Secretary.
The Board is in the process of recruiting
a CFO and in the interim has employed
a specialist company to act as
Company Secretary.
access to the Group’s external auditor
and the Company’s external auditor
attends the Audit Committee to
present its findings on the audit and to
maintain a direct line of communication
with the Directors.
AUDIT COMMITTEE
The Audit Committee is led by Tom
Quigley (Committee Chairman) and
includes Ian Pearson (Company
Chairman). Meetings are joined by
the CFO as the Director in charge of
Company financial management, with
other Directors joining as appropriate.
Typically, the Audit Committee meets
at commencement of the annual audit,
and then again toward conclusion of
the audit, to approve the Annual Report.
It meets again at the start of the second
half of the year, to review Interim Results.
It may also meet to review the suitability
and effectiveness of internal control
processes, accounting policies and
material accounting judgments.
The Audit Committee has unrestricted
REMUNERATION COMMITTEE
The Remuneration Committee includes
Ian Pearson (Company Chairman) and
Tom Quigley (Non-Executive Director).
The Remuneration Committee reviews
the performance of the Executive
Directors and makes recommendations
to the Board on matters relating
to Director terms of service and
remuneration, including the granting
of equity incentives pursuant to any
incentive plans in operation from time
to time. The Remuneration Committee
generally meets twice a year—once at
the start to review performance over the
previous year and consider performance-
related pay and once toward the end of
the year to review remuneration terms,
policies and improvements to them.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
2023
Total meetings held
Ian Pearson
David Palumbo
Yoel Alemán Méndez
Jeffrey Vander Linden
Thomas Quigley
Nauman Babar (resigned)
BOARD OF
DIRECTORS
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
15
13
15
7
12
11
12
2
2
–
–
–
2
2
2
2
2
–
2
2
–
The Company’s external auditor attends the Audit Committee to present its findings
on the audit and to provide a direct line of communication with the Directors.
IAN PEARSON
Chairman
27 June 2024
30 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 31
EQTEC in focus
EQTEC Italia MDC
EQTEC’s first co-owned reference plant
that demonstrates the high quality of
EQTEC-produced syngas
FEEDSTOCK
At present, the plant uses feedstock
that is relatively homogenous, to
produce heat, power and biochar.
The primary point of demonstration
for the plant is the high-quality syngas
produced through EQTEC’s patented
and proprietary gasification process,
which offers a productive yield of
electricity, heat and biochar at high
efficiency. The plant has already
shown savings in feedstock input
required versus output yield and
this is expected to improve even
further as the plant moves toward
sustainable operations.
With EQTEC technology at its core,
the plant is capable of converting
multiple types of biomass feedstock
into electrical power, thermal energy
and biochar. At present, the plant is
converting high-density wood chips
into electrical power for export to
the national grid, for which a
connection has been secured with
a preferential tariff.
EQTEC Italia MDC Srl is a company
registered in Italy for the purpose of
transforming agricultural and forestry
waste into electrical power and biochar
in a relatively remote and heavily
agrarian community.
EQTEC Italia MDC owns and operates
a 1 MWe plant in Gallina, a village near
Castiglione d’Orcia in Tuscany’s Val
d’Orcia, an area considered to be one
of the region’s most scenic. It is on a
site originally owned by Toscana Cereali
Societa’ Cooperativa Agricola and that
was previously used for grain and cereals.
EQTEC’s modular approach to design of
the gasification plant was thus brought
to bear when building its facility inside
a pre-existing structure.
The original plant was commissioned by
EQTEC in 2015 but was decommissioned
soon thereafter by its owner at the
time, which went into liquidation for
reasons unrelated to the plant. The
Company reacquired the facility in 2021
and brought in other shareholders
who together invested in upgrading
and recommissioning the plant. The
Company currently owns 49% of
EQTEC Italia MDC.
EQTEC Italia MDC is a reference plant
for the Company and the first in which
it has an ownership stake and the right
to use it freely for showcasing EQTEC’s
technology. Since early 2023, the
Company has taken a number of visitors
to the site, including some of Europe’s
largest Utility companies. The purpose
of the plant is to demonstrate what
many visitors note as a first for them:
seeing a commercial-scale gasification
plant in operation.
32 | EQTEC plc Annual Report 2023
EQTEC in focus
With EQTEC technology at its core, the
plant is capable of converting multiple
types of biomass feedstock into electrical
power, thermal energy and biochar.
EQTEC Italia MDC Operations Team, with visiting EQTEC
Group managers on site in Castiglione d’Orcia, Tuscany.
Front entry of the EQTEC Italia MDC, with the silo in front, which holds a full day’s supply of feedstock.
EQTEC plc Annual Report 2023 | 33
EQTEC in focus
EQTEC in focus
The plant is also able to support
lower-density feedstocks such as
straw or other agricultural waste. This
ability to switch amongst feedstock
types and suppliers adds resilience to
EQTEC Italia MDC’s business model.
About EQTEC reference plants
EQTEC Italia MDC is not the first
commercial-scale plant to apply
EQTEC’s technology, but it is the first
plant in which the Company can freely
showcase its technology and try out
new approaches or solutions that will
improve the functioning of the plant
and be replicable to other facilities in
the future.
At present, EQTEC has at least three
other such reference plants in mind:
a plant to demonstrate EQTEC’s
capabilities with mixed feedstocks;
a plant to demonstrate a circular
approach to industrial waste; and
a plant to demonstrate EQTEC’s
capabilities with advanced fuel
offtakes such as renewable natural
gas (RNG), hydrogen or liquid fuels.
In Doubs, France, the Company in
2023 sold its Grande-Combe project to
France infrastructure owner-operator
Idex. The project will retrofit a purpose-
built but failed gasification plant,
replacing it with EQTEC technology.
The upgraded plant will transform
mixed feedstock of wood, demolition
wood waste and refuse-derived fuel
(RDF) into 6.5 MWe for sale to the
national grid. With the sale to Idex,
EQTEC has agreed for the use of the
facility as a reference plant for the
Company.
In Belišće, Croatia, the Company is
in the process of securing additional
equity and/or debt funding to
recommission an existing plant that
still contains EQTEC technology.
Originally commissioned in 2016,
the plant was shut down with the
insolvency of the same company
that previously owned the EQTEC
Italia MDC. Once upgraded and
recommissioned, the Croatia plant will
convert paper pulp, paper waste and
plastics from a nearby paper mill into
1.5 MWe electricity and potentially
biochar. The electricity is expected
to be returned in circular fashion
to the paper mill to run its industrial
processes. The biochar would be sold
on the market.
Finally, the Company envisions a fourth
reference plant to demonstrate its
capabilities producing a syngas that
can be further refined to produce
RNG, hydrogen, liquid fuels or
other chemicals. As one example
of the potential, the Company
announced in January 2024 a
joint venture with gas-to-liquids
technology company CompactGTL for
development of an integrated, waste-
to-liquid fuel solution that would
convert EQTEC syngas into liquid fuel
such as sustainable aviation fuel (SAF).
The partners are starting with pilot
work at the Company’s R&D facility at
the University of Lorraine in France but
are also raising funding for a reference
plant that would apply the solution at
commercial scale.
EQTEC plc Annual Report 2023 | 35
The gas engine meter indicates electricity
production at 902kW, approaching the full capacity
of the plant.
Four external hoppers capture approximately
five days’ worth of biochar output by the thermal
cracking reactor inside the plant.
The countryside surrounding the plant is Tuscany’s
Val d’Orcia, an area of scenic beauty that the EQTEC
Italia MDC will help maintain with clean energy
production.
An internal conveyor transport feeds the hopper from
the day silo, for feeding into the gasification reactor.
The plant is also able to support lower-
density feedstocks such as straw or other
agricultural waste. This ability to switch
amongst feedstock types and suppliers
adds resilience to EQTEC Italia MDC’s
business model. As the plant operation
matures, it will pursue permitting for
transformation of demolition wood
or other waste wood, for which it
expects to achieve further incentives.
The technology is flexible enough to
accommodate a reasonable range of
such feedstocks.
OFFTAKE
Electrical power of up to 1 MWe is
generated by a Jenbacher gas engine,
which utilises as fuel the syngas
produced by the EQTEC gasification
process. Because of its high quality, the
EQTEC-produced syngas can be injected
directly into the gas engine without
going through a boiler. Results from the
plant’s chromatograph regularly attest
to the high quality of the plant’s syngas,
which contains only trace amounts of
any hydrocarbons or other pollutants
and a high proportion of hydrogen.
34 | EQTEC plc Annual Report 2023
In addition to the electricity, the plant
is producing biochar for potential sale
on the emerging market in Italy and
across Europe. Thermal energy produced
through the continuous EQTEC
thermochemical conversion process
is being recycled to dry the feedstock,
further improving the plant’s waste-to-
energy conversion efficiency.
most of 2023 mobilising a capable
and sustainable operations team. By
December 2023, the team included
11 operators, including an Operations
Manager, all of whom live within 15 km
of the plant and are thus local hires.
The Company has also deployed a
consultant Operations Director to
support the team.
The Company is exploring options for
sale of biochar, including its potential
certification for agricultural use, which
would command a higher premium.
It is also exploring the potential sale
of carbon credits associated with the
sale of biochar. At the same time, it is
investigating the option of selling
some of its heat output to
neighbouring companies.
IN PURSUIT OF CONTINUOUS
OPERATIONS
Although the plant went into live
operation in March 2023 and has
successfully exported electricity to the
national grid, also producing dozens of
tonnes of biochar, the company spent
With this capable and dedicated
team in place, the plant has in early
2024 undergone successive rounds
of operational uptime, followed by
maintenance and improvements to
repair and refine operation toward
continuous operations.
The Company expects the plant to
achieve continuous operations in 2024.
In the meantime, it continues bringing
prospective customers to the site who
have an interest in the gasification
technology in a live environment.
Such visits have already resulted
in new contracts and revenues for
the Company.
Directors’
report
The Directors present their
annual report and the audited
financial statements of the
Company and its subsidiaries,
collectively known as ‘the
Group’ for the financial year
ended 31 December 2023.
PRINCIPAL ACTIVITIES,
BUSINESS REVIEW AND FUTURE
DEVELOPMENTS
EQTEC is a technology provider to
clients in the Utility, Industrial and Waste
Management sectors with its own,
proprietary and patented technology
for clean production of synthesis gas
(syngas), a fossil fuel alternative that will
increasingly contribute to production
of the world’s baseload energy and
biofuels. Syngas plants utilising EQTEC
technology are fuelled by waste from
industrial, municipal, agricultural, forestry
and other sources. Syngas can be
used either as a direct replacement for
natural gas or as an intermediate fuel
for generation of a range of final fuels
including hydrogen, renewable natural
gas (RNG), liquid biofuels, thermal
energy, electrical power and chemicals
such as methanol or ethanol.
EQTEC designs, develops and supplies
core technology to syngas production
plants in Europe and the USA, with
highly efficient equipment that is
modular and scalable from 1MW to
30MW and beyond. EQTEC’s versatile
solutions convert at least 60 types of
feedstock, including biomass wastes,
industrial wastes and municipal solid
waste, with no hazardous or toxic
emissions.
EQTEC’s revenues come from: (1)
engineering services including design,
specification, advisory and plant
commissioning work; (2) sales of
equipment manufactured according
to EQTEC specifications; and (3)
maintenance and operations support
services for commissioned plants.
In general, EQTEC does not own or
operate its own plants, except for a
small number of showcase facilities,
where the Company might hold
equity and an interest in plant
operations and maintenance.
Directors’ report
data-based services over the lifetime of
each plant.
The Company is quoted on the London
Stock Exchange’s Alternative Investment
Market (AIM:EQT) and the London
Stock Exchange has awarded EQTEC
the Green Economy Mark, which
recognises listed companies with
50% or more of revenues from
environmental/green solutions.
DIRECTORS
The following Directors held office
during the financial year and to the
date of this report: Ian Pearson (Non-
executive Chairman); David Palumbo
(Chief Executive Officer); Yoel Alemán
Méndez (Chief Technology Officer);
Jeffrey Vander Linden (Chief Operating
Officer); and Thomas Quigley (Non-
executive Director).
In addition, the following Director
held office during the financial year
until 16 November 2023: Nauman
Babar (Chief Financial Officer and
Company Secretary).
RESEARCH AND DEVELOPMENT
The Group is fully committed to ongoing
technological innovation in all sectors
of its business. Revenues from client-
focused R&D and testing totalled
€119,325 in 2023 and EQTEC investment
in non-client-facing R&D totalled €Nil
in 2023 (2022: €12,170) as disclosed in
Note 14 to the Financial Statements.
PRINCIPAL RISKS AND
UNCERTAINTIES
Risk assessment and evaluation are
essential parts of the Group’s internal
controls. Information about financial risk
management objectives and policies of
the Group, along with exposure of the
Group to credit risk, liquidity risk and
market risk, is disclosed in Note 5 to the
financial statements.
36 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 37
CTO Yoel Alemán Méndez measures equipment
installed on site to support construction contractors
with a bespoke connection solution.
In future, EQTEC intends to augment
its services and equipment revenues
with recurring revenues from licensing
of its technology to syngas plant
owners, providing value-added services
including maintenance, upgrades and
Corporate risks and mitigations specific
to the Group are outlined in its Corporate
Governance Statement in this document
and available also on the Company’s
website. These are reviewed and updated
regularly to accommodate changes in
Directors’ report
the Group’s market context as well as the
Board’s view on priorities and responses
to the changing context.
Additionally, the Group is exposed to a
number of generic risks faced by many
companies in infrastructure, technology,
renewables and other related sectors.
These are outlined below.
Dynamic market environment
Group operations and execution of our
business plans are subject to the effects
of global competition and geopolitical
risk. They are also impacted by local
economic conditions such as interest
rates, inflation, recession, currency
volatility, currency controls and actual
or anticipated default on sovereign
debt. Political changes and trends such
as populism, economic nationalism
and sentiment toward multinational
companies and resulting changes to
trade, tax or other laws and policies
may be disruptive, and can interfere
with our global operating model, our
supply chain, our customers and all of
our activities in a particular location.
While some global economic and
political risks can be hedged using
derivatives or other financial instruments
and some are insurable, such attempts
to mitigate these risks are costly and not
always successful.
Intellectual property risks
EQTEC owns a number of patents and
reserves its rights with regard to these
and other proprietary technology
including its kinetic process modelling
capabilities and its process control
systems. We continually review both the
scope and geographic applicability of
our intellectual property (IP). Although
the Group makes reasonable endeavours
to protect its IP, our patents and rights
over our own proprietary capabilities
do not necessarily prevent competitors
from independently developing or
selling products and services similar to or
duplicative of our own, and there can be
no assurance that the resources invested
by us to protect our IP will be sufficient
to address these matters. The Directors
believe that the strongest protection of
the Company’s IP is in building its brand
as a reliable and consistent provider
of uniquely innovative technology,
deploying that technology into as many
38 | EQTEC plc Annual Report 2023
plants in as many places as possible. If
we are unable to protect our IP, the value
of our brand and other intangible assets
may be diminished, and our business
may be adversely affected. In addition
to the IP and patents relating to our
technology process, we possess a wide-
ranging level and breadth of proprietary
know-how that drives our proven
operational capabilities and excellence.
Operational risks
Operational risks arise from people,
processes, systems or external factors
that could adversely impact the
otherwise smooth, efficient and
agile operation of our businesses.
Such risks include innovation, R&D,
project development, project delivery,
plant operations and maintenance,
quality management, information
management & data security,
marketing & communications
and/or people management.
We innovate, deploy and integrate highly
sophisticated solutions and provide
specialised services based on leading
edge technologies, including know-
how, hardware and software. Many of
our solutions involve complex industrial
machinery and plant infrastructure such
that the impact of a product failure or
similar event could be catastrophic. While
we apply quality assurance, inspection
and operations & maintenance processes
to ensure that our solutions operate
as designed, there can be no perfect
assurance that the Group, our customers
or other third parties will not experience
operational process failures or other
problems that could result in product,
safety, regulatory or environmental
risks. Even where crisis management
or business continuity plans exist,
operational failures or quality issues
resulting from organisational changes,
attrition or labour relations could have a
material, adverse effect on our business,
reputation and/or financial position.
In specific instances, the Group invests
capital in developing go-to-market
entities (such as wholly-owned
subsidiaries, majority-owned joint
ventures or associate undertakings)
toward growing and pursuing pipelines
of projects. The Group’s business model
relies on funding of projects by third
parties, the timing of which is subject
to a range of uncertainties often not
in the Group’s control. The timing of
funds generated from projects can be
difficult to predict and could adversely
affect the Group’s results.
Supply chain
Significant raw material shortages,
supplier capacity constraints, supplier
production disruptions, supplier
quality and sourcing issues or price
increases could increase our costs
of goods sold and adversely impact
the competitive positions of our
products. Our reliance on third-party
suppliers, contract manufacturers and
service providers, and commodity
markets to secure raw materials,
parts, components and sub-systems
used in our products exposes us to
volatility in the prices and availability
of these materials, parts, components,
systems and services. Any disruption
in deliveries from third-party suppliers,
contract manufacturers or service
providers, capacity constraints,
production disruptions, price increases,
or decreased availability of raw
materials or commodities, including as
a result of catastrophic events, could
have an adverse effect on our ability to
meet our commitments to customers
and/or increase our operating costs.
Quality, capability and sourcing issues
experienced by third-party providers
can also adversely affect our costs,
margin rates and the quality and
effectiveness of our products and
services and result in liability and
reputational harm.
Liquidity
The cash requirements of the Group
are forecast by the Board annually
in advance and reviewed monthly
by management. The cash forecast
includes assumptions with respect
to working capital, development
spend and the timing of planning
Revenue
2023
€2.5M
FY 2022: €8.0 million
FY 2021: €9.2 million
Aerial view of site in Hawaii,
USA designated by Simonpietri
Enterprises for development of an
EQTEC-enabled syngas plant.
Directors’ report
consents and financial close of projects.
Significant delays in these expected
timings may lead to a requirement for
additional cash and impinge on the
Company’s status as a going concern.
IMPORTANT EVENTS SINCE THE
YEAR-END
Details of occurrence of events since
31 December 2023 with an impact on
the Group are included in Note 37 to
the Financial Statements. Aside from
those disclosed in Note 37, no other
adjusting or significant events have
occurred between the 31 December
reporting date and the date of
authorisation.
GOING CONCERN
The financial statements have been
prepared on a going concern basis.
The Group and Company’s business
activities, together with the factors
likely to affect its future development,
performance and position, are set out
in the Chairman’s Statement and Chief
Executive’s Report. The principal risks
and uncertainties are set out above.
Management maintain a rolling,
12-month forecast for the business, and
have produced forecasts for the period
up to December 2025 and for the
period January 2026 – December 2028,
taking account of reasonably plausible
changes in trading performance
and market conditions, which have
been reviewed by the Directors. The
forecasts demonstrate that the Group
and Company are forecast to generate
cash in 2024/25 and that the Group
and Company have sufficient reserves
to enable the Group and Company
to meet their obligations as they fall
due for a period of at least 12 months
from the date at which the financial
statements have been signed.
After undertaking the assessments
and considering the uncertainties
set out above, the Directors share
a reasonable expectation that the
Group and Company have adequate
resources to continue to operate for
the foreseeable future and for these
reasons they continue to adopt the
going concern basis in preparing the
financial statements.
EQTEC plc Annual Report 2023 | 39
Directors’ report
RESULTS AND DIVIDENDS
The results for the financial year are set out on page 57. No dividends have been
proposed by the Directors in the current financial year (2022: €Nil). It is the Directors’
view that revenue growth and profitability are immediate priorities and that
profits should be reinvested in further growth, creating shareholder value through
appreciation of the share price.
SHARE CONSOLIDATION
Pursuant to the Capital Reorganisation and Share Consolidation announced on
20 November 2023 and approved at an Extraordinary General Meeting (EGM) on
18 December 2023, the Company’s previous 14,783,204,492 ordinary shares of €0.001
each were consolidated into 147,832,044 ordinary shares of €0.01 each in issue. As of
31 December 2023, the Company had 181,485,890 ordinary shares in circulation.
DIRECTORS’ INTERESTS IN SHARES
Following the share consolidation, Directors of EQTEC plc who held office at any point
in 2023 held the following ordinary shares of the Company (of €0.01 each) at the end
of 2023, versus ordinary shares (of €0.001 each) at the end of 2022:
DIRECTOR
ROLE/S
Ian Pearson
Chairman
David Palumbo
CEO
Jeffrey Vander Linden
COO
ORDINARY SHARES HELD
AT 31 DECEMBER 2023
AT 31 DECEMBER 2022
72,043
731,320
282,347
7,204,300
60,809,627
21,560,914
Yoel Alemán Méndez
CTO
2,007,920
185,791,970
Thomas Quigley
Director
Nauman Babar
(resigned)
CFO and Company
Secretary
547,510
10,000
54,751,035
1,000,000
DIRECTORS’ INTERESTS IN SHARE OPTIONS AND WARRANTS
Following the 1:100 share consolidation at the end of 2023, Directors of EQTEC plc
who held office at any point in 2023 had interests in the following share options
and/or warrants toward Company shares (versus pre-consolidation entitlements at
the end of 2022):
DIRECTOR
ROLE/S
SHARE OPTIONS TO
WHICH ENTITLED
WARRANTS TO
WHICH ENTITLED
AT 31 DEC
2023
AT 31 DEC
2022
AT 31 DEC
2023
AT 31 DEC
2022
Ian Pearson
Chairman
-
-
-
-
David Palumbo
CEO
337,500
33,750,000 1,969,688 196,968,812
Jeffrey Vander Linden
COO
419,318
41,931,818
712,971
71,297,138
Yoel Alemán Méndez
CTO
221,159
22,115,888
984,844
98,484,406
Thomas Quigley
Director
-
-
Nauman Babar
(resigned)
CFO and Company
Secretary
295,827
29,582,716
-
-
-
-
EQTEC Italia MDC Operations Director
Francesco Messina confers with the
Operations Team on site.
Share options granted at the start of
2023 were later rescinded in line with the
Company’s underperformance in 2023
and with the intention of discontinuing
its long-term incentive programme
(LTIP). On that basis, any difference in
share option entitlements between
2022 and 2023 should express only
the consolidated share amount, no
incremental increase in entitlement.
Share options were granted in
previous years through the LTIP, with
vesting conditions linked to company
performance, with a three-year vesting
period and a two-year holding period for
Directors. The 2022 LTIP maximum award
options were 188,648,745 at an award
price of 1.00p (GBP 0.010) with an expiry
date of 30 April 2033 and an exercise
price of EUR 0.001 (becoming EUR 0.01)
following the share consolidation at the
end of 2023. One-third of 2022 share
options vested on 01 May 2023.
Further details of the LTIP scheme
are set out in Note 28 of the financial
statements. The Directors and Secretary
who held office at 31 December 2023
did not have any interests in the share
capital of any of the subsidiaries of
the Company.
The warrants such are exercisable up to
16 November 2027 at 7.878 pence (GBP
0.07878) per ordinary share.
REMUNERATION COMMITTEE
REPORT
The Group’s remuneration model is
designed to attract and retain people
of the highest calibre and who bring
their experience and impact to the work
of the Group and achievement of both
its near-term business plan and its long-
term strategy. Executive remuneration
in particular targets a higher proportion
of pay based on Company performance
and attracts leadership with strong
accountability, comfort with ambiguity,
entrepreneurialism and long experience
and expertise on matters of policy,
strategic decision-making and
governance.
In setting remuneration levels, the
Remuneration Committee benchmarks
other companies of similar size and
Directors’ report
scope. To date, remuneration has
favoured a lower average executive
non-contingent base pay, augmented
by a higher rate of contingent,
performance-based pay.
In 2023, the Directors took specific
actions in support of Group cash flow,
some of which impacted Director
remuneration.
In September 2023, the Company
announced cancellation of short-term
incentives (STIs) for Executive Directors
through which bonus would otherwise
be payable annually, subject to
achievement of corporate and individual
performance, to be restored at such time
as the Company’s cash position supports
restoration of originally agreed terms.
In November 2023, the Company further
announced deferral by all Executive
Directors of 40% of base salary until such
time as the Company’s cash position
supports restoration of originally agreed
terms. Non-executive Directors deferred
100% of their pay on the same timetable.
Additionally, the Company announced
that the Long-Term Incentive Plan
(LTIP), through which EQTEC share
options are made available to Executive
Directors and staff subject to corporate
performance, were cancelled. Previously
issued LTIP options remain in place
and options granted through 2022 will
continue to vest.
Any and all incentive pay is approved
by the Remuneration Committee and
ratified by the Board. Details of Directors’
remuneration are included in Note 36 of
the notes to the financial statements.
ACCOUNTING RECORDS
The Directors believe that they have
complied with the requirements of
Sections 281 to 285 of the Companies
Act 2014 with regard to the keeping
of accounting records by employing
persons with appropriate expertise and
by providing adequate resources to the
Finance function. The accounting records
are held at the Company’s business
address at Building 1000, City Gate,
Mahon, Cork T12 W7CV, Ireland.
Syngas plants
utilising EQTEC
technology
are fuelled by
waste from
industrial,
municipal,
agricultural,
forestry and
other sources.
40 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 41
Directors’ report
Directors’ report
The Directors are responsible for ensuring
that the Group and the Company keep
or cause to be kept adequate accounting
records that correctly explain and record
the transactions of the Group and the
Company, enable at all times the assets,
liabilities, financial position and profit
or loss of the Group and the Company
to be determined with reasonable
accuracy, enable them to ensure that
the financial statements and Directors’
Report comply with the Companies
Act 2014 and enable the financial
statements to be audited. They are also
responsible for safeguarding the assets
of the Group and the Company and
hence for taking reasonable steps for
the prevention and detection of fraud
and other irregularities. Legislation in
Ireland governing the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The Directors are responsible for
preparing the Directors’ Report and
the financial statements in accordance
with applicable laws and regulations
and the AIM Rules for Companies. Irish
company law requires the Directors to
prepare financial statements for each
financial year giving a true and fair view
of the assets, liabilities and financial
position and the profit or loss for the
Group and the Company. Under that law
the Directors have elected to prepare
the financial statements in accordance
with International Financial Reporting
Standards (IFRSs) as adopted by the
European Union. Under the Company
Law, the Directors must not approve
the financial statements unless they are
satisfied that they give a true and fair
view of the assets, liabilities and financial
position of the Group and the Company
as at the financial year end date and
of the profit or loss of the Group and
Company for the financial year and
otherwise comply with the Companies
Act 2014.
In preparing these financial statements,
the Directors are required to:
select suitable accounting policies
and then apply them consistently;
make judgments and accounting
estimates that are reasonable and
prudent;
state whether the financial statements
have been prepared in accordance
with applicable accounting standards,
identify those standards, and note the
effect and the reasons for any material
departure from those standards; 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.
AUDITORS
The auditors, Grant Thornton,
Chartered Accountants and Statutory
Audit Firm, continue in office in
accordance with Section 383(2)
of the Companies Act 2014.
In future, EQTEC intends to
augment its services and
equipment revenues with
recurring revenues from
licensing of its technology
to syngas plant owners.
DISCLOSURE OF INFORMATION
TO AUDITORS
Each of the persons who are Directors
at the time when this Directors’ report
is approved has confirmed that: so far
as that Director is aware, there is no
relevant audit information of which
the Company’s auditors are unaware,
and that Director has taken all the
steps that ought to have been taken
as a Director in order to be aware of
any relevant audit information and to
establish that the Company’s auditors
are aware of that information.
On behalf of the Board:
DIRECTORS’ COMPLIANCE
STATEMENT
To ensure that the Company achieved
material compliance with its relevant
obligations, the Directors confirm that
they have: drawn up a compliance policy
statement setting out the Company’s
policies respecting compliance by the
Company with its relevant obligations.
put in place appropriate arrangements
and structures that are designed to
secure material compliance with
the Company’s relevant obligations.
conducted a review, during the
financial year, of the arrangements
and structures, referred to above.
IAN PEARSON
Non-Executive Chairman
DAVID PALUMBO
Chief Executive Officer
42 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 43
EQTEC’s modular build allows for vertical
process plants with smaller floorplate, or
horizontal builds where there is more space...
or anything in between.
27 June 2024
27 June 2024
EQTEC in focus
EQTEC team
QASIM ALI
Project Accountant
MARCOS GARCÍA BARTOLOMÉ
Automation Control Engineer
CRISTINA CÁMARA
Office Manager
ERNESTO BRAVO CAMPOS
Mechanical Engineer
LIZ DE ABREU DEVIA
Process Engineer
SARA PIQUÉ FERRER
Quality Manager
OSCAR VELASCO HERNAN
O&M Manager
CARLOS LINARES
Automation Controls Engineer
THE COMPANY
EQTEC is an Irish company that currently
delivers its technology solutions and
expert engineering services to clients
across Europe and the USA. The
Company’s shares are traded on the
London Stock Exchange’s Alternative
Investment Market (AIM:EQT). Its
technology and engineering centre
is in Spain.
EQTEC plc and Group were formed in
2018 with acquisition of a Spain-based
gasification technology company by an
Ireland-based developer of renewable
energy projects across a range of
technologies. Today, the Company
is focused solely on innovating and
deploying technology solutions that
produce the highest quality synthesis
gas (syngas), supporting client projects
and plants that will cleanly and
sustainably generate heat, electrical
power, renewable natural gas, hydrogen,
liquid fuels and other chemicals as
replacements for traditional, fossil-fuel-
based solutions.
Demand for EQTEC solutions is
consistently strong, with new
enquiries coming to the Company
weekly from six continents around the
globe. As the Company grows, so too will
its team of world-leading syngas process
engineers and technology integrators.
CTO Yoel Alemán Méndez, who is the
inventor behind EQTEC’s patented and
proprietary capabilities. EQTEC process
engineers are leaders in gasification
technology and apply their know-how
to every one of EQTEC’s designs in
support of client-specific solutions.
THE TEAM
The Company currently operates in
Ireland, the United Kingdom, Spain, Italy
and France. In other markets such as
the USA, the Company works through
a number of go-to-market partners.
Operating across all target markets,
the Company has a small number of
senior staff dedicated to incubating
demand, qualifying customers and
partners, managing customer and
stakeholder relationships, supporting
client project alignment and negotiating
commercial terms.
EQTEC’s process engineers are led by
four chemical engineers with PhDs and
specialisms in gasification, including
EQTEC also has a small number of
mechanical and electrical engineers
trained in and experienced with
integration of EQTEC technologies
into plant designs. These capabilities
are further augmented by engineering
partner CT3 Ingeniería of Spain, which
is able to mobilise mechanical, electrical
and civil engineers to augment EQTEC’s
design efforts.
EQTEC also has operations &
maintenance (O&M) specialists and
capabilities able to support clients
with integration of EQTEC technology
and engineering on site and to
support clients with early-stage
operation of new plants running
EQTEC technology.
DAVID LE SAINT
Managing Director, France
ALEX MARTIN
Electrical Engineer
JIMMY MCGLINCHEY
Group Financial Accountant
ARIEL ENTENZA MEDINA
Electrical Engineer
HAMZA QAYUM
Head of FP&A
JAVIER RECARI
Process Engineer
ESTHER LORENTE ROYO
Senior Process Engineer
DENISA RODRIGUEZ ROYO
Project Manager
DR. YOEL ALEMÁN MÉNDEZ
Chief Technical Officer
CÉSAR BERRUECO MORENO
Chief Process Engineer
DAVID PALUMBO
Chief Executive Officer
PREET PARMER
Investment Specialist
LISA SYLVESTER
Executive Assistant
JEFFREY VANDER LINDEN
Chief Operating Officer
ANDREA RODRIGUEZ ZAMBRANO
Calculation & Design Technician
44 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 45
50
project engineers
through engineering
partner CT3
EQTEC in focus
Board of Directors
The Board comprises three,
full-time executive directors:
CEO David Palumbo, CTO Dr. Yoel
Alemán Méndez, and COO
Jeffrey Vander Linden, and two
independent, non-executive
directors: Chairman Ian Pearson
and Director Tom Quigley.
The biographies of all five, EQTEC
directors are outlined here.
IAN PEARSON
Non-Executive Chairman
DAVID PALUMBO
Chief Executive Officer (CEO)
DR YOEL ALEMÁN MÉNDEZ
Chief Technical Officer (CTO)
JEFFREY VANDER LINDEN
Chief Operating Officer (COO)
TOM QUIGLEY
Non-Executive Director
Ian is an experienced Board director,
with leading roles in several companies
including EQTEC, where he has been
non-executive Chairman since 2017. He
is a non-executive director at Thames
Water Utilities Limited, the UK’s largest
water company. He is also Chairman
of Quantum Exponential Group plc
a company focused on quantum
computing. Previously, Ian was a Senior
Adviser to BAI Communications plc and
Chairman of AIM-listed OVCT2, where he
oversaw the company’s investment in a
variety of renewable energy companies.
Ian was a member of the UK Advisory
Board of Big Four accountancy PwC.
Between 2001 to 2010, he was a Minister
in the UK Government, holding roles as
Government Whip, Minister in Northern
Ireland, Minister for Trade, Minister for
Climate Change and the Environment,
Science and Innovation Minister and
Economic Secretary to the Treasury. He
was elected as a Member of Parliament in
1994. He graduated from Balliol College,
Oxford and has both a master’s degree
and a doctorate in Industrial and Business
Studies from the University of Warwick.
David is an experienced investor,
business leader and entrepreneur
with over 20 years’ experience in
private equity, venture capital and
asset management. Since 2006, he
has founded and co-founded several
companies in a variety of industries
including cleantech, digital technology
and real estate. David joined EQTEC
in 2018 as an investment and growth
advisor and after restructuring the
Company’s financial platform, he was
asked by lead investors in late 2019 to
take on the role of CEO. Since then, he
has focused EQTEC’s leadership team on
establishing a growth platform through
its R&D and engineering, its operations
and scale capabilities and its financial
management discipline. In addition
to re-focusing EQTEC, David founded
and remains the Managing Partner of
Origen Capital LLP, a private investment
firm representing family offices and
private consortia in Europe, CIS and
Latin America. He holds a BSc and a
MSc in Electrical Engineering.
Yoel’s mechanical and chemical
engineering career includes more than
20 years’ experience with gasification as
his chosen specialism. He has designed,
built and operated thermochemical
conversion facilities of various sizes
and capacities for a wide range of
feedstocks, including commercial-
scale plants to handle biomass and
non-biomass feedstocks (including
RDF). He is the author of all of EQTEC’s
patents and the lead inventor of its
proprietary technologies. He joined
the Company in 2010, to rescue
a project that was struggling at
the Mostos, Vinos y Alcoholes, S.A.
(Movialsa) agro-industrial facility in
southern Spain. That initial, highly
successful project, completed in
2011, established the platform for
EQTEC’s proven technology capability.
Dr Alemán has been an associated
professor or researcher at three
universities and earned a PhD in
Chemical Engineering. Prior to his
appointment to the EQTEC plc Board
of Directors in 2019, he was Chief
Technical Officer of EQTEC Iberia slu.
Jeff is a strategy and operations
professional with 30 years’ experience
implementing complex change and
growth strategies across private- and
public-sector organisations, from
small start-ups to large multinationals.
Prior to joining EQTEC in 2020, he led
development and implementation of
global operations and scale at one of
the world’s largest consumer products
companies. Before that, he spent 16
years designing and delivering business
strategy, process and technology
transformation as a business consultant
and programme director at PwC, IBM
and Capgemini. His dozens of clients
include NTT, NEC, AT&T, Motorola, BAE
Systems and National Grid. Jeff spent
10 years living and working in Japan,
with projects across Korea, Taiwan, Hong
Kong and Singapore. He has worked in
the UK, Europe and India since 2001.
He received a Bachelor of Arts in Social
Studies (Economics, Politics, History,
Philosophy) from Wesleyan University
in Connecticut, USA.
Tom is a business executive and
investor, with a long career working at
Board-level, as Managing Director, CFO
or CIO. In addition to EQTEC, where he
joined as a non-executive director in
2018, he is a non-executive director at
Barchester Healthcare, Ethical Power
and several other organisations. He is
a member of the UBS advisory board
in Jersey, Channel Islands and acts
as a Protector to a major family trust
structure. Prior to joining EQTEC, he
was a director or managing director at
Close Brothers Corporate Finance, ING
Barings and Terra Firma Capital Partners.
Tom has worked in real estate, financial
services, healthcare and banking,
and across a number of jurisdictions.
He holds a BA in Physics from
Oxford University and is a Chartered
Accountant having qualified at Price
Waterhouse (now PwC) in London.
46 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 47
Partner spotlight
Luis Ibarra
Founder & CEO
Jose (Manolo) Boccardo
Founder & eADVISORY Director
eCERTO is an innovative technology
and advisory business with its origins
in the oil and gas sector, committed to
bringing decades of commercial insights
with process technologies to renewables
sectors. Its vision is to transform the
sustainability and financial performance
of capital projects across the energy
sector with INTEGRATI®.
INTEGRATI® is eCERTO’s proprietary,
Enterprise AI Platform for Capital
Project Modelling. Designed for both
developers and investors to streamline
the project development and viability
assessment, bridging the gaps to make
projects investment ready, delivered
on time and cost. Supporting its
deployment is an advisory and digital
transformation team with decades of
experience in large-scale and complex
infrastructure projects, executive
leadership, business development,
technology commercialisation and
project management.
EQTEC and eCERTO’s founders
have been acquainted for many years,
even prior to eCERTO’s inception in
2016. With EQTEC’s small but challenging
set of larger, more complex projects,
EQTEC approached eCERTO in 2021
for its view on how to approach these
with greater discipline, pace and risk
mitigation. eCERTO was appointed
in 2022 for a UK-based project, to
rapidly assess and integrate the
work that had been done and to
identify gaps and strategies for
addressing them.
With eCERTO’s guidance, EQTEC was able
to organise project complexity around a
standard framework built on best-in-class
techniques well utilised in the energy
sector. More than that, the capital project
model built with INTEGRATI® enabled
EQTEC and its partners to gain insights
on the ‘hot spots’ in the financial model,
cost structure and forward schedule that
resulted in a refined strategy for project
development.
EQTEC’s strategic partnership with
eCERTO has led to increased interest from
project funders approaching eCERTO to
conduct independent due diligence in
relation to investment opportunities in
the renewable energy sector, leveraging
eCERTO’s capital project modelling
services powered by INTEGRATI®.
Although EQTEC aspires to discontinue
any work as a project developer, it is
committed to applying best practices
with best partners to all of its projects,
including those it must oversee until it
can bring on professional developers.
eCERTO and INTEGRATI® will continue
to be highly recommended by EQTEC
to accelerate, improve and drive carbon
efficiency from infrastructure projects
applying EQTEC’s syngas technology,
and beyond.
Independent auditor’s report
Independent
auditor’s report
OPINION
We have audited the financial statements
of EQTEC plc (“the Company”) and
its subsidiaries (‘’the Group’’), which
comprise the Consolidated statement of
profit or loss, Consolidated statement of
comprehensive income, Consolidated
statement of financial position,
Consolidated statement of changes in
equity, Consolidated statement of cash
flows, Company statement of financial
position, Company statement of changes
in equity and the Company statement of
cash flows for the financial year ended
31 December 2023, and the related notes
to the financial statements, including the
summary of material accounting policies.
The financial reporting framework that
has been applied in the preparation of
the financial statements is Irish law and
International Financial Reporting Standards
(IFRS) as adopted by the European Union.
In our opinion:
the Group’s consolidated financial
statements give a true and fair view in
accordance with IFRS as adopted by the
European Union of the assets, liabilities
and financial position of the Group as at
31 December 2023 and of the Group’s
financial performance and cash flows
for the financial year then ended;
the Company’s financial statements
give a true and fair view in accordance
with IFRS as adopted by the European
Union of the assets, liabilities and
financial position of the Company as
at 31 December 2023 and of its cash
flows for the financial year then
ended; and
have been properly prepared in
accordance with the requirements of
the Companies Act 2014.
BASIS FOR OPINION
We conducted our audit in accordance
with International Standards on Auditing
(Ireland) (‘ISAs (Ireland)’) and applicable
law. Our responsibilities under those
standards are further described in the
‘Responsibilities of the auditor for the
audit of the financial statements’ section
of our report. We are independent of the
Group and Company in accordance with
the ethical requirements that are relevant
to our audit of the financial statements
in Ireland, including the Ethical
Standard for Auditors (Ireland) issued
by the Irish Auditing and Accountancy
Supervisory Authority (IAASA), and the
ethical pronouncements established by
Chartered Accountants Ireland, applied
as determined to be appropriate in
the circumstances for the Group and
Company. We have fulfilled our other
ethical responsibilities in accordance
with these requirements. We believe that
the audit evidence we have obtained is
sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RELATING TO
GOING CONCERN
In auditing the financial statements, we
have concluded that the directors’ use of
going concern basis of accounting in the
preparation of the financial statements
is appropriate. Our evaluation of the
directors’ assessment of the Group and
Company’s ability to continue as a going
concern basis of accounting included:
Evaluating management’s future
cash flow forecasts, understanding
the process by which they were
prepared, and assessed the
calculations are mathematically
accurate. This includes performing
stress test on management’s future
cash flow forecasts.
Challenging the underlying key
assumptions such as expected cash
inflow from services and equipment
sales and cash outflow for operating
costs. This includes reviewing funding
required to support the business in the
short and medium term and reviewing
post year-end financial reports to test
accuracy of forecasts.
Making inquiries with management
and reviewing the board minutes
and available written communication
with commercial partners in order
to understand the future plans and
to identify potential contradictory
information.
Making inquiries and obtaining
supports for funding such as receipt of
equity raise and reviewing of settlement
agreement contracts for committed
costs due to be refunded to the
Company and the Group.
Assessing the adequacy of the
disclosures with respect to the going
concern assertion.
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 Company’s ability to
continue as a going concern for a period
of at least twelve months from the
date 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.
48 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 49
Independent auditor’s report
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
financial period and include the most
significant assessed risks of material
misstatement (whether or not due to
fraud) we identified, including those
which had the greatest effect on: the
overall audit strategy, the allocation of
resources in the audit, and the directing
of 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 therefore we
do not provide a separate opinion on
these matters.
Overall audit strategy
We designed our audit by determining
materiality and assessing the risks of
material misstatement in the financial
statements. In particular, we looked at
where the directors made subjective
judgements as discussed in the key audit
matters section. We also addressed the
risk of management override of internal
controls, including evaluating whether
there was any evidence of potential
bias that could result in a risk of material
misstatement due to fraud.
Based on our considerations as set out
below, our areas of focus included:
Impairment of goodwill;
Revenue recognition;
Impairment of investments accounted
for using equity method; and
Impairment of certain financial assets.
How we tailored the audit scope
The Group has one operating segment:
the technology sales segment. We
tailored the scope of our audit taking
into account the areas where the risk of
misstatement was considered material
to the Group and Company, taking into
account the nature of the Group and
Company’s business and the industry in
which it operates. We performed an audit
of the complete financial information
of all the components of the Group.
Components represent business units
across the Group considered for audit
scoping purposes.
In establishing the overall approach to
our audit, we assessed the risk of material
misstatement at a Group and Company
level, taking into account the nature,
likelihood and potential magnitude of
any misstatement. As part of our risk
assessment, we considered the control
environment in place at the Company.
Materiality and audit approach
The scope of our audit is influenced
by our application of materiality. We
set certain quantitative thresholds
for materiality. These, together with
qualitative considerations, such as
our understanding of the Group and
Company and their environment, the
history of misstatements, the complexity
of the Group and Company and the
reliability of their control environment,
helped us to determine the scope of
our audit and the nature, timing and
extent of our audit procedures and to
evaluate the effect of misstatements,
both individually and on the financial
statements as a whole.
Based on our professional judgment,
we determined materiality for the
Group and Company as follows: 1%
of total assets (excluding goodwill for
the Group) for the financial year ended
31 December 2023. We chose total
assets as the benchmark as we
considered this to be the main focus
of the users of the financial statements
based on nature of the Group and
Company’s activities with continuing
funding rounds and business expansion.
We have set performance materiality
for the Group and Company at 60%
of materiality, having considered our
prior year experience of the risk of
misstatements, business risks and fraud
risks associated with the Group and
Company and their control environment.
This is to reduce to an appropriately low
level the probability that the aggregate
of uncorrected and undetected
misstatements in the financial
statements exceeds materiality for
the financial statements as a whole.
We agreed with the board of directors
that we would report to them
misstatements identified during our
audit above 5% of materiality as well
as misstatements below that amount
that, in our view, warranted reporting
for qualitative reasons.
Significant matters identified
The risks of material misstatement that
had the greatest effect on our audit,
including the allocation of our resources
and effort, are below as significant
matters together with an explanation
of how we tailored our audit to address
these specific areas in order to provide
an opinion on the financial statements
as a whole. This is not a complete list of
all risks identified by our audit.
Impairment of goodwill – valuation
(Notes 3, 15 and 19)
The Group reports a significant goodwill
balance arising from the acquisition
of Eqtec Iberia SLU in 2017 (see Note
19). As at 31 December 2023, goodwill
amounted to €10,000,000 which was
33.76% of the Group’s total assets after
total impairment of €6,710,497. Eqtec
Iberia SLU incurred further losses of
€1,997,833 in 2023, which we have
identified as an indicator of impairment.
We obtained management’s discounted
cash flow projections in support of the
recoverability of this goodwill.
Under the relevant IFRS as adopted
by the European Union, the Group is
required to annually test the amount
of goodwill for impairment. This annual
impairment test was significant to
our audit because the balance, as
above, is material to the financial
statements. In addition, management’s
assessment process is complex and
highly judgmental and is based on
assumptions, specifically on future cash
flows, which are affected by expected
future market or economic conditions.
Actual results may differ from the
estimates under different assumptions
or conditions.
Due to the subjective estimates
inherent in this calculation, this was
a key judgmental area that our audit
concentrated on.
Our responses
For this risk, our audit procedures
included the following testing:
Evaluated and challenged
management’s future cash flow
forecasts and the process by which
they were drawn up and tested the
integrity and mathematical accuracy
of the impairment model;
Tested the significant assumptions
and estimates used in preparing
the cash flows which includes
revenue forecasts, gross profit rates
and discount rates and reviewed
reasonableness of growth rates used
for the projection and compared
them against proven track record of
performance;
Tested the adequacy of discount rate
used and evaluated the model in
determining the value in use of the
cash generating unit;
Performed sensitivity analysis
to determine reasonableness of
the input variables used in the
impairment model; and
Considered the adequacy of the
Group’s disclosures relating to
goodwill and the annual impairment
review with the requirements
included in the consolidated financial
statements in accordance with IFRS
as adopted by European Union.
The value of the goodwill is based on
the best estimates of the Directors.
As part of our audit, we have gained
sufficient audit evidence supporting the
assumptions of the model. However,
in view of uncertainty in relation to the
future events that affects the timing of
revenue cash flows and significance of
this balance to the consolidated financial
statements, we consider that it should
be drawn to your attention. There is a risk
that assumptions used by the directors
specifically on certain projects will be
delayed which may affect the future cash
flows of the Group. The consolidated
financial statements do not reflect the
adjustments that might arise should the
assumptions used in the impairment
model change.
Revenue recognition – occurrence,
completeness and accuracy
(Notes 3, 4, 7 and 8)
Revenue from the rendering of services
which includes after-sales service
and maintenance, consulting and
construction contracts for renewable
energy systems is recognised when
the Group and Company satisfies
performance obligations which is based
on the stage of completion of the
contract activity at the reporting date.
For this purpose, the stage of completion
set as at the reporting date and the
expected future costs to completion
are assessed. The Group CFO discusses
and monitors status of scoped projects
per relevant contracts. The projects are
discussed at meetings of the Board of
Directors at the request of the CFO.
The stage of completion method
involves significant scope for judgment
by Management in terms of determining
the correct amount and timing of
revenue recognition, including estimated
cost required to complete the contract,
which could have a material impact on
the consolidated financial statements. In
addition, revenue recognition is deemed
a significant risk during the performance
of our audit. As a result, we considered
these as key audit matters.
Our responses
The following audit work has been
performed to address the risks:
We understand the Group’s estimation
process (including the approval
of project budget, monitoring of
project costs and activities, and
management’s review and customer’s
approval of project’s stage of
completion used in determining
the amounts of revenue from the
rendering of services and related costs
recognised in the financial statements.
For significant customer contracts,
we challenged the management’s
assessment with regard to estimating
the stage of completion by reviewing
the underlying customer agreements
and verifying the extent and timing
of delivery acceptance from customer
for consistency.
Independent auditor’s report
Examined invoice copies including
proof of acceptances including tracing
of customer payments to ensure
revenue has occurred.
Obtained management’s projections
of expected future costs and tested
the estimate for consistency with
the status of delivery and customer
acceptances and sign off from
customers to identify possible delays
in achieving milestones, which
require changes in estimated costs
or efforts to complete the remaining
performance obligations including
how this costs will be funded for the
project to close.
Reviewed adequacy of disclosures
made in the financial statements
as required by the related IFRS as
adopted by the European Union.
Our planned audit procedures were
completed without material exception.
Impairment of Investments accounted
for using the equity method - valuation
(Notes 3, 15 and 21)
There is a risk that investments
accounted for using the equity method
held by the Group and Company
including financial assets are not
recoverable at financial year-end.
During the financial year, the Group
and Company have impaired these
investments amounting to €2,619,234
(2022: €4,712,490).
Significant auditor’s attention was
deemed appropriate because of the
materiality of the investments accounted
for using the equity method. In addition,
the impairment of the Company’s
investments accounted for using the
equity method is a key judgmental
area due to the level of subjectivity in
estimating its recoverability such as the
financial condition of the counterparties
and their expected future cash flows.
As a result, we considered these as key
audit matters.
50 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 51
Independent auditor’s report
Our responses
The following audit work has been
performed to address the risks:
Reviewed client prepared memos
where management assessed the
appropriate accounting, recoverability
and presentation of each of the
investments and financial assets.
Evaluated and challenged
management’s future cash flow
forecasts and the process by which
they were drawn up and tested the
integrity and mathematical accuracy
of the impairment model;
Tested the significant assumptions
and estimates used in preparing
the cash flows which includes
revenue forecasts, gross profit rates
and discount rates and reviewed
reasonableness of growth rates used
for the projection and compared
them against proven track record of
performance. In addition, we assessed
recoverability of the investments by
inspecting the investee’s financial
statements and other relevant
documentation and ensured that the
investments were recoverable and
that no provisions were necessary.
Reviewed elimination of gains and
losses resulting from downstream
transactions between the Company
and its associates to confirm gains
or losses are recognised only to the
extent of unrelated investors’ interests
in the associates.
Reviewed minutes of board meetings
for increase or decreases in rights
including any existing litigations and
claims on investments held including
agreeing whether considerations have
been agreed to be paid.
Reviewed adequacy of disclosures
made in the financial statements
as required by the related IFRS as
adopted by the European Union.
Our planned audit procedures were
completed without material exception.
Impairment of certain financial assets -
valuation (Notes 3, 22, 25, 26)
There is a risk that financial assets
52 | EQTEC plc Annual Report 2023
such as development assets and loans
receivables from project development
undertakings held by the Group and
Company are not recoverable at financial
year-end. During the financial year, the
Group and Company have impaired
these financial assets amounting to
€8,132,096 (2022: Nil).
Significant auditor’s attention was
deemed appropriate because of
the materiality of these financial
assets. In addition, the impairment
of the Company’s financial assets is
a key judgmental area due to the
level of subjectivity in estimating its
recoverability such as the financial
condition of the counterparties and
their expected future cash flows. As a
result, we considered these as key
audit matters.
Our responses
The following audit work has been
performed to address the risks:
Obtained understanding of the
process in place including evaluation
of the design of controls relevant to
the valuation of loans receivable from
project development undertakings
and related impairment provisions.
Reviewed management simplified
assessment which includes the
potential for default, historical
experience and forward-looking
information. This also includes
review of appropriate accounting,
recoverability and presentation of
each of the financial assets..
Evaluated and challenged
management’s assumptions such
as status and future plans for the
projects and estimated future cash
flow for these projects.
Reviewed minutes of board meetings
for any existing litigations and claims
with project developers, future plans
for projects and agreeing whether
considerations have been agreed to
be paid.
Reviewed adequacy of disclosures
made in the financial statements
as required by the related IFRS as
adopted by the European Union.
Our planned audit procedures were
completed without material exception.
OTHER INFORMATION
Other information comprises information
included in the annual report, other
than the financial statements and the
auditor’s report thereon, including the
Chairman’s Statement, Chief Executive’s
Report, Corporate Governance
Statement and Directors’ Report. The
directors are responsible for the other
information. 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.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent
with the financial statements or our
knowledge obtained in the audit, or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies in the financial
statements, we are required to
determine whether there is a material
misstatement in the financial statements
or a material misstatement of the other
information. If, based on the work we
have performed, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact.
We have nothing to report in this regard.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY THE
COMPANIES ACT 2014
We have obtained all the information
and explanations which we consider
necessary for the purposes of our audit.
In our opinion the accounting records
of the Company were sufficient to
permit the financial statements to be
readily and properly audited.
The financial statements are in
agreement with the accounting
records.
In our opinion the information given
in the Directors’ report is consistent
with the financial statements. Based
solely on the work undertaken in the
course of our audit, in our opinion, the
Directors’ report has been prepared in
accordance with the requirements of
the Companies Act 2014.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
Based on our knowledge and
understanding of the Company and its
environment obtained in the course of
the audit, we have not identified material
misstatements in the Directors’ report.
Under the Companies Act 2014 we
are required to report to you if, in our
opinion, the disclosures of directors’
remuneration and transactions specified
by sections 305 to 312 of the Act have
not been made. We have no exceptions
to report arising from this responsibility.
RESPONSIBILITIES OF
MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR
THE FINANCIAL STATEMENTS
As explained more fully in the Directors’
responsibilities statement, management
is responsible for the preparation of the
financial statements which give a true
and fair view in accordance with IFRS as
adopted by the European Union, and for
such internal control as they determine
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,
management is responsible for assessing
the Group and 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 management
either intends to liquidate the Group or
Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance
are responsible for overseeing the
Group and Company’s financial
reporting process.
RESPONSIBILITIES OF THE AUDITOR
FOR THE AUDIT OF THE FINANCIAL
STATEMENTS
The objectives of an auditor 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 (Ireland) 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.
A further description of our
responsibilities for the audit of the
financial statements is located on
the Irish Auditing and Accounting
Supervisory Authority’s website at: http://
www.iaasa.ie/getmedia/b2389013-1cf6-
458b-9b8f-a98202dc9c3a/Description_
of_auditors_responsibilities_for_audit.
pdf. This description forms part of our
auditor’s report.
Explanation as to what extent
the audit was considered 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. Owing to the inherent limitations
of an audit, there is an unavoidable
risk that material misstatement in
the financial statements may not be
detected, even though the audit is
properly planned and performed in
accordance with the ISAs (Ireland).
The extent to which our procedures
are capable of detecting irregularities,
including fraud is detailed below.
Based on our understanding of the
Group and industry, we identified that
the principal risks of non-compliance
with laws and regulations related to
Independent auditor’s report
compliance with Stock Exchange
Listing Rules, and we considered the
extent to which non-compliance might
have a material effect on the financial
statements. We also considered those
laws and regulations that have a direct
impact on the preparation of the
financial statements such as the local
laws and tax: Companies Act 2014 and
Irish tax legislation. As the Company
and Group operates in the technology
development and services industry, the
Audit engagement partner considered
the experience and expertise of the
engagement team to ensure that the
team had appropriate competence and
capabilities. We evaluated management’s
incentives and opportunities for
fraudulent manipulation of the financial
statements (including the risk of
override of controls), and determined
that the principal risks were related to
posting inappropriate journal entries to
manipulate financial performance and
management bias through judgements
and assumptions in significant
accounting estimates, in particular in
relation to significant one-off or unusual
transactions. We apply professional
scepticism through the audit to consider
potential deliberate omission or
concealment of significant transactions,
or incomplete/inaccurate disclosures in
the financial statement.
In response to these principal risks, our
audit procedures included but were not
limited to:
enquiries of management, board
and audit committee on the policies
and procedures in place regarding
compliance with laws and regulations,
including consideration of known
or suspected instances of non-
compliance and whether they have
knowledge of any actual, suspected or
alleged fraud;
inspection of the Company and
Group’s regulatory and legal
correspondence and review of
minutes of director’s meetings
during the year to corroborate
inquiries made;
gaining an understanding of the
Company and Group’s current
activities, the scope of authorisation
EQTEC plc Annual Report 2023 | 53
Independent auditor’s report
and the effectiveness of its control
environment;
discussion amongst the engagement
team in relation to the identified laws
and regulations and regarding the
risk of fraud, and remaining alert to
any indications of non-compliance
or opportunities or fraudulent
manipulation of financial statements
throughout the audit;
identifying and testing journal entries
to address the risk of inappropriate
journals and management override
of controls;
designing audit procedures to
incorporate unpredictability
around the nature, timing or
extent of our testing;
challenging assumptions and
judgements made by management
in their significant accounting
estimates, including impairment
assessment of goodwill, investments,
trade debtors and revenue
recognition; and
review of the financial statement
disclosures to underlying supporting
documentation and inquiries of
management.
The primary responsibility for
the prevention and detection of
irregularities including fraud rests
with those charged with governance
and management. As with any audit,
there remains a risk of non-detection
or irregularities, as these may involve
collusion, forgery, intentional omissions,
misrepresentations or override of
internal controls.
THE PURPOSE OF OUR AUDIT
WORK AND TO WHOM WE OWE
OUR RESPONSIBILITIES
This report is made solely to the
Company’s members, as a body, in
accordance with section 391 of the
Companies Act 2014. Our audit work
has been undertaken so that we might
state to the Company’s members those
matters we are required to state to
them in an auditor’s report and for no
other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Cathal Kelly
For and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Audit Firm
Dublin 2, Ireland
27 June 2024
54 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 55
Financial
statements
Paper waste at Grande-Combe waste management
facility that will supply wood waste and RDF to Idex-
owned syngas plant built around EQTEC techology
in Doubs, France.
56 | EQTEC plc Annual Report 2023
Consolidated statement of profit or loss
for the financial year ended 31 December 2023
Revenue
Cost of sales
Gross profit
Operating income/(expenses)
Administrative expenses
Other income
Impairment costs
Other gains
Employee share-based compensation
Foreign currency losses/(gains)
Operating loss
Share of results from equity accounted investments
Gains from sales to equity accounted investments deferred
Loss arising from loss of control of subsidiaries
Change in fair value of financial investments
Finance income
Finance costs
Significant and non-recurring transactions:
Impairment of equity-accounted investment
Impairment of other investments
Impairment on loans receivable from project development undertakings
Impairment of development assets
Impairment of goodwill
Impairment of trade and other receivables
Loss on disposal of tangible asset
Loss before taxation
Income tax
Loss for the year from continuing operations
Profit/(loss) for the year from discontinued operations
LOSS FOR THE FINANCIAL YEAR
Loss attributable to:
Owners of the Company
Non-controlling interest
Basic loss per share:
From continuing operations
From discontinued operations
Total basic loss per share
Diluted loss per share:
From continuing operations
From discontinued operations
Total diluted loss per share
NOTES
2023
€
2022 RESTATED
€
8
2,546,975
7,970,072
(2,174,345)
(7,002,314)
372,630
967,758
9
14
12
10
21
21
23
11
11
15
15
15
15
15
15
15
14
16
35
17
17
17
17
17
17
(4,363,765)
(5,708,787)
109,672
-
431,962
-
(48,212)
33,645
(2,752)
10,088
(340,257)
156,835
(3,497,713)
(4,883,470)
(23,603)
-
-
(26,143)
121,320
(1,486,020)
(2,619,234)
(1,417,066)
(3,528,550)
(4,603,546)
(5,283,459)
(1,393,864)
-
(52,059)
(28,378)
(489)
(326,501)
316,805
(589,618)
(4,712,490)
-
-
-
-
-
(154,205)
(23,757,878)
(10,430,405)
(22,768)
(60,934)
(23,780,646)
(10,491,339)
271,954
(33,776)
(23,508,692)
(10,525,115)
(23,508,657)
(10,525,104)
(35)
(11)
(23,508,692)
(10,525,115)
2023
€ PER SHARE
2022 RESTATED
€ PER SHARE
(0.208)
0.002
(0.206)
(0.208)
0.002
(0.206)
(0.117)
-
(0.117)
(0.117)
-
(0.117)
EQTEC plc Annual Report 2023 | 57
The notes on pages 67 to 113 form part of these financial statements. Consolidated statement of comprehensive income
for the financial year ended 31 December 2023
Loss for the financial year
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
2023
€
2022
€
(23,508,692)
(10,525,115)
Exchange differences arising on retranslation of foreign operations
179,037
(478,066)
Other comprehensive income/(loss) for the year
179,037
(478,066)
Total comprehensive loss for the financial year
(23,329,655)
(11,003,181)
Attributable to:
Owners of the company
Non-controlling interests
(23,282,246)
(11,128,847)
(47,409)
125,666
(23,329,655)
(11,003,181)
Consolidated statement of financial position
at 31 December 2023
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Financial assets
Other financial investments
Total non-current assets
Current assets
Development assets
Loan receivable from project development undertakings
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
NOTES
2023
€
2022
€
18
19
21
22
23
25
25
26
27
615,634
133,053
12,177,408
17,578,231
6,832,388
-
6,715
7,619,514
3,728,434
171,186
19,632,145
29,230,418
613,516
2,066,099
7,044,217
262,019
6,033,543
5,446,087
7,221,046
1,693,116
9,985,851
20,393,792
29,617,996
49,624,210
Total assets
€29.6M
CTO Yoel Alemán Méndez and O&M Senior Engineer
Oscar Velasco review the SCADA and chromatograph
at the EQTEC Italia MDC reference plant.
58 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 59
The notes on pages 67 to 113 form part of these financial statements. The notes on pages 67 to 113 form part of these financial statements. Consolidated statement of financial position
at 31 December 2023 – continued
Consolidated statement of changes in equity
for the financial year ended 31 December 2023
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Other reserves
Accumulated deficit
Equity attributable to the owners of the company
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Total current liabilities
NOTES
2023
€
2022
€
28
28
28
32,497,848
88,916,950
2,694,125
26,799,584
87,203,372
2,694,125
(100,588,165)
(77,305,919)
23,520,758
39,391,162
29
(2,305,932)
(2,258,523)
21,214,826
37,132,639
30
31
32
30
31
2,457,984
400,518
1,064,598
-
2,858,502
1,064,598
2,853,641
2,488,229
202,798
6,264,404
5,106,038
56,531
5,544,668
11,426,973
Total equity and liabilities
29,617,996
49,624,210
The financial statements were approved by the Board of Directors on 27 June 2024 and signed on its behalf by:
IAN PEARSON
Non-Executive Chairman
DAVID PALUMBO
Chief Executive Officer
SHARE
CAPITAL
€
SHARE
PREMIUM
€
OTHER
RESERVES
€
ACCUMULATED
DEFICIT
€
EQUITY
ATTRIBUTABLE
TO OWNERS OF
THE COMPANY
€
NON-
CONTROLLING
INTERESTS
€
TOTAL
€
25,977,130
83,610,562
2,353,868
(66,177,072)
45,764,488
(2,384,189) 43,380,299
Balance at
1 January 2022
Issue of ordinary shares in
EQTEC plc (Note 28)
Conversion of debt into
equity (Notes 28)
769,697
3,717,379
52,757
237,672
Share issue costs (Note 28)
-
(362,241)
Employee share-based
compensation (Note 10)
-
-
Transactions with owners
822,454
3,592,810
-
-
-
-
-
-
4,487,076
290,429
(362,241)
-
-
-
4,487,076
290,429
(362,241)
340,257
340,257
-
340,257
-
340,257
-
4,755,521
-
4,755,521
Loss for the financial year
-
-
-
(10,525,104)
(10,525,104)
(11)
(10,525,115)
Unrealised foreign
exchange losses
Total comprehensive loss
for the financial year
Balance at
31 December 2022
Issue of ordinary shares in
EQTEC plc (Note 28)
Conversion of debt into
equity (Note 28)
-
-
-
(603,743)
(603,743)
125,677
(478,066)
-
-
-
(11,128,847)
(11,128,847)
125,666 (11,003,181)
26,799,584
87,203,372
2,694,125
(77,305,919)
39,391,162
(2,258,523) 37,132,639
1,596,560
2,399,413
4,101,704
(224,713)
-
-
-
-
3,995,973
3,876,991
-
-
3,995,973
3,876,991
Share issue costs (Note 28)
-
(461,122)
-
-
(461,122)
-
(461,122)
Transactions with owners
5,698,264
1,713,578
-
-
7,411,842
-
7,411,842
Loss for the financial year
-
-
-
(23,508,657)
(23,508,657)
(35)
(23,508,692)
Unrealised foreign
exchange losses
Total comprehensive loss
for the financial year
Balance at
31 December 2023
-
-
-
226,411
226,411
(47,374)
179,037
-
-
-
(23,282,246)
(23,282,246)
(47,409)
(23,329,655)
32,497,848
88,916,950
2,694,125 (100,588,165)
23,520,758
(2,305,932) 21,214,826
60 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 61
The notes on pages 67 to 113 form part of these financial statements. The notes on pages 67 to 113 form part of these financial statements. Consolidated statement of cash flows
for the financial year ended 31 December 2023
Consolidated statement of cash flows
for the financial year ended 31 December 2023 – continued
Cash flows from operating activities
Loss for the financial year before income tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss on disposal of tangible assets
Impairment of goodwill
Impairment of equity-accounted investments
Impairment of other investments
Impairment of loans receivable from project development undertakings
Employee share-based compensation
Impairment of development assets
Impairment of trade and other receivables
Share of loss of equity accounted investments
Gains from sales to equity accounted investments deferred
Loss on loss of control of subsidiary
Change in fair value of financial investments
Gain on debt for equity swap
Unrealised foreign exchange movements
Operating cash flows before working capital changes
Decrease/(Increase) in:
Development assets
Trade and other receivables
Decrease in Trade and other payables
Net cash used in operating activities – continuing operations
Finance income
Finance costs
Taxes paid
NOTES
2023
€
2022 RESTATED
€
(23,757,878)
(10,430,405)
18
19
15
15
15
15
15
10
25
15
21
21
23
12
11
11
181,584
124,664
-
5,283,459
2,619,234
1,417,066
3,528,550
-
4,603,546
1,393,864
23,603
-
-
26,143
(431,962)
451,240
239,233
124,602
154,205
-
4,712,490
-
-
340,257
2,752
-
52,059
28,378
489
326,501
(10,088)
(319,440)
(4,536,887)
(4,778,967)
54,100
(1,274,229)
(1,020,070)
(2,578,047)
(2,837,708)
(274,938)
(6,777,086)
(10,469,660)
(121,320)
1,486,020
145
(316,805)
589,618
(108,311)
Net cash used in operating activities – continuing operations
(5,412,241)
(10,305,158)
Net cash used in operating activities – discontinued operations
35
(1,448)
(33,776)
Cash flows from investing activities
Addition to tangible assets
Additions to intangible assets
Payments on deposit on land
Cash inflow from disposal of subsidiary
Loans advanced to project development undertakings
Loans repaid by project development undertakings
Investment in equity accounted undertakings
Loans advanced to equity accounted undertakings
Loans repaid by equity accounted undertakings
Investment in related undertakings
Investment in unconsolidated subsidiary
Addition to other investments
Grants received
Other advances to equity accounted undertakings
Interest received
Net cash generated from/(used in) investing activities
– continuing operations
Net cash generated from/(used in) investing activities
– discontinued operations
NOTES
2023
€
2022 RESTATED
€
18
19
26
34
25
25
21
21
21
22
23
23
33
(6,265)
(7,300)
-
225,573
-
-
(29,780)
(350,450)
35,700
-
(1,000)
(5,665)
300,000
(2,000)
39
(29,199)
-
(586,421)
170,000
(773,034)
100,000
(6,790)
(2,852,699)
40,018
(351,853)
-
-
-
(2,000)
-
158,852
(4,291,978)
35
-
(50,000)
Net cash generated from/(used in) investing activities
158,852
(4,341,978)
Cash flows from financing activities
Proceeds from borrowings and lease liabilities
Repayment of borrowings and lease liabilities
Loan issue costs
Proceeds from issue of ordinary shares
Share issue costs
Interest paid
30
30
30
28
28
35
2,291,952
7,236,850
(2,309,483)
(1,126,483)
(50,361)
4,051,609
(295,670)
(12,488)
(334,557)
4,430,069
(274,784)
(3,284)
3,675,559
9,927,811
-
-
Net cash used in operating activities
(5,413,689)
(10,338,934)
Net cash generated from financing activities - continuing operations
Net cash generated from financing activities – discontinued operations
Net cash generated from financing activities
3,675,559
9,927,811
Net decrease in cash and cash equivalents
(1,579,278)
(4,753,101)
Cash and cash equivalents at the beginning of the financial year
1,693,116
6,446,217
Cash and cash equivalents at the end of the financial year
27
113,838
1,693,116
Details of non-cash transactions are set out in Note 38 of the financial statements.
62 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 63
The notes on pages 67 to 113 form part of these financial statements. The notes on pages 67 to 113 form part of these financial statements. Company statement of financial position
at 31 December 2023
Company statement of changes in equity
for the financial year ended 31 December 2023
NOTES
2023
€
2022
€
SHARE
CAPITAL
€
SHARE
PREMIUM
€
OTHER
RESERVES
€
ACCUMULATED
DEFICIT
€
TOTAL
€
Balance at 1 January 2022
25,977,130
102,544,642
2,353,868
(83,603,698)
47,271,942
ASSETS
Non-current assets
Intangible assets
Investment in subsidiary undertakings
Investments accounted for using the equity method
Other financial investments
Total non-current assets
Current assets
Development assets
Loan receivable from project development undertakings
Trade and other receivables
Cash and bank balances
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share premium
Other reserves
Accumulated deficit
Total equity
Total non-current liabilities
Borrowings
Current liabilities
Borrowings
Trade and other payables
Total current liabilities
Total equity and liabilities
19
20
21
23
25
25
26
27
28
28
28
30
30
32
2,170,169
4,948,536
-
-
2,294,772
19,729,486
2,728,959
171,186
7,118,705
24,924,403
88,129
-
1,258,191
3,421,901
18,761,984
23,671,749
108,763
980,098
18,958,876
26,077,581
29,331,939
54,256,342
32,497,848
26,799,584
107,851,030
106,137,452
2,694,125
2,694,125
(122,312,919)
(88,820,042)
20,730,084
46,811,119
2,457,984
1,064,598
2,242,250
647,263
2,889,513
5,006,076
1,374,549
6,380,625
26,077,581
54,256,342
The Group is availing of the exemption in Section 304 of the Companies Act 2014 from filing its Company Statement of
Comprehensive Income. The loss for the financial year incurred by the Company was €33,492,877 (2022: €5,216,344).
The financial statements were approved by the Board of Directors on 27 June 2024 and signed on its behalf by:
IAN PEARSON
Non-Executive Chairman
DAVID PALUMBO
Chief Executive Officer
Issue of ordinary shares in EQTEC plc (Note 28)
Conversion of debt into equity (Notes 28 and 30)
Share issue costs (Note 28)
769,697
52,757
-
3,717,379
237,672
(362,241)
Employee share-based compensation (Note 10)
-
-
-
-
-
340,257
340,257
-
-
-
-
4,487,076
290,429
(362,241)
340,257
-
4,755,521
Transactions with owners
Loss for the financial year (Note 39)
Total comprehensive loss for the financial year
822,454
3,592,810
-
-
-
-
(5,216,344)
(5,216,344)
-
-
(5,216,344)
(5,216,344)
Balance at 31 December 2022
26,799,584
106,137,452
2,694,125
(88,820,042)
46,811,119
Issue of ordinary shares in EQTEC plc (Note 28)
Conversion of debt into equity (Note 28)
Share issue costs (Note 28)
Transactions with owners
1,596,560
4,101,704
-
2,399,413
(224,713)
(461,122)
-
-
-
-
3,995,973
3,876,991
-
-
(461,122)
5,698,264
1,713,578
-
-
7,411,842
Loss for the financial year (Note 39)
-
-
-
(33,492,877)
(33,492,877)
Total comprehensive loss for the financial year
-
-
-
(33,492,877)
(33,492,877)
Balance at 31 December 2023
32,497,848
107,851,030
2,694,125 (122,312,919)
20,730,084
Syngas can be used either as a direct
replacement for natural gas or as an
intermediate fuel for generation of a
range of final fuels including hydrogen,
renewable natural gas (RNG), liquid
biofuels, thermal energy, electrical
power and chemicals such as
methanol or ethanol.
EQTEC’s second reference plant in Belišće, Croatia is
finalising investment toward recommissioning and
will be an Industrial waste-to-value facility.
64 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 65
The notes on pages 67 to 113 form part of these financial statements. The notes on pages 67 to 113 form part of these financial statements. Company statement of cash flows
for the financial year ended 31 December 2023
Cash flows from operating activities
Loss for the financial year before taxation
Adjustments for:
Amortisation of intangible assets
Employee share-based compensation
Impairment of investment in subsidiaries
Impairment of equity-accounted investments
Impairment of other investments
Impairment of loans to project development undertakings
Impairment of development assets
Reversal of impairment of intercompany loans
Finance costs
Finance income
Impairment of intercompany balances
Change in fair value of other financial investments
Gains on debt for equity swap
Foreign currency losses arising from retranslation of borrowings
Operating cash flows before working capital changes
Funds advanced to intercompany accounts
Repayment of intercompany balances
Increase in development assets
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Loans advanced to equity accounted undertakings
Investment in subsidiary
Loans to subsidiaries repaid
Loans repaid by project development undertakings
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds from issue of ordinary shares
Share issue costs
Loan issue costs
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
NOTES
2023
€
2022
€
(33,492,877)
(5,216,344)
124,603
-
15,783,854
2,728,959
148,521
3,528,550
496,312
-
1,459,891
(48,176)
8,986,681
26,143
(431,962)
43,971
(645,530)
124,602
151,411
-
4,712,490
-
-
-
(170,000)
579,137
(260,720)
2,786
326,501
(10,088)
349,360
589,135
(3,862,913)
(11,029,109)
1,771,585
(88,631)
(883,808)
(27,068)
3,832,442
(952,638)
(5,310,477)
773,618
(3,736,365)
(12,097,029)
-
(528,085)
(1,000,000)
(1,550,000)
-
-
170,000
100,000
12
-
(999,988)
(1,808,085)
2,291,952
(2,132,512)
4,051,609
(295,670)
(50,361)
7,138,782
(919,931)
4,430,069
(274,784)
(334,557)
19
10
20
15
23
25
25
11
11
26
23
12
21
20
25
30
30
28
28
30
27
1. GENERAL INFORMATION
EQTEC plc (“the Company/parent company”) is a company domiciled
in Ireland. These financial statements for the financial year ended 31
December 2023 consolidate the individual financial statements of the
Company and its subsidiaries (together referred to as ‘the Group’).
The Group is a technology provider to clients in the Utility, Industrial
and Waste Management sectors with its own, proprietary and
patented technology for clean production of synthesis gas (syngas),
a fossil fuel alternative that will increasingly contribute to production
of the world’s baseload energy and biofuels. Syngas plants utilising
EQTEC technology are fuelled by waste from industrial, municipal,
agricultural, forestry and other sources. Syngas can be used either
as a direct replacement for natural gas or as an intermediate fuel for
generation of a range of final fuels including hydrogen, renewable
natural gas (RNG), liquid biofuels, thermal energy, electrical power
and chemicals such as methanol or ethanol.
EQTEC designs, develops and supplies core technology to syngas
production plants in Europe and the USA, with highly efficient
equipment that is modular and scalable from 1MW to 30MW and
beyond. EQTEC’s versatile solutions convert at least 60 types of
feedstock, including biomass wastes, industrial wastes and
municipal solid waste, with no hazardous or toxic emissions.
In future, EQTEC intends to augment its services and equipment
revenues with recurring revenues from licensing of its technology
to syngas plant owners, providing value-added services including
maintenance, upgrades and data-based services over the lifetime
of each plant.
The Company is quoted on the London Stock Exchange’s
Alternative Investment Market (AIM:EQT) and the London Stock
Exchange has awarded EQTEC the Green Economy Mark, which
recognises listed companies with 50% or more of revenues from
environmental/green solutions.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL
FINANCIAL REPORTING STANDARDS (IFRSS)
New/revised standards and interpretations adopted
in 2023
In the current financial year, the Group has applied a number of
amendments to IFRS Standards and Interpretations issued by the
International Accounting Standards Board (IASB), as adopted by
the European Union, that are effective for an annual period that
begins on or after 1 January 2023. Their adoption has not had any
impact on the disclosures or on the amounts reported in these
financial statements.
New and revised IFRS Standards in issue but not
yet effective
The following new and revised Standards and Interpretations
have not been adopted by the Group, whether endorsed by the
European Union or not. The Group is currently analysing the
practical consequences of the new Standards and the effects of
applying them to the financial statements. The related standards
and interpretations are:
Amendments to IFRS 10 and IAS 28 Sale of Contribution of Assets
between an Investor and its Associate or Joint Venture;
Amendments to IAS 1 Classification of Liabilities as Current
or Non-current;
Amendments to IAS 1 Non-current Liabilities with Covenants;
Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements;
Amendments to IAS 21 Lack of Exchangeability;
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback.
The directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial statements
of the Group in future periods.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES
Statement of Compliance, Basis of Preparation and
Going Concern
The Group’s consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union (‘EU’) and effective
at 31 December 2023 for all years presented as issued by the
International Accounting Standards Board.
The financial statements of the parent company, EQTEC plc
have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union (‘EU’)
effective at 31 December 2023 for all years presented as issued by
the International Accounting Standards Board and Irish Statute
comprising the Companies Act 2014.
The consolidated financial statements are prepared under the
historical cost convention except for certain financial assets and
financial liabilities which are measured at fair value. The principal
accounting policies set out below have been applied consistently
by the parent company and by all of the Company’s subsidiaries
to all years presented in these consolidated financial statements.
Comparative amounts have been re-presented where necessary,
to present the financial statements on a consistent basis.
IFRS 17 Insurance Contracts and Amendments to IFRS 17 Insurance
Contracts (Amendments to IFRS 17 and IFRS 4);
The financial statements are presented in euros and all values are
not rounded, except when otherwise indicated.
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure
3,865,018
10,039,579
of Accounting Policies;
(871,335)
(3,865,535)
980,098
108,763
4,845,633
980,098
Amendments to IAS 12 Deferred Tax related to Assets and
Liabilities arising from a Single Transaction;
Amendments to IAS 12 International Tax Reform – Pillar Two
Model Rules;
Amendments to IAS 8 Definition of Accounting Estimates.
The Group incurred a loss of €23,508,692 after posting non-
recurring items of €18,845,719 (2022: €10,525,115) during the
financial year ended 31 December 2023 and had net current
assets of €4,441,183 (2022: €8,966,819) and net assets of
€21,214,826 (2022: €37,132,639) at 31 December 2023.
The financial statements have been prepared on a going concern
basis. The Group’s business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Chairman’s Statement and Chief Executive’s
Report. The principal risks and uncertainties are set out in the
Directors’ Report.
66 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 67
Notes to the Financial Statements The notes on pages 67 to 113 form part of these financial statements.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Statement of Compliance, Basis of Preparation and
Going Concern - continued
The directors had carried out an evaluation of financial forecasts,
sensitised to reflect a rational judgement of the level of inherent
risk. The forecasts which Management have prepared covering the
next 12 months include certain assumptions with regard to cost
and overhead reductions, the timing and amount of any funds
generated from sales of the Group’s technology and committed
proceeds from a legal settlement agreement. The forecasts indicate
that during this period the Group will have sufficient funds to
continue with its activities for a period of at least 12 months from
the date of signing these financial statements.
After undertaking the assessments and considering the level of
inherent risk, the Directors have a reasonable expectation that
the Group and Company has adequate resources to continue
to operate for the foreseeable future and for these reasons they
continue to adopt the going concern basis in preparing the
financial statements.
Basis of consolidation
The Group financial statements consolidate those of the parent
company and all of its subsidiaries as of 31 December 2023. All
subsidiaries have a reporting date of 31 December.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised
losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the financial year are recognised
from the effective date of acquisition, or up to the effective date of
disposal, as applicable. The Group attributes total comprehensive
income or loss of subsidiaries between the owners of the parent
and the non-controlling interests based on their respective
ownership interests.
A change in the ownership interest of a subsidiary, without a loss
of control, is accounted for as an equity transaction. The carrying
amount of the Group’s interests and the non-controlling interests
are adjusted to reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and
attributed to the owners of the Company.
When the Group loses control of a subsidiary, the gain or loss on
disposal recognised in profit or loss is calculated as the difference
between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), less
liabilities of the subsidiary and any non-controlling interests. All
amounts previously recognised in other comprehensive income
in relation to that subsidiary are accounted for as if the Group had
directly disposed of the related assets or liabilities of the subsidiary
(i.e. reclassified to profit or loss or transferred to another category
of equity as required/permitted by applicable IFRS Standards).
The fair value of any investment retained in the former subsidiary
at the date when control is lost is regarded as the fair value on
initial recognition for subsequent accounting under IFRS 9 when
applicable, or the cost on initial recognition of an investment in an
associate or a joint venture.
Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities incurred,
and the equity interests issued by the Group, which includes
the fair value of any asset or liability arising from a contingent
consideration arrangement. Acquisition costs are expensed as
incurred. Assets acquired and liabilities assumed are generally
measured at their acquisition-date fair values.
Step Acquisitions
Business combination achieved in stages is accounted for using
acquisition method at acquisition date. The components of a
business combination, including previously held investments are
remeasured at fair value at acquisition date and a gain or loss is
recognised in the consolidated statement of profit or loss.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either
has been disposed of or is classified as held for sale. Profit or loss
from discontinued operations comprises the post-tax profit or loss
of discontinued operations and the post-tax gain or loss resulting
from the measurement and disposal of assets classified as held for
sale (see also policy on non-current assets and liabilities classified
as held for sale and discontinued operations below and Note 35).
Investments in associates and joint ventures
Investments in associates and joint ventures are accounted for
using the equity method. The carrying amount of the investment in
associates and joint ventures is increased or decreased to recognise
the Group’s share of the profit or loss and other comprehensive
income of the associate and joint venture, adjusted where
necessary to ensure consistency with the accounting policies of
the Group. When the Group’s share of losses on an associate or a
joint venture exceeds the Group’s interest in that associate or joint
venture (which includes any long-term interests that, in substance,
form part of the Group’s net investment in the associate or joint
venture), the Group discontinues recognising its share of future
losses. Additional losses are recognised only to the extent that
the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
Unrealised gains and losses on transactions between the Group
and its associates and joint ventures are eliminated to the extent of
the Group’s interest in those entities. Where unrealised losses are
eliminated, the underlying asset is also tested for impairment.
If there is objective evidence that the Group’s net investment in
an associate or joint venture is impaired, the requirements of IAS
36 are applied to determine whether it is necessary to recognise
any impairment loss with respect to the Group’s investment. When
necessary, the entire carrying amount of the investment (including
goodwill) is tested for impairment in accordance with IAS 36 as a
single asset by comparing its recoverable amount (higher of value
in use and fair value less costs of disposal) with its carrying amount.
Any impairment loss recognised is not allocated to any asset,
including goodwill that forms part of the carrying amount of the
investment. Any reversal of that impairment loss is recognised in
accordance with IAS 36 to the extent that the recoverable amount
of the investment subsequently increases.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Investments in related undertaking
Advances paid to acquire investee shares are recognised at cost
and will be reclassified to either to investments in associates and
joint ventures or investments in subsidiaries, as applicable.
Investments in subsidiaries
Investments in subsidiaries in the Company’s statement of financial
position are measured at cost less accumulated impairment. When
necessary, the entire carrying amount of the investment is tested
for impairment by comparing its recoverable amount (higher
of value in use and fair value less costs to sell) with its carrying
amount, any impairment loss recognised forms part of the carrying
amount of the investment. Any reversal of that impairment loss
is recognised to the extent that the recoverable amount of the
investment subsequently increases.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Euro,
which is also the functional and presentation currency of the
parent company. The Group has subsidiaries in the United
Kingdom, whose functional currency is the GBP £.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional
currency of the respective Group entity, using the exchange rates
prevailing at the dates of the transactions (spot exchange rate).
Foreign exchange gains and losses resulting from the settlement
of such transactions and from the remeasurement of monetary
items denominated in foreign currency at year-end exchange
rates are recognised in consolidated statement of profit or loss.
Non-monetary items are not retranslated at year-end and are
measured at historical cost (translated using the exchange rates
at the transaction date), except for non-monetary items measured
at fair value which are translated using the exchange rates at the
date when fair value was determined.
Foreign operations
In the Group’s financial statements, all assets, liabilities and
transactions of Group entities with a functional currency other
than Euro are translated into Euro upon consolidation. The
functional currency of the entities in the Group has remained
unchanged during the reporting financial year.
On consolidation, assets and liabilities have been translated into
Euro at the closing rate at the reporting date. Goodwill and fair
value adjustments arising on the acquisition of a foreign entity
have been treated as assets and liabilities of the foreign entity and
translated into Euro at the closing rate. Income and expenses have
been translated into Euro at the average rate over the reporting
financial year. Exchange differences are charged or credited to
consolidated statements of other comprehensive income and
recognised in the accumulated deficit reserve in equity. On
disposal of a foreign operation, the related cumulative translation
differences recognised in equity are reclassified to profit or loss and
are recognised as part of the gain or loss on disposal. To the extent
that foreign subsidiaries are not under the full control of the parent
company, the relevant share of currency differences is allocated to
the non-controlling interests.
Segment reporting
The Group has one operating segment: the technology sales
segment. In identifying these operating segments, management
generally follows the Group’s service lines representing its main
products and services.
Each operating segment is managed separately as each requires
different technologies, marketing approaches and other resources.
All inter-segment transfers are carried out at arm’s length prices
based on prices charged to unrelated customers in standalone
sales of identical goods or services.
For management purposes, the Group uses the same measurement
policies as those used in its financial statements. In addition,
corporate assets which are not directly attributable to the business
activities of any operating segment are not allocated to a segment.
This primarily applies to the Group’s central administration costs
and directors’ salaries.
Revenue
Revenue arises from the rendering of services. Revenue is
measured based on the consideration to which the Group expects
to be entitled in a contract with a customer and excludes amounts
collected on behalf of third parties. The Group recognises revenue
when it transfers control of a product or service to a customer.
To determine whether to recognise revenue, the Group follows
a 5-step process:
1. Identifying the contract with a customer;
2. Identifying the performance obligations;
3. Determining the transaction price;
4. Allocating the transaction price to the performance
obligations; and
5. Recognising revenue when/as performance obligation(s)
are satisfied.
The Group applies the revenue recognition criteria set out below
to each separately identifiable component of the sales transaction.
The consideration received from these multiple-component
transactions is allocated to each separately identifiable component
in proportion to its relative fair value. Revenue is recognised
either at a point in time or over time, when the Group satisfies
performance obligations by transferring the promised goods or
services to its customers.
Rendering of services
The Group generates revenues from after-sales service and
maintenance, consulting, and construction contracts for renewable
energy systems. Consideration received for these services is initially
deferred, included in other payables, and is recognised as revenue
in the financial year when the performance obligation is satisfied.
In recognising after-sales service and maintenance revenues, the
Group determines the stage of completion by considering both
the nature and timing of the services provided and its customer’s
pattern of consumption of those services, based on historical
experience. Where the promised services are characterised by an
indeterminate number of acts over a specified year of time, revenue
is recognised over time.
Revenue from consulting services is recognised when the services
are provided by reference to the contract’s stage of completion at
the reporting date in the same way as construction contracts for
renewable energy systems described below.
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Notes to the Financial Statements Notes to the Financial Statements 3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Revenue - continued
Construction contracts for renewable energy systems
Construction contracts for renewable energy systems specify a
fixed price for the design, development and installation of biomass
systems. When the outcome can be assessed reliably, contract
revenue and associated costs are recognised by reference to the
stage of completion of the contract activity at the reporting date.
Contract revenue is measured at the fair value of consideration
received or receivable and recognised over time on a cost-to-
cost method. When the Group cannot measure the outcome
of a contract reliably, revenue is recognised only to the extent
of contract costs that have been incurred and are recoverable.
Contract costs are recognised in the financial year in which they are
incurred. In either situation, when it is probable that total contract
costs will exceed total contract revenue, the expected loss is
recognised immediately in consolidated statement of profit or loss.
A construction contract’s stage of completion is assessed by
management by comparing costs incurred to date with the total
costs estimated for the contract (a procedure sometimes referred
to as the cost-to-cost method). Only those costs that reflect work
performed are included in costs incurred to date. The gross amount
due from customers for contract work is presented within trade
and other receivables for all contracts in progress for which costs
incurred plus recognised profits (less recognised losses) exceeds
progress billings. The gross amount due to customers for contract
work is presented within other liabilities for all contracts in progress
for which progress billings exceed costs incurred plus recognised
profits (less recognised losses).
Interest and dividends
Interest income and expenses are reported on an accrual basis
using the effective interest method. Dividends, other than those
from investments in associates and joint ventures, are recognised
at the time the right to receive payment is established.
Operating expenses
Operating expenses are recognised in consolidated statement
of profit or loss upon utilisation of the service or as incurred.
Expenditure for warranties is recognised when the Group incurs
an obligation, which is typically when the related goods are sold.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are recognised
in profit or loss in the period in which they are incurred.
Goodwill
Goodwill represents the future economic benefits arising from
a business combination that are not individually identified and
separately recognised. Goodwill is carried at cost less accumulated
impairment losses. Goodwill is not amortised but is reviewed
for impairment at least annually. Refer below for a description of
impairment testing procedures.
Non-controlling interests
Non-controlling interests that are present ownership interest and
entitle their holders to a proportionate share of the entity’s net
assets in the event of a liquidation may be initially measured either
at fair value of at the non-controlling interests’ proportionate share
of the recognised amounts of the acquiree’s identifiable net assets.
Other types of non-controlling interests are measured at fair value,
or, when applicable, on the basis specified in another IFRS.
Property, plant and equipment
Property, plant and equipment are initially recognised at
acquisition cost or manufacturing cost, including any costs
directly attributable to bringing the assets to the location and
condition necessary for them to be capable of operating in the
manner intended by the Group’s management. Property, plant and
equipment, are subsequently measured at cost less accumulated
depreciation and impairment losses. Depreciation is recognised on
a straight-line basis to write down the cost less estimated residual
value of leasehold buildings. The following useful lives are applied:
Leasehold buildings: 5-50 years
Office equipment: 2-5 years
Material residual value estimates and estimates of useful life are
updated as required, but at least annually. Gains or losses arising on
the disposal of leasehold buildings are determined as the difference
between the disposal proceeds and the carrying amount of the
assets and are recognised in profit or loss within other income or
other expenses.
Construction in progress is stated at cost less any accumulated
impairment loss. Cost comprises direct costs of construction as well
as interest expense and exchange differences capitalised during the
year of construction and installation. Capitalisation of these costs
ceases and the asset in course of construction is transferred to fixed
assets when substantially all the activities necessary to prepare
the assets for their intended use are completed. No depreciation is
provided in respect of payments on account and asset in course of
construction until it is fully completed and ready for its intended
use. Construction in progress is derecognised upon disposal or
when the asset is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss
arising on derecognition of the construction in progress (calculated
as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in profit or loss in the
period in which the asset is derecognised.
Leased assets
The Group as a lessee
The Group makes the use of leasing arrangements principally for
the provision of the main office space. The rental contract for offices
are typically negotiated for terms of between 3 and 10 years and
some of these have extension terms. The Group does not enter into
sale and leaseback arrangements. All the leases are negotiated on
an individual basis and contain a wide variety of different terms and
conditions such as purchase options and escalation clauses.
The Group assesses whether a contract is or contains a lease at
inception of the contract. A lease conveys the right to direct the
use and obtain substantially all of the economic benefits of an
identified asset for a period of time in exchange for consideration.
Some lease contracts contain both lease and non-lease
components. The Group has elected to not separate its leases for
offices into lease and non-lease components and instead accounts
for these contracts as a single lease component.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Leased assets - continued
Measurement and recognition of leases
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the consolidated statement of financial
position. 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
payments 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 payments unpaid at that date,
discounted using the Group’s incremental borrowing rate because
as the lease contracts are negotiated with third parties it is not
possible to determine the interest rate that is implicit in the lease.
The incremental borrowing rate is the estimated rate that the
Group would have to pay to borrow the same amount over a similar
term, and with similar security to obtain an asset of equivalent
value. This rate is adjusted should the lessee entity have a different
risk profile to that of the Group.
Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in substance
fixed), 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 reduced by
lease payments that are allocated between repayments of principal
and finance costs. The finance cost is the amount that produces a
constant periodic rate of interest on the remaining balance of the
lease liability.
The lease liability is reassessed when there is a change in the lease
payments. Changes in lease payments arising from a change in the
lease term or a change in the assessment of an option to purchase
a leased asset. The revised lease payments are discounted using
the Group’s incremental borrowing rate at the date of reassessment
when the rate implicit in the lease cannot be readily determined.
The amount of the remeasurement of the lease liability is reflected
as an adjustment to the carrying amount of the right-of-use asset.
The exception being when the carrying amount of the right-of-use
asset has been reduced to zero then any excess is recognised in
consolidated statement profit or loss.
Payments under leases can also change when there is either
a change in the amounts expected to be paid under residual
value guarantees or when future payments change through an
index or a rate used to determine those payments, including
changes in market rental rates following a market rent review. The
lease liability is remeasured only when the adjustment to lease
payments takes effect and the revised contractual payments for the
remainder of the lease term are discounted using an unchanged
discount rate. Except for where the change in lease payments
results from a change in floating interest rates, in which case the
discount rate is amended to reflect the change in interest rates.
The remeasurement of the lease liability is dealt with by a reduction
in the carrying amount of the right-of-use asset to reflect the full or
partial termination of the lease for lease modifications that reduce
the scope of the lease. Any gain or loss relating to the partial or full
termination of the lease is recognised in profit or loss. The right-of-
use asset is adjusted for all other lease modifications.
The Group has elected to account for short-term leases and
leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability,
the payments in relation to these are recognised as an expense
in consolidated statement of profit or loss on a straight-line basis
over the lease term.
On the consolidated statement of financial position, right-of-use
assets have been included in property, plant and equipment and
lease liabilities have been presented in separate lines therein.
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated amortisation and
accumulated impairment losses. All finite-lived intangible assets,
including patents, are accounted for using the cost model whereby
capitalised costs are amortised on a straight-line basis over their
estimated useful lives. Residual values and useful lives are reviewed
at each reporting date The following useful lives are applied:
Patents: 20 years
Impairment testing of goodwill, intangible assets and
property, plant and equipment
For impairment assessment purposes, assets are grouped at
the lowest levels for which there are largely independent cash
inflows (cash-generating units). As a result, some assets are
tested individually for impairment, and some are tested at
cash-generating unit level. Goodwill is allocated to those cash-
generating units that are expected to benefit from synergies of
a related business combination and represent the lowest level
within the Group at which management monitors goodwill. Cash-
generating units to which goodwill has been allocated (determined
by the Group’s management as equivalent to its operating
segments) are tested for impairment at least annually. All other
individual assets or cash-generating units are tested for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the
asset’s (or cash-generating unit’s) carrying amount exceeds its
recoverable amount, which is the higher of fair value less costs
of disposal and value-in-use. To determine the value-in-use,
management estimates expected future cash flows from each cash-
generating unit and determines a suitable discount rate in order to
calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group’s
latest approved budget, adjusted as necessary to exclude the
effects of future reorganisations and asset enhancements. Discount
factors are determined individually for each cash-generating unit
and reflect current market assessments of the time value of money
and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the
carrying amount of any goodwill allocated to that cash-generating
unit. Any remaining impairment loss is charged pro rata to the
other assets in the cash-generating unit. With the exception of
goodwill, all assets are subsequently reassessed for indications
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EQTEC plc Annual Report 2023 | 71
Notes to the Financial Statements Notes to the Financial Statements 3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Impairment testing of goodwill, intangible assets and
property, plant and equipment - continued
that an impairment loss previously recognised may no longer exist.
An impairment loss is reversed if the asset’s or cash-generating
unit’s recoverable amount exceeds its carrying amount.
Development assets
Development assets are stated at the lower of cost and net
realisable value. Cost comprises direct materials and overheads
that have been incurred in furthering the development of a project
towards financial close, when project financing is in place so that
the project undertaking can commence construction. Net realisable
value represents the costs plus an estimated development
premium to be earned on the costs at financial close of a project.
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value adjusted
for transaction costs, except for those carried at fair value through
profit or loss which are measured initially at fair value, and trade
receivables that do not contain a significant financing component,
which are measured at the transaction price in accordance with
IFRS 15. Subsequent measurement of financial assets and financial
liabilities is described below.
Financial assets are derecognised when the contractual rights
to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires. If the Group
issues equity instruments to a creditor to extinguish all or part
of a financial liability, the Group recognises in profit or loss the
difference between the carrying amount of the financial liability
(or part thereof) extinguished and the measurement of the equity
instruments issued.
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement financial assets, other
than those designated and effective as hedging instruments, are
classified into the following categories upon initial recognition:
amortised cost
fair value through profit or loss (FVTPL)
fair value through other comprehensive income (FVOCI)
In the periods presented, the Group does not have any financial
assets categorised as FVOCI.
The classification is determined by both:
the Group’s business model for managing the financial asset; and
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are
recognised in consolidated statement of profit or loss are presented
within finance costs or finance income, except for impairment of
trade receivables which is presented within administrative expenses.
they are held within the business model whose objective is to
hold the financial asset and collect its contractual cash flows;
the contractual terms of the financial assets give rise to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
After initial recognition, they are measured at amortised cost using
the effective interest method. Discounting is omitted where the
effect of discounting is immaterial. The Group and Company’s cash
and cash equivalents, trade and most other receivables fall into this
category of financial instruments.
Financial assets as fair value through profit or loss (FVPTL)
Financial assets held within a different business model other
than ‘hold to collect and sell’ are categorised at FVTPL. Further,
irrespective of the business model used, financial assets whose
contractual cash flows are not solely payments of principal and
interest are accounted for at FVTPL.
This category contains equity investments. The Group accounts
for the investment at FVTPL and did not make the irrevocable
election to account for the investments at FVOCI. The fair value
was determined in line with the requirements of IFRS13 ‘Fair Value
Measurement’.
Assets in this category are measured at fair value with gains or losses
recognised in profit or loss. The fair values of financial assets in this
category are determined by reference to active markets transactions
or using a valuation technique where no active market exists.
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information
to recognise expected credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of the requirements included
loans and other debt-type financial assets measured at amortised
cost and FVOCI, trade receivables, contract assets recognised and
measured under IFRS 15 and loan commitments and some financial
guarantee contracts (for the issuer) that are not measured at fair
value through profit or loss.
The Group considers a broader range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions, reasonable and
supportable forecasts that affect the expected collectability
of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is
made between:
financial instruments that have not deteriorated significantly
in credit quality since initial recognition or that have low credit
risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in
credit quality since initial recognition and whose credit risk
is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence
of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first
category (ie Stage 1) while ‘lifetime expected credit losses’ are
recognised for the second category (ie Stage 2).
Financial assets at amortised cost and impairment
Financial assets are measured at amortised cost if the assets meet
the following conditions (and are not designated at FVTPL):
Measurement of the expected credit losses is determined by a
probability-weighted estimate of credit losses over the expected
life of the financial instrument.
3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Financial instruments - continued
Trade and other receivables
The Group and Company makes use of a simplified approach
in accounting for trade and other receivables and records the
loss allowance as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering the
potential for default at any point during the life of the financial
instrument. In calculating, the Group uses its historical experience,
external indicators and forward-looking information to calculate
the expected credit losses.
Individually significant receivables are considered for impairment
when they are past due or when other objective evidence is
received that a specific counterparty will default. Receivables that
are not considered to be individually impaired are reviewed for
impairment in groups, which are determined by reference to the
industry and region of the counterparty and other shared credit risk
characteristics. The impairment loss estimate is then based on recent
historical counterparty default rates for each identified group.
In measuring the expected credit losses, the trade receivables have
been assessed on a collective basis as they possess shared credit risk
characteristics. They have been grouped based on the days past due
and also according to the geographical location of customers.
The expected loss rates are based on the payment profile for sales
over the past 48 months before 31 December 2022 and 1 January
respectively as well as the corresponding historical credit losses
during that period. The historical rates are adjusted to reflect
current and forward-looking macroeconomic factors affecting the
customer’s ability to settle the amount outstanding. The Group has
identified gross domestic product (GDP) and unemployment rates
in the countries in which the customers are domiciled to be the
most relevant factors and accordingly adjusts historical loss rates for
expected changes in these factors. However, given the short period
exposed to credit risk, the impact of these macroeconomic factors
has not been considered significant within the reporting period.
Classification and subsequent measurement of financial liabilities
The Group and Company’s financial liabilities include borrowings,
lease liabilities, trade and other payables and derivative financial
instruments.
Financial liabilities are measured subsequently at amortised
cost using the effective interest method except for derivatives
and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in
profit or loss (other than derivative financial instruments that are
designated and effective as hedging instruments). All interest-
related charges and, if applicable, changes in an instrument’s fair
value that are reported in profit or loss are included within finance
costs or finance income.
Fair values
For financial reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree to which inputs
to the fair value measurements are observable and the significance
of the inputs to the fair value measurement in its entirety, which are
described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities
Level 2: valuation techniques for which the lowest level of inputs
which have a significant effect on the recorded fair value are
observable, either directly or indirectly
Level 3: valuation techniques for which the lowest level of inputs
that have a significant effect on the recorded fair value are not
based on observable market data.
Income taxes
Tax expense recognised in consolidated statement of profit or loss
comprises the sum of deferred tax and current tax not recognised
in consolidated statement of other comprehensive income or
directly in equity.
Calculation of current tax is based on tax rates and tax laws that
have been enacted or substantively enacted by the end of the
reporting financial year. Deferred income taxes are calculated using
the liability method.
Deferred tax assets are recognised to the extent that it is probable
that the underlying tax loss or deductible temporary difference will
be utilised against future taxable income. This is assessed based
on the Group’s forecast of future operating results, adjusted for
significant non-taxable income and expenses and specific limits on
the use of any unused tax loss or credit.
Deferred tax liabilities are generally recognised in full, although
IAS 12 ‘Income Taxes’ specifies limited exemptions. As a result of
these exemptions the Group does not recognise deferred tax on
temporary differences relating to goodwill, or to its investments in
subsidiaries.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
maturing within 90 days from the date of acquisition that are
readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value.
Non-current assets and liabilities classified as held for
sale and discontinued operations
Non-current assets classified as held for sale are presented
separately and measured at the lower of their carrying amounts
immediately prior to their classification as held for sale and their fair
value less costs to sell. However, some held for sale assets such as
financial assets or deferred tax assets, continue to be measured in
accordance with the Group’s relevant accounting policy for those
assets. Once classified as held for sale, the assets are not subject to
depreciation or amortisation.
Any profit or loss arising from the sale or remeasurement of
discontinued operations is presented as part of a single line item,
profit or loss from discontinued operations (See also policy on
profit or loss from discontinued operations above).
Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that have
been issued. Share premium includes any premiums received on
issue of share capital. Any transaction costs associated with the
issuing of shares are deducted from share premium, net of any
related income tax benefits.
Accumulated deficit includes all current and prior financial year
retained losses. All transactions with owners of the parent are
recorded separately within equity. Dividend distributions payable
to equity shareholders are included in other liabilities when the
dividends have been approved in a general meeting prior to the
reporting date.
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EQTEC plc Annual Report 2023 | 73
Notes to the Financial Statements Notes to the Financial Statements 3. STATEMENT OF MATERIAL ACCOUNTING POLICIES –
CONTINUED
Share-based payments
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. The Company
issues equity- settled share-based payments in the form of share
options and warrants to certain Directors, employees and advisors.
Equity-settled share-based payments are made in settlement of
professional and other costs. These payments are measured at the
fair value of the services provided which will normally equate to the
invoiced fees and charged to the consolidated statement of profit
or loss, share premium account or are capitalised according to the
nature of the fees incurred.
Where employees are rewarded using share-based payments,
the fair value of employees’ services is determined indirectly by
reference to the fair value of the equity instruments granted. This
fair value is appraised at the grant date and excludes the impact of
non-market vesting conditions (for example profitability and sales
growth targets and performance conditions). Fair value is estimated
using the Black-Scholes valuation model. The expected life used in
the model has been adjusted on the basis of management’s best
estimate for the effects of non- transferability, exercise restrictions
and behavioural considerations. All share-based remuneration
is ultimately recognised as an expense in profit or loss with a
corresponding credit to retained earnings. If vesting years or other
vesting conditions apply, the expense is allocated over the vesting
year, based on the best available estimate of the number of share
options expected to vest.
Non-market vesting conditions are included in assumptions about
the number of options that are expected to become exercisable.
Estimates are subsequently revised if there is any indication
that the number of share options expected to vest differs from
previous estimates. Any adjustment to cumulative share-based
compensation resulting from a revision is recognised in the
current financial year. The number of vested options ultimately
exercised by holders does not impact the expense recorded in
any financial year.
Upon exercise of share options, the proceeds received, net of any
directly attributable transaction costs, are allocated to share
capital up to the nominal (or par) value of the shares issued with
any excess being recorded as share premium.
Warrants
Share warrants issued to shareholders in connection with share
capital issues are measured at fair value at the date of issue and
treated as a separate component of equity, in Other Reserves. Fair
value is determined at the grant date and is estimated using the
Black-Scholes valuation model. Share warrants issued separately to
Directors, employees and advisers are accounted for in accordance
with the policy on share-based payments.
Post-employment benefit plans
The Group provides post-employment benefit plans through
various defined contribution plans.
Defined contribution plans
The Group pays fixed contributions into independent entities in
relation to several retirement plans and insurances for individual
employees. The Group has no legal or constructive obligations
to pay contributions in addition to its fixed contributions, which
are recognised as an expense in the period that related employee
services are received.
Short-term employee benefits
A liability is recognised for benefits accruing to employees in
respect of wages and salaries, annual leave and sick leave in the
period the related service is rendered at the undiscounted amount
of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits
are measured at the undiscounted amount of the benefits expected
to be paid in exchange for the related service.
Provisions, contingent assets and contingent liabilities
Provisions for legal disputes, onerous contracts or other claims are
recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an
outflow of economic resources will be required from the Group
and amounts can be estimated reliably. Timing or amount of the
outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal
plan for the restructuring exists and management has either
communicated the plan’s main features to those affected or
started implementation. Provisions are not recognised for
future operating losses.
Any reimbursement that the Group is virtually certain to collect
from a third party with respect to the obligation is recognised as a
separate asset. However, this asset may not exceed the amount of
the related provision.
No liability is recognised if an outflow of economic resources as a
result of present obligations is not probable. Such situations are
disclosed as contingent liabilities unless the outflow of resources
is remote.
4. SIGNIFICANT MANAGEMENT JUDGEMENT IN
APPLYING ACCOUNTING POLICIES AND ESTIMATION
UNCERTAINTY
When preparing the financial statements, management makes
a number of judgements, estimates and assumptions about
the recognition and measurement of assets, liabilities, income
and expenses.
Significant management judgements
The following are significant management judgements in applying
the accounting policies of the Group that have the most significant
effect on the financial statements.
Going concern
As described in the basis of preparation and going concern in
Note 3 above, the validity of the going concern basis is dependent
upon the achievement of management forecasts taking account
of reasonably plausible changes in trading performance and
market conditions. After undertaking the assessments and
considering the uncertainties set out above, the Directors have
a reasonable expectation that the Group and the Company has
adequate resources to continue to operate for the foreseeable
future. Furthermore, the Directors are not aware of any material
uncertainties that may cast significant doubt upon the Group and
Company’s ability to continue as a going concern.
4. SIGNIFICANT MANAGEMENT JUDGEMENT IN
APPLYING ACCOUNTING POLICIES AND ESTIMATION
UNCERTAINTY – CONTINUED
Significant management judgements - continued
Control assessment in a business combination
As disclosed in Note 20, the Group owns 50.02% of the voting rights
in Newry Biomass Limited. One other company owns the remaining
voting rights. Management has reassessed its involvement in
Newry Biomass Limited in accordance with IFRS 10’s revised control
definition and guidance and has concluded that, based on its
sufficiently dominant voting interests to direct its activities, it has
control of Newry Biomass Limited.
As disclosed in Note 20, the Group owns 100% of the shares in
Biogaz Gardanne SAS. Biogaz Gardanne SAS was created to fulfil
a narrow, specific purpose which was to fulfil the objectives of the
French government. Management has assessed its involvement
in Biogaz Gardanne SAS in accordance with IFRS 10’s revised
control definition and guidance and has concluded that, based on
the fact that control over the activities of the company is driven
by the French government, it does not have control over Biogaz
Gardanne SAS and that the investment should be accounted for as
an unconsolidated structured entity.
Interests in joint ventures
The Group holds 50.1% of the share capital of EQTEC Synergy
Projects Limited but this entity is considered to be a joint venture
as decisions about the relevant activities requires the unanimous
consent of both the Group and the joint venture partner.
The Group holds 49% of the share capital of Synergy Karlovac d.o.o.
and Synergy Belisce d.o.o. However, these entities are considered
to be a joint venture of the Group as decisions about the relevant
activities requires the unanimous consent of both the Group and
the joint venture partner.
Revenue
As revenue from construction contracts is recognised over time, the
amount of revenue recognised in a reporting period depends on
the extent to which the performance obligation has been satisfied.
It also requires significant judgment in determining the estimated
costs required to complete the promised work when applying the
cost-to-cost method.
Deferred tax assets
Deferred tax is recognised based on differences between the
carrying value of assets and liabilities and the tax value of assets
and liabilities. Deferred tax assets are only recognised to the extent
that the Group estimates that future taxable profits will be available
to offset them. The Group and Company has not recognised any
deferred tax assets in the current or prior financial years.
Estimation uncertainty
Information about estimates and assumptions that have the most
significant effect on recognition and measurement of assets,
liabilities, income and expenses is provided below. Actual results
may be substantially different.
Impairment of goodwill and non-financial assets
Determining whether goodwill and non-financial assets are
impaired requires an estimation of the value in use of the cash
generating units to which the assets have been allocated. The value
in use calculation requires the directors to estimate the future cash
flows to arise from the cash-generating unit and a suitable discount
rate in order to calculate present value. Where the actual cash flows
are less than expected, a material impairment may arise. The total
property, plant and equipment reversal of impairment charges
during the financial year as included in Note 18 amounted to €Nil
(2022: €Nil), while the impairment for goodwill during the financial
year as included in Note 19 amounted to €5,283,459 (2022: €Nil).
Provision for impairment of equity-accounted investments - Group
Determining whether the carrying value of Group’s equity-
accounted investments has been impaired requires an estimation
of the value in use of the investment in associated undertakings
and joint venture vehicles. The value in use calculation requires the
directors to estimate the future cash flows expected to arrive from
these vehicles and a suitable discount rate in order to calculate
present value. After reviewing these calculations, the directors are
satisfied that a net impairment cost of €2,619,234 (2022: €4,712,490)
be recognised in the Group accounts of EQTEC plc. Details on
equity-accounted investments can be found in note 21.
Provision for impairment of investment in subsidiaries – Company
Determining whether the carrying value of the Company’s
investment in subsidiaries has been impaired requires an
estimation of the value in use of the investment in subsidiaries.
The value in use calculation requires the directors to estimate
the future cash flows expected to arrive from these vehicles and
a suitable discount rate in order to calculate present value. After
reviewing these calculations, the directors are satisfied that a
net impairment cost of €15,783,854 (2022: €Nil) be recognised
in the Company accounts of EQTEC plc. Details on investment in
subsidiaries can be found in note 20.
Useful lives and residual values of intangible assets
Intangible assets are amortised over their useful lives taking
into account, where appropriate, residual values. Assessment of
useful lives and residual values are performed annually, taking
into account factors such as technological innovation, market
information and management considerations. In assessing the
residual value of an asset, its remaining life, projected disposal
value and future market conditions are taken into account. Detail
on intangible assets can be found in note 19.
Provision for impairment of financial assets
Determining whether the carrying value of Group’s financial assets
has been impaired requires an estimation of the value in use of the
financial assets. The value in use calculation requires the directors
to estimate the future cash flows expected to arrive from these
vehicles and a suitable discount rate in order to calculate present
value. After reviewing these calculations, the directors are satisfied
that a net impairment cost of €1,417,066 (2022: €Nil) be recognised
in the Group accounts of EQTEC plc. Details on financial assets can
be found in Note 22.
Allowances for impairment of loans receivable from project
development undertakings
The Group estimates the allowance for doubtful loan receivables
based on assessment of specific accounts where the Group has
objective evidence comprising default in payment terms or
significant financial difficulty that certain borrowers are unable to
meet their financial obligations. In these cases, judgment used was
based on the best available facts and circumstances including but
not limited to, the length of relationship. The Group and Company
measure expected credit losses of a financial instrument in a way
that reflects an unbiased and probability-weighted amount that is
determined by evaluating a range of possible outcomes, the time
74 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 75
Notes to the Financial Statements Notes to the Financial Statements 4. SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES AND ESTIMATION UNCERTAINTY
– CONTINUED
Estimation uncertainty - continued
value of money and information about past events, current conditions and forecasts of future economic conditions. When measuring
ECL the Group and Company use reasonable and supportable forward-looking information, which is based on assumptions for the future
movement of different economic drivers and how these drivers will affect each other. At 31 December 2023, provisions for doubtful loans
receivable amounted to €3,528,550 (2022: €Nil) (see note 25).
Allowances for impairment of trade receivables
The Group estimates the allowance for doubtful trade receivables based on assessment of specific accounts where the Group has
objective evidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their
financial obligations. In these cases, judgment used was based on the best available facts and circumstances including but not limited
to, the length of relationship. The Group and Company measure expected credit losses of a financial instrument in a way that reflects
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money
and information about past events, current conditions and forecasts of future economic conditions. When measuring ECL the Group
and Company use reasonable and supportable forward-looking information, which is based on assumptions for the future movement of
different economic drivers and how these drivers will affect each other. At 31 December 2023, provisions for doubtful debts amounted to
€875,687 which represents 12% of trade receivables at that date (2022: €475,687– 7%) (see note 26).
Share based payments and warrants
The calculation of the fair value of equity-settled share-based awards and warrants issued in connection with share issues and the
resulting charge to the consolidated statement of profit or loss or share-based payment reserve requires assumptions to be made
regarding future events and market conditions. These assumptions include the future volatility of the Company’s share price. These
assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards at the date of grant (See
Notes 10 and 28).
Estimating impairment of development assets
Management estimates the net realisable values of development assets, taking into account the most reliable evidence available at
each reporting date. The future realisation of these development assets may be affected by market-driven changes that may reduce
future prices/premiums (See Note 25). After reviewing the development assets, the directors are satisfied that a net impairment cost of
€4,603,546 (2022: €2,752) be recognised in the Group accounts of EQTEC plc.
5. FINANCIAL RISK MANAGEMENT
Financial risk management objectives and policies
The Group and Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk, interest rate risk and foreign currency
exchange risk.
The Group and Company’s financial risk management programme aims to manage the Group’s exposure to the aforementioned risks in
order to minimise the potential adverse effects on the financial performance of the Group and Company. The Group and Company seeks
to minimise the effects of these risks by monitoring the working capital position, cash flows and interest rate exposure of the Group and
Company. There is close involvement by members of the Board of Directors in the day-to-day running of the business.
Many of the Group and Company’s transactions are carried out in Pounds Sterling.
Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group and Company. The Group and Company is exposed
to credit risk from financial assets including cash and cash equivalents held at banks, trade and other receivables and loans receivable from
project development undertakings.
The Group’s maximum exposure to credit risk is represented by the balance sheet amount of each financial asset:
5. FINANCIAL RISK MANAGEMENT - CONTINUED
The Company’s maximum exposure to credit risk is represented by the balance sheet amount of each financial asset:
Loans receivable from project development undertakings (Note 25)
Trade and other receivables (Note 26)
Cash and cash equivalents (Note 27)
2023
€
-
18,591,102
108,763
2022
€
3,421,901
23,552,137
980,098
The Group and Company’s credit risk is primarily attributable to its loans receivable from project development undertakings and trade and
other receivables.
The Group has adopted procedures in extending credit terms to customers and in monitoring its credit risk. The Group’s exposure to
credit risk arises from defaulting customers, with a maximum exposure equal to the carrying amount of the related receivables. Provisions
are made for impairment of trade receivables when there is default of payment terms and significant financial difficulty. On-going credit
evaluation is performed on the financial condition of accounts receivable at operating unit level at least on a monthly basis.
The Group had risk exposure to the following counterparties at year-end:
Loans receivable from project development undertakings
Loan receivable from Logik Wte Limited (Note 25)
Loan receivable from Shankley Biogas Limited (Note 25)
Trade and other receivables
Receivable from Synergy Karlovac d.o.o. (Note 36)
Receivable from Synergy Belisce d.o.o. (Note 36)
2023
€
2022
€
2,066,099
-
2,320,428
2,292,836
2,024,186
2,824,572
2,245,191
2,217,523
Credit risk - continued
Apart from the above, the Group does not have significant risk exposure to any single counterparty or any group of counterparties having
similar characteristics. The Group defines counterparties as having similar characteristics if they are related parties. Concentration of credit
risk related to the above companies did not exceed 20% of gross monetary assets at any time during the year. Concentration of credit risk
to any other counterparty did not exceed 5% of gross monetary assets at any time during the financial year.
Exposure to credit risk on cash deposits and liquid funds is monitored by directors. Cash held on deposit is with financial institutions in the
Ba rating category of Moody’s (2022: Ba). During the financial year ended 31 December 2023, the Group impaired the balance receivable
from Shankley Biogas Limited, resulting in a loss of €2,883,057 (see Note 25). The directors are of the opinion that the likelihood of default
by any other counter party leading to material loss is minimal. The reconciliation of loss allowance is included in Note 26.
Liquidity risk
The Group and Company’s liquidity is managed by ensuring that sufficient facilities are available for the Group and Company’s operations
from diverse funding sources. The Group uses cash flow forecasts to regularly monitor the funding requirements of the Group. The Group’s
operations are funded by cash generated from financing activities, borrowings from banks and investors and proceeds from the issuance
of ordinary share capital.
The table below details the maturity of the Group’s contracted liabilities as at 31 December 2023:
NOTES
32
30
UP TO 1 YEAR
€
2,853,641
3,025,476
5,879,117
1 – 5 YEARS
€
AFTER 5 YEARS
€
-
2,775,242
2,775,242
-
-
-
TOTAL
€
2,853,641
5,800,718
8,654,359
Loans receivable from project development undertakings (Note 25)
Trade and other receivables (Note 26)
Cash and cash equivalents (Note 27)
2023
€
2,066,099
6,723,599
262,019
2022
€
5,446,087
6,094,669
1,693,116
Trade and other payables
Borrowings
76 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 77
Notes to the Financial Statements Notes to the Financial Statements 5. FINANCIAL RISK MANAGEMENT - CONTINUED
The table below details the maturity of the Group’s liabilities as at 31 December 2022:
Trade and other payables
Borrowings
NOTES
32
30
UP TO 1 YEAR
€
6,264,404
5,180,902
11,445,306
1 – 5 YEARS
€
AFTER 5 YEARS
€
-
1,131,513
1,131,513
-
-
-
TOTAL
€
6,264,404
6,312,415
12,576,819
Refer to Notes 30 and 32 for the outstanding balance.
Interest rate risk
The primary source of the Group’s interest rate risk relates to bank loans and other debt instruments while the Company’s interest rate risk
relates to debt instruments. The interest rates on these liabilities are disclosed in Note 30.
The Group’s bank borrowings and other debt instruments (excluding amounts in the disposal group) amounted to €4,946,213 and
€6,170,636 in 31 December 2023 and 31 December 2022, respectively. The Company’s bank borrowings and debt instruments amounted
to €4,700,234 and €6,070,674 in 31 December 2023 and 31 December 2022, respectively.
The interest rate risk is managed by the Group and Company by maintaining an appropriate mix of fixed and floating rate borrowings.
The Group does not engage in hedging activities. Bank borrowings and certain debt instruments are arranged at floating rates which are
mainly based upon EURIBOR and the prime lending rate of financial institutions thus exposing the Group to cash flow interest rate risk. The
other remaining debt instruments were arranged at fixed interest rates and expose the Group to a fixed cash outflow.
These bank borrowings and debt instruments are mostly medium-term to long-term in nature. Interest rates on loans received from
investors and shareholders are fixed in some cases while others are a fixed percentage greater than current prime lending rates. ‘Medium-
term’ refers to bank borrowings and debt instruments repayable between 2 and 5 years and ‘long-term’ to bank borrowings repayable
after more than 5 years.
The sensitivity analysis below has been determined based on the exposure to interest rates for non-derivative instruments at the end of
the reporting financial year. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability outstanding at the
end of the financial year was outstanding for the whole year. A 50-basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s assessment of the reasonably possible changes in interest rates.
If interest rates have been 50 basis points higher/lower and all other variables were held constant, the Group’s loss for the financial year
ended 31 December 2023 would increase/decrease by €741 (2022: €Nil) with a corresponding decrease/increase in equity.
The Group’s sensitivity to interest rates has increased as a result of obtaining a bank overdraft in the year.
Foreign Exchange risk
The Group and Company is mainly exposed to future changes in the Sterling, the US Dollar and the Croatian Kuna relative to the Euro.
These risks are managed by monthly review of Sterling, US Dollar and Croatian Kuna denominated monetary assets and monetary
liabilities and assessment of the potential exchange rate fluctuation exposure. The Group and Company’s exposure to foreign exchange
risk is not actively managed. Management will reassess their strategy to foreign exchange risk in the future.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting
financial year are as follows:
Sterling
US Dollar
Croatian Kuna
LIABILITIES
2023
€
2022
€
ASSETS
2023
€
2022
€
5,498,875
10,475,339
2,453,921
6,559,389
44,938
-
29,463
426,154
2,301
-
2,076
5,143,044
The carrying amount of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting
financial year are as follows:
Sterling
US Dollar
LIABILITIES
2023
€
2022
€
ASSETS
2023
€
2022
€
5,088,681
7,274,170
12,374,437
13,894,925
44,938
27,802
20,421
19,463
5. FINANCIAL RISK MANAGEMENT - CONTINUED
The following table details the Group and Company’s sensitivity to a 10% increase and decrease in the Euro against the relevant foreign
currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents
management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts their translation at the year-end for a 10% change in foreign currency rates.
The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan
is in the currency other than the currency of the lender or the borrower. A positive number below indicates an increase in profit where
the Euro strengthens 10% against the relevant currency. For a 10% weakening of the Euro against the relative currency, there would be a
comparable impact on the loss, and the balances below will be negative.
Sterling Impact: Profit and loss/equity
US Dollar Impact: Profit & Loss/Equity
Croatian Kuna: Profit and loss/equity
GROUP
COMPANY
2023
€
307,571
4,307
-
2022
€
395,550
2,766
476,454
31 DEC 2023
€
31 DEC 2022
€
735,935
2,476
-
668,763
893
-
The Group and Company’s sensitivity to foreign currency has increased during the current financial year mainly due to the placing of
equity for sterling in the financial year.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates, which are
detailed above. There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.
Price risk
The Group is exposed to equity price risk in respect of its investment in Metal NRG plc, which is listed on the London Stock Exchange (see
Note 23). However, as the likelihood of the Group recovering this amount is considered remote, it was deemed prudent to provide fully for
the investment in Metal NRG plc, thus eliminating further price risk.
6. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Group manages its capital to ensure that the Group is able to continue as a going concern while maximising the return to shareholders
through the optimisation of the debt and equity balance.
The capital structure of the company consists of financial liabilities, cash and cash equivalents and equity attributable to the equity holders
of the parent company. The Group’s management reviews the capital structure on a yearly basis. As part of the review, management
considers the cost of capital and risks associated with it. The Group’s overall strategy on capital risk management is to continue to improve
the ratio of debt to equity.
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. No changes were made in the
objectives, policies or processes for managing capital during the years ended 31 December 2023 and 2022.
The gearing ratio of the Group for the financial year presented is as follows:
Borrowings
Lease liabilities
Cash and cash equivalents
Net debt
Equity attributable to the owners of the company
Net debt to equity ratio
31 DEC 2023
€
4,946,213
603,316
(262,019)
5,287,510
23,520,758
22%
31 DEC 2022
€
6,170,636
56,531
(1,693,116)
4,534,051
39,391,162
12%
78 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 79
Notes to the Financial Statements Notes to the Financial Statements 7. SEGMENT INFORMATION
Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment
performance focuses on the products and services sold to customers. The Group’s reportable segments under IFRS 8 Operating Segments
are as follows:
Technology Sales: Being the sale of Gasification Technology and associated Engineering and Design Services.
The chief operating decision maker is the Chief Executive Officer. Information regarding the Group’s current reportable segment is
presented below. The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment:
SEGMENT REVENUE
SEGMENT PROFIT/(LOSS)
Technology Sales
Total from continuing operations
Central administration costs and directors’ salaries
Impairment costs
Other income
Other gains
Change in fair value of financial investments
Foreign currency (losses)/gains
Employee share-based compensation
Share of results from equity accounted investments
Gains from sales to equity accounted investments deferred
Loss arising from loss of control of subsidiaries
Impairment of equity-accounted investment
Impairment of other investments
Impairment of loans receivable from project
development undertakings
Impairment of development assets
Impairment of goodwill
Impairment of trade and other receivables
Loss on disposal of tangible asset
Finance income
Finance costs
Loss before taxation (continuing operations)
2023
€
2,546,975
2,546,975
2022
€
7,970,072
7,970,072
2023
€
(1,629,462)
(1,629,462)
(2,361,673)
-
109,672
431,962
(26,143)
(48,212)
-
(23,603)
-
-
(2,619,234)
(1,417,066)
(3,528,550)
(4,603,546)
(5,283,459)
(1,393,864)
-
121,320
(1,486,020)
(23,757,878)
2022
€
(988,906)
(988,906)
(3,785,899)
(2,752)
33,645
10,088
(326,501)
156,835
(340,257)
(52,059)
(28,378)
(489)
(4,712,490)
-
-
-
-
-
(154,205)
316,805
(589,618)
(10,464,181)
Revenue reported above represents revenue generated from associated companies, jointly controlled entities, unconsolidated
structured entities and external customers. Inter-segment sales for the financial year amounted to €Nil (2022: €Nil). Included in
revenues in the Technology Sales Segment are revenues of €1,126,977 (2022: €4,860,015) which arose from sales to associate
undertakings, joint ventures and unconsolidated structured entities of EQTEC plc. This represents 44% (2022: 61%) of total revenues
in the financial year. A breakdown of the turnover by associated undertaking, joint venture and unconsolidated structured entity is
set out in Note 36 Related Party Transactions.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3. Segment profit
or loss represents the profit or loss earned by each segment without allocation of central administration costs and directors’ salaries, other
operating income, share of profit or loss of jointly controlled entities, profit on disposal of jointly controlled entities, interest costs, interest
income and income tax expense. This is the measure reported to the chief operating decision maker for the purpose of resource allocation
and assessment of segment performance.
Other segment information:
Technology sales
Head Office
80 | EQTEC plc Annual Report 2023
DEPRECIATION AND AMORTISATION
ADDITIONS TO NON-CURRENT ASSETS
2023
€
113,376
192,872
306,248
2022
€
130,084
233,751
363,835
2023
€
502,696
217,574
720,270
2022
€
83,241
-
83,241
7. SEGMENT INFORMATION – CONTINUED
The Group operates in four principal geographical areas: Republic of Ireland (country of domicile), the European Union, the United States
of America and the United Kingdom. The Group’s revenue from continuing operations from external customers and information about its
non-current assets* by geographical location are detailed below:
Republic of Ireland
EU
United States of America
United Kingdom
REVENUE FROM ASSOCIATES AND
EXTERNAL CUSTOMERS
NON-CURRENT ASSETS*
2023
€
-
2022
€
-
2023
€
-
2022
€
-
2,256,621
5,128,979
2,607,493
2,392,776
290,354
-
2,546,975
-
2,841,093
7,970,072
-
185,549
2,793,042
-
35,049
2,427,825
* Non-current assets excluding goodwill, financial instruments, deferred tax and investment in jointly controlled entities and associates. The management information provided to
the chief operating decision maker does not include an analysis by reportable segment of assets and liabilities and accordingly no analysis by reportable segment of total assets
or total liabilities is disclosed.
8. REVENUE
An analysis of the Group’s revenue for the financial year (excluding interest revenue), from continuing operations, is as follows:
Revenue from technology sales
Revenue from development fees
9. OTHER INCOME
Other income
10. EMPLOYEE SHARE-BASED PAYMENTS
Expensed in the year
2023
€
1,469,589
1,077,386
2,546,975
2022
€
4,768,964
3,201,108
7,970,072
2023
€
109,672
2022
€
33,645
2023
€
-
2022
€
340,257
The share-based payment expense includes the cost of employee warrants and options granted and vested in the year (Note 28).
11. FINANCE COSTS AND INCOME
Finance Costs
Interest on loans, bank facilities and overdrafts
Fees on early redemption of loans
Interest expense for leasing arrangements
Other interest
Finance Income
Interest receivable on loans advanced
Interest receivable on deferred consideration
Other interest receivable
2023
€
2022
€
1,144,349
320,474
13,641
7,556
1,486,020
119,726
-
1,594
121,320
582,620
-
5,000
1,998
589,618
279,839
36,966
-
316,805
EQTEC plc Annual Report 2023 | 81
Notes to the Financial Statements Notes to the Financial Statements 12. OTHER GAINS
Gain/(loss) on debt for equity swap
2023
€
431,962
2022
€
10,088
During the financial year the Group extinguished some of its financial liabilities by issuing equity instruments. In accordance with IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments, the gain recognised on these transactions was €431,962 (2022: €10,088).
13. EMPLOYEE DATA
The aggregate payroll costs of employees (including executive directors) in the Group were as follows:
Salaries
Social insurance costs
Pension costs – defined contribution plans
Other compensation costs:
Cost of share-based payments
Short term incentives
Private health insurance and other insurance costs
Average number of employees (including executive directors)
Company
Average number of employees (including executive directors)
Capitalised employee costs in the financial year amounted to €Nil (2022 €Nil).
14. LOSS BEFORE TAXATION
Loss before taxation on continuing operations is stated after charging/(crediting):
Depreciation of property, plant and equipment (Note 18)
Amortisation of intangible assets (Note 19)
Movement in fair value of investments (Note 23)
Research and development
Losses/(gains) on foreign exchange
Directors’ remuneration: (Note 34)
for services as directors
for salaries as management
share-based payments
Impairment of development assets (Note 25)
Auditor’s remuneration:
Audit of Group accounts
Tax advisory services
2023
€
2022
€
2,495,084
2,375,349
504,769
61,998
-
(547,575)
54,555
543,682
64,317
340,257
444,690
58,897
2,568,831
3,827,192
No.
28
3
No.
27
3
2023
€
2022
€
181,584
124,664
26,143
-
239,233
124,602
326,501
12,170
48,212
(156,835)
110,442
901,379
-
4,603,546
100,000
15,000
115,000
112,860
919,776
185,495
2,752
93,000
15,000
108,000
15. SIGNIFICANT AND NON-RECURRNING TRANSACTIONS
Impairment of investment (Note (a))
Impairment of other investments (Note (b))
Impairment on loans receivable from project development undertakings (Note (c))
Impairment of development assets (Note (d))
Impairment of goodwill (Note (e))
Impairment of trade and other receivables (Note (f))
Loss on disposal of tangible asset (Note (g))
2023
€
2,619,234
1,417,066
3,528,550
4,603,546
5,283,459
1,393,864
-
2022
€
4,712,490
-
-
-
-
-
154,205
a) Please see note 21 for further details
b) Please see notes 22 and 23 for further details
c) Please see note 25 for further details
d) Please see note 25 for further details
e) Please see note 19 for further details
f) Please see note 26 for further details
g) This is a loss arising on the disposal of gasification equipment installed in the University of Lorraine for R&D purposes.
16. INCOME TAX
Income tax expense comprises:
Income tax expense comprises:
Current tax expense
Deferred tax credit
Adjustment for prior financial years
Tax expense
Loss before taxation
Applicable tax 12.50% (2022: 12.50%)
Effects of:
Amortisation & depreciation in excess of capital allowances
Expenses not deductible for tax purposes
Losses carried forward
Current tax expense
Adjustment for prior financial years
Actual tax expense
2023
€
-
-
22,768
22,768
2022
€
-
-
60,934
60,934
2023
€
2022
€
(23,485,924)
(10,464,181)
(2,935,741)
(1,308,023)
38,281
1,114,243
1,783,217
-
22,768
22,768
45,479
690,421
572,123
-
60,934
60,934
The tax rate used for the reconciliation above is the corporate rate of 12.5% payable by corporate entities in Ireland on taxable profits
under tax law in that jurisdiction.
82 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 83
Notes to the Financial Statements Notes to the Financial Statements
17. LOSS PER SHARE
18. PROPERTY, PLANT AND EQUIPMENT
Basic loss per share
From continuing operations
From discontinued operations
Total basic loss per share
Diluted loss per share
From continuing operations
From discontinued operations
Total diluted loss per share
2023
€ PER SHARE
2022
RESTATED
€ PER SHARE
(0.208)
0.002
(0.206)
(0.208)
0.002
(0.206)
(0.117)
-
(0.117)
(0.001)
-
(0.001)
The loss and weighted average number of ordinary shares used in the calculation of the basic and diluted loss per share are as follows:
2023
€
2022 RESTATED
€
Loss for financial year attributable to equity holders of the parent
(23,508,657)
(10,525,104)
Profit/(loss) for the financial year from discontinued operations used in the calculation of basic
earnings per share from discontinued operations
Losses used in the calculation of basic loss per share from continuing operations
Weighted average number of ordinary shares for the purposes of basic loss per share
Weighted average number of ordinary shares for the purposes of diluted loss per share
271,954
(33,776)
(23,780,611)
(10,491,328)
No.
No. (Restated)
114,129,384
114,129,384
89,660,843
89,660.843
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were excluded in the diluted earnings per share calculation as they were anti-dilutive.
Share warrants in issue
Share options in issue
LTIP options in issue
Convertible loans
Total anti-dilutive shares
2023
27,339,399
673,045
2,116,938
207,422,790
2022
RESTATED
4,598,810
673,045
1,488,109
3,918,853
237,552,172
10,678,817
Details of share warrants and share options in issue outstanding at year-end are set out in Note 28.
Events after the year-end
As disclosed in Note 37, 12,802,031 shares were issued on 8 May 2024 in settlement of debt. If these shares were in issue prior to
31 December 2023, they would have affected the calculation of the weighted average number of shares in issue for the purposes of
calculating both the basic and diluted loss per share by 1,066,836 (assuming the shares were issued in December 2023).
As disclosed in Note 37, 63,322,989 were issued in June 2024 as part of a share placing. If these shares were in issue prior to 31 December
2023, they would have affected the calculation of the weighted average number of shares in issue for the purposes of calculating both
the basic and diluted loss per share by 5,276,916 (assuming the shares were issued in December 2023).
Retrospective Adjustments
The comparative earnings per share figures have been restated to reflect:
(1) The disposal of a subsidiary in 2023, leading to a restatement of comparative figures to reflect discontinued operations
(see Notes 34 and 35); and
(2) The capital reorganisation that took place in the current financial year, leading to a decrease in the number of ordinary shares
outstanding (see Note 28).
GROUP
Cost
At 1 January 2022
Additions
Disposals
Exchange differences
At 31 December 2022
Additions
Disposal of subsidiary
De-recognition of assets
Exchange differences
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Charge for the financial year
Charge on disposal
Exchange differences
At 31 December 2022
Charge for the financial year
De-recognition of assets
Exchange differences
At 31 December 2023
Carrying amount
At 31 December 2022
At 31 December 2023
RIGHT OF USE
ASSETS
€
OFFICE
EQUIPMENT
€
CONSTRUCTION
IN PROGRESS
€
579,316
4,042
-
(11,420)
571,938
706,705
-
(575,620)
4,365
707,388
325,212
197,016
-
(7,810)
514,418
168,187
(575,620)
3,170
110,155
57,520
597,233
63,342
29,199
-
-
92,541
6,265
-
-
-
98,806
63,342
3,666
-
-
67,008
13,397
-
-
80,405
25,533
18,401
TOTAL
€
835,415
83,241
(192,757)
(11,420)
714,479
712,970
(50,000)
(575,620)
4,365
806,194
388,554
239,233
(38,551)
(7,810)
581,426
181,584
(575,620)
3,170
190,560
133,053
615,634
2022
€
57,520
TOTAL
€
192,757
50,000
(192,757)
-
50,000
-
(50,000)
-
-
-
-
38,551
(38,551)
-
-
-
-
-
-
50,000
-
2023
€
597,233
OFFICE
EQUIPMENT
€
Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:
Leasehold buildings
COMPANY
Cost
At 1 January 2022, at 31 December 2022 and at 31 December 2023
1,233
1,233
Accumulated depreciation
At 1 January 2022, at 31 December 2022 and at 31 December 2023
1,233
1,233
Carrying amount
At 1 January 2023
At 31 December 2023
–
–
–
–
84 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 85
Notes to the Financial Statements Notes to the Financial Statements 19. INTANGIBLE ASSETS
GROUP
Cost
At 1 January 2022 and at 31 December 2022
Additions, separately acquired
As at 31 December 2023
Amortisation and Impairment
At 1 January 2022
Amortisation
At 31 December 2022
Amortisation
Impairment
As at 31 December 2023
Carrying value
As at 31 December 2022
As at 31 December 2023
COMPANY
Cost
GOODWILL
€
OTHER INTANGIBLES
€
PATENTS
€
TOTAL
€
16,710,497
-
16,710,497
1,427,038
-
1,427,038
-
5,283,459
6,710,497
15,283,459
10,000,000
-
2,492,059
19,202,556
7,300
7,300
-
7,300
2,492,059
19,209,856
-
-
-
61
-
61
72,685
124,602
197,287
124,603
-
321,890
1,499,723
124,602
1,624,325
124,664
5,283,459
7,032,448
-
2,294,772
17,578,231
7,239
2,170,169
12,177,408
PATENTS
€
TOTAL
€
As at 1 January 2022, 31 December 2022 and as at 31 December 2023
2,492,059
2,492,059
Amortisation and Impairment
At 1 January 2022
Amortisation
At 31 December 2022
Amortisation
At 31 December 2023
Carrying value
As at 31 December 2022
As at 31 December 2023
72,685
124,602
197,287
124,603
321,890
72,685
124,602
197,287
124,603
321,890
2,294,772
2,170,169
2,294,772
2,170,169
Patents
During the year ended 31 December 2021, the Group acquired patents from a company controlled by one of the directors. Patent are
amortised over their estimated useful lives, which is on average 20 years. The average remaining amortisation period for these patents is
17.4 years (2022: 18.4 years).
Goodwill
Cash-generating units
Goodwill acquired in business combinations is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit
from that business combination. A CGU is the smallest identifiable group of assets that generate cash inflows that are largely independent
of the cash inflows from other assets or group of assets. The CGUs represent the lowest level within the Group at which the associated
goodwill is assessed for internal management purposes and are not larger than the operating segments determined in accordance
with IFRS 8 Operating Segments. A total of 1 CGUs (2022: 1) have been identified and these are all associated with the Technology Sales
Segment. The carrying value of the goodwill within the Technology Sales Segment is €10,000,000 (2022: €15,283,459).
19. INTANGIBLE ASSETS – CONTINUED
In accordance with IAS 36 Impairment of Assets, the CGUs to which significant amounts of goodwill have been allocated are as follows:
EQTEC Iberia SLU
2023
€
2022
€
10,000,000
15,283,459
For the purpose of impairment testing, the discount rates applied to this CGU to which significant amounts of goodwill have been
allocated was 12.39% (2022: 11.78%) for the Eqtec Iberia CGU.
Annual test for impairment
Goodwill acquired through business combinations has been allocated to the above CGU for the purpose of impairment testing.
Impairment of goodwill occurs when the carrying value of the CGU is greater than the present value of the cash that it is expected to
generate (i.e., the recoverable amount). The Group reviews the carrying value of each CGU at least annually or more frequently if there is an
indication that a CGU may be impaired.
The recoverable amount of the CGU (2023: €10,000,000; 2022: €15,283,459) is determined from value-in-use calculations. The forecasts
used in these calculations are based on a financial plan approved by the Board of Directors, plus 5-year projections forecasted by
management, and specifically excludes any future acquisition activity.
The value in use calculation represents the present value of the future cash flows, including the terminal value, discounted at a rate
appropriate to each CGU. The real pre-tax discount rates used is 12.39% (2022: 11.78%). These rates are based on the Group’s estimated
weighted average cost of capital, adjusted for risk, and are consistent with external sources of information.
The cash flows and the key assumptions used in the value in use calculations are determined based on management’s knowledge and
expectation of future trends in the industry. Expected future cash flows are, however, inherently uncertain and are therefore liable to
material change over time. The key assumptions used in the value in use calculations are subjective and include projected EBITDA margins,
net cash flows, discount rates used and the duration of the discounted cash flow model.
The directors performed sensitivity analysis to account for changes in value in use calculation due to potential delays in commencement of
the projects. The following are the sensitivities performed:
Revenues being risk adjusted between 30% to 80% based on the project specific probabilities.
Reduction in gross margin to 11%
5% increase in discount rate
Zero percentage long term growth rate (year 6 onwards)
All of these sensitivity analysis resulted in an impairment loss of €5,283,459 (2022: €Nil) calculated for the financial year ended 31
December 2023.
20. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
COMPANY
Investment in subsidiary undertakings
At beginning of financial year
Contribution to capital in EQTEC Iberia
Impairment of investments in subsidiaries
Foreign currency movement
Share options and awards
At end of financial year
2023
€
2022
€
19,729,486
1,000,000
(15,783,854)
2,904
-
4,948,536
17,994,504
1,550,000
-
(3,864)
188,846
19,729,486
The share options and awards addition reflect the cost of share-based payments attributable to employees of subsidiary undertakings,
which are treated as capital contributions by the Company.
86 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 87
Notes to the Financial Statements Notes to the Financial Statements 20. INVESTMENT IN SUBSIDIARY UNDERTAKINGS – CONTINUED
Details of EQTEC plc subsidiaries at 31 December 2023 are as follows:
20. INVESTMENT IN SUBSIDIARY UNDERTAKINGS – CONTINUED
The table below shows details of non-wholly owned subsidiaries of the Group that have non-controlling interests:
COUNTRY OF INCORPORATION
SHAREHOLDING
REGISTERED
OFFICE
PRINCIPAL ACTIVITY
NAME
EQTEC Iberia SLU
Spain
EQTEC Holdings Limited
Republic of Ireland
EQTEC UK Services Limited
Haverton WTV Limited
Deeside WTV Limited
Southport WTV Limited
EQTEC Southport H2
MDC Limited
Newry Biomass No. 1 Limited
React Biomass Limited
Reforce Energy Limited
Grass Door Limited
Newry Biomass Limited
Enfield Biomass Limited
Moneygorm Wind Turbine
Limited
EQTEC No. 1 Limited
EQTEC Strategic Project
Finance Limited
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Republic of Ireland
Republic of Ireland
Republic of Ireland
United Kingdom
Northern Ireland
United Kingdom
Republic of Ireland
Republic of Ireland
United Kingdom
Clay Cross Biomass Limited
United Kingdom
Altilow Wind Turbine Limited
Republic of Ireland
Synergy Projects d.o.o.
EQTEC France SAS
Croatia
France
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50.02%
100%
100%
100%
100%
100%
100%
100%
100%
5
1
2
2
2
2
2
1
1
1
3
4
3
1
1
3
3
1
6
7
Provision of technical
engineering services
Development of building projects
Development of building projects
Waste-to-energy developer
Waste-to-energy developer
Waste-to-energy developer
Waste-to-energy developer
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Waste-to-energy developer
Waste-to-energy developer
PROPORTION OF OWNERSHIP
INTERESTS AND VOTING
RIGHTS HELD BY NON-
CONTROLLING INTERESTS
PROFIT/(LOSS) ALLOCATED
TO NON-CONTROLLING
INTERESTS FOR THE
FINANCIAL YEAR
NON-CONTROLLING
INTERESTS
NAME OF SUBSIDIARY
PRINCIPAL PLACE
OF BUSINESS AND
PLACE OF
INCORPORATION
Newry Biomass Limited
Northern Ireland
49.98
Individually immaterial subsidiaries
with non-controlling interests
Total
0.00
0.00
2023
€
2022
€
49.98
2023
€
(32)
-
(32)
2022
€
2023
€
2022
€
(11)
(2,410,932)
(2,363,523)
-
105,000
105,000
(11)
(2,305,932)
(2,258,523)
EQTEC plc owns 50.02% of the voting rights in Newry Biomass Limited. One other company owns the remaining voting rights.
Management has reassessed its involvement in Newry Biomass Limited in accordance with IFRS 10’s revised control definition and
guidance and has concluded that it has control of Newry Biomass Limited. The activities of Newry Biomass Limited are not considered
material to the Group as a whole.
No dividends were paid to the non-controlling interests during the years ended 31 December 2023 and 2022.
Interests in unconsolidated structured entities
The Group had the following interest in unconsolidated structured entities in 2023:
NAME
COUNTY OF INCORPORATION
SHAREHOLDING
REGISTERED OFFICE
PRINCIPAL ACTIVITY
Biogaz Gardanne SAS
France
100%
28 Cours Albert 1er,
75008 Paris, France
Vehicle to fulfil energy
requirements
Biogaz Gardanne SAS was set up in 2023 was set up as an easily transferable legal entity (SPV) to hold all assets associated with a project
initiated and wholly support by the national government of France. Biogaz Gardanne was created to fulfil a narrow, specific purpose which
was to fulfil the objectives of the French government. EQTEC has had and continues to have no control over defining or changing those
objectives. All relevant decisions regarding scope of activity, investor rights and right of returns are controlled by the French government,
not EQTEC, and on that basis, EQTEC does not have control over Biogaz Gardanne SAS under IFRS 10 and is therefore not consolidated in
these accounts. Details of the investment are included in Note 23.
The shareholding in each company above is equivalent to the proportion of voting power held.
Key to registered offices:
1. Building 1000, City Gate, Mahon, Cork T12 W7CV, Ireland.
2. Acre House, 11/15 William Road, London NW1 3ER, England.
3. Labs Triangle, Camden Lock Market, Chalk Farm Road, London NW1 8AB, England.
4. 68 Cloughanramer Road, Carnmeen, Newry, Co. Down BT34 1QG, Northern Ireland.
5. Rosa Sensat nº 9-11 Planta 5ª, 08005 Barcelona, Spain.
6. Zagorska 31, HR-10000 Zagreb, Croatia.
7. 28 Cours Albert 1er, 75008 Paris, France.
During the year, the Group disposed of its investment in Grande-Combe SAS. Details of this disposal are set out in Note 34.
Subsequent to the financial year-end, three dormant subsidiaries (Enfield Biomass Limited, Clay Cross Biomass Limited and EQTEC
Strategic Project Finance Limited) were voluntarily struck off the Company Register.
88 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 89
Notes to the Financial Statements Notes to the Financial Statements 21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
GROUP
Investment in associate undertakings (a)
Investment in joint ventures (b)
COMPANY
Investment in associate undertakings (a)
a) Investment in associate undertakings
GROUP
At beginning of financial year
Impairment of investment in North Fork Community Power LLC (Note 15)
Derecognition of investment arising from Chapter 11(Note 15)
Investment in shares
Acquisition of increased share in associate
Loans advanced to associate undertakings
Loans repaid from associate undertakings
Receivables converted into loans to associate undertakings
Payables reclassified
Derecognition of loans
Interest accrued on loans to associate undertakings
Share of loss of associate undertakings
Adjustment in respect of unrealised sales from the Group
Exchange differences
At end of financial year
Made up as follows:
Investment in shares in associate undertakings
Loans advanced to associate undertakings
Less: Losses recognised under the equity method
Investment in associate undertakings
Details of the Group’s interests in associated undertakings at 31 December 2023 is as follows:
NAME OF ASSOCIATE
UNDERTAKING
North Fork Community
Power LLC
COUNTY OF INCORPORATION
2023
United States of America
28.52%
SHAREHOLDING
2022
49%
EQTEC Italia MDC srl
Italy
49.27%
19.99%
2023
€
2022
€
3,474,359
3,358,029
6,832,388
4,263,604
3,355,910
7,619,514
-
2,728,959
4,263,604
(2,619,234)
6,951,064
-
-
(4,677,590)
29,780
856,967
334,750
(32,000)
554,067
279,000
(252,500)
71,562
(12,577)
-
940
3,474,359
783,801
2,747,141
(56,583)
3,474,359
6,790
-
528,085
-
1,161,000
-
-
196,188
(31,626)
(907)
130,600
4,263,604
2,777,249
1,656,573
(170,218)
4,263,604
PRINCIPAL ACTIVITY
Operator of biomass
gasification power project
Operator of biomass
gasification power project
21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD – CONTINUED
On 6 November 2023, it was announced that, to fund performance improvements in the project, EQTEC Italia MDC SRL raised funds
through a combination of shareholder loans and equity from the Group and one of the other investors, resulting in a change to relative
ownership of the SPV. The Group’s share increased from 19.99% to 38.30% as a result of this increase in equity. On 20 November 2023, it
was announced that the Group had agreed to purchase all of another investor’s participation (equity and debt) in EQTEC Italia MDC srl
which was settled through the issue of shares in the Group to the value of £800,000. As a result of this transaction, the Group’s share of
ownership in EQTEC Italia MDC srl increased to 49.27%.
On 12 October 2022, it was announced that North Fork Community Power, LLC (“NFCP”) has entered into an agreement for a financial
restructuring with the project lenders (“Lenders”), for the provision of a standby facility, in the amount of USD 4.3 million, towards full
funding of the project up to the commercial operations date (“COD”) of a plant, with EQTEC technology at its core, in North Fork California,
USA (the “Plant”). The third-party funding has been agreed as part of a pre-negotiated petition filed by NFCP for relief under Chapter 11 of
the US Bankruptcy Code, following alignment between NFCP managing members, including the Company, with the Lenders. As part of the
agreed terms, it was specified that the Group will remain as an equity shareholder in NFCP with the final shareholding being determined
during the legal process post 31 December 2023 as 28.52%. However, arising from this, it was determined that the Group is no longer in
control of how the North Fork project progresses, as this now rests with the lender bondholders. As a result, the Group deems it prudent to
fully impair its investment in North Fork.
Summarised financial information in respect of the Group’s interests in associated undertakings is as follows:
2023
NORTH
FORK
€
EQTEC ITALIA
€
TOTAL
€
Non-current assets
1,691,299
6,962,172
8,653,471
Current assets
35,171,261
609,671
35,780,932
NORTH
FORK
€
1,738,412
27,869,071
2022
EQTEC ITALIA
€
5,687,496
141,018
TOTAL
€
7,425,908
28,010,089
Non-current liabilities
(19,647,815)
(5,243,088)
(24,890,903)
(25,064,040)
(4,875,541)
(29,939,581)
Current liabilities
(14,873,565)
(991,939)
(15,865,504)
Net Assets
2,341,180
1,336,816
3,677,996
90,586
4,634,029
(869,152)
83,821
(778,566)
4,717,850
Reconciliation to carrying amount
Group’s share of net
assets
Carrying value of loan
to associate
Adjustment in respect
of unrealised profits on
sales from the Group
Adjustment arising
from Chapter 11
Exchange differences
Goodwill
667,704
658,649
1,326,353
2,270,674
16,743
2,287,417
-
2,747,141
2,747,141
-
1,656,573
1,656,573
(78,846)
(23,358)
(102,204)
(78,846)
(23,358)
(102,204)
(1,948,631)
140,612
3,838,395
-
-
(1,948,631)
140,612
91,927
3,930,322
(1,948,631)
(1,467,946)
3,838,395
-
-
-
-
-
(1,948,631)
(1,467,946)
3,838,395
-
Impairment of asset
(2,619,234)
-
(2,619,234)
Carrying amount
-
3,474,359
3,474,359
2,613,646
1,649,958
4,263,604
Summarised income statement
Revenue
-
4,615
4,615
6,105
-
6,105
(Loss)/Profit after tax
for period
Other comprehensive
income
Total comprehensive
income/(loss)
17,718
(72,009)
(54,291)
(73,613)
12,937
(60,676)
-
-
-
–
-
-
17,718
(72,009)
(54,291)
(73,613)
12,937
(60,676)
Reconciliation to Group’s share of total comprehensive income
Group’s share of total
comprehensive income
Group’s share of total
comprehensive income
4,673
(17,250)
(12,577)
(34,216)
4,673
(17,250)
(12,577)
(34,216)
2,590
2,590
(31,626)
(31,626)
90 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 91
Notes to the Financial Statements Notes to the Financial Statements 21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD – CONTINUED
21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD – CONTINUED
COMPANY
At beginning of financial year
Impairment of investment
Derecognition of investment arising from Chapter 11
Loans advanced to associate undertakings
Interest accrued on loans to associate undertakings
Exchange differences
At end of financial year
Made up as follows:
2023
€
2,728,959
(2,728,959)
-
-
-
-
-
2022
€
6,569,432
-
(4,677,590)
528,085
177,069
131,963
2,728,959
Investment in shares in associate undertakings
-
2,728,959
b) Investment in joint ventures
The Group’s interests in joint ventures at the end of the reporting period is as follows:
GROUP
Synergy Belisce d.o.o.
Synergy Karlovac d.o.o.
EQTEC Synergy Projects Limited
Interests in joint ventures
Details of the Group’s interests in joint ventures is as follows:
NAME OF JOINT VENTURE
Synergy Belisce d.o.o.
Synergy Belisce d.o.o.
COUNTRY OF
INCORPORATION
Croatia
Croatia
EQTEC Synergy Projects Limited
Cyrprus
Synergy Projects Aegean Energy
Production and Distribution
Society SA.
Greece
Synergy Drama Single Member PC Greece
Synergy Livadia Single Member PC Greece
2023
49%
49%
50.1%
50.1%
50.1%
50.1%
SHAREHOLDING
2022
49%
49%
50.1%
50.1%
50.1%
50.1%
2023
€
2,174,542
1,095,061
88,425
3,358,028
2022
€
2,171,174
1,091,612
93,124
3,355,910
PRINCIPAL ACTIVITY
Operator of biomass
gasification power project
Operator of biomass
gasification power project
Operator of biomass
gasification power project
Holding company
Operator of biomass
gasification power project
Operator of biomass
gasification power project
The purpose of the joint ventures is to act as go-to-market entities, in partnership with the local partners, to actively seek business
development and project development in the territory. The joint ventures have share capital, consisting solely of ordinary shares.
Decisions about the relevant activities of the joint ventures require unanimous consent of the Group and the respective joint
venture partners.
a) Synergy Belisce d.o.o. was set up in April 2021 as a 100% subsidiary of Synergy Projects d.o.o., a 100% subsidiary of the Group.
On 26 November 2021, the Group’s Croatian project development partner, Sense ESCO d.o.o. subscribed for additional shares in
Synergy Belisce d.o.o. which resulted in the Group owning 49% of the equity of the joint venture. Synergy Belisce d.o.o. has acquired a
1.2 MWe waste-to-energy gasification plant in Belisce, Croatia which had been built in 2016 around EQTEC’s proprietary and patented
Advanced Gasification Technology. The plant is expected to be reconfigured as an industrial waste processing facility, recommissioned
and repowered for operations once final round of funding has been completed (expected Q4 2024).
b) Synergy Karlovac d.o.o. was set up in April 2021 as a 100% subsidiary of Synergy Projects d.o.o., a 100% subsidiary of the Group. On
26 November 2021, the Group’s Croatian project development partner, Sense ESCO d.o.o. subscribed for additional shares in Synergy
Karlovac d.o.o. which resulted in the Group owning 49% of the equity of the joint venture. Synergy Karlovac d.o.o. has acquired a
3 MWe waste-to-energy gasification plant in Karlovac, Croatia which originally employed an early gasification technology from a third
party. The plant was not able to achieve the designed operational availability and had to be closed. The Group’s intention is to redesign
and reconfigure the Plant to incorporate the patented, proprietary EQTEC Advanced Gasification Technology at the centre. When
subsequently commissioned, it will transform locally sourced wood chips and forestry wood waste from regional forests into green
electricity for use by the local community. The plant is expected to be updated, recommissioned and repowered for operations once
funding is agreed.
c) EQTEC Synergy Projects Limited was set up in 2020 in partnership with its Greek strategic partners, ewerGy GmbH. The Group owns
50.1% of the equity of the joint venture. EQTEC Synergy Projects Limited owns 100% of Synergy Projects Aegean Energy Production and
Distribution Society SA, and this company holds 100% of the shares in two further companies which are special purpose vehicles for
projects (Project SPV): Synergy Drama Single Member PC and Synergy Livadia Single Member PC. The objective of these two companies
is the development of biomass-to-energy plants, generating green electricity from locally and sustainably sourced forestry waste.
In line with the agreed Company strategy to minimise or eliminate development activities across the Group, it has progressed discussions
and has reached agreement, subject to final legal documentation, with its joint venture partners in Croatia and Greece to restructure
its ownership and financial arrangements in relation to the joint venture entities. In line with its stated objective to move away from
development activities the Group will seek to reduce its equity stake to below 20% in each joint venture and to restructure its loans and
receivables due to facilitate early repayment.
The movement in the investment in joint ventures is as follows:
At the beginning of the year
Impairment of fair value of joint venture
Loans advanced to joint ventures
Loans repaid by joint ventures
Share of loss after tax
Unrealised profits on sales to joint ventures
Exchange differences
Interests in joint ventures
Made up as follows:
Investment in shares in joint ventures
Loans advanced to associate ventures
Less: Losses recognised under the equity method
2023
€
2022
€
3,355,910
1,123,120
-
15,700
(3,700)
(11,025)
-
1,144
(489)
2,324,614
(40,018)
(20,433)
(27,470)
(3,414)
3,358,029
3,355,910
–
3,531,128
(173,099)
3,358,029
–
3,517,979
(162,069)
3,355,910
92 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 93
Notes to the Financial Statements Notes to the Financial Statements 21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD – CONTINUED
Summarised financial information for joint ventures accounted for using the equity method
Set out below is the summarised financial information for the Group’s joint ventures which are accounted for using the equity method. The
information below reflects the amounts presented in the financial statements of the joint ventures reconciled to the carrying value of the
Group’s investments in joint ventures.
2023
2022
2022
SYNERGY
BELISCE
D.O.O. €
SYNERGY
KARLOVAC
D.O.O. €
EQTEC
SYNERGY
PROJECTS
LIMITED
GROUP €
SYNERGY
BELISCE
D.O.O. €
SYNERGY
KARLOVAC
D.O.O. €
TOTAL €
EQTEC
SYNERGY
PROJECTS
LIMITED
GROUP €
TOTAL €
Summarised balance sheet (100%)
Non-current assets
4,279,612
3,236,785
-
7,516,397
4,278,173
3,235,696
-
7,513,869
Current assets
Cash and Cash equivalents
103
655
296
1,054
Other current assets
188,366
169,685
203,023
561,074
188,469
170,340
203,319
562,128
Non-current liabilities
-
-
-
-
124
187,340
187,464
-
580
168,592
169,172
-
424
203,022
203,446
-
1,128
558,954
560,082
-
Current liabilities
Bank overdrafts and loans
2,256,237
1,182,134
100,000
3,538,371
2,250,880
1,174,339
100,000
3,525,219
Other current liabilities
2,213,242
2,263,141
126,423
4,602,806
2,212,103
2,259,812
117,521
4,589,436
4,469,479
3,445,275
226,423
8,141,177
4,462,983
3,434,151
217,521
8,114,655
21. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD – CONTINUED
2023
2022
SYNERGY
BELISCE
D.O.O. €
SYNERGY
KARLOVAC
D.O.O. €
Summarised income statement (100%)
EQTEC
SYNERGY
PROJECTS
LIMITED
GROUP €
-
-
-
-
-
TOTAL €
13,737
-
-
80
-
SYNERGY
BELISCE
D.O.O. €
SYNERGY
KARLOVAC
D.O.O. €
EQTEC
SYNERGY
PROJECTS
LIMITED
GROUP €
TOTAL €
-
-
-
-
-
-
-
-
-
-
-
-
-
23
-
23
-
-
-
-
-
-
-
3
-
13,737
-
-
77
-
Revenue
Depreciation
Amortisation
Interest expenses
Taxation
Loss after tax
(4,053)
(8,857)
(9,380)
(22,290)
(6,584)
(27,167)
(7,776)
(41,527)
Other comprehensive income
-
-
-
-
-
-
-
-
Total comprehensive loss
(4,053)
(8,857)
(9,380)
(22,290)
(6,584)
(27,167)
(7,776)
(41,527)
Reconciliation to Group’s share of total comprehensive income
Group’s share of total
comprehensive loss
Group’s share of total
comprehensive loss
(1,986)
(4,340)
(4,699)
(11,025)
(3,226)
(13,312)
(3,896)
(20,434)
(1,986)
(4,340)
(4,699)
(11,025)
(3,226)
(13,312)
(3,896)
(20,434)
(1,398)
(38,150)
(23,104)
(62,652)
2,654
(29,283)
(14,075)
(40,704)
22. FINANCIAL ASSETS
Net (liabilities)/assets
(100%)
Reconciliation to
carrying amount:
Group’s share of net assets/
(liabilities)
Carrying value of loans to
joint ventures
Unrealised gains on sales to
joint ventures
(685)
(18,693)
(11,575)
(30,953)
1,300
(14,349)
(6,876)
(19,925)
2,252,722
1,178,406
100,000
3,531,128
2,247,366
1,170,613
100,000
3,517,979
(72,655)
(64,997)
Exchange differences
(4,839)
345
Adjustment arising on loss
of control in period
-
-
-
-
-
(137,652)
(72,655)
(64,997)
(4,494)
(4,348)
345
-
(489)
-
-
-
-
(137,652)
(4,003)
(489)
Carrying amount
2,174,543
1,095,061 88,425
3,358,029
2,171,174
1,091,612
93,124
3,355,910
GROUP
Investment in related undertakings
At beginning of the financial year
Derecognition of investment in Logik WTE Limited
Derecognition of investment in Shankley Biogas Limited
Exchange differences
At end of the financial year
2023
€
2022
€
3,728,434
(3,805,636)
-
77,202
-
4,050,030
-
(113,644)
(207,952)
3,728,434
Investment in Logik WTE Limited
On 8 December 2020, EQTEC announced that EQTEC’s wholly owned subsidiary, Deeside WTV Limited (“Deeside”), had signed a Share
Purchase Agreement (the “SPA”) with Logik Developments Limited (“Logik”) to acquire full ownership of the Deeside Refuse Derived Fuel
(“RDF”) project (the “Project”) from Logik through the acquisition of Logik WTE Limited (“Logik WTE”).
On 20 September 2023, EQTEC announced that it had issued a claim against Logik and Logik WTE in connection with payments made
by the Group and due to the Group in relation to the Project, and for breach of the SPA between Logik and Deeside. Consequently, the
Group has decided to de-recognise the investment in Logik WTE, with a corresponding derecognition of the associated liability
(€2,537,091 - see Note 32).
Investment in Shankley Biogas Limited
On 27 September 2021, EQTEC announced that EQTEC’s wholly owned subsidiary, Southport WTV Limited (“Southport”), had signed a
Share Purchase Agreement (“SPA - Southport”) with Rotunda Group Limited (“Rotunda”) to acquire full ownership of the Southport Hybrid
Energy Park project (“Southport Project”) from Rotunda through the acquisition of Shankley Biogas Limited (“Shankley”).
On 21 September 2022, the Company announced that it had entered into agreements for the cancellation of the SPA-Southport. Any
investments costs previously recognised has now been de-recognised (€113,644) and included in the costs associated with development
fee services charged to Shankley amounting to €2,841,093.
94 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 95
Notes to the Financial Statements Notes to the Financial Statements 23. OTHER FINANCIAL INVESTMENTS
Group
Financial investments at amortised cost
Investment in unconsolidated subsidiary (Biogaz Gardanne SAS)
Investment in previously consolidated company Grande-Combe SAS
Convertible loan note in Metal NRG plc
Less: Provision against convertible loan note
Bonds and Debentures
Less: Provision against investment in Bonds
Other investments
Less: Provisions against other investments
Financial investments at fair value through profit or loss (FVTPL)
Investment in Metal NRG plc
Less: Provision against investment in Metal NRG plc
Total
Company
Financial investments at amortised cost
Convertible loan note in Metal NRG plc
Less: Provision against convertible loan note
Financial investments at fair value through profit or loss (FVTPL)
Investment in Metal NRG plc
Less: Provision against investment in Metal NRG plc
Total
2023
€
2022
€
24. DEFERRED TAXATION
A deferred tax asset has not been recognised at the consolidated statement of financial position date in respect of trading tax losses
arising from the Irish and UK subsidiaries. Due to the history of past losses, the Group has not recognised any deferred tax asset in respect
of tax losses to be carried forward which are approximately €43.9 million at 31 December 2023 (2022: €29.3 million).
1,000
50
115,322
(115,322)
402,644
(402,644)
22,915
(17,250)
6,715
33,199
(33,199)
-
6,715
115,322
(115,322)
-
33,199
(33,199)
-
-
-
-
112,983
-
402,644
(402,644)
17,250
(17,250)
112,983
58,203
-
58,203
171,186
112,983
-
112,983
58,203
-
58,203
171,186
25. DEVELOPMENT ASSETS
GROUP
Costs associated with project development undertakings
Loan receivable from project development undertakings
Convertible loans
Other loans
Less: Loss Allowance
2023
€
2022
€
613,516
6,033,543
2,883,057
2,711,592
(3,528,550)
2,066,099
2,824,572
2,621,515
-
5,446,087
The Group invests capital in assisting in the development of waste to value projects which can deploy its technology and expertise
and make a profit from the realisation of the development costs at the financial close, when project financing is in place so that the
project undertaking can commence construction. Cost comprises direct materials and overheads that have been incurred in furthering
the development of a project towards financial close. For the financial year ended 31 December 2023, €212,280 (2022: €2,160,694) of
development assets was included in consolidated statement of profit or loss as an expense and €4,603,546 (2022: €2,752) was impaired
resulting from write down of development assets. The impairment arose via the suspension of the Billingham and Deeside projects.
Included in loans receivable from project development undertakings is an amount of €Nil (2022: €450,000) which is receivable, along with
accrued interest, 18 months from the date of drawdown. Interest is charged at 15% per annum. During the financial year, the company
has determined it is unlikely to recover the value of the loan from the borrower and has impaired the value of the loan in full, incurring an
impairment cost of €645,493 (2022: €Nil).
Included in loans receivable is an amount of £Nil (2022: £2,500,000) arising from development service fees to Shankley Biogas Limited
which has been converted into a convertible loan note secured by a fixed and floating charge on the assets and business of Shankley
Biogas Limited. The loan note, which is interest-free, is due to be paid to the company following sale of, or investment into Shankley Biogas
Limited by any third party. During the financial year, the Company has determined it is unlikely to recover the value of the loan and have
impaired the value of the loan in full, incurring an impairment cost of €2,883,057 (2022: €Nil).
The remaining loans receivables were issued with no interest and no fixed repayment date.
2023
€
2022
€
88,129
1,258,191
2,883,057
645,493
(3,528,550)
-
2,824,572
597,329
-
3,421,901
Financial assets at FVTPL include the equity investment in Metal NRG plc (“MRNG”) which was financed through the exchange of shares in
the Company. The Group and the Company accounts for the investment in MRNG at FVTPL and did not make the irrevocable election to
account for it at FVOCI.
As at 31 December 2023, the fair value of the Group’s interest in Metal NRG plc, which is listed on the London Stock Exchange,
was €33,199 (2022: €58,203) based on the quoted market price available on the London Stock Exchange, which is a Level 1 input in terms of
IFRS 13. However, as the likelihood of the Group recovering this amount is considered remote, it was deemed prudent to provide fully for
both the investment and the convertible loan note in Metal NRG plc.
Movement in other financial investments was as follows:
COMPANY
Costs associated with project development
Loan receivable from project development undertakings
Convertible loans
Other loans
Less: Loss Allowance
At beginning of financial year
Acquisition of unconsolidated subsidiary
Acquisition of other investments
Investment in previously recognised subsidiary
Movement in fair value
Exchange differences
Provision against investments in Metal NRG plc
At end of financial year
2023
€
2022
€
171,186
506,976
1,000
5,665
50
(26,143)
3,478
(148,521)
6,715
-
-
-
(326,501)
(9,289)
-
171,186
96 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 97
Notes to the Financial Statements Notes to the Financial Statements 26. TRADE AND OTHER RECEIVABLES
GROUP
Trade receivables gross
Allowance for credit losses
Trade receivables net
VAT receivable
Advances to related undertakings
Allowance for credit losses on advances to related undertakings
Prepayments
Amounts receivable from associate companies
Deposit payment on land (See below)
Corporation tax
Receivable arising from issue of ordinary shares
Payments on account to suppliers
Other receivables
2023
€
7,268,720
(875,687)
2022
€
5,961,004
(475,687)
6,393,033
5,485,317
166,134
60,000
(60,000)
295,780
31,482
-
24,838
-
-
257,288
60,000
(60,000)
149,786
29,477
858,670
47,757
55,635
14,529
132,950
7,044,217
322,587
7,221,046
The deposit option payment on land represented a deposit paid with respect to a conditional land purchase agreement relating to the
land on which the proposed up to 25 MWe Billingham waste gasification and power plant at Haverton Hill, Billingham, UK, would have
been constructed. As the Group has announced that this project has been discontinued, this deposit has been written off in 2023 at a cost
of €876,449.
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.
The following table shows an analysis of trade receivables split between past due and within terms accounts. Past due is when an account
exceeds the agreed terms of trade, which are typically 60 days.
26. TRADE AND OTHER RECEIVABLES - CONTINUED
In determining the recoverability of a trade receivable, the Group considers any changes in the credit quality of the trade receivable from
the date credit was initially granted up to the end of the current reporting financial year. The concentration of the credit risk is limited due
to the customer base being large and unrelated, and the fact that no one customer holds balances that exceeds 10% of the gross assets of
the Group. The maximum exposure risk to trade and other receivables at the reporting date by geographic region, ignoring provisions, is
as follows:
Ireland
Spain
France
Croatia
2023
€
300,209
4,482,383
807,373
1,678,756
7,268,720
2022
€
30,000
4,295,790
-
1,635,214
5,961,004
The aged analysis of other receivables is within terms.
The closing balance of the trade receivables loss allowance as at 31 December 2023 reconciles with the trade receivables loss allowance
opening balance as follows:
Opening loss allowance as at 1 January 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2023
€
475,687
-
475,687
400,000
875,687
The closing balance of the advances to related undertakings loss allowance as at 31 December 2023 reconciles with the advances to
related undertakings loss allowance opening balance as follows:
Within terms
Past due more than one month but less than two months
Past due more than two months
2023
€
2022
€
1,580,193
1,063,269
7,000
5,681,527
7,268,720
4,317
4,893,418
5,961,004
Opening loss allowance as at 1 January 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2023
Included in the Group’s trade receivables balance are debtors with carrying amount of €4,805,840 (2022: €4,417,731) which are past due at
year end and for which the Group has not provided.
The Group does not hold any collateral over these balances. No interest is charged on overdue receivables. The quality of past due not
impaired trade receivables is considered good. The carrying amount of trade receivables approximates to their fair values.
The Group’s policy is to recognise an allowance for doubtful debts of 100% against all receivables with non-related parties over 120 days
because historical experience has been that trade receivables that are past due beyond 120 days are not recoverable. Allowances for
doubtful debts are recognised against trade receivables from non-related parties between 60 days and 120 days based on estimated
irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s
current financial position. The review on these balances shows that all of the above amounts are considered recoverable.
There is no concentration of credit risk with respect to receivables as disclosed in Note 5 under credit risk.
COMPANY
Amounts due from subsidiary undertakings
Allowance for impairment of balances
Trade receivables – Intercompany and related parties
Trade receivables - third party
Allowance for credit losses on trade receivables
Advances to related undertakings
Allowance for credit losses on advances to related undertakings
Management charges receivable
Prepayments
Receivable arising from issue of ordinary shares
Corporation Tax
VAT Receivable
Other receivables
€
60,000
-
60,000
-
60,000
2022
€
20,731,916
-
20,731,916
310,300
-
(30,000)
60,000
(60,000)
2,532,848
63,881
55,635
96
4,157
2,916
23,671,749
2023
€
23,997,996
(9,004,018)
14,993,978
310,496
270,013
(30,000)
60,000
(60,000)
3,034,241
170,786
-
96
9,248
3,126
18,761,984
98 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 99
Notes to the Financial Statements Notes to the Financial Statements 26. TRADE AND OTHER RECEIVABLES – CONTINUED
The concentration of credit risk in the individual financial statements of EQTEC plc relates to amounts due from subsidiary undertakings.
The directors have reviewed these balances in the light of the impairment review carried out on the investments by EQTEC plc in its
subsidiaries.
The directors considered the future cash flows arising from subsidiaries and are satisfied that the appropriate impairment has been applied
to these balances. All amounts are short-term. The net carrying values of amounts due from subsidiary undertakings, trade and loans
receivables are considered a reasonable approximation of their fair values.
The closing balance of the trade receivables loss allowance as at 31 December 2023 reconciles with the trade receivables loss allowance
opening balance as follows:
28. EQUITY
Share Capital
AT 31 DECEMBER 2022
AUTHORISED
NUMBER
ALLOTTED AND
CALLED UP
NUMBER
Ordinary shares of €0.001 each
12,561,091,094
9,421,479,112
Deferred ordinary shares of €0.40 each
200,000,000
Deferred convertible “A” ordinary shares of €0.01 each
10,000,000,000
Deferred “B” Ordinary Shares of €0.099 each
75,140,494
22,370,042
99,117,952
75,140,494
AUTHORISED
€
12,561,091
80,000,000
100,000,000
7,438,909
ALLOTTED AND
CALLED UP
€
9,421,478
8,948,017
991,180
7,438,909
200,000,000
26,799,584
Opening loss allowance as at 1 January 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2023
€
30,000
-
30,000
-
30,000
The closing balance of the advances to related undertakings loss allowance as at 31 December 2023 reconciles with the advances to
related undertakings loss allowance opening balance as follows:
Opening loss allowance as at 1 January 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2023
€
60,000
-
60,000
-
60,000
The closing balance of the amounts due from subsidiary undertakings loss allowance as at 31 December 2023 reconciles with the amounts
due from subsidiary undertakings opening balance as follows:
Opening loss allowance at 1 January and at 31 December 2022
Loss allowance recognised during the financial year
Loss allowance as at 31 December 2023
€
-
9,004,018
9,004,018
27. CASH AND CASH EQUIVALENTS
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand and in banks. Cash and cash equivalents at
the end of the financial year as shown in the cash flow statement can be reconciled to the related items in the balance sheet as follows:
Group
Cash and bank balances
Bank overdrafts (Note 30)
Company
Cash and bank balances
2023
€
2022
€
262,019
(148,181)
113,838
1,693,116
-
1,693,116
108,763
980,098
The carrying amount of the cash and cash equivalents is considered a reasonable approximation of its fair value.
AUTHORISED
NUMBER
ALLOTTED AND
CALLED UP
NUMBER
AUTHORISED
€
ALLOTTED AND
CALLED UP
€
257,610,911
181,485,890
2,576,109
AT 31 DECEMBER 2023
Ordinary shares of €0.01 each
1,814,859
8,948,017
991,180
Deferred ordinary shares of €0.40 each
200,000,000
22,370,042
80,000,000
Deferred convertible “A” ordinary shares of €0.01 each
10,000,000,000
99,117,952
100,000,000
Deferred “B” Ordinary Shares of €0.099 each
75,140,494
75,140,494
7,438,909
7,438,909
Deferred “C” Ordinary Shares of €0.01 each
2,318,498,198
1,330,488,404
23,184,982
13,304,883
213,200,000
32,497,848
The holders of the ordinary shares are entitled to participate in the profits or assets of the Company (by way of payment of any dividends,
on a winding up or otherwise) and are entitled to receive notice, attend, speak and vote at general meetings of the Company. Each
ordinary share equates to one vote at meetings of the Company.
The holders of the deferred convertible “A” ordinary shares are entitled to participate pari passu with ordinary shareholders in the
profits or assets of the Company on a winding-up, up to an amount equal to the par value paid in respect of such deferred convertible
“A” ordinary shares but are not entitled to participate in the profits or assets of the Company (by way of payment of any dividends or
otherwise). The holders of the deferred convertible “A” ordinary shares are not entitled to receive notice, attend, speak and vote at general
meetings of the Company.
The holders of the deferred ordinary shares, the deferred “B” ordinary shares and the deferred “C” ordinary shares are not entitled to
participate in the profits or assets of the Company (by way of payment of any dividends, on a winding up or otherwise) and are not entitled
to receive notice, attend, speak and vote at general meetings of the Company.
Share Premium
Proceeds received in excess of the nominal value of the shares issued during the financial year have been included in share premium, less
registration and other regulatory fees. Costs of new shares charged to equity amounted to €461,122 (2022: €362,241).
Company Share Premium
The share premium included in the consolidated and company statement of financial position is different by €18,934,080 due to the
reverse acquisition of the Group which occurred on 13 October 2008. The reverse acquisition resulted to a reverse acquisition reserve
which has been netted off against the share premium in the consolidated statement of financial position.
Capital reorganisation
On 17 December 2023, a capital re-organisation took place whereby (1) each existing ordinary share of €0.001 each was sub-divided into 10
ordinary shares of €0.0001 each; (2) every 1,000 sub-divided shares of €0.0001 each was consolidated into 10 ordinary shares of €0.01 each;
and (3) 9 out of every 10 ordinary shares of €0.01 each was re-designated into 9 deferred “C” ordinary shares of €0.01 each.
100 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 101
Notes to the Financial Statements Notes to the Financial Statements 28. EQUITY – CONTINUED
Movements in the financial year to 31 December 2023
AMOUNTS OF SHARES
2023
2022
Ordinary Shares of €0.001 each issued and fully paid
– Beginning of the financial year
– Issued on exercise of warrants
– Issued in lieu of borrowings and settlement of payables
– Issued in exchange for financial instruments
– Share issue placement
– Consolidation of shares from €0.001 to €0.01
Total Ordinary shares of €0.001 each authorised, issued and fully paid at the end of the
financial year
Ordinary Shares of €0.001 each issued and fully paid
– Beginning of the financial year
– Consolidation of shares from €0.001 to €0.01
– Issued in lieu of borrowings and settlement of payables
Total Ordinary shares of €0.001 each authorised, issued and fully paid at the end of the
financial year
Other Reserves
Other reserves relates to equity-settled share-based payment transactions.
9,421,479,112
8,599,024,945
-
3,765,165,007
19,696,881
52,757,286
-
750,000,000
1,596,560,373
750,000,000
(14,783,204,492)
-
-
-
147,832,044
33,653,846
181,485,890
9,421,479,112
-
-
-
-
Share warrants and options
As at 31 December 2023 the Company had 55,787,668 share warrants and options outstanding (2022 (restated): 13,499,903).
Details of warrants and options granted
LTIP 2022 OPTIONS
LTIP 2023 OPTIONS
LENDER WARRANTS
EMPLOYEE WARRANTS
EMPLOYEE OPTIONS
EXERCISE
PRICE
(PENCE)
EXERCISE
PRICE
(PENCE)
NUMBER
EXERCISE
PRICE
(PENCE)
EXERCISE
PRICE
(PENCE)
NUMBER
NUMBER
NUMBER
EXERCISE
PRICE
(PENCE)
NUMBER
At 1 January
2023
(Restated)
Issued in year
Cancelled
or expired
in year
Exercised
in year
At 31
December
2023
Exercisable
at 31
December
2023
Average life
remaining
at 31
December
2023
230,450
–
–
–
230,450
–
1
–
–
–
1
–
1,886,487
–
–
–
1,886,487
1
–
–
–
1
6,666,667
32,287,918
7.878
7.878
–
–
–
–
4,043,254
7.878
673,045
7.878
–
–
–
–
–
–
–
–
–
–
–
–
38,954,585
7.878
4,043,254
7.878
673,045
7.878
–
–
38,954,585
7.878
4,043,254
7.878
673,045
7.878
8.08 years
9.25 years
3.87 years
3.87 years
3.87 years
NO OF WARRANTS/OPTIONS
9,999,847
43,670,884
230,450
1,886,487
55,787,668
EXERCISE PRICE
(PENCE)
FINAL EXERCISE
DATE
33
7.878
1
1
30/03/2025
19/11/2027
31/01/2032
30/04/2033
At 1 January 2023 (Restated)
Issued in year
Cancelled or expired in year
Exercised in year
At 31 December 2023
Exercisable at 31 December 2023
Average life remaining at 31 December 2023
PLACING WARRANTS 2023
EXERCISE PRICE
(PENCE)
-
33
-
-
33
33
NUMBER
-
9,999,847
-
-
9,999,847
9,999,847
1.25 years
The opening position on warrants has been restated to reflect the capital reorganisation that took place in the year (see above).
During the year, the Company announced that the EQTEC All Employee Long-term Incentive Plan (the “LTIP”) has been cancelled for all
Executive directors and staff. Previously issued LTIP options will remain in place and options granted through 2022 will continue to vest.
The Group recognised total expenses of €Nil and €340,257 related to equity-settled share-based payment transactions in 2023 and 2022
respectively (see note 10). The corresponding credit is recognised in the share-based payments reserve.
29. NON-CONTROLLING INTERESTS
Balance at beginning of financial year
Share of loss for the financial year
Unrealised foreign exchange gains/(losses)
Balance at end of financial year
2023
€
2022
€
(2,258,523)
(2,384,189)
(35)
(11)
(47,374)
125,677
(2,305,932)
(2,258,523)
102 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 103
Notes to the Financial Statements Notes to the Financial Statements 30. BORROWINGS
Group
Current liabilities
At amortised cost
Unsecured loan facility (USLF)
Secured loan facility (SLF)
Other loans
Bank overdraft
Non-current liabilities
At amortised cost
Unsecured shareholder loan (USSL)
Secured loan facility (USLF)
New syndicated facility (NSF)
Company
Current liabilities
At amortised cost
Unsecured loan facility (USLF)
Secured loan facility (SLF)
Non-current liabilities
At amortised cost
Unsecured shareholder loan (USSL)
Secured loan facility (USLF)
New syndicated facility (NSF)
2023
€
2022
€
-
5,006,076
2,242,250
97,798
148,181
2,488,229
-
99,962
-
5,106,038
-
1,064,598
1,635,275
822,709
2,457,984
2023
€
-
-
1,064,598
2022
€
-
2,242,250
2,242,250
5,006,076
-
5,006,076
-
1,064,598
1,635,275
822,709
2,457,984
-
-
1,064,598
Borrowings at amortised cost
On 28 March 2022, the Company entered into arrangements in respect of the provision of a new unsecured loan facility (USLF) for up
to £10 million, with an initial advance received by the Company of £5 million. The initial advance is to be repaid on a monthly basis
commencing 5 months after the receipt of the advance by the Company and have a final maturity date of 12 months. The Company
will also pay a fixed interest coupon to the lenders on a quarterly basis calculated at 7.5% of the value of each advance of the USLF.
On 20 November 2023, it was announced that the USLF was to be replaced by a new secured loan facility (SLF) the initial advance of
which was made of the balance on the old USLF (£4.2 million) plus £1.1 million of 30 months 10% p.a. fixed coupon less £200,000 paid off
by way of shares. This initial advance will have a 6-month principal repayment holiday, followed by 24 equal monthly cash repayments of
principal and interest thereafter to the maturity date. The Company has entered into a debenture with Riverfort Global Capital Limited
(as security agent) to provide the lenders with fixed and floating charges on all of the assets of the company. The Debenture secures all
monies owed to the Lenders under the SLF from time to time. The Company’s obligations are also guaranteed by certain of its subsidiaries.
At 31 December 2023, the face value of the SLF and accrued interest at 31 December 2023 was €4,715,173 (2022: €Nil).
On 8 December 2022, the Company entered into a loan facility (USSL) with Altair Group Investment Limited, the Company’s largest
shareholder. The USSL will provide the Company with an up to £2.0 million unsecured loan with a term of 24 months from the date of
execution. The USSL carries an annual interest rate of 8.0% on funds drawn and outstanding, with interest payable quarterly in advance.
30. BORROWINGS – CONTINUED
Additionally, the Company will pay a 2.5% fee for arrangement of the Facility. On 20 November 2023, it was announced that the balance of
the USSL will be settled by the issue of shares in the Company. At 31 December 2023, the face value of the USSL and accrued interest at 31
December 2023 was €Nil (2022: €1,131,513).
On 20 November 2023, the Company entered into a new unsecured convertible loan facility (“New Syndicated Facility” or NSF) which has
been provided by existing lenders, including Altair Group Investment Limited. The facility is for up to £3 million, with an initial advance
received by the Company of £950,000. Each Tranche will be repaid in instalments agreed with the Lenders at the time of each draw down
and will have a final maturity date of 24 months from the date of advance to the Company. The Company will pay a fixed interest coupon
calculated at 8% per annum of the amount of the Tranche, paid in instalments on each Repayment Date. In respect of the First Tranche,
the entire amount of the advance plus fixed interest is repayable on the final maturity date. The NSF is unsecured, but the Company’s
obligations are guaranteed by certain of its subsidiaries. At 31 December 2023, the face value of the NSF and accrued interest at 31
December 2023 was €987,747 (2022: €Nil).
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non–cash changes.
Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s
consolidated statement of cash flows as cash flows from financing activities. Except where noted, all liabilities noted below are disclosed in
Note 30.
USLF
€
USSL
€
OTHER LOANS
€
LEASE LIABILITIES
(NOTE 31)
€
-
-
-
257,708
TOTAL
€
257,708
5,981,262
1,157,520
98,068
-
7,236,850
Total from financing cash flows
4,732,562
1,151,732
(919,931)
(328,769)
-
(5,788)
-
-
98,068
(206,552)
-
(206,552)
(1,126,483)
(334,557)
5,775,810
-
-
-
4,042
4,042
(303,002)
243,825
332,691
273,514
(27,615)
896
(60,415)
(87,134)
(303)
-
2,197
1,894
99,962
(3,667)
-
5,000
5,375
56,531
(334,587)
244,721
279,473
193,649
6,227,167
Balance at 31 December 2022
5,006,076
1,064,598
Other changes include interest accruals and payments.
Balance at 1 January 2022
Financing Cash Flows
Proceeds from borrowings
Repayment of borrowings and lease
liabilities
Loan issue costs paid
Non-cash changes
Capitalisation of leases
Effect of changes in foreign
exchange rates
Amortisation of loan issue costs
Other changes
Total non-cash changes
104 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 105
Notes to the Financial Statements Notes to the Financial Statements 30. BORROWINGS – CONTINUED
Reconciliation of liabilities arising from financing activities - continued
USLF
€
SLF
€
USSL
€
NSF
€
OTHER
LOANS
€
BANK
OVERDRAFT
€
LEASE
LIABILITIES
(NOTE 31)
€
TOTAL
€
Balance at 1 January 2023
5,006,076
-
1,064,598
-
99,962
-
56,531
6,227,167
Financing Cash Flows
Proceeds from borrowings
-
Repayment of borrowings
and lease liabilities
(424,594)
-
-
1,373,190
918,762
-
(1,707,919)
-
(2,197)
-
-
-
2,291,952
(174,773)
(2,309,483)
31. LEASES - CONTINUED
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset recognised in the statement of financial
position:
RIGHT-OF-USE
ASSET
Leasehold
Building
NO. OF
RIGHT-OF-USE
ASSETS LEASED
2
RANGE OF
REMAINING
TERM
1.75-4.33
years
AVERAGE
REMAINING
LEASE TERM
NO. OF
LEASES WITH
EXTENSION
OPTIONS
NO OF LEASES
WITH OPTIONS
TO PURCHASE
NO OF LEASES
WITH VARIABLE
PAYMENTS
LINKED TO AN
INDEX
NO OF
LEASES WITH
TERMINATION
OPTIONS
3.04 years
0
0
0
0
The lease liabilities are secured by the related underlying asset. Further minimum lease payments at 31 December 2023 were as follows:
Loan issue costs paid
(3,423)
(34,386)
-
(6,877)
-
-
-
(44,686)
MINIMUM LEASE PAYMENTS DUE
Total from financing
cash flows
Non-cash changes
(428,017)
(34,386)
(334,729)
911,885
(2,197)
Capitalisation of leases
-
-
-
-
Conversion of debt
into equity
Effect of changes in
foreign exchange rates
Redemption fee levied
Commitment fee levied
(1,010,519)
(640,727)
(1,296,226)
(65,334)
71,239
22,833
13,016
3,084
33
-
-
-
-
250,294
100,293
Transfers
(4,280,754)
4,256,684
Transfer from cash and
cash equivalents
Amortisation of loan i
ssue costs
Other changes
-
-
305,530
336,445
43,144
229,977
-
-
24,070
-
-
-
68,294
7,962
-
-
-
-
-
-
-
148,181
-
(174,773)
(62,217)
706,705
706,705
-
(3,012,806)
1,212
-
-
-
-
-
111,417
250,294
100,293
-
148,181
424,930
655,565
-
-
-
-
-
-
-
134,460
(58,958)
-
-
13,641
2023
Lease
payments
Finance
charges
Net Present
Values
2022
Lease
payments
Finance
charges
Net Present
Values
WITHIN 1 YEAR
€
1-2 YEARS
€
2-3 YEARS
€
3-4 YEARS
€
4-5 YEARS
€
AFTER 5 YEARS
€
TOTAL
€
218,124
184,420
105,600
105,600
22,000
-
635,744
(15,326)
(9,270)
(5,391)
(2,343)
(98)
-
(32,428)
202,798
175,150
100,209
103,257
21,902
-
603,316
56,849
(318)
56,531
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56,849
(318)
56,531
Total non-cash changes
(4,578,059)
3,911,911
(729,869)
(89,176)
33
148,181
721,558
(615,421)
Balance at 31 December
2023
-
3,877,525
-
822,709
97,798
148,181
603,316
5,549,529
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for
leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The expense related to payments not
included in the measurement of the lease liability is as follows:
Other changes include interest accruals and payments.
31. LEASES
Lease liabilities are presented in the statement of financial position as follows:
GROUP
Current
Non-current
2023
€
202,798
400,518
603,316
2022
€
56,531
–
56,531
The Group has leases for its offices in London, England and in Barcelona, Spain. With the exception of short-term leases and leases of low-
value underlying assets, each lease is reflected on the statement of financial position as a right-of-use asset and a lease liability. The Group
classifies its right-of-use assets in a consistent manner to its property, plant and equipment (see Note 18).
Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the
right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive
termination fee. Some leases contain an option to purchase the underlying leased asset outright at the end of the lease, or to extend the
lease for a further term. The Group is prohibited from selling or pledging the underlying leased assets as security. For leases over office
buildings, the Group must keep those properties in a good state of repair and return the premises in their original condition at the end of
the lease. Further, the Group must insure items of property, plant and equipment and incur maintenance fees on such items in accordance
with the lease contracts.
Short term leases
Leases of low-value assets
2023
€
57,845
27,452
85,297
2022
€
16,131
10,294
26,425
At 31 December 2023, the Group was committed to short-term leases and the total commitment at that date was €18,651 (2022: €18,837).
Total cash outflow for lease liabilities for the financial year ended 31 December 2023 was €174,773 (2022: €206,552).
Additional information on the right-to-use assets by class of assets is as follows:
Leasehold Buildings
Total Right-of-use assets
CARRYING
AMOUNT
(NOTE 18)
€
597,233
597,233
DEPRECIATION
EXPENSE
€
168,187
168,187
IMPAIRMENT
€
-
-
The right-of-use assets are included in the same line item as where the corresponding underlying assets would be presented if they were owned.
106 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 107
Notes to the Financial Statements Notes to the Financial Statements 32. TRADE AND OTHER PAYABLES
GROUP
VAT payable
Trade payables
Advances paid by customers
Other payables
Amounts payable to associates
Deferred income – government grants (Note 33)
Accruals
PAYE & social welfare
2023
€
227,242
1,458,810
228,510
30,585
129,737
300,000
361,636
117,121
2,853,641
2022
€
273,570
1,537,888
186,018
2,629,734
-
-
1,522,092
115,102
6,264,404
Trade and other creditors are payable at various dates in accordance with the suppliers’ usual and customary credit terms. PAYE and
social welfare and other taxes including social insurance are repayable at various dates over the coming months in accordance with the
applicable statutory provisions.
The carrying amount of trade and other payables approximates its fair value. All trade and other payables fall due within one year.
Included in other payables is an amount of €Nil (£Nil) (2022: €2,485,623 (£2,500,000)) relating to consideration payable under the share
purchase contract to acquire Logik WTE Limited This liability was derecognised at a credit of €2,357,091 as the associated investment was
derecognised (See Note 22).
COMPANY
Trade payables
Other creditors
Amounts payable to subsidiary undertakings
Advances paid by customers
PAYE & social welfare
Accruals
2023
€
368,192
3,437
2
-
15,017
260,615
647,263
2022
€
161,177
4,504
2
69,018
24,685
1,115,163
1,374,549
34. DISPOSAL OF SUBSIDIARY
On 12 July 2023, the Group disposed of 95% of its interest in Grande-Combe SAS, retaining 5% which has been transferred to other
investments (See Note 23). The net liabilities of Grande-Combe SAS at the date of disposal were as follows:
Property, plant & equipment
Development costs
Trade and other receivables
Bank balances and cash
Trade and other payables
Net liabilities disposed of
Gain on disposal
Total Consideration
Satisfied by:
Cash and cash equivalents
Minority interest retained
Total consideration transferred
Net cash inflow arising on disposal
Consideration received in cash and cash equivalents
Less: Cash equivalents disposed of
There was no disposal of subsidiaries made in 2022.
12 JULY 2023
€
50,000
386,197
39,841
1,404
(523,817)
(46,375)
273,402
227,027
226,977
50
227,027
226,977
(1,404)
225,573
35. DISCONTINUED OPERATIONS
As disclosed in Note 34 above, the Group disposed of 95% of its interest in Grande-Combe SAS. The combined results of the discontinued
operations included in the loss for the financial year is set out below:
Trade and other creditors are payable at various dates in accordance with the suppliers’ usual and customary credit terms. PAYE & social
welfare are repayable at various dates over the coming months in accordance with the applicable statutory provisions.
The carrying amount of trade and other payables approximates its fair value. All trade and other payables fall due within one year.
33. DEFERRED INCOME – GOVERNMENT GRANTS
GROUP
Government Grant
2023
€
300,000
2022
€
-
The above grant was received from the French government to lead a technical and commercial feasibility on the site of a decommissioned
coal-fired power station. The income will be offset against sales arising from this project. There are no unfulfilled conditions or other
contingencies attaching to this grant.
Revenue
Cost of sales
Gross profit
Administrative expenses
Finance costs and income
Loss from discontinued operations before tax
Taxation
Profit after tax on disposal of subsidiary (Note 34)
Profit/(loss) for the financial year from discontinued
operations (attributable to owners of the Company)
108 | EQTEC plc Annual Report 2023
Cash flows generated by Grande-Combe SAS for the financial years under review were as follows:
Operating activities
Investing activities
Financing activities
Net cash flows used in discontinued operations
PERIOD ENDED
12 JULY 2023
€
YEAR ENDED
31 DECEMBER 2022
€
-
-
-
-
-
(1,448)
-
(1,448)
-
(1,448)
273,402
-
(33,776)
-
(33,776)
-
(33,776)
-
271,954
(33,776)
PERIOD ENDED
12 JULY 2023
€
YEAR ENDED
31 DECEMBER 2022
€
(1,448)
-
-
(1,448)
(33,776)
(50,000)
-
(83,776)
EQTEC plc Annual Report 2023 | 109
Notes to the Financial Statements Notes to the Financial Statements 36. RELATED PARTY TRANSACTIONS
The Group’s related parties include Altair Group Investment Limited (“Altair”), who at 31 December 2023 held 18.19% (2022: 19.00%) of the
shares in the Company. Other Group related parties include the associate and joint venture companies and key management.
Transactions with Altair
During the financial year ended 31 December 2023, Altair advanced €1,373,191 (2022: €1,157,520) to the Group by way of borrowings.
During the financial year ended 31 December 2023, the Group repaid borrowings of €1,707,919 (2022: €Nil) by way of cash and €1,296,226
(2022: €Nil) by way of conversion into equity. Interest payable to Altair for the financial year ended 31 December 2023 amounted to
€455,686 (2022: €1,725) and is included in interest on loans, bank facilities and overdrafts as set out in Note 11. Included in the above
figure was €320,474 (2022: €Nil) representing redemption and commitment fees. Included in borrowings, net of amortisation costs,
at 31 December 2023 is an amount of €Nil (2022: €1,064,598) due to Altair from the Group (See Note 30).
During the financial year ended 31 December 2023, Altair advanced €173,730 (2022: €Nil) to the Group as part of the new syndicated
facility advanced by a number of lenders. Interest payable to Altair as part of the new syndicated facility amounted to €343 (2022: €Nil)
and is included in interest on loans, bank facilities and overdrafts as set out in Note 11. Included in borrowings, net of amortisation costs,
at 31 December 2023 is an amount of €152,643 (2022: €Nil) due to Altair from the Group as part of the new syndicated facility (See Note 30).
Transactions with key management personnel
Key management of the Group are the members of EQTEC plc’s board of directors. Key management personnel remuneration includes
the following:
NAME
Executive Directors
D Palumbo
J Vander Linden
Y Alemán Méndez
Former Executive
Directors
N Babar
Non-Executive
Directors
I Pearson
T Quigley
Total 2023
Total 2022
DATE OF
DIRECTORSHIP
APPOINTMENT/
RETIREMENT
SALARY
€’000S
FEES
€’000S
PENSION
CONTRIBUTION
€’000S
OTHER
BENEFITS
€’000S
TERMINATION
PAYMENTS
€000’S
SHORT TERM
INCENTIVES
€’000S
LONG TERM
INCENTIVES
€000’S
2023
TOTAL
€’000S
2022
TOTAL
€’000S
Resigned
17/11/2023
259
259
194
190
-
-
902
920
-
-
-
-
69
41
110
113
7
10
13
13
-
9
4
-
-
35
36
-
-
21
24
-
-
-
-
-
-
-
(83)
(83)
(55)
(62)
-
-
(283)
275
-
-
-
-
-
-
196
199
139
419
422
276
141
323
69
41
71
42
-
185
785
-
-
1,553
At 31 December 2023, directors’ remuneration unpaid (including past directors) amounted to €66,568 (31 December 2022: €274,917).
During the year, it was agreed to cancel the short term incentive payable to executive directors accrued in 2022.
Details of each director’s interests in shares and equity related instruments that were in office at the year-end are shown in the
Directors’ Report.
Transactions with unconsolidated structured entities
During the year ended 31 December 2023, the Group generated sales of €807,373 from Biogaz Gardanne SAS (2022: €Nil), an
unconsolidated structured entity as set out in Note 20. Included in trade and other receivables at 31 December 2023 is €807,373
receivable from Biogaz Gardanne SAS (2022: €Nil).
36. RELATED PARTY TRANSACTIONS - CONTINUED
NORTH FORK
COMMUNITY
POWER LLC
SYNERGY BELISCE
D.O.O.
SYNERGY KARLOVAC
D.O.O.
EQTEC ITALIA
MDC SRL
EQTEC SYNERGY
PROJECTS LIMITED
TOTAL
2023
€
2022
€
2023
€
2022
€
2023
€
2022
€
2023
€
2022
€
2023
€
2022
€
2023
€
2022
€
Loans to associated undertakings and joint ventures
1,891,842
2,247,366
551,808
1,170,612
585,251
1,656,573
492,406
100,000
100,000
5,174,551
3,621,307
528,085
4,600
1,706,258
11,100
618,356
334,750
(8,694)
(3,700)
(31,324)
(32,000)
At start of year
Advanced during year
Repaid in year
Acquisition of loans
Debtor reclassified
as loan
Payables reclassified
Loans derecognised
Interest charged in year
Loans reclassified as
investment (see below)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
177,069
(2,728,959)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
623,234
554,067
1,161,000
279,000
(252,500)
-
-
71,562
19,119
(487,545)
(15,952)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
350,450
2,852,699
(35,700)
(40,018)
623,234
-
554,067
1,161,000
279,000
(252,500)
-
-
71,562
196,188
(487,545)
(2,744,911)
1,150
128,286
Exchange differences
-
131,963
756
(2,006)
394
(1,671)
-
-
At end of year
-
- 2,252,722 2,247,366 1,178,406 1,170,612 2,747,141 1,656,573
100,000
100,000 6,278,269 5,174,551
Sales of goods and services
Technology sales
Development fees
Other income
Year-end balances
Included in trade
receivables
Included in other
receivables
Included in other
payables
20,341
-
20,341
-
-
-
-
-
75,000
1,000,000
75,000
-
149,263
3,500,000
-
245,010
-
115,005
-
-
75,000 1,245,010
75,000
115,005
149,263 3,500,000
-
-
-
-
108,932
-
-
-
-
-
-
319,604
4,500,000
-
-
360,015
-
319,604 4,860,015
-
108,932
-
20,341
-
2,292,836
2,217,523
2,320,428
2,245,191
68,341
609,000
-
-
4,701,946
5,874,214
-
-
-
-
12,426
12,421
100
100
18,956
16,956
31,482
29,477
-
-
-
-
-
-
129,737
-
-
-
129,737
-
As part of the financial restructurings of North Fork Community Power LLC under Chapter 11 of the US Bankruptcy Code (see Note 21),
borrowings and accrued interest advanced to North Fork Community Power LLC amounting to €2,728,959 have been reclassified as equity
in North Fork Community Power LLC in the year ended 31 December 2022. As set out in note 21, the Group has made the decision to impair
fully the investment in 2023, leading to an impairment cost of €2,729,959 for the year ended 31 December 2023.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received.
Outstanding balances are usually settled in cash.
37. EVENTS AFTER THE BALANCE SHEET DATE
Drawdown of Bank Refinance Approved for Italy Market Development Centre
On 16 January 2024, it was announced that Banca del Fucino S.p.A., a historic private banking group based in Rome, (the “Lender”) has
approved the drawdown of a loan facility of €2.9 million to provide financing to its associate entity, EQTEC Italia MDC srl, which owns the
Italy Market Development Centre, located in Gallina, near Castiglione d’Orcia, Tuscany, Italy. The term of the Facility is 48 months, with an
annual interest rate of 2.5% over the six-month Euro Interbank Offered Rate (Euribor), which is currently c. 3.9%. The loan is guaranteed
up to 80% by MedioCredito Centrale S.p.A., which is controlled by the Italian Ministry of Economy. Italia MDC intends to draw down the
Facility in full imminently to support the Plant’s business plan and to fund additional performance improvements as Italia MDC pursues
further operational efficiency and commercial opportunities.
110 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 111
Notes to the Financial Statements Notes to the Financial Statements
37. EVENTS AFTER THE BALANCE SHEET DATE – CONTINUED
Equity placement
On 28 May 2024, the Company announced a fundraise of £852,425 (Gross), achieved through the placing of 60,887,490 ordinary shares
of €0.01 each in the Company (“Shares”) at£0.014 per share to the subscribers (the “Placing Shares”). A further 2,435,499 new Shares are
being issued in settlement of certain fees in relation to the Placing (“Fee Shares”). The Placing represents a new capital injection raised
for cash proceeds. No portion of the Placing will be used for repayments of the Term Loan with the lenders having waived the rights to
any prepayment arising from the Placing. The board intends for the proceeds of the Placing to be used for the working capital for the
operations of the Company. On 31 May 2024, the Company confirmed receipt of £350,000 in relation to the above placing and on 11 June
2024 confirmed receipt of the balance of £502,425.
No other adjusting or significant non-adjusting events have occurred between the 31 December reporting date and the date of
authorisation.
38. NON-CASH TRANSACTIONS
During the financial year, the Group entered into the following non-cash investing and financing activities which are not reflected in the
consolidated statement of cash flows:
Issue of shares in settlement of borrowings and other liabilities
2023
€
2022
€
3,876,990
290,429
39. COMPANY PROFIT AND LOSS
As a consolidated group income statement is published, a separate income statement for the parent company is omitted from the Group’s
financial statements by virtue of section 304(2) of the Companies Act, 2014. The Company’s loss for the financial year ended 31 December
2023 was €33,492,877 (2022: €5,216,344).
40. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were approved by the Board of Directors on 27 June 2024.
37. EVENTS AFTER THE BALANCE SHEET DATE – CONTINUED
Settlement Agreement with Logik Developments
On 3 April 2024, it was announced that the Company has reached a settlement agreement with Logik Developments Limited and its
wholly-owned subsidiary Logik WTE Limited (collectively, “Logik”). Pursuant to the Settlement Agreement, the Company and its wholly-
owned subsidiaries EQTEC UK Services Limited and Deeside WTV Limited and Logik have agreed to the full and final settlement of certain
claims between them. In connection with this settlement, subject to and conditional on the sale of a site at Weighbridge Road in Deeside
Industrial Park (the “Land”) completing on or before 30 April 2024, Logik will pay the Company a settlement sum of £1.7 million within the
next business day following the date of completion. If the sale of the Land completes between 1 May 2024 and 30 November 2024, Logik
will pay the Company a settlement sum of £2 million within the next business day following the date of completion. If a sale of the Land
does not complete by 1 December 2024, Logik will be liable to pay to the Company £2,000,000 not conditional upon any sale of the Land.
Under the terms of the Settlement Agreement, EQTEC will also receive interest at 4% above the Bank of England Base Rate on any part of
the settlement sum that is not paid in accordance with the terms of the Settlement Agreement. The Company has received confirmation
from Logik that the Land is currently in the process of being sold and that the proposed purchaser is funded by a global investment
company. Further, the Company has been informed that all elements of the transaction have now been agreed and the funder is seeking
final sign-off and confirmation at its internal committee meeting in the coming days.
On 1 May 2024, it was announced that the Company has received written confirmation from Logik that exchange for the sale of the Land
to a proposed purchaser, who is funded by a global investment company, has taken place. Completion of the purchase of the Land and
receipt of funds by EQTEC remains conditional only upon the final legal execution of certain documents pertaining to the project. The long
stop date for completion has been set for 28 June 2024.
Drawdown on Syndicated Facility
On 8 May 2024, the Company announced that it has received a further advance of £340,000 pursuant to the terms of the New Syndicated
Facility announced on 23 November 2023. The Drawdown is intended to provide working capital in advance of the anticipated receipt of
the proceeds from the settlement with Logik Developments, In accordance with the terms of the New Syndicated Facility, the Refinance
Investors will be granted an aggregate of 7,359,671 warrants in the Company with an exercise price of £0.02656 per Warrant (being 150% of
the average of the 5 daily VWAPs prior to execution) and a 48-month term from grant.
Repayment and conversion for reduction of debt balances
On 8 May 2024, the Company announced that Riverfort Global Opportunities PCC Limited and YA II PN Limited (the “Lenders”) are party to
a secured facility of up to £10.0 million as detailed in the Company’s announcement on 20 November 2023 (the “YA-RF Secured Facility”).
No further funds have been advanced pursuant to the YA-RF Secured Facility which currently stands with £5.1 million drawn and no further
fees have been accrued since that time. Upon the anticipated receipt of funds pursuant to the Logik settlement, 20% of the proceeds of
the Logik settlement amounting to £400,000 will be paid to the YA-RF Lenders to reduce the balances outstanding pursuant to the YA-RF
Secured Facility. In addition, Riverfort Global Opportunities PCC Limited has agreed with the Company to convert part of the outstanding
balances of the YA-RF Secured Facility by subscribing £200,000 for 12,802,031 shares in the Company at an issue price of 1.562p per share,
representing a 5.3% discount to the mid-market closing price of 3 May 2024.
Refinancing of existing secured loan facility
On 23 May 2024, the Company announced that they have secured a refinancing of its existing secured facility, the YA-RF Secured Facility.
The new funding replaces the previous funding with a non-convertible secured term loan facility with no scheduled repayments until 21
May 2026. the key terms of which are:
A 24-month term (“Term”), with repayment of the principal and interest of each advance due at the expiry of the Term (subject to
agreed prepayments as detailed below).
9.5% fixed coupon of principal outstanding accruing on the commencement of each 12-month period.
No fixed monthly payment or conversion rights. Outstanding amounts will only be converted into shares in the Company in the case
of an event of default.
Arrangement fee of 5% for each advance.
Maximum facility amount reduced to £5.5m.
Repayment of principal and interest secured by the Debenture previously granted (as detailed in the Refinance Announcement).
Agreed prepayments, save as waived in full or part by the Lenders, during the Term:
- 20% of net funds received by the Company of any certain future equity fundraisings;
- 25% of any cash inflows excluding operational turnover or equity placements. This will include the anticipated proceeds of the
Logik settlement, details of which were announced by the Company on 3 April 2024; and
- 10% of net revenue (after costs of sales) earned, paid quarterly in arrears.
The above repayment terms supersede other repayment obligations to the Lenders that were previously announced.
112 | EQTEC plc Annual Report 2023
EQTEC plc Annual Report 2023 | 113
Notes to the Financial Statements Notes to the Financial Statements
EQTEC plc
Cork, Building 1000,
City Gate,
Mahon,
Cork,
T12 W7CV,
Republic of Ireland
Registered Number: 462861
Notes to the Financial Statements