Getech Group plc
Annual Report
and Accounts
YEAR ENDED
31 DECEMBER 2020
Company Registration Number: 02891368
Getech
Highlights
Accelerating progress to
global net-zero by supporting
customers in the optimisation
of existing, and delivery of
new, energy assets and
strategic mineral resources.
Covid-19
and Customer
Activity Update
• In 2020 Getech balanced risk management with
business development in zero-carbon energy.
• Covid-19 has created a challenging business
environment, 2020 customer budgets reduced
by c35%.
• In 2020, Getech’s orderbook, annualised
recurring revenue and customer relationships
remained robust, but revenue declined as
customers cut back project work, which also
impacted data sales.
• The move to home working was smooth;
projects continue to be delivered on time
and to cost.
• Actions implemented from 1 May 2020 reduced
monthly Group costs by c26%.
• Getech retains further cost flexibility and has
maintained the capacity to deliver its orderbook
and the resources needed to maximise the
impact of its sales conversations and new
business activities.
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2020 Financial
Highlights
Revenue
£3.6m (2019: £6.1 million)
Gross margin
53% (2019: 58%, adjusted)
protected by cost
management initiatives
Orderbook remained strong
£2.7m at 31 December 2020
(31 December 2019: £3.1 million)
Annualised Recurring Revenue
£2.1m
at 31 December 2020
(31 December 2019: £2.3 million)
Total cost base*
20% (2020: £5.1 million; 2019: £6.4 million)
below 2019
Adjusted† EBITDA
£0.5m loss
(2019: £0.9 million profit)
Net cash
£1.4m at 31 December 2020
(31 December 2019: £2.7 million)
B
*See table 3 on page 20 for details.
†Adjusted for exceptional items (see page 19 for details).
Getech Group plc Annual Report and Accounts 2020
01
Getech Group plc Annual Report and Accounts 2020
Beyond 2020 - delivering
diversified growth
Getech is using its earth science and geospatial
expertise to accelerate progress to global net-zero,
by supporting its customers in the optimisation of
existing, and delivery of new, energy assets.
• Getech is using its earth science and geospatial
• This will be used to grow and diversify Getech’s
expertise to accelerate progress to global
activities across the zero-carbon economy, with
net-zero, by supporting its customers in the
particular focus on the green hydrogen, carbon
optimisation of existing, and delivery of new,
capture, geothermal and strategic minerals
energy assets and strategic mineral resources.
sectors.
• For existing customers this means helping
• Our focus is on activities that are essential,
identify the highest value/lowest carbon-impact
repeatable and strongly scalable.
petroleum assets, whilst also utilising Getech’s
skills and technologies to support their net-zero
asset investment.
• This work connects Getech with a wider group
of net zero customers, with whom the Company
is beginning to build a more diversified baseline
of product and service sales.
• We will measure success through our carbon-
neutral goal, our profit and the creation of asset
value.
• In March 2021 Getech completed its first
project investment - acquiring H2 Green, a
data-led business that is using Getech’s location
analytics to establish a national network of green
• Getech’s commitment to this path is underlined
hydrogen hubs.
by the Company joining the United Nations’
Race to Zero campaign - Getech’s pledge is to be
carbon-neutral by 2030.
• Getech is also aligning its Board to these
areas of focus – appointing a new Chairman
and new NEDs. This brings expertise in clean
• Getech will deliver this through the application
technologies, zero-carbon investment, ESG and
of its products and skills, and by direct
business scale up.
decarbonisation steps - taking targeted equity
exposures in emergent carbon neutral value
chains.
• Getech’s Board is excited by the opportunities
ahead and values the continued support of
the Company’s shareholders, customers and
• In April 2021 Getech raised £6.25 million
business partners.
through a Placing, Subscription and Open Offer
of shares.
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Getech making
the commitment to be
carbon-neutral by 2030
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Getech Group plc Annual Report and Accounts 2020
Getech Group plc Annual Report and Accounts 2020
03
At a Glance
Our Mission
To accelerate progress to global net-zero carbon emissions by
supporting our customers in the optimisation of existing, and
delivery of new, energy assets and strategic mineral resources.
Our Strategy
To apply our extensive earth science and geospatial skills to the
transitioning primary energy sector, in particular hydrogen, CCUS
(Carbon Capture, Utilisation and Storage), geothermal and locating
strategic minerals.
Our Customers
Energy and Natural Resource companies; Governments,
States, Cities; Low Carbon energy investors.
The Commercial Formula
We are product and technology led, offering diversified growth from
predictable annually recurring revenues. We deliver this through
product sales and seeking direct exposures to project cash flows.
Our Building Scale
We intend to create growth both organically and through
acquisition; targeting activities that are essential, repeatable
and strongly scalable. We measure this in terms of total return
on investment including, the creation of asset value, and the
delivery of our pledge to be carbon neutral by 2030.
Table of
Contents
About Getech
Highlights
2020 Financial Highlights
Beyond 2020 - delivering diversified growth
At a Glance
Strategic Report
Chairman and CEO Statement
Case Study – Hydrogen
Case Study – Strategic Minerals
Case Study – Geothermal
Covid Response
Operations Review
Financial Review
Risk Management
Governance
Board of Directors
Corporate Governance
Directors’ Report
Financial Statements
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Parent Company Statement of Financial Position
Parent Company Statement of Changes in Equity
Notes to the Parent Company Financial Statements
Notice of Annual General Meeting
Advisors
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IFC
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02
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22
26
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32
35
45
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49
81
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Getech Group plc Annual Report and Accounts 2020
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Strategic Report
Chairman and
CEO Statement
Getech provides data, knowledge, software
and analytical products and services to
help governments and investors locate and
manage new energy and mineral resources
and to optimise their development. Our
mission is to accelerate progress to global
net zero by supporting our customers in the
optimisation of existing, and the delivery of
new, energy assets. We do this through the
application of our extensive earth science
and geospatial skills to the transitioning
primary energy sector, in particular targeting
growth across green hydrogen, carbon
capture, geothermal energy and the mining
of strategic minerals.
Our Market
Richard Bennett
Chairman
Dr Jonathan Copus
Chief Executive
In the 15 years since joining AIM, Getech has continually provided products and services to many international oil and gas
companies and governments. We have developed a reputation for technical excellence, which is built on Getech’s unique
product Intellectual Property. From this we have built a strong financial and operational platform, underpinned by a robust
orderbook and annualised recurring revenues.
As the world is transitioning towards net zero, petroleum exploration activity has declined and demand for alternative
sources of energy has increased. These trends have been accelerated by the Covid-19 pandemic and provide numerous
growth opportunities for the Group.
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Getech’s role in the path to net zero
The transition to a net zero economy is an unprecedented challenge. As the world seeks to decarbonise, this will require the
replacement of more than 50% of the world’s energy infrastructure and new supplies of rare earths and other metals. We
see the global energy mix of our future as being built with many different renewable energy technologies, delivered through
a distributed architecture. This presents a huge opportunity for Getech and our overarching goal is to build a portfolio of
products, services and assets under management that build value and provide long-term sustainable cash flows.
Our commitment to this cause is demonstrated by our membership of the United Nations’ Race to Zero campaign – Getech’s
pledge being to be carbon neutral by 2030.
Our existing energy customers
In the near-term, our business plan is to continue to service our existing energy customers. We will do this by optimising the
value and sustainability of their petroleum portfolios, whilst also supporting their diversification into zero carbon assets and
technologies.
While customer sentiment remains relatively subdued in comparison with the pre-Covid-19 environment, it is encouraging
to see some momentum returning. In Q1 2021, this was evidenced by new data sales and service work, both of which were
largely absent in H2 2020. Existing customers are also renewing their software licences, all of which is helping to build the
orderbook and increase recurring revenues.
Through our current work, we also naturally engage with a wider group of new zero carbon customers, from whom we are
already beginning to secure product sales, and winning service work.
Across all customers we deploy our skills in ways similar to how our earth scientists and geospatial experts have
traditionally worked with oil and gas assets, namely:
• Where in the world will we find the resources required for the energy transition?
• Who can help us develop these resources?
• How do we optimise development and production?
• How do we operate these new projects?
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Strategic Report
Sector focus
We concentrate our business development work on activities that we consider to be essential, repeatable and strongly
scalable. Sectorally, our knowledge and geospatial skills are best suited to identifying economically privileged and
environmentally sustainable locations for:
• Geothermal assets - baseload energy that can be utilised to produce heat and power.
• Strategic minerals - deposits of rare earth and battery metals such copper and lithium.
• Carbon capture and storage - the conditions required to deliver safe long-term storage.
• Green hydrogen - utilising excess renewable energy to create hydrogen hubs.
We are excited to have already won new business in geothermal and have continued this momentum in announcing
business collaborations in geothermal and hydrogen.
Investing for growth
To progress these sector focus areas, in April 2021 Getech successfully raised £6.25 million through a share Placing,
Subscription and Open Offer. Since the completion of this fundraise, our priority has been to reorganise and focus our team
on these exciting developing sectors, as we resource and commence our expanded program of investment.
Domain experts are being appointed to lead business development and product and service delivery in these new sector
groupings. We are focused on identifying people who share our passion for a zero carbon future, who are established
experts in their fields, with both a track record in business scale up and the delivery of commercial success in the green
economy.
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Our role in the energy transition
Getech’s role in the Energy Transition is not to compete with industry mega projects
that are currently being announced. Instead, we intend to use our earth science and geospatial
expertise to identify and help develop economic zero carbon projects that will become part of a distributed
energy system.
In addition, our strategy is not only to help our customers identify and develop zero carbon energy assets, but also to
participate in the projects and become wherever possible co-owners, managers and/or service providers. We believe
that such a portfolio of assets will increase the net asset value of the company and, with the recurring profits that result,
substantially increase shareholder value. In aggregate, this could become a substantial energy business.
Outlook
With clear strategic focus, strong balance sheet, and new team members aligned with our vision, we are very excited about
the outlook and growth prospects for Getech. 2021 will be about continuing to service our current petroleum customers
whilst building on our foundations for growth in the green hydrogen, carbon capture, strategic minerals and geothermal
We are also reshaping the Non-Executive skills of our Board. Since the appointment of a new Board Chair, we have
sectors. Similar to our early steps into the hydrogen sector, we also see the potential for acquisitions within geothermal and
recruited a new Audit Chair designate who bring in-depth knowledge of clean technologies, renewable energy finance,
strategic minerals as a path to both accelerate the build-out of our offering and to provide access to operating projects. We
strategic minerals, and environmental, social and governance (ESG).
also expect to announce further product developments as we expand our offering further into these areas.
Our ongoing program of investment focuses on repurposing our existing products and services to address further
We look forward to keeping our shareholders abreast of developments as we identify further growth opportunities within
opportunities in the energy transition. We are also building partnerships and broadening our offering to include assistance in
the energy transition.
the technical and financial development of zero carbon assets.
We would like to thank our employees and fellow board members for their continued dedication to the Company, helping
By providing our customers with an integrated technical and commercial overview of their development portfolios and by
Getech perform robustly in what has been a very challenging period.
expanding our work into emergent energy value chains, Getech can capture direct exposure to the value that our skills and
technologies create at the asset level. This asset exposure brings our shareholders transformative potential, which can be
delivered at low incremental capital costs.
We took our first step on this path in March 2021, when we exercised our option to purchase H2 Green Limited. H2 Green
is a UK developer of hydrogen hubs, which we intend to use as a foundation to develop a portfolio of hydrogen projects.
The Company is focused on establishing its first cash producing hydrogen assets, and has already entered into a notable
agreement with UK gas distributor SGN Commercial Services with the aim of developing hydrogen hubs utilising their land
portfolio. The company has also notably signed a Letter of Intent with Element 2, a Hydrogen fuel retailer, to supply green
hydrogen to its refuelling stations.
As part of our ambitious, long-term growth strategy, we are focussed on identifying further value-enhancing partnerships
and initiatives over the months and years ahead.
It is a pleasure to become chairman of Getech at this
inflection point in the development of the Group, as
we apply our core geoscience skills and geospatial
services to the energy transition and contribute to the
decarbonisation of the world’s energy systems.
Richard Bennett Chairman
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09
Fuelling
the future
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Strategic Report
Strategic Report
Case Study
Hydrogen
The Getech Group is making strategic investments
into the hydrogen economy, leveraging its geospatial
expertise to optimise green hydrogen production, and
deploying its geoscience experience in supporting
blue hydrogen carbon capture projects.
The strategic acquisition of H2 Green and its portfolio of opportunities in March 2021 places Getech
in an excellent position to capitalise on a large part of this emergent market. H2 Green’s mission is
to establish a network of green hydrogen production hubs across the UK. To do this the Company
is using a data-led approach, designed by Getech’s geospatial experts to identify optimal overlap
between demand growth and land opportunities.
H2 Green has already made substantial progress
in the hydrogen market, including:
• Securing an option to redevelop 30 infrastructure assets for hydrogen production
• Signing an Letter of Intent to develop a strategic offtake framework agreement
• Building strategic relationships with other growth partners and government agencies
Driving this progress is H2 Green’s customer-focused approach to developing clean hydrogen solutions.
Our primary target customers, operators of commercial fleet vehicles, must have confidence in their fuel
provider; H2 Green is unlocking that by switching production & storage designs from kilograms to tonnes -
providing unprecedented security in supply for hydrogen customers.
The UK government in the Energy White Paper of 2020 has already defined hydrogen as a strategic fuel for
the UK, and we expect their Hydrogen White paper due in July 2021, will call for the development of hydrogen
hubs in cities and industrial hubs across the UK. Hydrogen is expected to become an important fuel choice for
HGVs, city utility vehicles and trains, as well as a heating fuel. H2Green is well positioned to take advantage
of the expected new policy and is gaining a significant head start by working with companies such as SGN
Commercial Services to identify potential strategic locations.
Getech is also exploring ways to apply its geoscience and oilfield experience to aid carbon sequestration
for blue hydrogen production projects. Requiring a combination of geospatial, economics and geological
knowhow, we believe we can solve many of the challenges associated with permanent sequestration of
carbon dioxide below ground.
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Strategic Report
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Case Study
Strategic Minerals
The technologies and infrastructure required to deliver a low
carbon future rely heavily on metals and minerals. Meeting
this demand is a significant challenge for the metals and
mining industries, which have historically returned low
exploration success rates.
Getech already counts a number of mining customers in its client base and these currently account for c.7 percent of Group
revenue. These customers use Getech’s gravity and magnetic data, Globe and its geoscience and geospatial technology
services to help identify, predict, and rank potential sites for new deposits.
Case Study
Geothermal
Heat from the Earth’s interior can be harvested to provide
a stable and predictable source of baseload energy. This
is an advantage over key sources of renewable energy,
such as wind and solar, which are variable in nature.
With the petroleum majors poised to make their biggest
geothermal investments in 30 years, Getech is well
positioned to catch this rising wave of investment.
Getech’s intention is to expand its footprint in this market, with a particular focus on the location and sustainable
Getech already has products that add value to geothermal companies - its gravity and magnetic data are an
development of new deposits of strategic minerals. A key element to deliver this is to align Getech’s ‘Globe’ product to the
essential tool for imaging and modelling the structure and temperature of the Earth’s crust, and Getech has
needs of mineral explorers.
Globe already comprises many essential components that assist in targeting giant mineral deposits, but its content is
already developed global heat maps for its petroleum customers. These products combine with Getech’s
geoscience and geospatial services to provide valuable prospecting tools for geothermal resource.
primarily designed for petroleum customers. In the last 18 months however, Globe has been adopted by a global minerals
With these capabilities as part of its foundation, Getech is developing a new solution called ‘Heat Seeker’ - a
major and presentation of their work has driven sales interest from other mining companies.
To capture this commercial potential requires investment to enhance Globe’s value offering to mining customers. This will
include: a focus on deeper Earth processes, the extension of Globe’s plate model further back in time, the update of Globe’s
palaeoenvironment data and an expansion of Globe’s validation to include mineral occurrences and related key data.
To capture the full value of this work Getech intends to build its team - adding domain expertise and extending the Group’s
sales network - and has established commercial partnerships with companies which provide access to fresh, exciting and
valuable content.
The work required to position Globe as an essential tool for mining will also in part bring value to existing petroleum
customers and so the Group expects this investment to both expand Getech’s reach into mining and strengthen its offering
to Globe’s current customers.
complete solution for geothermal prospectivity analysis and site selection. Heat Seeker addresses both the
geotechnical conditions that create a viable geothermal resource as well as the availability of infrastructure and a
potential customer market for any heat or power produced. This will help its customers – both governments and
businesses - to identify optimum potential geothermal project opportunity locations. Getech intends to invest
further in the development and promotion of this solution, and to accelerate its commercialisation through the
recruitment of domain experts.
Through these activities, Getech targets new data sales and recurring license-based revenue. Getech is also
exploring the potential to enhance the returns that it can generate, by capturing asset exposures - a commercial
model similar in nature to H2 Green.
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Getech Group plc Annual Report and Accounts 2020
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Strategic Report
Covid
Response
Throughout 2020 and into 2021,
the Covid-19 pandemic has led
to unprecedented restrictions
on social and business activity.
These have deeply disrupted the
global economy. In H1 2020, in the
face of sharp falls in oil demand, a
relatively short-lived but untimely
OPEC-Russia supply war added
unwelcome complexity.
During H1 2020, Oil prices touched 20-year lows, followed by
a recovery in demand and price in the latter part of 2020. In
response to demand uncertainty, petroleum companies cut their
2020 capex budgets by c35%.
2020 was undoubtedly a very challenging and uncertain year
but the combination of a strong balance sheet and orderbook at
the start of the year helped Getech navigate this. Whilst Getech
experienced a drop in ‘spot’ sales and short-term project work,
there were no negative orderbook revisions and we maintained a
strong level of recurring revenue throughout the year.
Operationally, the move to home working was smooth, with projects remaining on schedule - both in terms of time
and cost. During this period of home working, the Group delivered a busy schedule of software and product upgrades,
all to schedule. Having established solid remote communication practices early, we have also enhanced our ability to
deliver online trials of our products. The uptake in product training from home working customers across our customer
and contact base has been strong, and having expanded our programme of digital marketing, webinar attendance has
increased significantly. Together, this creates a unique opportunity to both increase our profile and reach deeper into
our customers’ organisations and we have reshaped our sales and marketing activities to capture the benefit of this. We
have also accelerated new business activities, focusing on the value that our transferable skills and technologies can
deliver in new energy and infrastructure settings.
Like all businesses however, we do not know how long Covid-19 disruption and energy demand weakness will last,
and so to preserve capital we implemented a range of actions that have lowered Group monthly costs by c26%. Getech
retains additional cost flexibility, but, importantly, we have also maintained our capacity to deliver our contracted
orderbook and to maximise the impact of our sales and new business conversations. Furthermore, in Q1 2021, Getech
raised a £6.25m equity fund to accelerate diversified growth of the business in the Hydrogen economy, Geothermal
energy, the mining of Strategic Minerals, as well as to strengthen the balance sheet and to mitigate risk from the near
term effects of Covid.
In response to restrictions preventing in person communication with investors and other stakeholders, the board and
executive have held virtual meetings with stakeholders and Getech has used regulatory news services, blog posts and
social media when appropriate, to keep stakeholders appraised of developments within the business.
We believe Getech is now well positioned to rapidly adjust to any further deterioration, or improvement, in our core
markets as well as strive for growth in new markets, and that this flexibility and our balance sheet strength, will
underpin Getech throughout 2021 and 2022.
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Operations Review
Getech’s core value proposition combines our
Geoscience and Geospatial expertise to provide
unique insight for our energy sector customers.
In an energy market that is transitioning to deliver a decarbonised and decentralised primary energy system, the application
of Getech’s combination of skills and technologies opens a wide front of commercial opportunity to the Group. In 2020 we
embraced these changes by continuing to evolve our solutions for our core petroleum markets, whilst also accelerating our plans
to diversify into other energy and natural resource markets - including Mining, Geothermal and Hydrogen.
One of the foundations of our Petroleum offerings is our market leading Gravity and Magnetic (G&M) expertise. Through 2020,
sales of data and related services declined as our customers reduced their levels of project-based work. Getech responded
to this by focusing our staff’s time on enhancing and broadening our offering. In 2020, we completed and released ‘Multi-
Sat 2020’ - a major new gravity data product that integrates information from the latest satellites with innovative processing
methods to create the most accurate, reliable and coherent gravity data for all offshore areas, providing resolution comparable to
regional 2D shipborne solutions.
We also further enhanced our flagship earth modelling product, Globe, with the release of ‘Globe 2020’, which delivered new
information, analytic tools and additional usability features, including an initial version for ArcGIS Pro, Esri’s latest desktop GIS
application. Our work to re-position Globe for the evolving petroleum market were further rewarded in 2020 when we secured
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As we planned the
likely to be necessary
for developing a Heat Seeker
prototype, we also built a network
of contacts within the Geothermal market and
established strategic relationships to assist our work – one result of
which was Getech becoming a member of the International Geothermal Association (IGA)
in March 2021, an organisation that we continue to work in partnership with through 2021.
work
a new super-major customer and high renewal rates for existing subscribers and those on multi-year licence agreements.
In 2020 we drove further diversification by entering the Hydrogen sector through our relationship with H2 Green, securing
Elsewhere in petroleum, our GIS Software team completed releases that delivered significant enhancements to our software’s
data integration, exploration prospectivity analysis and onshore shale gas/oil well pad & lateral planning capabilities. As with
Globe, software renewal rates through 2020 remained high and we were able to add several new customers through the year.
In addition, we continued to successfully deliver on a wide variety of oil and gas GIS services contracts, including the completion
of our first significant GIS implementation project in the pipeline sector. That these products and services projects were
delivered to customers on time and within budget was a notable achievement given the migration to home working caused by
Covid-19 from March 2020.
Alongside our work in petroleum, through 2020 we focussed on better understanding how our core products were being used
in the Mining sector. As a result of this, we were able to leverage both our G&M expertise and Globe to help customers deliver
Copper and Lithium exploration projects – both potentially essential strategic minerals for the Energy Transition. As a result of
these project successes, we commenced planning additional workstreams for further expansion into the Mining market, and
work is now well underway in 2021.
Our innovation and market diversification work also identified Geothermal as a potentially untapped market for Getech. Through
a combination of our G&M, geoscience and GIS expertise we developed the concept of the ‘Heat Seeker’ solution -
a tool for locating potential geothermal resource sites within reach of readily available customer markets for heat or power.
an exclusive option to acquire the business in November 2020. Early in our discussions with H2 Green we recognised that
a key component of our joint value proposition was Getech’s expertise in GIS and geospatial location analytics. These skills
were key to enabling H2 Green to identify and rank multiple site locations
across the UK as it developed and optimised its portfolio of green hydrogen
opportunities. The success of this approach led to the acquisition of H2 Green
in 2021 and the delivery of additional phases of location analysis in support
of identifying further green hydrogen site locations.
Finally, our group-wide Innovation team, established in 2019, continued
through 2020 with its remit to research and develop cross-discipline
opportunities for new markets, capabilities, partnerships, products, and
services. In 2020 our innovation work focussed on assessing opportunities
within the geothermal and mining domains; applying machine learning to
our Globe and G&M products to create new insight; further investigating the
concepts of IoT and Digital Twins to feed geospatial projects; and developing
solutions to enable organisations to analyse their CO2 emission sources and
assess alternative greener energy supply as part of their energy
transition requirements.
Chris Jepps
Chief Operating Officer
16
Getech Group plc Annual Report and Accounts 2020
Getech Group plc Annual Report and Accounts 2020
17
Strategic Report
Financial Review
In 2020 the Covid-19 pandemic cast a shadow over the
global economy and Getech’s ‘Covid response’ is detailed
on page 14 in this Annual Report.
The impact of Covid-19 compounded macroeconomic and investment themes that since 2014 have led to volatility and uncertainty
(1) Exceptional administrative expenses
During the year, Getech incurred costs totalling £115,000 in relation to restructuring the business. In 2019 there were
exceptional items relating to cost of sales and administrative expenses, which are detailed in note 24.
Operating Results
Revenue
Despite remote working throughout most of the year, Getech remained close to its customers through a broad and
innovative program of online engagement.
This was rewarded by a high renewal rate on our subscription revenues. Annualised recurring revenue totalled £2.1m at 31
December 2020 (31 December 2019: £2.3m). Getech’s orderbook was also robust, totalling £2.7m at 31 December 2020
(31 December 2019: £3.1m).
The Group did however see a drop in revenue, driven by our customers’ reducing their levels of short-term project work,
which also drove lower sales of off-the-shelf data. This resulted in an overall reduction in revenue from £6.1m in 2019 to
£3.6m in 2020. This can be seen in the analysis of revenue by timing of recognition, where ‘point in time’ products revenue
fell from £2.41m in 2019 to £0.48m in 2020, whereas products revenue over time (from subscriptions) increased from
£1.96m in 2019 to £2.13m in 2020.
Gross margin before exceptional items
A large proportion of Getech’s cost of sales are invariable, however Gross margin for the year was protected from the
decrease in revenue by cost saving measures that the Group announced in May 2020. Overall gross margin was 53% for
2020, compared to 58% in 2019, adjusted. The products margin remained strong at 72% compared to 76% in 2019.
in both oil prices and the levels of petroleum exploration spending. Brent averaged $42/bbl (2019: $64/bbl) and long-dated crude
Getech’s Services division returned to profit in 2019 and in 2020 the Group maintained a small gross profit, with a Services
prices traded around the mid-$40/bbl, down from mid-$50/bbl in 2019. The impact of climate change has also continued to move
gross margin of 2% (2019: 8% margin). Getech continues to target a return to a 25% margin for the Services division in the
up the social agenda, placing the Energy Transition firmly on the strategic roadmap of Getech and our customers.
mid-term.
To protect the Group against these dynamics, since 2016 management has focused on building Getech’s foundation of recurring
revenue and orderbook. Between 2017 and 2019 this focus grew Getech’s annualised recurring revenue by 53% and orderbook by
197%. In 2020, in the face of unparalleled business disruption, Getech’s orderbook, recurring revenue and customer relationships
Table 2 – Gross margin by reporting segment
have all proved to be robust. Annualised recurring revenue totalled £2.1m at 31 December 2020 (31 December 2019: £2.3m) and
order book totalled £2.7m at 31 December 2020 (31 December 2019: £3.1m).
Looking forward, Getech is also focused on the delivery of diversified transformational growth, with particular focus on the mining,
hydrogen and geothermal sectors.
To aid in the analysis of Getech’s underlying financial performance, the table below sets out key reported figures from the financial
statements and the equivalent figure adjusted for exceptional items, detailed in footnote 1.
Revenue
Cost of sales
Gross profit
Gross margin
Administrative costs
2020
2019
Products
£’000
Services
£’000
Products
£’000
Services
£’000
2,602
(740)
1,862
72%
962
(942)
20
2%
4,324
(1,025)
3,299
76%
1,636
(1,506)
130
8%
Table 1 - Financial Summary
Revenue
Gross margin
EBITDA
Operating loss
Loss after tax
Earnings per share
Cash (outflow)/inflow from operations (before W/C adjustments)
Development costs
Net (decrease)/increase in cash
Cash and cash equivalents
Net cash
18
2020
2019
Reported
(audited)
£’000
Adjusted1
(unaudited)
£’000
Reported
(audited)
£’000
Adjusted1
(unaudited)
£’000
3,563
53%
(601)
(1,774)
(1,644)
(4.38)p
(516)
(902)
3,563
53%
(486)
(1,659)
(1,529)
(4.07)p
(516)
(902)
(1,311)
(1,311)
2,192
1,358
6,058
64%
(1,935)
(3,091)
(3,088)
(8.22)p
934
(1,108)
2,154
3,554
2,700
6,058
58%
872
(284)
(281)
(0.75)p
934
(1,108)
2,154
Administrative expenses include £1,173,000 of depreciation and amortisation charges. Excluding these charges and
exceptional items and restructure costs, administrative expenses totalled £2,378,000; a 12% decrease (2019: £2,685,000).
This reflects the net impact of cost saving measures that the group took in May 2020, the expression of which was partially
diluted in the total administrative cost figure by fixed overhead costs such as rental, rates and subscription costs. In 2021
Getech has sub-let the London office, reducing fixed overhead costs.
Cost base analysis
Getech took significant cost saving measures in May 2020 as a result of the Covid pandemic and the impact of our Oil and
Gas customers cutting their capex budgets by c35%. These measures included a small reduction in headcount, savings on
travel and conference costs, utilisation of the government Furlough scheme in the UK and PPP scheme in the US. Staff also
agreed to temporary salary reductions, ranging from 20% for Getech’s board to 8% for most other staff.
As a result, the monthly Group cost base was reduced by 26%, and the Group cost base for 2020 as a whole was 20%
lower than the cost base for 2019 (excluding restructuring costs and exceptional items).
19
Getech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements The table below reconciles our cost base to the financial statements.
Table 3 - Cost base reconciliation
Cost of sales
Development costs capitalised
Administrative costs
Payment of lease liabilities
Depreciation and amortisation charges
Exchange adjustments
Movement on provisions
Cost base, excluding exceptional items
% Variance
£’000
2020
£’000
1,681
902
3,551
136
2019
£’000
2,532
1,108
3,809
71
(1,173)
(1,156)
6
-
5,103
(2)
-
6,362
(20)%
Cost base is measured as: cost of sales, administrative costs, development costs capitalised and payment of lease liabilities, less
depreciation and amortisation, and adjusted for movement in work in progress, non-cash foreign exchange adjustments.
EBITDA
A lower cost base and continued investment in the drivers of recurring revenue has limited the impact of lower revenue on
EBITDA. Adjusted EBITDA totalled a £496,000 loss (2019: £872,000 profit).
Income tax
To help our customers understand and resolve their exploration and operational challenges requires Getech undertaking
pioneering research and development. Against the cost of this work we obtained corporation tax relief, and subsequently
realised a tax credit relating to the current year of £174,000 (2019: £53,000 credit).
Getech reported a loss after tax, adjusted for exceptional items and restructuring costs of £1,529,000 (2019: £281,000 loss).
Operating cash flows
Before working capital adjustments Getech’s cash outflow from operations was £516,000 (2019: £934,000 inflow), this
included restructuring costs of £115,000 paid during 2020.
Changes in working capital
In 2020 there was an overall net positive working capital movement of £248,000. As a result of Covid restrictions, Getech
experienced delays in receipt of payment from several customers; at the year-end, receivables overdue by more than 3 months
totalled £184,000 (2019: £nil), and deferred subscription invoices totalled £271,000. In early 2021, these positions were
quickly resolved, however they negatively impacted working capital movement in the year and year-end cash balance by
£455,000.
In 2019 there was net positive working capital movement of £2,525,000, this was largely due to the timing of product sales
towards the end of 2018, for which cash was received in early 2019.
Investment and Capital Expenditure
In line with the Group’s strategy to invest and enhance its product offering, Getech broadly maintained its development
expenditure on Globe and Software in 2020, totalling £902,000 (2019: £1,108,000). Having successfully completed a £6.25m
equity raise in H1 2021, Getech expects to increase investment in its products during 2021 as part of its strategy of diversified
growth.
Financing
In April 2020, due to the uncertainties arising from Covid and a low Oil Price, Getech took a 12-month capital repayment holiday
on its loan. During the year Getech made repayments against the loan facility of £20,000 (2019: £78,000). Getech recommenced
capital repayments in April 2021.
Repayment of lease liabilities totalled £136,000 (2019: £71,000) and relate to the London office lease. After the year-end, in
February 2021 Getech sub-leased the London office as part of its continued capital efficiency measures.
Post balance sheet events
In January 2021, Getech appointed Richard Bennett to the board as non-executive Chairman designate and Peter
Stephens retired from his position as non-executive director. In April 2021, Richard assumed the position of Chairman,
whilst Dr Stuart Paton stepped down from his Chairman position, Stuart remains on the board for a period of knowledge
transfer.
In February 2021, Getech completed an agreement to sub-lease its London office.
On 31 March 2021, Getech shareholders approved a share placing to raise £6.25m to fund Getech’s programme of growth
through diversification. At the same time, the board approved the acquisition of H2 Green. Getech has agreed to pay up
to £1m for H2 Green, payable in cash and shares. Milestone payments are linked to the hydrogen business achieving a
number of key operational and commercial targets.
At the date of the report, H2 Green had met the first two of these milestones, resulting in up-front consideration of
£250,000. Of this, £53,750 of the consideration was cash, the balance paid in shares.
In May 2021, the Group appointed Michael Covington as non-executive director. Michael is audit chair designate and will
take the position of audit chair on 1 July 2021, following a period of hand-over with Dr Alison Fielding.
Liquidity and Going Concern
At the end of 2020, Getech held £2,192,000 in cash and cash equivalents (2019: £3,554,000).
Cash balances post-year-end increased significantly, Getech completing a £6.25m equity raise in April 2021, detailed
above.
Getech’s business activities and the factors likely to affect its future development, performance and position are set out in
the Chairman’s and Chief Executive’s Review. The financial position of the Group, its cash flows and its liquidity position
are described in the financial statements. In addition, notes 16 and 17 include details of Getech’s key financial risks and the
Group’s policies and procedures for capital management.
In making the going concern assessment, the Board of Directors has considered Group budgets and detailed cash
flow forecasts to 30 June 2022. The Board has considered the sensitivity of these forecasts with regards to different
assumptions about future income and costs, and various scenarios have been run on the potential impact of Covid-19 (see
note 1.2 for more detail).
These cash flow projections, when considered in conjunction with Getech’s existing cash balances, and the cost
saving measures implemented, demonstrate that the Group has sufficient working capital for the foreseeable future.
Consequently, the Directors are fully satisfied that Getech is a going concern.
Andrew Darbyshire
Chief Financial Officer
20
21
Getech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Strategic Report
Strategic Report
Risk Management
How we manage risk
The Group constantly monitors the Group’s risk exposures
and reports to the Audit Committee and the Board on a regular
basis.
The Audit Committee receives and reviews these reports and
focuses on ensuring that the effective systems of internal
financial and non-financial controls including the management
of risk are maintained. The results of this work are reported
to the Board which in turn performs its own review and
assessment on an annual basis.
Key Risk Areas
Strategic Risk
Making sure we apply the appropriate strategies in certain
The Audit Committee
The Audit Committee oversees the framework for risk
situations and ensuring we deliver on strategic objectives.
management and ensures it is operating effectively.
Operational Risk
Successfully developing products and providing services
Senior Management and Risk Owners
The risks are separated into strategic, operational and
that meet our customers’ needs.
Financial Risk
Prudent financial management seeks to mitigate the
impact of market fluctuations.
Risk Management Framework
The Board
The Board is responsible for setting the Group’s risk
appetite and acceptable risk tolerance and putting in
place a framework for risk management.
financial categories. Senior management are assigned
responsibility for the identified risks within the three
categories.
Risk Management Process
The risk management process utilises a risk register
held by the Executive Committee (ExCom). Key risks in
these registers have assigned owners and are reviewed
during ExCom meetings. The risk owners ensure that the
risks are monitored, mitigated and appropriate controls
are implemented. The Audit Committee has delegated
authority to the ExCom to manage the risks.
S
S
t
t
r
r
a
a
t
t
e
e
g
g
i
i
c
c
R
R
e
e
p
p
o
o
r
r
t
t
G
o
v
e
r
n
a
n
c
e
i
F
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
Risk matrix
Each risk on the risk register is rated for its likelihood of occurring and on
the risk’s potential impact on the Group. Ratings are from 1 to 5, where 1
is least likely / lowest impact and 5 is most likely / highest impact.
The key risks are summarised on the risk matrix on the next page.
H
G
H
I
T
C
A
P
M
I
W
O
L
LOW
9
5
7
4
8
1
2
3
6
LIKELIHOOD
HIGH
Risk scale
1
2
3
4
5
6
7
8
9
Covid-19 and oil price
Energy transition and climate change
Stakeholder engagement
Data security
Innovation
People
Operational control
Visibility of revenues
Liquidity and cash flow risk
22
Getech Group plc Annual Report and Accounts 2020
Getech Group plc Annual Report and Accounts 2020
23
Strategic Report
Strategic Report
Risk
Strategic
1
2
3
Covid-19 and Oil Price
There is no way of
knowing how long
Covid-19 disruption and
oil price weakness will last
but there is certainty that
when the world emerges
from lockdown it will be in
a recession.
Energy transition
and climate change
Customers permanently
reduce their spending on
hydrocarbon exploration at
a time when the detailed
roadmap of the energy
transition is still forming.
Stakeholder engagement
If Getech does not engage
with its stakeholders,
they will not understand
the Group’s commercial,
strategic and corporate
value.
Operational
4
Data security
If there is loss or theft of
data then our data could
be devalued and we may
lose the ability to sell the
data.
24
Executive
Ownership Mitigation
Change
Impact
Likelihood
Risk
Executive
Ownership Mitigation
Change
Impact
Likelihood
CEO
CEO
CEO
CFO
To preserve capital, we have
undertaken a broad range of
measures, which together lower
Getech’s monthly costs by c26%.
Looking forward, the Group retains
additional cost flexibility, but we
have been careful to maintain our
capacity to deliver our orderbook
of contracted work, and to retain
the ability to maximise our sales
conversations and to enhance
our new business activities. The
Group has undertaken a number
of initiatives to further diversify
revenue away from sources linked
to the price of Oil. Further detail
is given in the Covid Response
section of this report.
Diversification of Getech’s product
and service offerings to areas
outside of hydrocarbon exploration.
Getech is funded to deliver an
initiative to diversify revenues into
Mining and Geothermal markets
and the Hydrogen economy. These
sectors map closely to Getech’s
skills and technologies. They are
also at varying stages of ‘value
chain’ development, which the
Company believes to mitigate a
portion of the risk profile in terms
of speed of sector development.
Provide clear, transparent and
consistent communication to all
stakeholders. Ensure delivery
against the Group strategic
plan. Regular meetings with
shareholders and potential
shareholders. Getech has also
retained a PR firm to further
strengthen its program of
stakeholder engagement.
Periodic audit of disaster
recovery processes and controls.
Ensuring appropriate data licence
agreements are in place with
our customers. Investment in IT
security and periodic IT security
audit.
4
4
4
4
3
3
4
2
Operational
5
6
7
Innovation
If we do not continue
to innovate and provide
cutting edge products and
services, our competitors
and customers will leave
us behind.
People
Retention of specialist
staff is crucial to the
success of the business.
Operational control
Delivery on time and to
cost. Product plans and
services that are in step
with our customers’ needs.
COO
COO
COO
Financial
8
9
Visibility of revenues
If we are not able to
accurately forecast
revenues then we will not
be able to plan or guide
properly, resulting in sub-
optimal decision making.
Liquidity and
cash flow risk
The Group may be unable
to meet short-term
financial demands as a
result of a volatile working
capital cycle.
CEO/CFO
CFO
Continue to invest in innovation.
Ensuring Getech has a clear
innovation strategy. Creating
a working environment that
encourages the sharing of
knowledge and ideas.
The Group aims to ensure that it
provides stimulating work in an
attractive environment; together
with its employment policies, these
features are designed to attract
and retain the high-quality staff
that form the basis for the Group’s
success.
The Group works closely with its
customers to ensure that, wherever
possible, Getech’s offering is
relevant to their most pressing
needs. This is backed up with a
focus on delivery, and we continue
to invest in our Project Office team
ensuring that project managers are
adequately trained and have the
appropriate tools to manage their
projects. Monthly progress and
performance reports are presented
to the Executive Committee.
Strategically grow recurring revenues
through the positioning of our core
products and services, reducing the
Group’s reliance on one-off lumpy
transactions. Deliver diversified
revenue growth. Careful budgeting,
regular forecasting and review of
performance against targets.
Cash flow forecasts and future
income levels are carefully
monitored on a regular basis to
pre-empt liquidity issues before
they occur. Careful budgeting and
close control over expenditure
mitigate risk. Post year-end,
the £6.25m equity raise has
strengthened the group balance
sheet substantially.
3
2
2
2
2
2
4
4
5
2
Approval of the Strategic Report
The Strategic Report on pages 4 to 25 was approved by the Board on 4 June 2021.
Richard Bennett
Chairman
4 June 2021
25
Getech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Strategic Report
Strategic Report
Board of Directors
Richard Bennett Non-Executive Chairman
Richard Bennett has extensive business and listed company experience over a career
A N R
I
spanning 30 years. During that time, he has worked for General Electric in Asia and the US
and co-founded and listed on NASDAQ J2Global, an internet telecoms business currently
valued at US$3.5 billion. He has worked in executive, chairman and non-executive roles
with a series of highly successful growth-focused technology and clean energy companies,
currently including the AIM-quoted wireless technology company, MTI Wireless Edge.
Dr. Stuart Paton Non-Executive Director
Stuart holds a number of advisory roles, including with GLG and Reform Scotland and is
A N R
chair of the Machan Trust. He has previously been an advisor for Lime Rock Partners and
Berwick’s Consulting. Stuart was the Technical and Commercial Director and CEO of Dana
Petroleum, delivering a number of acquisitions for them. Before joining Dana, he held a
number of roles at Shell. Stuart has a BA in Earth Sciences and a PhD in Geology from
Cambridge University.
Dr. Alison Fielding Non-Executive Director
Alison is an experienced entrepreneur and non-executive director. Her career has spanned
A N R
scientific research at Zeneca plc, strategy consultancy at McKinsey & Company, investment
and business building at IP Group plc and she is currently a board member of Maven
Income and Growth VCT plc, Nanoco Group plc, Zotefoams plc and the Carnegie Trust
for the Universities of Scotland. Alison holds an MBA from Manchester Business School,
a PhD in Organic Chemistry and a First-Class degree in Chemistry from the University of
Glasgow.
Michael Covington Non-Executive Director
Michael has over 25 years’ experience in corporate advisory and broking with international
A
I
investment banks and financial and strategic consulting. In the last 15 years, his activities
have included co-founding Solar Securities, one of the UK’s first solar project developers,
advising energy transition sector participants, and holding non-executive board positions
including with Enertechnos Holdings Ltd., a power transmission technology player.
He has also been an active investor at all stages of the value chain in European CleanTech
& Renewables with Sustainable Investments Capital, a Barcelona based private equity
fund. He qualified as a Chartered Accountant in 1994 with PwC.
Chris Flavell Non-Executive Director
Chris holds a BSc in Geology and an MSc in Applied Geophysics from the University of
N R
I
N R
Birmingham. He started his career in 1980 with BP in London and has since worked for
a variety of small to large Independent Oil Companies in various technical and managerial
roles, as well as consulting for 8 years. Chris’s last oil company role was General Manager
of Exploration for Tullow Oil when the company grew rapidly following the discovery of
major new oil provinces in Ghana, Uganda and Kenya. Chris is the Executive Chairman of
Zinc Consultants.
Dr Jonathan Copus Chief Executive Officer
Jonathan brings to his role extensive industry, corporate finance and capital markets
experience. Having worked as a deep-water exploration geologist at Shell he moved into
the City, where as an energy sector equity analyst he was consistently rated number 1
by the investing institutions. In 2011 he was appointed CFO at Salamander Energy plc, a
Southeast Asian-focused oil and gas production company which the management team
sold to Ophir plc in 2015. Jonathan has a PhD from the University of Cambridge and a
First-Class BSc in Geology from the University of Durham.
Andrew Darbyshire Chief Financial Officer
Andrew started his accounting and finance career at Garbutt & Elliott and went on to work
in audit for Grant Thornton. Andrew joined Getech in 2014, to establish their new finance
team and was appointed to the Board in February 2018. Andrew has a master’s degree
in Mathematics from the University of York and is a member of the Institute of Chartered
Accountants in England and Wales, he is also the treasurer for the charity, Live Music Now
– North East.
Chris Jepps Chief Operating Officer
Chris has extensive petroleum industry, GIS and entrepreneurial experience, having
worked within integrated exploration teams at Shell, as a professional services consultant
at Landmark Graphics and as Technical Director at Exprodat where Chris established the
company’s technical strategy and led its software design and development. Following
Exprodat’s acquisition by Getech Group plc in 2016, Chris joined as Products Director,
becoming Getech Group plc COO in February 2018. Chris has a BSc in Geology from
Imperial College, London, and is an alumni of Esri’s Partner Advisory Council.
26
27
Committee Membership
Audit Committee
A
N
Nomination Committee
R
Renumeration Committee
I
Independent
Getech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Corporate Governance
Getech is committed to high standards of corporate
governance. As such, the Board has chosen to adopt
the principles of the Quoted Companies Alliance (‘QCA’)
Corporate Governance Code for Small and Mid-Size
Quoted Companies 2018 (‘the Code’). Details of how
Getech complies with the Code, and the reasons for
any non-compliance, are set out in this Corporate
Governance statement.
The Board considers that the structure of the Board
provides a cost-effective and practical method of directing
and managing the Group. As the Group’s activities develop
in size, nature and scope, the size of the Board and the
implementation of additional corporate governance policies
and structures will be reviewed.
The board consider Getech to be in compliance with the ten
principles of the QCA code, with the exception of including
separate Audit Committee and Remuneration Committee
reports. Due to the make-up of these committees being a
large proportion of the non-executive board. All required
disclosures have been made in this corporate governance
report and the notes to the financial statements.
The Board
The Board currently comprises five Non-Executive Directors
and three Executive Directors. The roles of the Chairman,
who is non-executive and elected by the Board, and the
Chief Executive, are separated. All Directors are subject
to retirement by rotation and re-election is a matter for
the shareholders. The Non-Executive Directors ensure
a balance to the Board by constructively challenging the
Executive Directors.
Post year-end, Richard Bennett joined the board
as chairman designate and at the same time Peter
Stephens retired from the board. In May 2021 Richard
assumed the position of Chairman, whilst Stuart remained
on the board as a non-Executive director through a period
of knowledge transfer. In April 2021, Michael Covington
joined the board as a non-Executive director and Audit
Chair designate. After a period of knowledge transfer
Michael will assume the position of Audit Chair, at which
time Alison Fielding will step down from the position.
After this period of change, there will continue to be 4
non-Executive Directors on the Getech board.
A Directors’ Responsibilities statement in respect of the
financial statements is set out in this Annual Report on
page 33.
The Board is responsible for approving overall strategic,
financial and operational matters and for the identification
of risks faced by the Group. Board approval is required for
certain matters, the most significant of which are:
• Final approval of the Annual Report and Accounts
• The budget and major capital expenditure
• The dividend policy
• Acquisitions and alliances policies
The Board delegates certain matters regarding audit,
remuneration and nomination to its principal committees,
each of which has written terms of reference.
Attendance by each Director at full meetings of the Board
and Board committees of which they were a formal
member during the year is summarised below.
The effectiveness of the Board is reviewed on an annual
basis, and progress against the review recommendations
is monitored on a regular basis. Directors who have been
appointed to the Company have been chosen because of
the skills and experience they offer.
The Company undertakes regular monitoring of personal
and corporate performance using agreed Key Performance
Indicators and detailed financial reports. Responsibility
for assessing and monitoring the performance of the
Executive Directors lies with the Chairman and the
Non-Executive Directors.
The board undertakes an annual company health-check,
where the board performs an appraisal of its effectiveness
as a whole. Where areas for improvement are identified,
specific actions are set, to be completed in a suitable
timescale.
Progress of these actions are monitored on a regular basis.
The Board considers the need for the periodic refreshing
of its membership, this involves ensuring the skillsets
provided by the board members continues to be aligned
with corporate strategy and risk.
Company Secretary
The Company Secretary is responsible for ensuring that the
Board procedures are followed, that the Company complies
with Company Law and the AIM rules, and that the Board
receives the information it needs to fulfil its duties.
Remuneration Committee
The Remuneration Committee consists of three non-
executive members of the Board and meets at least once
a year. The principal duties and responsibilities of the
Remuneration Committee include:
All Directors have access to the Company Secretary
and their appointment (or termination of appointment)
is a matter for decision by the full Board.
Audit Committee
The Audit Committee consists of three non-executive
members of the board and meets at least twice a year.
The principal duties and responsibilities of the Audit
Committee include:
• Monitor the Group’s internal financial controls and assess
their adequacy
• Review key estimates, judgements and assumptions
applied by management in preparing published
financial statements
• Review and update the Group’s risk register
• Assess annually the auditor’s independence and
objectivity
• Make recommendations in relation to the appointment,
re-appointment and removal of the company’s
external auditor
• Review and consider for approval, significant new contracts
• Setting the remuneration policy for all Executive Directors
and the Chairman
• Recommending and monitoring the level and structure
of remuneration for senior management
• Approving the design of, and determining targets for,
performance-related pay schemes operated by the
company and approve the total annual payments made
under such schemes
• Reviewing the design of all share incentive plans for
approval by the Board and shareholders
None of the Committee members have any personal
financial interest (other than as shareholders), conflicts
of interest arising from cross-directorships or day-to-day
involvement in the running of the business. No director
plays a part in any final decision about his or her own
remuneration.
Nomination Committee
The Nomination Committee consists of four non-executive
members of the board and meet at least once a year.
The principal duties and responsibilities of the Nomination
Committee include:
• Regularly reviewing the structure, size and composition
of the Board
• Giving consideration to succession planning for Directors
and other senior Executives
• Identifying and nominating for the approval of the Board,
candidates to fill Board vacancies as and when they arise
• Deciding membership of the Audit and Remuneration
Committees
Board of Directors’ attendance
Director
Dr Stuart Paton
Peter Stephens
Dr Alison Fielding
Chris Flavell
Dr Jonathan Copus
Andrew Darbyshire
Chris Jepps
Board
10/10
10/10
10/10
10/10
10/10
9/10
10/10
Audit
Committee
Remuneration
Committee
Nomination
Committee
2/2
2/2
2/2
—
—
—
—
1/1
—
1/1
1/1
—
—
—
1/1
1/1
1/1
1/1
—
—
—
28
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GovernanceGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportGovernanceFinancial Statements Corporate Governance cont.
The ten principles of the QCA code
Number
Principles
1
2
3
4
5
6
7
8
9
Establish a strategy and business model that promotes
long-term value for shareholders
Seek to understand and meet shareholders needs and expectations
Take into account wider stakeholder and social responsibilities and their implications
for long-term success
Embed effective risk management, considering both opportunities and threats
throughout the organisation
Maintain the Board as a well-functioning, balanced team led by the chair
Ensure that between them the directors have the necessary and up-to-date
experience, skills and capabilities
Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement
Disclosed in the
2020 annual report
Pages 6 - 9
Page 31
Page 31
Pages 22 - 25
Pages 28 - 29
Pages 26 - 29
Pages 28 - 29
Promote a corporate culture that is based on ethical values and behaviours
Page 31
Maintain governance structures and processes that are fit for purpose and support
good decision-making by the board
Pages 28 - 34
10
Communicate how the Company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
Page 31
Communications with shareholders
The Board is committed to maintaining an open dialogue
with shareholders. Working in coordination with Getech’s
Broker, Nomad and PR advisors, communication with
shareholders is led by the Chief Executive Officer, the
Group Finance Director and the Non-Executive Chair.
Corporate social responsibility
The Board recognises the importance of social,
environmental and ethical matters. The Board also
recognises the impact that their wider stakeholders have
on the Group’s long-term success, including employees,
contractors, customers and suppliers.
Throughout the year, the Board maintains a regular
dialogue with institutional investors, providing them
with such information on the Company’s progress as is
permitted within the guidelines of the AIM rules, Market
Abuse Regulation (MAR) and requirements of the
relevant legislation.
Twice yearly, at the time of announcing the Group’s
interim and full-year results, the Company does a round
of visits to its major shareholders, as well as prospective
new shareholders, to update them on developments and
to receive feedback and suggestions from them. The Board
believes that the Annual Report and Accounts, and the
Interim Report published at the half-year, play an important
part in presenting all shareholders with an assessment
of the Group’s position and prospects. All reports and
press releases are published in the Investor section
of the Group’s website.
The Board is aware of the need to protect the interests of
minority shareholders and balancing these interests with
those of any more substantial shareholders. The Annual
General Meeting (‘AGM’) is the principal opportunity for
private shareholders to meet and discuss the Group’s
business with the Directors. There is an open question
and answer session during which shareholders may ask
questions both about the resolutions being proposed
and the business in general. The Directors are also
available after the meeting for an informal discussion
with shareholders.
The Board produces a series of updates throughout
the year relating to company performance, these are
distributed by RNS and RNS Reach. Copies of all RNS
announcements and the resolutions passed following the
most recent AGM can be found on the Getech website.
Getech’s Broker also regularly publishes detailed financial
research on the Group. In December 2020 Getech
appointed Financial PR firm, Camarco, to further strengthen
its programme of stakeholder engagement.
As part of the staff appraisal process, employees are invited
into an open dialogue and agreement on goals targets,
aspirations and personal development opportunities.
We engage annually with our Globe and potential Globe
customers at the Getech Globe User Group Meeting, which
provides valuable insight into our customers’ needs. In
addition, we regularly request feedback on our products
and services from our customers.
Feedback is an essential part of all control mechanisms.
Systems need to be in place to solicit, consider and act on
feedback from all stakeholder groups. Key relationships
with customers, suppliers, contractors and regulators
are closely managed by the executive directors and the
executive committee. All new suppliers and contractors
must complete our “New Business Associates” process
and all contractors must agree to the terms of our
anti-bribery policies.
The Board is appraised of any issues arising. The Board also
understands that it has a responsibility to consider, where
practicable, the social, environmental and economic impact
of its corporate strategy.
As part of our social responsibility and to safeguard our
employees and contractors, we follow the UK Foreign
Office advice on travelling and working abroad in high risk
countries and territories.
As a Group we aim to minimise our carbon footprint;
initiatives include the introduction of low energy LED
lighting in our offices, waste recycling and the use of
videoconferencing in place of international travel where
practical.
Starting in 2019, assessed footprint from travel, carbon
offset scheme. In 2020, we moved beyond carbon offset
by making a direct investment in a Hydrogen infrastructure
business, which we subsequently acquired in 2021 and
raised equity to fund this Hydrogen opportunity as well
as activities in Geothermal and Mining, which align with
the Group’s focus on accelerating progress to global net
zero. In step with this, we signed up to the UN race to
zero campaign.
30
31
GovernanceGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportGovernanceFinancial Statements Directors’ Report
The Directors present their report and financial statements
for the year ended 31 December 2020.
Principal activities
The principal activity of the Group is to provide data,
knowledge, software and analytical products and services
to help governments and investors locate and manage
new energy and mineral resources and to optimise
their development.
Future developments
The future developments of the Group are included
in the Outlook section of the Chairman and Chief
Executive’s Review.
Directors
The Directors of the Parent Company who served during
the year were:
Richard Bennett (appointed 28 January 2021)
Dr Jonathan Copus
Michael Covington (appointed 13 May 2021)
Andrew Darbyshire
Dr Alison Fielding
Chris Flavell
Chris Jepps
Dr Stuart Paton
Peter Stephens (resigned 28 January 2021)
Results and Dividends
The results for the year are set out on page 45.
The Directors do not recommend a dividend
(2019: no dividend).
Directors’ Indemnity
The Group maintains Directors’ and Officers’ liability
insurance, which gives cover against legal action that may
be taken against them. Qualifying third-party indemnity
provisions (as defined in Section 234 of the Companies Act
2006) are in force for the benefit of Directors.
Companies Act s172 statement
The Directors set out their statement of compliance with
s172 (1) of the Companies Act 2006 (s172), which should be
read in conjunction with the rest of the annual report and
the Corporate Governance section of the Getech website.
S172 requires Directors to take into consideration the
interests of stakeholders in their decision making. In
the midst of Covid restrictions, this has brought about
additional challenges, which is discussed in more detail in
the Covid Response section of the annual report.
The Board continue to have regard to the interests of
the Company’s shareholders, employees and other
stakeholders, including the impact of its activities on
the community, the environment and the Company’s
reputation, when making decisions. In particular:
• The Board has a strategy for diversified growth, which
is discussed in more detail on pages 8 of the
annual report. The Board therefore gives careful
consideration to the long-term consequences of any
immediate decisions.
• Our employees are fundamental to the success of the
business. The Executive Committee provides regular
group-wide ‘Friday updates’ to all staff and Getech’s CEO
hosts a town-hall forum for staff discussion every quarter.
There are also a range of other initiatives, which are
aimed at enhancing the learning, interaction and interest
of our employees.
• Getech values its relationships with customers and
suppliers. As a part of our ISO 9001 accreditation,
customers are regularly asked to complete satisfaction
surveys to ensure that the products and services that
we provide are to the highest standards.
• Getech is a responsible corporate citizen and we
minimise our impact on the environment. More detail
of our interactions with our employees, customers,
suppliers, community and environment can be found on
page 31 of the Corporate Governance report.
Risks
The principal risks of the Group including around financial
risk management are included in the Strategic Report
(see pages 22 to 25).
• As a Board, it is our intention to behave responsibly
toward our shareholders and treat them fairly and
equally, so that they all benefit from the success
of the Group.
Substantial Shareholders
The Parent Company was notified on 6 April 2021 of the
following interests in excess of 3% of its issued Ordinary
Share capital. Please see the table below:
Corporate Governance
See separate Corporate Governance Report.
The Board has overall responsibility for ensuring high
standards of governance, and to determine the Group’s
purpose, values and strategy. The primary aim of the
Board is to promote the long-term sustainable success of
Getech, generating value for shareholders and contributing
to wider society.
32
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors have prepared the consolidated financial
statements in accordance with International Accounting
Standards in conformity with the requirements of the
Companies Act 2006. Under company law, the Directors
must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and Group and of the profit or loss
of the Company and Group for that year. In preparing these
financial statements, the Directors are required to:
• Select suitable accounting policies and then apply
them consistently
• Make judgements and estimates that are reasonable
and prudent
• State whether applicable International Accounting
Standards in conformity with the requirements
of the Companies Act 2006 have been followed
in the consolidated financial statements and the
Parent Company’s financial statements, subject to any
material departures disclosed and explained in the
financial statements
• Prepare the financial statements on a going concern
basis, unless it is inappropriate to presume that the
Company or Group will continue in business
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and the Group and enable them to ensure
that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the
assets of the Company and the Group, and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors confirm that:
• So far as each Director is aware, there is no relevant
audit information of which the Company’s external
auditor is unaware
• The Directors have taken all steps that they ought to
have taken to make themselves aware of any relevant
audit information and to establish that the external
auditor is aware of that information
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Substantial shareholders
Amati Global Partners
BGF Group
Eiffel Investment Group
Premier Miton Group
Hargreaves Lansdown plc
Walker Crips Group
Jarvis Securities
Rathbones plc
Interactive Investor
Number of
Ordinary Shares
% of issued
share capital
7,727,000
5,805,089
5,460,089
4,160,968
3,447,397
3,025,000
2,489,808
2,241,978
2,161,520
11.7
8.8
8.3
6.2
5.2
4.6
3.8
3.4
3.3
33
GovernanceGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportGovernanceFinancial Statements Governance
Directors’ Report cont.
Going Concern
In making the going concern assessment, the Board of
Directors has considered Group budgets and detailed
cash flow forecasts to 30 June 2022. The Board has
considered sensitivity of these forecasts with regards to
different assumptions about future income and costs, and
various scenarios have been run on the potential impact
of Covid-19 (see note 1.2 for more detail). This assessment
also takes into consideration the post year-end equity raise
of £6.25m and the Group’s plan for diversified growth.
These cash flow projections, when considered in
conjunction with Getech’s existing cash balances, and the
cost saving measures implemented, demonstrate that the
Group has sufficient working capital for the foreseeable
future. Consequently, the Directors are fully satisfied that
Getech is a going concern.
Post balance sheet events
See post balance sheet events section of the Financial
Review on page 21.
Auditor
Grant Thornton UK LLP has expressed its willingness
to continue in office as external auditor. A resolution
to re-appoint Grant Thornton UK LLP will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Richard Bennett
Chairman
4 June 2021
Financial Statements
Independent auditor’s report
to the members of Getech Group plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Getech Group plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 December 2020, which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows, the Parent Company Statement of Financial Position, the Parent Company Statement of
Changes in Equity, and notes to the financial statements, including a summary of significant accounting policies. The
financial reporting framework that has been applied in the preparation of the group financial statements is applicable
law and international accounting standards in conformity with the requirements of the Companies Act 2006. The
financial reporting framework that has been applied in the preparation of the parent company financial statements
is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2020 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the
financial statements’ section of our report. We are independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. 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
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the group’s and the parent company’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit
evidence obtained up to the date of our report. However, future events or conditions may cause the group or the parent
company to cease to continue as a going concern.
A description of our evaluation of management’s assessment of the ability to continue to adopt the going concern basis
of accounting, and the key observations arising with respect to that evaluation is included in the key audit matters section
of our report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group’s and the parent company’s ability to continue
as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
The responsibilities of the directors with respect to going concern are described in the ‘Responsibilities of directors
for the financial statements’ section of this report.
34
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Getech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Independent auditor’s report cont.
to the members of Getech Group plc
Our approach to the audit
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
Materiality
Overall materiality:
Overview of our audit approach
Group: £88,950, which represents 5% of the group’s loss before taxation.
Parent company: £66,700, which is based on the Company’s loss before tax, restricted
as a component of the group.
Key audit matters
Key audit matters were identified as;
• Improper revenue recognition
• Carrying value of goodwill and other intangible assets
• Going concern
These were all key audit matters in the previous year.
High
t
c
a
p
m
i
t
n
e
m
e
t
a
t
s
l
a
i
c
n
a
n
fi
l
a
i
t
n
e
t
o
P
Low
Management
override of
controls
Revenue
Carrying value of goodwill
and other intangibles
Completeness
of creditors
Going
concern
Accounting for
option agreement
Trade receivables
Recovery of
deferred tax assets
Scoping
We have performed the following audit procedures:
Low
Extend of management judgement
High
• an audit of the financial statements of the parent company – Getech Group plc (full
Key audit matter
Significant risk
Other risk
scope audit);
• an audit of one or more account balances, classes of transactions or disclosures of
the component (specified audit procedures) of two further components – Exprodat
Consulting Limited and Geophysical Exploration Technology Inc – to gain sufficient
appropriate audit evidence at the group level; and
• analytical procedures at group level for the remaining component in the group during
the year – ERCL Limited.
Key audit matters
Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These
matters included those that had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Description
Audit response
KAM
Disclosures
Our results/
Key observations
Key Audit Matter – Group and Parent
Revenue Recognition
We identified revenue recognition as one of the most
significant assessed risks of material misstatement due
to the improper recognition of revenue as a result of
fraud. Revenue for the year totalled £3.6m.
The risk is heightened based on the level of revenue
which is accrued or deferred based on underlying
contracts for non-recurring work. In respect of revenue
recognised for ongoing projects, there is a risk that
revenue is recognised before the risks and rewards
of ownership have transferred to the customer, and
performance obligations have been met.
As there are contractual arrangements with customers,
there is a risk that revenue is misstated as each contract’s
outcome and stage of completion requires professional
judgement.
Relevant disclosures in the Annual Report
and Accounts 2020
The group’s accounting policy on revenue recognition
including the key sources of estimation uncertainty is
shown in notes 1.6 and 1.19 in the Accounting Policies
section and related disclosures are included in Note 2
to the consolidated financial statements.
How our scope addressed the matter –
Group and Parent
In responding to the key audit matter, we performed the
following audit procedures:
• Obtaining an understanding of the relevant processes
and controls in place for the recording of revenue;
• Evaluation of the group’s revenue recognition policies
for appropriateness with IFRS 15, including challenge
of management judgements concerning the stage of
completion at year end;
• Testing a sample of revenue transactions in respect of
sale of products and provision of services and assessing
them against supporting documentation relating to
underlying contract and proof of delivery as relevant,
to determine whether income has been appropriately
recognised in accordance with IFRS 15 and the Group’s
accounting policy;
• Testing of transactions around the year end to
determine whether the transactions were recorded in
the correct accounting period and whether revenue was
appropriately deferred;
• Testing the completeness of revenue, via tracing from
bank receipts back to invoice and recognition of revenue
in the nominal ledger; and
• Comparison of current year revenue with that from
the prior period and obtaining and corroborating the
explanations for significant and unusual variances.
Our results
Based on our work performed we have identified
no material misstatement in the revenue based on
non-recurring contracts recognised during the year.
36
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Independent auditor’s report cont.
to the members of Getech Group plc
Key Audit Matter – Group and Parent
Carrying value of goodwill and other intangible assets
We identified carrying value of goodwill and other
intangible assets as a significant risk of fraud and error,
which was one of the most significant assessed risks of
material misstatement.
Within the consolidated statement of financial position
there are significant balances for goodwill and other
intangible assets arising from both previous acquisition
activity and ongoing development work. These amounted
to £3.7m at 31 December 2020.
Within the parent company financial statement of
financial position there are significant balances for
intangible assets arising from ongoing development work.
These amounted to £2.8m at 31 December 2020.
These balances represent a significant proportion of
the total assets figure within the statements of financial
position and, if the underlying subsidiaries are not
performing in line with forecast, or the capitalised
development work is not delivering against its objectives,
are at risk of being materially misstated due to
unrecorded impairment. Further, the forward forecasts
include a degree of estimation as to future projects to be
delivered and the results to be derived therefrom.
The group has a number of cash generating units for
which separate impairment reviews will be required to be
undertaken, by reference to the assets attaching to these.
Relevant disclosures in the Annual Report
and Accounts 2020
The group’s accounting policy on intangible assets
including the key sources of estimation uncertainty is
shown in notes 1.12 and 1.19 in the Accounting policies
section and related disclosures are included in notes 9
and 10 to the consolidated financial statements.
How our scope addressed the matter –
Group and Parent
In responding to the key audit matter, we performed the
following audit procedures:
• Obtaining an understanding of the relevant processes
and controls in place for the assessment of the carrying
value of goodwill and intangible assets;
• Determination of whether the assigned life of each
applicable intangible asset remains appropriate;
• Computation of an expectation of amortisation expense
for the year and comparison to the expense recorded in
the financial statements;
• Assessment and challenge of management prepared
reviews of the carrying value of goodwill and intangible
assets. Our challenge focussed on the assumptions
regarding future revenues and cash flows from the
underlying cash generating units relative to historic
performance, prospects of future commercial projects,
and assessment of the growth rates and discount
rates applied;
• Testing of the accuracy of management’s forecasting
through a comparison of budget to actual data;
• Obtaining and assessing management’s allocation
of assets and cash flows to each cash generating unit
in the prepared forecasts;
• Performing sensitivity analysis to understand the impact
of any reasonably possible changes in assumptions
and evaluating the headroom available from different
outcomes to assess whether goodwill and other
intangibles could be impaired; and
• Assessing whether the group’s disclosures with respect
to the carrying value of goodwill and other intangibles
are adequate and whether the key assumptions
are disclosed.
Our results
Based on our audit work we have not identified any
material misstatements in the carrying value of goodwill
and intangible assets in the financial statements.
Key Audit Matter – Group and Parent
Going Concern
We identified going concern as one of the most significant
assessed risks of material misstatement due to fraud and
error as a result of the judgement required to conclude
whether there is a material uncertainty related to going
concern.
Covid-19 is one of the most significant economic events
currently faced by the UK, and at the date of this report its
effects are subject to continued levels of uncertainty. The
pandemic has adversely affected the key markets in which
the group operated during 2020 as regards demand
levels, and could continue to adversely impact the future
trading performance of the group and company. As such
this increases the extent of judgement and estimation
uncertainty associated with management’s decision
to adopt the going concern basis of accounting in the
preparation of the financial statements.
In undertaking their assessment of going concern for the
group, the Directors considered the impact of Covid-19
related events in their forecast future performance of the
group and anticipated cash flows.
Relevant disclosures in the Annual Report
and Accounts 2020
The group’s accounting policy on going concern is shown
in note 1.2 in the Accounting policies section of the
consolidated financial statements.
How our scope addressed the matter –
Group and Parent
In responding to the key audit matter, we performed the
following audit procedures:
Discussions with management to gain an understanding of
any relevant circumstances, or events, which may impact
the going concern status of the Group, or any individual
group entity;
Review of management’s forecasts covering the period to
30 June 2022, and assessment of how these forecasts were
compiled, including assessing their accuracy by validating
the reasonableness of underlying assumptions including
the impact of Covid-19;
Assessment of the reliability of management’s forecasting
by comparing the accuracy of actual financial performance
to the forecast information;
Assessment of management’s cash position throughout
the period of forecast. This assessment included the
corroboration of mitigating actions taken by management
to relevant documentation and evaluation of their
application in the revised forecasts for accuracy;
Assessment of management’s sensitivity analysis on their
base case forecasts to determine the reduction in revenue,
earnings and cash that would lead to elimination of the
headroom in their cash flow forecasts; and
Challenge of management with regards to the adequacy of
the going concern disclosures included within the financial
statements.
Our results
Based on the procedures performed, we concur with
management’s assessment of the applicability of the going
concern basis of preparation of the financial statements.
38
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Independent auditor’s report cont.
to the members of Getech Group plc
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the
opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Group
Parent company
Materiality for financial
statements as a whole
We define materiality as the magnitude of misstatement in the financial statements that,
individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of these financial statements. We use materiality in determining the
nature, timing and extent of our audit work.
Materiality threshold
£88,950, which is 5% of the group’s loss
before tax
£66,700, which is based on the parent
company’s loss before tax, restricted
by reference to the significance of the
component to the group
Significant judgements
made by auditor
in determining the
materiality
Loss before tax is a key performance metric
for users of the financial statements.
Loss before tax is a key performance metric
for users of the financial statements.
Materiality for the current year is higher
than the level that we determined for the
year ended 31 December 2019. A different
benchmark has been utilised to calculate
materiality for the current year to reflect the
trading performance of the group.
The Parent company is the largest trading
company, and contributes the largest loss to
the group. Therefore, determining the parent
materiality as a percentage of the company
loss but restricted to an appropriate level
for the component ensures that materiality
is based on a key figure to users of the
financial statements.
Materiality for the current year is higher
than the level that we determined for the
year ended 31 December 2019 to reflect the
higher group materiality in the current year.
Performance
materiality used to
drive the extent of our
testing
We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
Performance
materiality threshold
£66,700 which is 75% of financial statement
materiality.
£50,000 which is 75% of financial statement
materiality.
Significant judgements
made by auditor
in determining
the performance
materiality
Communication of
misstatements to the
audit committee
Threshold for
communication
In determining performance materiality, we
made the following significant judgements:
In determining performance materiality, we
made the following significant judgements:
• consideration of control deficiencies
• consideration of control deficiencies
identified in prior years;
identified in prior years;
• whether there were any significant
• whether there were any significant
adjustments made to the group’s financial
statements in prior years; and
• assessment for any significant changes
adjustments made to the parent company’s
financial statements in prior years; and
• assessment for any significant changes
in business objectives and strategy of the
group.
in business objectives and strategy of the
parent company.
We determine a threshold for reporting unadjusted differences to the audit committee.
£4,400 and misstatements below that
threshold that, in our view, warrant reporting
on qualitative grounds.
£3,300 and misstatements below that
threshold that, in our view, warrant reporting
on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
potential uncorrected misstatements.
Overall materiality – Group
Overall materiality – Parent company
Loss before tax
Loss before tax
£1,779,000
£1,779,000
FSM £88,950
5%
FSM £88,950
5%
PM £66,700
PM £66,700
75%
75%
Loss before tax
Loss before tax
£2,668,000
£2,668,000
FSM £66,700
FSM £66,700
PM £50,000
PM £50,000
75%
75%
TFPUM £22,250
25%
TFPUM £22,250
25%
TFPUM £16,700
25%
TFPUM £16,700
25%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope of our audit
• We performed a risk-based audit that requires an understanding of the group’s and the parent company’s business and
in particular matters related to:
Understanding the group, its components and their environments, including group-wide controls
The engagement team obtained an understanding of the group, its environment and risk profile, including group-wide
controls, and assessed the risks of material misstatement at the group level. We considered the structure of the group, its
processes and controls and the industries in which the components operate.
Identifying significant components and type of work to be performed on financial information of parent company and
other components
• In order to address the risks identified, the engagement team performed an evaluation of identified components to
assess the significant components and to determine the planned audit response based on a measure of materiality,
calculated by considering the component’s significance as a percentage of the group’s total assets, revenue and profit/
loss before tax. Of the group’s four components, we identified one which, in our view, required an audit of their financial
information (full scope audit), either due to size or risk characteristics. As a result of this, we performed an audit of the
financial statements of the parent company only;
• We identified improper recognition of revenue, the carrying value of goodwill and other intangible assets and going
concern as key audit matters, and the audit procedures performed in respect of these have been included in the key
audit matters section of our report;
• We performed specified audit procedures over certain balances and transactions of two components to give
appropriate coverage of balances. Together, the components subject to full-scope audits and specified audit procedures
were responsible for 99% of the group’s revenue, 99% of the group’s loss before tax, and 98% of the group’s total
assets; and
• We performed analytical procedures at group level over the remaining component. These procedures, together
with the additional procedures outlined above, performed at the group level gave us the audit evidence we needed
for our opinion on the group financial statements as a whole. All audit work has been undertaken by the group
engagement team.
Changes in approach from previous period
One of the subsidiary companies subject to full scope audit in the prior year has been subject to specified audit
procedures in the current year and the other subsidiary subject to full scope audit in the prior year has been subject to
analytical procedures at the group level in the current year. These changes have been made as a result of a review of the
financial significance of the subsidiaries relative to the group as a whole, in conjunction with the audit exemption applied
by the Directors for these subsidiaries for the year ended 31 December 2020 via parental guarantee.
40
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Independent auditor’s report cont.
to the members of Getech Group plc
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
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 or
apparent material misstatements, 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.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. 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 misstatements in the financial
statements may not be detected, even though the audit is properly planned and performed in accordance with the
ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the legal and regulatory frameworks applicable to the parent company and the
group and industry in which they operate. We determined that the following laws and regulations were most significant:
international accounting standards in conformity with the requirements of the Companies Act 2006, Quoted Companies
Alliance (QCA) Corporate Governance Code and the relevant tax compliance regulations in the jurisdiction in which
the group operates, being the UK and the US. In addition, we concluded that there are certain significant laws and
regulations that may have an effect on the determination of the amounts and disclosures in the financial statements
relating to employee matters, environmental, and bribery and corruption practices;
• We understood how the parent company and the group is complying with those legal and regulatory frameworks
by making inquiries to the management and those responsible for legal and compliance procedures. We corroborated
our inquiries through our review of board minutes and papers provided to the Audit Committee;
• We enquired of management whether there were any instances of non-compliance with laws and regulations or
whether they had any knowledge of actual, suspected fraud. We corroborated the results of our enquiries to supporting
documentation such as board minute reviews and papers provided to the Audit Committee. From the procedures
performed we did not identify any material matters relating to non-compliance with laws and regulation or matters in
relation to fraud.
• We assessed the susceptibility of the parent company’s and the group’s financial statements to material misstatement,
including how fraud might occur. Audit procedures performed by the group engagement team included:
– Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
– Challenging assumptions and judgements made by management in its significant accounting estimates, in particular
around accounting for revenue and the carrying value of non-current assets;
– Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations;
– Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related
financial statement item; and
– Identifying and testing related party transactions.
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Independent auditor’s report cont.
to the members of Getech Group plc
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2020
• The assessment of the appropriateness of the collective competence and capabilities of the engagement team included
consideration of the engagement team’s:
– Understanding of, and practical experience with audit engagements of a similar nature and complexity through
appropriate training and participation; and
– Knowledge of the industry in which the group operates.
• Team communications in respect of potential non-compliance with laws and regulations and fraud included the
potential for fraud in revenue recognition and application of the going concern assumption. These are also reported as
a key audit matters in the key audit matter section of our report where the matters are explained in more detail and the
specific procedures we performed in response to the key audit matters are described in more detail.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the 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.
Victoria McLoughlin BA FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds
4 June 2021
Sales revenue
Cost of sales
Gross profit before exceptional items
Exceptional cost of sales
Gross profit
Administrative expenses
Fair value gains and losses
Operating (loss)/profit before exceptional administrative costs
Exceptional administrative expenses
Operating loss
Finance revenue
Finance costs
Loss before tax
Tax credit
Loss for the year
Other comprehensive income
Currency translation differences on translation of foreign operations
Total comprehensive income for the year
attributable to owners of the Parent Company
Earnings per ordinary share (EPS)
Basic EPS
Diluted EPS
Notes
2
2
2
12
3
5
6
7
8
8
2020
£’000
3,563
(1,681)
1,882
—
1,882
(3,551)
10
(1,659)
(115)
(1,774)
1
(45)
(1,818)
174
(1,644)
2019
£’000
6,058
(2,533)
3,525
325
3,850
(3,809)
—
41
(3,132)
(3,091)
14
(64)
(3,141)
53
(3,088)
(57)
6
(1,701)
(3,082)
(4.38)p
(4.38)p
(8.22)p
(8.22)p
All activities relate to continuing operations. The accompanying accounting policies and notes form an integral part of these
financial statements.
44
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Consolidated Statement of Financial Position
as at 31 December 2020
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
SBP
reserve
£’000
Currency
translation
reserve
£’000
Retained
earnings
£’000
1 January 2019
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners:
Share-based payment charge
31 December 2019
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners:
Share-based payment charge
Transfer of reserves
31 December 2020
94
—
—
—
—
94
—
—
—
—
—
94
3,053
—
—
—
—
2,407
—
—
—
—
3,053
2,407
—
—
—
—
—
—
—
—
—
—
3,053
2,407
183
—
—
—
59
242
—
—
—
31
(22)
251
25
—
6
6
—
31
—
(57)
(57)
—
—
6,980
(3,088)
—
(3,088)
—
3,892
(1,644)
—
(1,644)
—
(22)
(26)
2,270
8,049
Total
equity
£’000
12,742
(3,088)
6
(3,082)
59
9,719
(1,644)
(57)
(1,701)
31
—
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Deferred tax asset
Current assets
Trade and other receivables
Tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Short-term borrowings
Trade and other payables
Non-current liabilities
Long-term borrowings
Trade and other payables
Deferred tax liabilities
Total liabilities
Net assets
Share capital
Share premium
Merger reserve
Share-based payment (SBP) reserve
Currency translation reserve
Retained earnings
Total equity
Notes
9
10
11
7
12
13
14
15
14
15
7
18
2020
£’000
296
3,509
2,716
364
6,885
1,353
278
2,192
3,823
2019
£’000
296
3,568
2,906
346
7,116
1,994
136
3,554
5,684
10,708
12,800
85
1,366
1,451
750
282
176
1,208
2,659
8,049
94
3,053
2,407
251
(26)
2,270
8,049
78
1,697
1,775
776
421
109
1,306
3,081
9,719
94
3,053
2,407
242
31
3,892
9,719
The financial statements of Getech Group plc (company number: 02891368) were approved by the Board of Directors and
authorised for issue on 4 June 2021.
Andrew Darbyshire
Chief Financial Officer
46
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Consolidated Statement of Cash Flows
for the year ended 31 December 2020
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Cash flows from operating activities
Loss before tax
Finance income
Finance costs
Fair value gains and losses
Depreciation charge
Amortisation of intangible assets
Impairment of goodwill
Impairment of intangible assets
Adjustment to direct cost accruals
Expected credit loss provisions on loans and loan commitments
Share-based payment charge
Foreign exchange adjustments
Cash (outflow)/inflow from operating activities
Movements in working capital:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from operations
Tax (paid)/received
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Development costs capitalised
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Repayment of loan
Repayment of lease liabilities
Interest paid
Net cash outflow from financing activities
(Decrease)/increase in net cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Foreign exchange adjustments to cash and cash equivalents
Cash and cash equivalents at the end of the year
Notes
5
6
3
3
9
10
12
15
11
10
10
5
6
13
2020
£’000
(1,818)
(1)
45
(10)
214
960
—
—
—
70
31
(6)
(516)
600
(352)
(268)
83
(185)
(24)
—
(902)
1
(925)
(20)
(136)
(45)
(201)
(1,311)
3,554
(51)
2,192
2019
£’000
(3,141)
(14)
64
—
216
940
3,132
621
(946)
—
59
3
934
2,861
(336)
3,459
37
3,496
(30)
(5)
(1,108)
14
(1,129)
(78)
(71)
(64)
(213)
2,154
1,400
—
3,554
1 Accounting policies
1.1 Basis of preparation
The consolidated financial statements of Getech Group plc (the Company) and subsidiaries (the Group) have been
prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies
Act 2006. The accounts were approved by the Board and authorised for issue on 4 June 2021. Getech Group plc is a public
limited company incorporated and registered in England and Wales and listed on the Alternative Investment Market (AIM).
The financial statements are prepared on a going concern basis under the historical cost convention except for certain
items measured at fair value and are presented to the nearest thousand pounds (£’000) except as otherwise stated.
New and amended standards and interpretations
During the year, the Group adopted the following new and amended IFRSs for the first time for their reporting period
commencing 1 January 2020:
Standard or interpretation
Amendments to IFRS 3 Definition of a business
Amendments to IAS 1 and IAS 8 Definition of materiality
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest rate benchmark reform
Amendments to IFRS 16, COVID-19 Rent Related Concessions
IASB effective date
1 January 2020
1 January 2020
1 January 2020
1 January 2020
During the year the group changed its accounting policies on Covid-19 rent related concessions upon early adoption of the
IFRS 16 amendment. As a result the group’s lease balances have not been recalculated.
New standards and interpretations not yet adopted
Certain new standards, interpretations and amendments to existing standards have been published that are mandatory
only for the Group’s accounting periods beginning on or after 1 January 2021 and which the Group has not adopted early.
Those that may be applicable to the Group in the future are as follows:
Standard or interpretation
Amendments to IAS 16 Proceeds before Intended Use
Amendments to IAS 37 Onerous Contracts
Annual Improvements to IFRS Standards 2018-2020 cycle
Amendments to IAS 1 Presentation of financial statements on classification of liabilities
IASB effective date
1 January 2022
1 January 2022
1 January 2022
1 January 2022
The Group does not expect any material impact on the financial statements from the implementation of the above
future standards.
1.2 Going concern
The Directors have performed regular reviews of trading and cash flow forecasts and have considered the sensitivity of
these forecasts with regards to different assumptions about future income and costs. Various scenarios have been run on
the potential impact of covid-19. These include an assessment of the orderbook – customer contractual commitments and
Getech’s ability to deliver this work; the drivers of licence renewals; and the modelling of extreme and hypothetical ‘zero
new revenue’ downside scenarios, these extending across multiple years. Additional cost actions have also been modelled,
including a bottom up restructuring of the Group’s overhead, offices, technical staff and commercial activities.
In addition to the sensitivity models of future income and costs, we have made various assumptions to model cash flow
forecasts: It has been assumed that the UK Government Job Retention Scheme will continue to be available until the end
of September 2021 and that current social distancing measures and travel restrictions, which impact our ability to meet
clients in person, will also be in place throughout H1 2021. In H2 2021, we make the assumption that these costs will
return. We have also not relied on the availability of additional sources of cash in our forecast assumptions.
These cash flow projections, when considered in conjunction with Getech’s existing cash balances, the net proceeds
of a post year-end equity raise totalling £5.7m, and the cost saving measures implemented, demonstrate that the Group
has sufficient working capital to at least 30 June 2022, being the Director’s period of assessment. Consequently, the
Directors are fully satisfied that Getech is a going concern or a period of at least 12 months from the date of signing the
financial statements.
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
1 Accounting policies cont.
1.3 Basis of consolidation
The Group’s financial statements consolidate those of the Parent Company and of its subsidiary undertakings, drawn up
to 31 December 2020. A subsidiary is an entity controlled by the Group. Control is achieved where the Group has the
power to govern the financial and operating policies of an entity to obtain benefits from its activities.
All intercompany transactions and balances between the Group companies, including unrealised profits, have been
eliminated on consolidation. Amounts reported in the financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies adopted by the Group.
1.4 Business combinations
Business combinations are accounted for using the acquisition method of accounting. The acquired identifiable tangible
and intangible assets are measured at their fair values at the date of the acquisition. Acquisition costs incurred are
expensed under administrative expenses.
Goodwill is initially measured at the excess of the aggregate of the consideration transferred over the fair value of the
identifiable assets acquired and liabilities assumed at the acquisition date.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
1.5 Exceptional items
Items which are material either because of their size or their nature, and which are non-recurring, are presented within
their relevant consolidated income statement category, but highlighted through separate disclosure. The separate
reporting of exceptional items helps provide a better picture of the Company’s underlying performance. Items which are
included within the exceptional category include:
• spend on the integration of significant acquisitions and other major restructuring programmes;
• significant goodwill or other asset impairments relating to specific market events; and
• other particularly significant or unusual items.
1.6 Revenue
The Group has adopted IFRS 15 and its principles. Revenue is measured by reference to the fair value of consideration
received or receivable by the Group for products and services provided, excluding VAT and comparable overseas taxes.
Typical invoice payment terms are 30 days for all categories of revenue.
Revenue from products and services falls into the four categories below:
Consultancy services
The Group provides various consulting services to its customers. Revenue from these services is recognised on a time-
and-materials basis plus a margin as the services are provided at a rate agreed in the customer contract. Customers are
invoiced monthly as work progresses.
The Group also provides outsourcing services for a fixed fee for an agreed period, as agreed in the customer contract.
As the amount of work required to perform these services does not vary significantly from month-to-month, revenue
is recognised on a straight-line basis over the term of the contract.
This revenue accounting policy is applicable for revenues from Government Advisory Services, Geoscience Services and
Geospatial Solutions.
Multiclient products
For sales of data and completed products, revenue is recognised when performance obligations have been satisfied,
which is on dispatch unless otherwise agreed. The transaction price is fixed and agreed in the customer contract.
This revenue accounting policy is applicable for revenues from Geophysical Data and Regional Reports.
1 Accounting policies cont.
1.6 Revenue cont.
Licence revenue
Customers subscribe to Getech’s software and data product licences, usually over a 12-month term. The customer has the
rights to all of the benefits provided by the product over the term of the licence, as such, revenue is recognised over the
term of the licence at the fixed fee agreed in the customer contract. The balance of the revenue invoiced is deferred.
This revenue accounting policy is applicable for revenues from Geospatial Solutions Software and Globe licences.
Multiple element contracts
Where contracts for multiple element products with staged deliverables involve delivery of several different elements
which are not fully delivered or performed by the year end, revenue is recognised based on the proportion of the fair
value of the elements delivered to the fair value of the respective overall contracts. Where the outcome of contracts that
are long term in nature and contracts for ongoing deliverables cannot be estimated reliably, revenue is recognised only to
the extent of the expenses recognised that are recoverable.
Revenue from multiple element contracts is recognised after separating the contract income as follows:
• Completed project elements and specific reports that are immediately deliverable – revenue is recognised when the
performance obligations have been satisfied, which is on dispatch unless otherwise agreed
• Service elements of the contract – revenue is recognised in line with the accounting treatment for consultancy services
• Project elements that are to be delivered from development work that is yet to be completed – revenue is recognised
when the performance obligations have been satisfied, which is on dispatch unless otherwise agreed
1.7 Foreign currency translation
The Group’s financial statements are presented in pound sterling, which is also the functional currency of the Parent Company.
Where supplies are obtained, or sales are made on terms denominated in foreign currency, such transactions are
translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the
reporting period. Exchange gains or losses arising on the settlement or translation of monetary items are included in
profit or loss from operations.
The assets and liabilities of the Group’s overseas subsidiary undertaking are translated into the presentation currency
using exchange rates prevailing at the end of the reporting period. Translation differences in respect of the assets and
liabilities of the foreign subsidiary are accounted for in the Group’s currency translation reserve within equity. Income and
expenses of this undertaking are translated at the average exchange rates for the period that approximates to the actual
rates on transaction dates. Exchange differences arising, if any, are recognised in other comprehensive income and the
Group’s currency translation reserve.
1.8 Employee benefits
Pension schemes
The Group operates defined contribution pension schemes. The assets of the schemes are held separately from
the Group in an independently administered fund. The pension charge represents contributions payable by the Group
to the schemes.
Share options
Where share options are granted, a charge is made to profit or loss and a reserve is created to record the fair value of
the awards in accordance with IFRS 2 ‘Share-based Payment’. A charge is recognised in profit or loss in relation to share
options granted based on the fair value (the economic value) of the grant, measured at the grant date. The charge is
spread over the vesting period. The valuation methodology takes into account assumptions and estimates of share price
volatility, the future risk-free interest rate and exercise behaviour, and is based on the Black Scholes method. When share
options are exercised, there is a transfer from the share option reserve to retained earnings.
At the end of each reporting period, the Group revises its estimate of the number of share options that are expected
to vest, taking into account those that have lapsed or been cancelled. It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding adjustment to the share option reserve. If the terms and conditions
of share options are modified before they vest, the change in the fair value of the share options, measured immediately
before and after the modification, is charged to profit or loss over the remaining vesting period.
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
1 Accounting policies cont.
1.9 Research
Research expenditure is charged to profit or loss in the period in which it is incurred.
1.10 Accounting for Government Support
Amounts receivable under the UK Government’s Coronavirus Job Retention Scheme have been recognised in profit or
loss on a systematic basis net of the expense for which the monies are intended to compensate, once any conditions
related to the receipts are met.
1.11 Right-of-use assets and lease liabilities
The Group recognises a right-of-use asset and a lease liability at the commencement date of the contract for all leases
conveying the right to control the use of an identified asset for a period of time. The commencement date is the date
on which a lessor makes an underlying asset available for use.
The right-of-use assets are initially measured at cost, which comprises:
• The amount of initial measurement of the lease liability;
• Any lease payments made at or before the commencement date, less any lease incentives;
• Any initial direct costs incurred by the lessee;
• An estimate of costs to be incurred by the lessee in dismantling and removing the underlying assets or restoring the site
on which the assets are located.
After the commencement date the right-to-use assets are measured at cost less accumulated depreciation and
accumulated impairment losses and adjusted for any re-measurement of the lease liability.
Depreciation is calculated using the straight-line method over the life of the lease.
The lease liability is initially measured at the present value of the lease payments that are not paid at that date. The
lease payments are discounted using the Group’s incremental borrowing rate (3.5%), or the rate implicit in the lease
contract. Lease liabilities are included within trade and other payables (both current and non-current) in the statement
of financial position.
After the commencement date, the Group measures the lease liability by:
• Increasing the carrying amount to reflect interest on the lease liability; and
• Reducing the carrying amount to reflect lease payments made.
1 Accounting policies cont.
1.13 Intangible assets
Expenditure on development activities is capitalised if the product or process meets the recognition criteria for
development expenditure as set out in IAS 38 ‘Intangible Assets’. The expenditure capitalised includes all directly
attributable costs, from the date that the intangible asset meets the recognition criteria, necessary to create, produce
and prepare the asset to be capable of operating in the manner intended by management.
Development expenditure is identified as being capital in nature if the costs can be measured reliably, the product
is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has
sufficient resources to complete development and to use or sell the asset. Other development expenditure not meeting
these criteria is recognised in profit or loss as incurred. Once the asset is ready for use, the capitalised development
expenditure is stated at cost less accumulated amortisation (see below) and impairment losses. Intangible assets not yet
ready for use are tested for impairment annually.
Other intangible assets include acquired data holdings that qualify for recognition as intangible assets in a business
combination. As these assets have finite useful economic lives, they 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. In addition, intangible assets are subject to annual
impairment reviews or a review whenever there is an indication of impairment.
The following useful lives are applied:
– fifteen years
Customer relationships
– five years
Software development
– three to ten years
Development costs
– ten years
Reports
Data holdings
– ten years
Goodwill on consolidation – indefinite, annual impairment review
Amortisation is included within ‘Administrative costs’, except for amortisation of Reports, which is included in ‘Cost of sales’.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination
in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored
for internal management purposes, being the operating segments.
1.12 Property, plant and equipment
Property, plant and equipment are carried at acquisition cost, net of depreciation and any provision for impairment.
1.14 Financial assets
Financial assets are recognised when the Group becomes a party to the contractual provisions of the financial instrument.
Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by
equal instalments over their estimated useful economic lives at the following rates:
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.
Freehold property
Plant and equipment
– 2% per annum on cost
– 33.3% and 25% per annum on cost
Material residual value and useful life estimates are updated as required, but at least annually. Freehold land is carried
at acquisition cost. As no finite useful life for land can be determined, related carrying amounts are not depreciated.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction
costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified into the following
categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
1 Accounting policies cont.
1.14 Financial assets cont.
Subsequent measurement of financial assets – Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated
as FVTPL):
• they are held within a business model whose objective is to hold the financial assets 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, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall
into this category of financial instruments.
Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the
‘expected credit loss (ECL) model’.
The Group considers a broader range of information when assessing credit risk and measuring expected credit losses,
including past events, current conditions, and 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 while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the
expected life of the financial instrument.
1.15 Income taxes
Current tax is the tax currently payable or receivable based on the taxable profit or loss for the year.
R&D expenditure credits are included as a credit in administrative expenses. Tax losses surrendered for R&D tax credit
refunds are included in tax charges/credits on the consolidated statement of comprehensive income.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally
provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the
related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences
associated with shares in subsidiaries is not provided if the reversal of these temporary differences can be controlled by
the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be
carried forward as well as other income tax credits are assessed for recognition as deferred tax assets.
Deferred tax assets and liabilities are calculated in full, with no discounting. Deferred tax assets are recognised to the
extent that it is probable that the underlying deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted at the end of the reporting period.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in profit or loss, except where
they relate to items that are charged or credited directly to equity (in which case, the related deferred tax is also charged
or credited directly to equity), or where they relate to items of other comprehensive income (in which case, they are
recognised in other comprehensive income).
1 Accounting policies cont.
1.16 Cash and cash equivalents
Cash and cash equivalents comprise cash-in-hand and demand deposits.
1.17 Equity
Equity comprises the following:
• ‘Share capital’ represents the nominal value of equity shares
• ‘Share premium account’ represents the excess over nominal value of the fair value of consideration received for equity
shares, net of expenses of the share issue
• ‘Merger reserve’ represents the premium on shares issued to acquire ERCL Limited and Exprodat Consulting Limited
• ‘Capital redemption reserve’ represents the nominal value of equity shares redeemed
• ‘Share option reserve’ represents the fair value of share options in accordance with IFRS 2 ‘Share-based Payment’
• ‘Currency translation reserve’ represents the value of exchange differences in translating the assets and liabilities of the
foreign subsidiary
• ‘Retained earnings’ represents retained profits
1.18 Dividends
Dividend distributions payable to equity shareholders are included in ‘Other short-term financial liabilities’ when dividends
are approved in general meetings prior to the end of the reporting period.
1.19 Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes
a party to the contractual provisions of the instrument. Financial liabilities categorised as at fair value through profit
or loss are recorded initially at fair value and all transaction costs are recognised immediately in profit or loss. All other
financial liabilities are recorded initially at fair value, net of direct issue costs.
Financial liabilities categorised as at fair value through profit or loss are re-measured at each reporting date at fair value,
with changes in fair value being recognised in profit or loss. All other financial liabilities are recorded at amortised cost
using the effective interest method, with interest-related charges recognised as an expense in finance costs in profit
or loss. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged
to profit or loss on an accruals basis using the effective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise.
Financial liabilities are categorised as at fair value through profit or loss where they are designated as at fair value through
profit or loss on initial recognition. Deferred consideration on acquisitions of assets, which is contingent on subsequent
sales of such assets, is treated as financial liability at fair value through profit or loss, and the value is allocated between
current and non-current liabilities in accordance with best estimates of the timing and amounts expected to fall due.
Financial liabilities also include loan commitments where these are agreed on non-beneficial terms to the Group. Such
loan commitments are measured at the present value of the expected credit loss arising over the committed element
of the loan to be advanced.
A financial liability is derecognised only when the obligation is extinguished; that is, when the obligation is discharged
or cancelled, or it expires.
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for the year ended 31 December 2020
1 Accounting policies cont.
1.20 Significant accounting judgements and estimates
In applying the Group’s adopted accounting policies, management has made appropriate estimates in key areas,
and the actual outcomes may differ from those calculated.
1 Accounting policies cont.
1.20 Significant accounting judgements and estimates cont.
Significant areas of estimation uncertainty
The key sources of estimation uncertainty at the end of the reporting period are as follows:
Significant areas of judgement
The key sources of judgement at the end of the reporting period are as follows:
Control over H2 Green Limited (“H2 Green”)
As described more fully in note 12, in November 2020 the Group entered into an option to acquire the entire ordinary
share capital of H2 Green for initial consideration of £500,000 and contingent deferred consideration of up to £500,000,
exercisable at the option of the Group. The option runs for a 9 month period. Concurrently to this the Group also entered
into a loan commitment to provide up to £20,000 per month for up to 6 months (extendable by 3 months at mutual
agreement), covering all working capital spending of H2 Green for the period. Getech retain the rights to terminate both
agreements at any time, for any reason.
Control can take a number of forms and whilst this would usually include legal ownership of the shares, potential voting
rights and other rights to direct operations or finances also form part of this judgement. The two agreements when taken
together carry indicators of control for Getech, however on balance management have taken a view that this control is not
so pervasive that control has been obtained prior to the year end. In addition, H2 Green is a start up business created to
develop specific intellectual property, and so there is a secondary key judgement as to whether, at the date control may
have been obtained, this represents a business as defined in IFRS 3.
Recognition of revenue from multiple element contracts
Management uses judgement in determining the fair value of multiple element contracts in order to appropriately
recognise the revenue attributable to each element. The value of revenue recognised in the period is dependent
on an assessment of work to completion.
Capitalisation of development costs
The capitalisation of development expenditure is dependent on the costs meeting the recognition criteria in accordance
with IAS 38 ‘Intangible Assets’. In assessing the criteria, management makes judgements on the level of future economic
benefits of the asset flowing to the Company. Management is assisted in making these judgements through the
monitoring both of sales forecasts and of the level of future cost benefits arising.
Deferred taxation
Management judgement is required in determining provisions for deferred tax liabilities and assets. The process involves
estimating the actual current tax exposure together with assessing temporary differences resulting from the different
valuation of certain assets and liabilities in the financial statements and the tax returns. Management must assess the
probability that the deferred tax assets will be recovered from future taxable income.
Multiple element contracts
Management uses estimates in determining the fair value of individual elements of the multiple element contracts in order
to appropriately recognise the revenue attributable to each element. A value is assigned to each element of the contract,
based on an estimate of the value of that element if it were sold individually; the ratio of these values is then used to
calculate a fair value for each element. The value of revenue recognised during the year is also dependent on estimates of
work to completion, as with long-term contracts. Were the proportion of work completed to total work to be performed to
differ by 5% from management’s estimates, the amount of revenue recognised would increase/decrease by £29,000.
Carrying amount of non-current assets
Where there is an indication of impairment, a review of the carrying values of non-current assets is undertaken as follows:
• Intangible non-current assets, including goodwill, are estimated on the basis of value in use
The value is calculated from the present value of future cash flows expected to be derived from the asset under review.
The key elements of estimation are the calculation of future cash flows. For intangible assets, future cash flows are
forecast revenues from the associated cash-generating unit. Further estimation is made in determining an appropriate
discount rate that reflects the specific risks associated with the asset or cash-generating unit. See notes 9 and 10 for
further details of assumptions made and sensitivity testing regarding goodwill and intangible assets.
Share options
Share-based payments are valued using the Black Scholes valuation model. Estimates are made in expected volatility and
the risk-free rate. Where appropriate, management uses historical market data as a basis for estimating the fair value
of share options on grant. Increasing the risk-free rate by 2% and increasing the volatility window in the calculation of
volatility from 5 days to 30 days made no material difference to the valuation of share options issued during the year.
2. Segment reporting
Information reported to the chief operating decision maker for the purposes of resource allocation and assessment
of segment performance focusses on the types of goods and services delivered or provided. The Directors of the
Company have chosen to organise the Group around differences in products and services. Operating segments with
similar characteristics, and where segments are similar in respect of the nature of the products and services, the nature
of the production processes, the type of customer and where they have similar methods of distribution, have been
aggregated into a single operating segment.
Specifically, the Group’s reportable segments under IFRS 8 are as follows:
• Products (Including Geophysical Data, Globe, Regional Reports and Software revenues)
• Services (Including Government Advisory Services, Geoscience Services and Geospatial Solutions revenues)
• The sources of income included in ‘other segments’ are other miscellaneous income
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
2 Segment reporting cont.
2.1 Segment revenues and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
Products
Services
Other
Total revenue/profit before exceptional items
Central administrative costs
Exceptional cost of sales
Exceptional administrative costs
Fair value gains and losses
Net finance costs
Profit before tax
Revenue
£’000
2,602
961
—
3,563
Revenue
£’000
4,324
1,636
98
6,058
2020
Profit
£’000
1,862
20
—
1,882
(3,551)
—
(115)
10
(44)
(1,818)
2019
Profit
£’000
3,299
128
98
3,525
(3,809)
325
(3,132)
—
(50)
(3,141)
The segment revenue reported above represents revenue generated from external customers. There were no
inter-segment sales.
The accounting policies of the reportable segments are the same as in the Group’s accounting policies described in
Note 1. Segment profit represents the profit before tax earned by each segment without allocation of central
administration costs, restructure costs or finance costs. This is the measure reported to the chief operating decision
maker for the purposes of resource allocation and assessment of segment performance.
Assets and liabilities are not reported to the chief operating decision maker by segment.
2.2 Revenue and assets by geographical markets
In the following table, revenue and non-current assets are disaggregated by geographical market.
United Kingdom
Rest of Europe
Americas
Asia-Pacific
Africa
Total revenue/non-current assets
2020
2019
Revenue
£’000
Non-current
assets
£’000
Revenue
£’000
Non-current
assets
£’000
391
677
1,229
1,170
96
3,563
7,626
—
257
—
—
7,883
965
851
2,580
1,041
621
6,058
6,873
—
243
—
—
7,116
Within revenue there were no sales to a single customer exceeding 10% of turnover (2019: £816,000).
2 Segment reporting cont.
2.3 Revenue from contracts with customers
Revenue by timing of recognition
In the following table, revenue is disaggregated by timing of revenue recognition. The table also includes a reconciliation
of the disaggregated revenue with the Group’s two reportable segments.
At a point in time
Over time
Other
Total revenue
Products
Services
2020
£’000
476
2,126
—
2,602
2019
£’000
2,412
1,962
—
4,374
2020
£’000
—
962
—
962
2019
£’000
—
1,636
—
1,636
3 Operating (loss)/profit
The operating (loss)/profit for the year is stated after charging/(crediting):
Depreciation of property, plant and equipment
Amortisation of intangible assets
Exceptional impairment of goodwill
Exceptional impairment of intangible assets
Exceptional adjustment to direct cost accruals
Exceptional restructure costs
Remuneration receivable by the Group’s auditor for services:
– the auditing of the accounts
– audit related services
Foreign exchange movement
Share-based payments charge
Research and development costs expensed as incurred
2020
£’000
476
3,087
—
3,563
2020
£’000
214
960
—
—
—
115
62
6
10
31
502
Total
2019
£’000
2,412
3,598
48
6,058
2019
£’000
216
940
3,132
621
(946)
—
45
6
—
59
628
The above charges and credits are included in ‘Cost of sales’ and ‘Administrative costs’ in the consolidated statement of
comprehensive income.
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
4 Directors and employees
4.1 Number of employees
The average monthly number of employees, including Executive Directors, employed by the Group was:
4 Directors and employees cont.
4.3 Directors’ remuneration cont.
Director’s remuneration for the year ended 31 December 2019 was as follows:
Directors
Administration
Technical
4.2 Staff costs
Staff costs in respect of those employees were as follows:
Salaries
Government grants received
Social security costs
Other pension costs
Share-based payment charge
2020
Number
2019
Number
3
14
46
63
2020
£’000
3,003
(163)
384
327
31
3,583
3
16
47
66
2019
£’000
3,485
—
382
232
59
4,158
A proportion of the Group’s staff costs shown above are capitalised as additions to intangible assets – development costs
in accordance with the Group’s accounting policies.
In April 2020 Getech took significant cost saving measures to manage the Group’s exposure to the uncertainties of the
Covid business environment. As a part of this, all staff agreed to temporary salary reductions, from 1 May 2020. Staff pay
reductions ranged between 15% and c8%, with salaries for the majority of staff reduced by c8%. These reductions remain
in place.
4.3 Directors’ remuneration
Directors’ remuneration for the year ended 31 December 2020 was as follows:
Executive Directors
Dr Jonathan Copus
Chris Jepps
Andrew Darbyshire
Non-executive Directors
Dr Alison Fielding
Dr Stuart Paton
Peter Stephens
Chris Flavell
Salary/Fees
£’000
Pension
contributions
£’000
Benefits
in kind
£’000
Total before
share options
£’000
Share
options
£’000
234
141
99
19
37
19
19
568
13
8
15
—
—
—
—
36
1
1
—
—
—
—
—
2
248
150
114
19
37
19
19
606
3
3
3
—
—
—
—
9
In April 2020 Getech took significant cost saving measures to manage the Group’s exposure to the uncertainties of the
Covid business environment. As a part of this, all staff agreed to temporary salary reductions, from 1 May 2020. Getech’s
Board agreed to a temporary 20% salary and fee reduction. This reduction remains in place.
60
Executive Directors
Dr Jonathan Copus
Chris Jepps
Andrew Darbyshire
Non-executive Directors
Dr Alison Fielding1
Dr Stuart Paton
Peter Stephens2
Chris Flavell3
Salary/Fees
£’000
Pension
contributions
£’000
Benefits
in kind
£’000
Total before
share options
£’000
Share
options
£’000
263
158
120
21
42
21
21
646
13
8
6
—
—
—
—
27
—
—
—
—
—
—
—
—
276
166
126
21
42
21
21
673
15
8
8
—
—
—
—
31
1 For the period to 31 March 2019 Directors’ fees for Alison Fielding were paid to IP Group plc, a company of which she was a consultant, subsequent fees
were paid through payroll.
2 For the period to 31 March 2019 Directors’ fees for Peter Stephens were paid to Noon & Co Limited, a company for which he is a Director, subsequent
fees were paid through payroll.
3 For the period to 31 March 2019 Directors’ fees for Chris Flavell were paid to TantlonGeo Limited, a company of which he is a Director, subsequent fees
were paid through payroll.
4.4 Directors’ share options
Date granted
Exercise period
Option
price
31 Dec
2019
Granted
Lapsed
31 Dec
2020
Number of shares
Dr Jonathan Copus
2 Aug 2016
2 Aug 2016
2 Aug 2016
20 Nov 2018
20 Nov 2018
20 Nov 2018
Chris Jepps
20 Nov 2018
20 Nov 2018
Andrew Darbyshire
20 Nov 2018
20 Nov 2018
Dr Stuart Paton
27 Apr 2011
27 Apr 2011
27 Apr 2011
27 Apr 2011
Peter Stephens
24 Dec 2010
2 Aug 2017 – 2 Aug 2026
2 Aug 2018 – 2 Aug 2026
2 Aug 2019 – 2 Aug 2026
2 Aug 2019 – 19 Nov 2028
20 Nov 2019 – 19 Nov 2028
20 Nov 2020 – 19 Nov 2028
24.50p
24.50p
24.50p
35.00p
35.00p
35.00p
500,000
500,000
400,000
100,000
125,000
125,000
20 Nov 2019 – 19 Nov 2028
20 Nov 2020 – 19 Nov 2028
35.00p
35.00p
125,000
125,000
20 Nov 2019 – 19 Nov 2028
20 Nov 2020 – 19 Nov 2028
35.00p
35.00p
125,000
125,000
27 Apr 2011 – 27 Apr 2021
27 Apr 2012 – 27 Apr 2021
27 Apr 2013 – 27 Apr 2021
27 Apr 2014 – 27 Apr 2021
17.50p
17.50p
17.50p
17.50p
300,000
200,000
200,000
200,000
24 Dec 2012 – 24 Dec 2020
15.00p
41,490
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
500,000
500,000
400,000
100,000
125,000
125,000
125,000
125,000
125,000
125,000
300,000
200,000
200,000
200,000
(41,490)
—
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
4 Directors and employees cont.
4.4 Directors’ share options cont.
The market price of the shares at the end of the financial year was 12.75p and the range of market prices during the year
was between 9.5p and 26.50p.
After the year-end, the board granted a one-year extension to Dr Stuart Paton’s share options by way of issuing identical
options to those above except for an exercise period of one year.
Full share-based payment disclosures are provided in Note 19.
5 Finance income
Interest on bank deposits
6 Finance costs
Interest on borrowings
Interest on leases
7 Income tax
7.1 Analysis of income tax credit
Current tax
Current year
Prior year
Foreign taxation
Total current tax
Deferred tax
Current year
Prior year
Total deferred tax
Total tax credit
2020
£’000
1
2020
£’000
24
21
45
2019
£’000
14
2019
£’000
36
28
64
2020
£’000
2019
£’000
(192)
(46)
13
(225)
50
1
51
(174)
(38)
5
54
21
(19)
(55)
(73)
(53)
7 Income tax cont.
7.2 Factors affecting the tax credit for the year
The tax rate applied to profit on ordinary activities in preparing the reconciliation below is the UK corporation tax rate
applicable to the Group’s profits. The difference between the total credit shown above and the amount calculated by
applying the standard rate of UK corporation tax of 19% (2019: 19%) to the consolidated profit before tax is as follows:
Loss on ordinary activities before tax
Tax at UK corporation tax rate of 19% (2019: 19%)
Effects of:
Fixed asset differences
Expenses not deductible for tax purposes
Non-taxable fair value gains
Impairment of goodwill
Impairment of intangible assets
Research and development enhanced expenditure
Surrender of tax losses for R&D tax credit refund
Movement in deferred tax not recognised
Remeasurement of deferred tax for changes in tax rates
Foreign tax charges
Adjustment for tax computation in foreign jurisdictions
Foreign exchange adjustments
Other differences
Adjustment to tax charge in respect of prior years
Group tax credit for the year
7.3 Deferred tax
The movement on the deferred tax asset and deferred tax liability in the year is shown below:
Deferred tax asset
Asset at 1 January
Asset transferred to liability
Share-based payments
Tax losses
Post employment benefits
Exchange differences
Foreign tax jurisdictions
Asset at 31 December
2020
£’000
(1,818)
(345)
2019
£’000
(3,091)
(587)
7
31
(2)
—
—
(188)
59
282
(7)
13
17
6
(2)
(45)
(174)
7
27
—
595
118
(221)
12
22
—
54
(41)
6
5
(50)
(53)
2020
£’000
2019
£’000
346
62
13
(30)
1
—
(28)
364
305
—
4
(18)
—
(6)
61
346
62
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
7 Income tax cont.
7.3 Deferred tax cont.
Deferred tax liability
Liability at 1 January
Asset transferred to liability
Accelerated capital allowances
Intangible assets on capitalised development costs
Intangible assets acquired in business combinations
Intangible assets on foreign subsidiaries
Exchange differences
Liability at 31 December
Analysis of deferred tax balances by category
Share-based payments
Accelerated capital allowances
Foreign tax jurisdictions
Intangible assets of foreign subsidiary company
Tax losses
Intangible assets on capitalised development costs
Provisions
Post-employment benefits
Net deferred tax asset
2020
£’000
2019
£’000
109
62
8
(7)
(2)
—
6
176
137
—
1
(17)
(17)
—
5
109
2020
£’000
2019
£’000
52
(100)
33
(11)
271
(65)
3
5
188
39
(92)
55
(11)
311
(72)
3
4
237
The deferred tax asset in respect of the UK company is calculated at 19% (2019: 17%) in light of the future tax rates
announced. On 3 March 2021, the Chancellor of the Exchequer announced that the main rate of corporation tax in the
United Kingdom will rise to 25% with effect from 1 April 2023 for companies earning annual taxable profits in excess of
£250,000. Companies earning annual taxable profits of £50,000 or less will continue to pay corporation tax at 19% with
a marginal rate adjustment for companies earning annual taxable profits between the two levels. These changes had not
been substantively enacted at the balance sheet date and therefore no adjustment has been made to deferred taxation
balances to account for this change.
The deferred tax asset in respect of foreign tax jurisdictions arises as a result of future capital allowances available
following the part-payment of the deferred consideration for the acquisition of assets from Lisle Gravity Inc.
in an earlier period. These will be relieved against profits of the foreign subsidiary.
The deferred tax asset in respect of tax losses arises as a result of losses incurred by the Group after 1 April 2017.
The Group is expected to generate future taxable profits, which these losses will be set against in the next five years.
The trading losses carried forward have no expiry date.
Losses incurred by the Group for which no deferred tax asset has been recognised amount to £1,902,000
(2019: £137,000).
8 Earnings per share (EPS)
Basic EPS is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number
of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to equity holders of the parent by the weighted average
number of ordinary shares outstanding plus the weighted average number of shares that would be issued on conversion
of all the dilutive share options into ordinary shares.
Loss attributable to equity holders of the parent
Loss attributable to equity holders of the parent adjusted for dilution
Weighted average number of ordinary shares for basic EPS
Effects of dilution from share options
Weighted average number of ordinary shares adjusted for dilution
There has been no dilution of EPS during 2020 or 2019 due to losses after tax.
Basic EPS
Diluted EPS
2020
£’000
(1,644)
(1,644)
2019
£’000
(3,088)
(3,088)
2020
Thousands
2019
Thousands
37,564
588
38,151
2020
pence
(4.38)
(4.38)
37,564
979
38,543
2019
pence
(8.22)
(8.22)
After the year-end, the board granted a one-year extension to the 900,000 share options with expiry date of 27 April 2021
by way of issuing identical options to those above except for an exercise period of one year.
On 30 March 2021, shareholders approved the issue of 29,303,065 ordinary shares at a premium of 22p. As at 1 April
2021, there were 66,866,680 shares in issue, called up and fully paid.
64
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
9 Goodwill
Cost
At 1 January 2019 and 1 January 2020
Additions
At 31 December 2020
Accumulated impairment losses/amortisation
At 1 January 2019
Impairment losses for the year
At 1 January 2020 and 31 December 2020
Carrying amount
At 31 December 2020
At 1 January 2020
At 1 January 2019
Goodwill
£’000
3,428
—
3,428
—
3,132
3,132
296
296
3,428
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination
in which the goodwill arose.
The Group’s cash-generating units are listed below, detailing the goodwill and intangible assets allocated to each:
Goodwill
£’000
Intangible
assets
£’000
2020
Property,
plant and
equipment
£’000
Geoscience products and services
Geospatial products and services
Other
Total
—
296
—
296
3,135
314
60
3,509
1,177
887
652
2,716
Goodwill
£’000
Intangible
assets
£’000
—
296
—
296
3,110
380
78
3,568
2019
Property,
plant and
equipment
£’000
1,259
949
698
2,906
Property, plant and equipment assets have been apportioned to their respective CGUs, weighted by employee headcount.
The recoverable amount was determined based on value in use calculations, covering a detailed five-year forecast,
followed by an extrapolation of expected cash flows for the remaining useful lives. The present value of the expected cash
flows is determined by applying a suitable discount rate reflecting the current market assessments of the time value of
money and risks specific to the cash-generating unit.
The recoverable amount is set out below:
Geoscience products and services
Geospatial products and services
Total
2020
£’000
8,274
10,160
18,434
2019
£’000
10,619
8,834
19,453
9 Goodwill cont.
In extrapolating future cash flows, long-term industry growth has been modelled at an annual rate of 2%, together with
a 2% rate of inflation on costs annually.
Sales volumes over the five-year period are based on past performance and management’s expectations of a market
recovery staggered over that period, reflected by 5% year-on-year growth, no additional growth has been factored in
beyond this five-year period.
The discount rate applied of 7.7% takes into consideration the industry-wide risks as well as those specific to the Group’s
operating segment.
Sensitivity analysis is carried out on all budgets, strategic plans and discount rates used in the calculations. The cash flow
model is sensitive to short-term market recovery and discount rate used. An increase of the discount rate by 3% reduces
the calculated recoverable amount by £4.5m, a reduction in short-term market recovery from 5% to 3% reduces the
calculated recoverable amount by £2.6m.
10 Intangible assets
Cost
At 1 January 2019
Additions
Exchange differences
At 31 December 2019
Additions
Exchange differences
At 31 December 2020
Amortisation and impairment
At 1 January 2019
Amortisation charge
Impairment charge
Exchange differences
At 31 December 2019
Amortisation charge
Exchange differences
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019
At 1 January 2019
Customer
relationships
£’000
Software
development
£’000
Development
costs
£’000
Reports
£’000
Data
holdings
£’000
Other
intangibles
£’000
877
—
—
877
—
—
877
447
38
—
—
485
38
—
523
354
392
430
462
—
—
462
—
—
462
235
92
—
—
327
92
—
419
43
135
227
3,898
1,108
—
5,006
902
—
5,908
1,283
760
—
—
2,043
813
—
2,856
3,052
2,963
2,615
1,509
—
—
1,509
—
—
1,509
856
32
621
—
1,509
—
—
1,509
—
—
653
1,728
—
(58)
1,670
—
(54)
1,616
1,635
16
—
(56)
1,595
15
(52)
1,558
58
75
93
29
5
—
34
—
—
34
29
2
—
—
31
2
—
32
2
3
—
Total
£’000
8,503
1,113
(58)
9,558
902
(54)
10,406
4,485
940
621
(56)
5,990
960
(52)
6,898
3,509
3,568
4,018
Amortisation charges are included in ‘Administrative costs’ in the consolidated statement of comprehensive income.
Included in development costs are completed phases of product development that are being amortised. The total cost of
these products is £5,682,000 and they carry a net book value of £2,891,000.
Details of the Group’s impairment reviews of intangible assets are detailed in note 9.
66
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
11 Property, plant and equipment
12 Trade and other receivables
Cost
At 1 January 2019
Additions
Disposals
Exchange differences
At 31 December 2019
Additions
Disposal
Exchange differences
At 31 December 2020
Depreciation
At 1 January 2019
Charge for the period
Disposals
Exchange differences
At 31 December 2019
Charge for the period
Depreciation on disposals
Exchange differences
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019
At 1 January 2019
Freehold land
and buildings
£’000
Right-of-use
assets
£’000
Plant and
equipment
£’000
2,798
—
—
—
2,798
—
—
—
2,798
410
36
—
—
446
36
—
—
482
2,316
2,352
2,388
641
—
—
—
641
—
—
—
641
34
128
—
—
162
128
—
—
290
350
479
607
1,126
30
(1)
7
1,162
24
(212)
(1)
973
1,035
52
(1)
1
1,087
50
(212)
(1)
924
49
75
91
Total
£’000
4,565
30
(1)
7
4,601
24
(212)
(1)
4,412
1,479
216
(1)
1
1,695
214
(212)
(1)
1,696
2,716
2,906
3,086
Trade receivables
Fair value through profit and loss derivatives
Other receivables
Prepayments
Accrued income
2020
£’000
619
10
150
337
237
2019
£’000
763
—
42
291
898
1,353
1,994
The carrying amounts of trade and other receivables are considered to be reasonable approximations to fair value.
Expected credit losses – trade receivables
The Group’s trade receivables have been reviewed for expected credit losses. Provisions have been made amounting
to £nil (2019: £nil). It is considered that the expected credit loss for receivables balances less than six months is £nil.
The carrying value for trade and other receivables is stated after the following allowance for credit losses:
Allowance for credit losses at 1 January
Loss allowances charged
Loss allowances reversed
Allowance for credit losses at 31 December
2020
£’000
—
—
—
—
The expected credit loss for trade receivables as at 31 December 2020 was determined as follows:
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
Less than
3 months
Less than
6 months
More than
6 months
0%
316
—
0%
119
—
0%
31
—
0%
153
—
The carrying amount of freehold land not subject to depreciation amounted to £1,000,000 (2019: £1,000,000).
The expected credit loss for trade receivables as at 31 December 2019 was determined as follows:
The Group continues to explore the future sale of Kitson House. The requirements of IFRS 5 have been reviewed and
based on the expected timeframe for disposal it is considered appropriate to continue to classify the land and buildings
as a non-current asset rather than an asset held for sale.
Depreciation charges are included in ‘Administrative costs’ in the consolidated statement of comprehensive income.
Expected credit loss rate
Gross carrying amount
Lifetime expected credit loss
Current
Less than
3 months
Less than
6 months
More than
6 months
0%
527
—
0%
233
—
0%
—
—
0%
—
—
2019
£’000
283
—
(283)
—
Total
—
619
—
Total
—
763
—
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
12 Trade and other receivables cont.
Expected credit losses – other receivables
Included within other receivables are gross receivables from H2 Green Limited (“H2 Green”), a company in which the
Group holds an option to acquire 100% of the ordinary share capital of. This option was exercised in March 2021, as
described in note 25. As part of this option agreement, the Group provided working capital facilities to H2 Green in the
form of amounts advanced prior to the year end of £54,000 (2019: £nil), and maximum committed loans to be advanced
in January 2021 of £20,000 (2019: £nil). In the event that the option is exercised all such loans are waived as part of the
terms of the acquisition of H2 Green.
The Directors, when performing the fair value exercise on the option, have determined that the Group has an implied
associated expected credit loss under IFRS 9 in respect of these loans and loan commitments of 95.2%, which is
presented as follows:
Other receivables
Loan commitment
Gross receivable/
commitment
£’000
Expected
credit loss
£’000
Net receivable/
commitment
£’000
54
(19)
(51)
—
3
(19)
The loan commitment is presented as an other payable in note 15.
Option to purchase
The option associated with the purchase of H2 Green and described above is designated as a fair value through profit and
loss derivative, as required by IFRS 9. The option was entered into in November 2020, alongside the loan commitment; as
at 31 December 2020 the underlying value of the option has been calculated to have increased by £9,524.
13 Cash and cash equivalents
Cash at bank and in hand
2020
£’000
2,192
2019
£’000
3,554
14 Borrowings
The bank loan carries a variable interest rate of 2.75% above bank base rate and is repayable in monthly instalments over
a 60-month term. The loan is secured by land and buildings owned by the Parent Company, with a current carrying value
of £2,316,000 (2019: £2,352,000).
Borrowings are presented as £85,000 due in less than one year, and £750,000 due in more than one year.
15 Trade and other payables
15.1 Trade and other payables due within one year
Trade payables
Social security and other taxes
Other payables
Accruals
Deferred income
Lease liabilities
2020
£’000
549
78
42
162
387
148
2019
£’000
778
101
28
138
507
145
1,366
1,697
All deferred revenue is expected to be recognised as revenue within one year. Revenue recognised in the year that was
included in opening deferred income amounted to £507,000.
Other payables includes £19,000 of expected credit losses on loan commitments entered into, as further described
in note 12.
15.2 Trade and other payables due after more than one year
Lease liabilities
Dilapidation provisions
2020
£’000
257
25
282
2019
£’000
396
25
421
The carrying amounts of trade and other payables are considered to be reasonable approximations to fair value.
The lease liabilities relate to long-term property leases.
16 Financial instruments
The Group is exposed to financial risks. The Group’s risk management is co-ordinated by its Directors who focus actively
on securing the Group’s short to medium-term cash flows through regular reviews of the operating activity of the
business.
The Group does not actively engage in the trading of financial assets for speculative purposes, nor does it write options.
The most significant financial risks to which the Group is exposed are described below.
16.1 Foreign currency risk
Exposure to currency exchange rates arises from the Group’s overseas sales and purchases, most of which are
denominated in US dollars and some of which are denominated in euros. Assets and liabilities denominated in US dollars
and euros give rise to foreign exchange exposures at the end of the reporting period.
To mitigate the Group’s exposure to foreign currency risk, exchange rates are monitored and the timing of settling
invoices, where sales and purchases are made in currencies other than pound sterling, is matched as far as possible.
Furthermore, there is no systematic exposure to exchange rates because selling prices are not fixed in currencies other
than sterling.
The Group has a US-based subsidiary whose net assets are exposed to foreign currency translation risk. With no matching
borrowings denominated in US dollars, it is the Group’s policy not to hedge against this translation exposure.
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
16 Financial instruments cont.
16.1 Foreign currency risk cont.
The Group had short-term exposure to the US dollar and the euro at 31 December 2020. The following table illustrates
the sensitivity of the net result for the year with regard to the Group’s financial assets and financial liabilities. It assumes
a +/-10% change in the US dollar and the euro exchange rates for the period ended 31 December 2020. Sensitivity
analysis is based on the Group’s foreign currency financial instruments held at the end of each reporting period.
If pound sterling had strengthened or weakened against the US dollar and the euro by 10%, this would have had the
following impact:
Reported profit/(loss) before tax
Sensitivity to movement in currency exchange rates:
US dollar
Euro
(Loss)/profit before tax
+10%
£’000
2020
-10%
£’000
+10%
£’000
2019
-10%
£’000
(1,544)
(1,544)
(3,141)
(3,141)
(26)
(3)
29
4
(8)
(20)
9
22
(1,573)
1,511
(3,169)
(3,110)
Exposures to foreign exchange rates vary during the year depending on the value of overseas transactions. Nonetheless,
the analysis above is considered to be representative of Getech’s exposure to currency risk.
There is no effect on equity in respect of currency exchange rate sensitivity.
The Group’s actual currency exposures at the end of the reporting period were as follows:
Denominated in US dollars
Financial assets
Financial liabilities
Net exposure
Denominated in euros
Financial assets
Financial liabilities
Net exposure
2020
£’000
2019
£’000
471
(68)
403
36
(3)
36
734
(147)
587
227
(8)
219
16 Financial instruments cont.
16.2 Credit risk analysis
The Group’s exposure to credit risk is limited to the carrying amount of its financial assets at the end of the reporting
period, as summarised below:
Classes of financial assets – carrying amounts
Trade and other receivables
Cash and cash equivalents
2020
£’000
1,016
2,192
3,208
2019
£’000
1,703
3,554
5,257
In respect of trade and other receivables that are not impaired, the Group is not exposed to any significant credit risk
exposure to any single counterparty or group of counterparties having similar characteristics. The Group’s customers are
generally major energy and natural resource companies with whom the Group has strong trading relationships with no
recent history of default. The Group continually monitors its trade receivables and incorporates this information into its
credit risk controls.
Trade receivables are stated on the basis of factors such as historical trends, age of debts and debt specific information.
Details of amounts past due but not impaired are set out in Note 12. The credit risk for liquid funds is considered
negligible since counterparties are reputable banks with high-quality external credit ratings.
The Group does not hold any collateral as security.
16.3 Interest rate risk
At 31 December 2020 the Group had cash subject to variable rates of £2,192,000 (2019: £3,554,000) and borrowings
subject to variable rates of £834,000 (2019: £854,000). There is no other material interest rate risk.
To mitigate the Group’s exposure to interest rate risk, market rates are monitored.
The following table illustrates the sensitivity of the profit before tax for the year to a reasonably possible change in interest
rates of +/-1% with effect from the beginning of the year. These changes are considered to be reasonably possible based
on observation of current market conditions. The calculations are based on the Group’s financial instruments held at the
end of each reporting period. All other variables are held constant.
Reported (loss)/profit before tax
Sensitivity to changes in interest rates
(Loss)/profit before tax
+1%
£’000
(1,544)
1
(1,543)
2020
-1%
£’000
(1,544)
(1)
(1,545)
+1%
£’000
(3,141)
11
(3,130)
2019
-1%
£’000
(3,141)
(11)
(3,152)
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements
Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
16 Financial instruments cont.
16.4 Capital and liquidity risk
The Group manages its liquidity needs by carefully monitoring scheduled cash outflows and anticipated cash inflows. Having
regard to modest visibility of sales, the cash forecasts are regularly reviewed and cover alternative income scenarios.
The contractual maturity of the Group’s financial liabilities at the end of the reporting period was as follows:
Trade and other payables – held at amortised cost
Trade and other payables – held at FVPL
Borrowings – held at amortised cost
* Excludes expected credit losses arising on loan commitments
Within
one year
£’000
In one
to two years
£’000
In two
to five years
£’000
734
19
85
838
—
—
113
644
—
—
636
636
Within
one year
£’000
In one
to two years
£’000
In two
to five years
£’000
Trade and other payables – held at amortised cost
Borrowings – held at amortised cost
1,045
78
1,123
—
78
78
Summary of the Group’s financial assets and liabilities as defined in IFRS 9 ‘Financial Instruments:
Recognition and Measurement’
Debt instruments measured at amortised cost
Trade and other receivables
Cash and cash equivalents
Equity instruments measured at fair value through profit and loss
Trade and other receivables
Current liabilities measured at amortised cost
Borrowings
Trade and other payables
Current liabilities measured at fair value through profit and loss
Trade and other payables
Non-current financial liabilities measured at amortised cost
Borrowings
Net financial assets and liabilities
—
698
698
2020
£’000
1,006
2,192
3,198
10
10
(85)
(734)
(819)
(19)
(19)
(750)
(750)
1,620
2020
£’000
734
19
834
1,587
2019
£’000
1,045
854
1,899
2019
£’000
1,703
3,554
5,257
—
—
(78)
(1,045)
(1,123)
—
—
(776)
(776)
3,358
17 Capital management policies and procedures
The Group’s capital management objectives are as follows:
• To ensure the Group’s ability to continue as a going concern
• To provide an adequate return to shareholders
These objectives are maintained by pricing products and services commensurately with the level of risk and by exercising
a policy of progressive dividends as appropriate.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on
the face of the consolidated statement of financial position. Capital for the reporting period under review is set out below:
Total equity
Less: cash and cash equivalents
2020
£’000
8,049
(2,192)
5,857
2019
£’000
9,719
(3,554)
6,165
In order to achieve the Group’s objectives in capital management, the goal is to maintain adequate capital with the
minimum amount of appropriate borrowing. The Group has met its stated objectives for the year.
18 Share capital
Authorised
90,000,000 Ordinary Shares of £0.0025 each (2019: 90,000,000)
Issued, called up and fully paid
37,563,615 Ordinary Shares of £0.0025 each (2019: 37,563,615)
Shares issued, called up and fully paid
Balance brought forward
Shares issued under share-based payments
Balance carried forward
2020
£’000
225
94
2019
£’000
225
94
2020
Number
2019
Number
37,563,615
—
37,563,615
—
37,563,615
37,563,615
Each share issued has the same right to receive dividends and the repayment of capital and represents one vote at the
shareholders’ meeting of the Group.
Subsequent to the year-end, additional shares were issued relating to an equity fund raise and the acquisition of H2 Green.
At the date of this report, there were 66,866,680 shares issued, called up and fully paid. As a result, Getech’s share capital
issued, called up and fully paid increased to £167,000 and share premium account increased to £8,885,000.
The Directors consider that the fair value of financial assets and liabilities equates to the carrying value for both 2020
and 2019.
74
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Notes to the Consolidated Financial Statements cont.
for the year ended 31 December 2020
19 Share-based payments
At 31 December 2020, the Group operated an approved Enterprise Management Incentive (EMI) share scheme and an
Unapproved Options scheme. Under the share options plans, the Directors can grant options over shares in the Company
to employees, subject to approval from the Remuneration Committee. Options are granted with a fixed exercise price and
the contractual life of an option of 10 years. Options will become exercisable on the second anniversary of the date of
grant. Exercise of an option is subject to continued employment.
At 31 December 2020, rights to options over Ordinary Shares of the Parent Company were outstanding as follows:
EMI share scheme
Exercise period
Number of shares
1 Jan
2020 Granted Exercised
Lapsed
31 Dec
2020
Granted 24 December 2010, exercise price: 15p per share
24 December 2012 – 24 December 2020
Granted 13 December 2012, exercise price: 21.3p per share
13 December 2014 – 12 December 2022
Granted 22 July 2014, exercise price: 48.0p per share
22 July 2016 – 21 July 2024
Granted 2 August 2016, exercise price: 24.5p per share
2 August 2017 – 1 August 2026
2 August 2018 – 1 August 2026
Granted 20 November 2018, exercise price: 35.0p per share
20 November 2019 – 19 November 2028
20 November 2020 – 19 November 2028
Total EMI share scheme options
27,549
200,000
280,000
500,000
500,000
500,000
500,000
2,507,549
—
—
—
—
—
—
—
—
—
(27,549)
—
—
—
—
—
—
—
— 200,000
— 280,000
— 500,000
— 500,000
— 500,000
— 500,000
— (27,549) 2,480,000
19 Share-based payments cont.
Unapproved options scheme
Exercise period
Number of shares
1 Jan
2020 Granted Exercised
Lapsed
31 Dec
2020
Granted 24 December 2010, exercise price: 15p per share
24 December 2012 – 24 December 2020
Granted 27 April 2011, exercise price: 17.5p per share
27 April 2011 – 27 April 2021
27 April 2012 – 27 April 2021
27 April 2012 – 27 April 2021
27 April 2012 – 27 April 2021
Granted 2 August 2016, exercise price: 24.5p per share
2 August 2019 – 1 August 2026
Granted 20 November 2018, exercise price: 35.0p per share
2 August 2019 – 19 November 2028
20 November 2019 – 19 November 2028
20 November 2020 – 19 November 2028
Total unapproved options
Total EMI share scheme and unapproved options
41,490
300,000
200,000
200,000
200,000
400,000
100,000
125,000
125,000
1,691,490
4,199,039
—
—
—
—
—
—
—
—
—
—
—
—
Options outstanding at 31 December 2020
Options exercisable at 31 December 2020
—
—
—
—
—
—
—
—
—
—
—
(41,490)
—
—
— 300,000
— 200,000
— 200,000
— 200,000
— 400,000
— 100,000
— 125,000
— 125,000
(41,490) 1,650,000
— (69,039) 4,130,000
Weighted
average
exercise price
—
27.8p
Number
—
4,130,000
4,130,000
After the year-end, the board granted a one-year extension to the 900,000 share options with expiry date of 27 April 2021
by way of issuing identical options to those above except for an exercise period of one year.
At 31 December 2019, rights to options over Ordinary Shares of the Parent Company were outstanding as follows:
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for the year ended 31 December 2020
19 Share-based payments cont.
EMI share scheme
19 Share-based payments cont.
Unapproved options scheme cont.
Exercise period
Granted 24 December 2010, exercise price: 15p per share
24 December 2012 – 24 December 2020
Granted 13 December 2012, exercise price: 21.3p per share
13 December 2014 – 12 December 2022
Granted 22 July 2014, exercise price: 48.0p per share
22 July 2016 – 21 July 2024
Granted 2 August 2016, exercise price: 24.5p per share
2 August 2017 – 1 August 2026
2 August 2018 – 1 August 2026
Granted 20 November 2018, exercise price: 35.0p per share
20 November 2019 – 19 November 2028
20 November 2020 – 19 November 2028
Total EMI share scheme options
Unapproved options scheme
27,549
200,000
280,000
500,000
500,000
500,000
500,000
2,507,549
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Number of shares
Exercise period
1 Jan 2019 Granted Exercised
Lapsed
Granted 24 December 2010, exercise price: 15p per share
24 December 2012 – 24 December 2020
Granted 27 April 2011, exercise price: 17.5p per share
27 April 2011 – 27 April 2021
27 April 2012 – 27 April 2021
27 April 2012 – 27 April 2021
27 April 2012 – 27 April 2021
Granted 2 August 2016, exercise price: 24.5p per share
2 August 2019 – 1 August 2026
Granted 20 November 2018, exercise price: 35.0p per share
2 August 2019 – 19 November 2028
20 November 2019 – 19 November 2028
20 November 2020 – 19 November 2028
Total unapproved options
Total EMI share scheme and unapproved options
41,490
300,000
200,000
200,000
200,000
400,000
100,000
125,000
125,000
1,691,490
4,199,039
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
31 Dec
2019
41,490
300,000
200,000
200,000
200,000
—
—
—
—
—
—
—
400,000
—
—
—
100,000
125,000
125,000
— 1,691,490
— 4,199,039
Number of shares
1 Jan
2019 Granted Exercised
Lapsed
31 Dec
2019
—
27,549
Options outstanding at 31 December 2019
Options exercisable at 31 December 2019
—
200,000
No share options were exercised during the year.
Weighted
average
exercise price
35.0p
26.3p
Number
625,000
3,574,039
4,199,039
—
280,000
—
—
—
—
500,000
500,000
500,000
500,000
— 2,507,549
20 Financial commitments
20.1 Capital commitments
There were no capital commitments at 31 December 2020 (2019: £nil).
20.2 Guarantees
No guarantees have been given, or have been received, by the Group.
21 Related party transactions
During the year, members of key management as defined by IAS 24 ‘Related Party Disclosures (revised 2009)’ included
non-Directors and their compensation was as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2020
£’000
673
66
15
754
2019
£’000
771
45
47
863
The remuneration of the Directors, who are all Directors of the Parent Company, is set out in Note 4.
The Directors did not receive dividends during the year.
During the period Getech made payments to Zinc Consultants Limited amounting to £11,000 (2019: £12,000) for
recruitment services, a company of which Chris Flavell is a director. All transactions were conducted under standard
commercial terms.
Getech loaned £3,000 to H2 Green Limited interest free, net of expected credit losses. The full amount was outstanding
at the year end. Getech and H2 Green Limited have a non-executive director in common.
22 Ultimate controlling party
The Directors consider that there is no ultimate controlling party.
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for the year ended 31 December 2020
Parent Company Statement of Financial Position
As at 31 December 2020
23 Pensions
The Group currently operates a Group personal pension plan for the benefit of employees. The amount recognised
as an expense is £327,000 (2019: £232,000).
24 Exceptional items
Exceptional (costs)/credits included in the income statement are detailed in the table below:
Exceptional cost of sales
Impairment of intangible assets
Adjustment to carrying value of direct cost accruals
Exceptional administrative costs
Restructuring costs
Impairment of goodwill
Notes
10
9
2020
£’000
—
—
—
(115)
—
(115)
2019
£’000
(621)
946
325
(197)
(3,132)
(3,132)
The above table lists the exceptional items reported in the Consolidated Statement of Comprehensive Income.
In 2020 restructuring costs totalling £115,000 were classified as an exceptional administrative cost.
In 2019, classified as exceptional cost of sales, the impairment of intangible assets reduces the carrying value of Getech’s
inventory of reports to £653,000. Also classified as an exceptional cost of sale in 2019, a reduction to the carrying value of
direct cost accruals, included in trade and other payables. The direct cost accruals credit results from updated information
that became available during 2019 around the contractual liability position relating to previously accrued balances.
Classified as an exceptional administrative cost in 2019, the impairment of goodwill relating to the acquisition of ERCL
reduces the carrying value of total goodwill to £296,000. The remaining goodwill relates to the acquisition of Exprodat.
24 Post balance sheet events
In January 2021, Getech appointed Richard Bennett to the Board as Non-executive Chairman designate and Peter Stephens
retired from his position as Non-executive Director. In April 2021, Richard assumed the position of Chairman, whilst Dr
Stuart Paton stepped down from his Chairman position, Stuart remains on the Board for a period of knowledge transfer.
In February 2021, Getech completed an agreement to sub-lease its London office. The agreed terms pass all service
charges and other costs to the lessor and largely the whole cost of the headline rent amount.
On 31 March 2021, Getech shareholders approved a share placing to raise £6.25m to fund Getech’s programme
of growth through diversification. At the same time, the Board approved the acquisition of H2 Green, total consideration
is expected to be £1m paid through a combination of cash and issue of shares to the former owners of H2 Green. At the
date of the acquisition, H2 Green had met the first two milestones of the sale and purchase agreement, resulting in
up-front consideration of £250,000. Of this, £53,750 of the consideration was cash and the remainder by way of share
issue. Total consideration is made up of a further two milestone payments totalling £250,000 and an earn-out clause
with a maximum value of £500,000.
In May 2021, the Group appointed Michael Covington as Non-executive Director. Michael is audit chair designate and will
take the position of audit chair after a period of hand-over with Alison Fielding.
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Current assets
Trade and other receivables
Tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Short-term borrowings
Trade and other payables
Non-current liabilities
Long-term borrowings
Trade and other payables
Deferred tax liabilities
Total liabilities
Net assets
Share capital
Share premium
Merger reserve
Share-based payment (SBP) reserve
Retained earnings
Total equity
Notes
3
4
5
7
8
9
10
9
10
6
11
11
2020
£’000
2,782
2,695
1,760
7,237
1,194
191
1,119
2,504
9,741
78
1,947
2,025
756
282
84
1,122
3,147
6,594
94
3,053
—
251
3,196
6,594
2019
£’000
2,722
2,863
1,760
7,345
1,588
60
2,681
4,329
11,674
78
2,247
2,325
776
421
95
1,292
3,617
8,057
94
3,053
—
242
4,668
8,057
As permitted by s408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income
and related notes. The Company’s loss for the year was £1,494,000 (2019: £4,765,000 loss).
The financial statements of Getech Group plc (company number: 02891368) were approved by the Board of Directors and
authorised for issue on 4 June 2021.
Andrew Darbyshire
Chief Financial Officer
The accompanying accounting policies and notes form an integral part of these financial statements.
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Parent Company Statement of Changes in Equity
For the year ended 31 December 2020
Notes to the Parent Company’s Financial Statements
For the year ended 31 December 2020
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
SBP
reserve
£’000
Retained
earnings
£’000
1 January 2019
Loss for the year
Total comprehensive income
Transactions with owners:
Transfer of merger reserve
Share-based payment charge
31 December 2019
Loss for the year
Total comprehensive income
Transactions with owners:
Reserves transfer
Share-based payment charge
31 December 2020
94
—
—
—
—
94
—
—
—
—
94
3,053
—
—
—
—
3,053
—
—
—
—
3,053
2,407
—
—
(2,407)
—
—
—
—
—
—
—
183
—
—
—
59
242
—
—
(22)
31
251
7,026
(4,765)
(4,765)
2,407
—
4,668
(1,494)
(1,494)
22
—
3,196
6,594
Total
equity
£’000
12,763
(4,765)
(4,765)
—
59
8,057
(1,494)
(1,494)
—
31
1 Accounting policies
1.1 Basis of preparation
The Company’s financial statements have been prepared on a historical cost basis, in accordance with applicable
accounting standards and in accordance with Financial Reporting Standard 101 – ‘The Reduced Disclosure Framework’
(FRS 101). The principal accounting policies adopted in the preparation of these financial statements are set out below.
These policies have all been applied consistently throughout the year unless otherwise stated.
The Company’s financial statements are presented in pound sterling and all values are rounded to the nearest thousand
pounds (£’000) except when otherwise indicated.
1.2 Disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101:
• A statement of cash flows and related notes
• The requirement to produce a balance sheet at the beginning of the earliest comparative period
• The requirements of IAS 24 ‘Related Party Disclosures’ to disclose related party transactions entered into between two or
more members of the Group as they are wholly owned within the Group
• Presentation of comparative reconciliations for property, plant and equipment and intangible assets
• Disclosure of key management personnel compensation
• Capital management disclosures
• Presentation of comparative reconciliation of the number of shares outstanding at the beginning and end of the period
• The effect of future accounting standards not adopted
• Disclosures in relation to impairment of assets
• Disclosures in respect of financial instruments (other than disclosures required as a result of recording financial
instruments at fair value)
• Fair value measurement disclosures (other than disclosures required as a result of recording financial instruments
at fair value)
1.3 Revenue
The Company has adopted IFRS 15 and its principles. Revenue is measured by reference to the fair value of consideration
received or receivable by the Company for products and services provided, excluding VAT and comparable overseas taxes.
Typical invoice payment terms are 30 days for all categories of revenue.
Revenue from products and services falls into the three categories below:
Consultancy services
The Company provides various consulting services to its customers. Revenue from these services is recognised on a time-
and-materials basis plus a margin as the services are provided. Customers are invoiced monthly as work progresses.
The Company also provides outsourcing services for a fixed fee for an agreed period. As the amount of work required
to perform these services does not vary significantly from month-to-month, revenue is recognised on a straight-line basis
over the term of the contract.
This revenue accounting policy is applicable to revenues from Geoscience and Geospatial Services.
Multiclient products
For sales of data and completed products, revenue is recognised when performance obligations have been satisfied,
which is on dispatch unless otherwise agreed.
This revenue accounting policy is applicable for revenues from Geophysical Data, Globe and Regional Reports.
Licence revenue
Customers subscribe to Getech’s Globe licences, usually over a 12-month term. The customer has the rights to all
of the benefits provided by the product over the term of the licence, as such, revenue is recognised over the term of the
licence at the fixed fee agreed in the customer contract. The balance of the revenue invoiced is deferred.
This revenue accounting policy is applicable for revenues from Globe licences.
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Notes to the Parent Company’s Financial Statements cont.
for the year ended 31 December 2020
1 Accounting policies cont.
1.3 Revenue cont.
Multiple element contracts
Where contracts for multiple element products with staged deliverables involve delivery of several different elements
which are not fully delivered or performed by the year end, revenue is recognised based on the proportion of the fair
value of the elements delivered to the fair value of the respective overall contracts. Where the outcome of contracts that
are long term in nature and contracts for ongoing deliverables cannot be estimated reliably, revenue is recognised only to
the extent of the expenses recognised that are recoverable.
Revenue from multiple element contracts is recognised after separating the contract income as follows:
• Completed project elements and specific reports that are immediately deliverable – revenue is recognised when the
performance obligations have been satisfied, which is on dispatch unless otherwise agreed
• Service elements of the contract – revenue is recognised in line with the accounting treatment for consultancy services
• Project elements that are to be delivered from development work that is yet to be completed – revenue is recognised
when the performance obligations have been satisfied, which is on dispatch unless otherwise agreed
1.4 Foreign currency translation
Where supplies are obtained, or sales made on terms denominated in foreign currency, such transactions are translated
into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting
period. Exchange gains or losses arising on the settlement or translation of monetary items are included in profit or loss
from operations.
1.5 Share options
When share options are granted, a charge is made to the Parent Company’s profit and loss account and a reserve is
created to record the fair value of the awards in accordance with IFRS 2 ‘Share-based Payment’. A charge is recognised in
the profit and loss account in relation to share options granted based on the fair value (the economic value) of the grant,
measured at the grant date. The charge is spread over the vesting period. The valuation methodology takes into account
assumptions and estimates of share price volatility, the future risk-free interest rate and exercise behaviour, and is based
on the Black Scholes method. When share options are exercised, there is a transfer from the share option reserve to
retained earnings.
At each balance sheet date, the Parent Company revises its estimate of the number of share options that are expected
to vest, taking into account those that have lapsed or been cancelled. It recognises the impact of the revision to original
estimates, if any, in the profit and loss account, with a corresponding adjustment to the share option reserve. If the terms
and conditions of share options are modified before they vest, the change in the fair value of the share options, measured
immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
1.6 Accounting for Government Support
Amounts receivable under the UK Government’s Coronavirus Job Retention Scheme have been recognised in profit or loss
on a systematic basis net of the expense for which the monies are intended to compensate, once any conditions related
to the receipts are met.
1.7 Property, plant and equipment
Property, plant and equipment are carried at acquisition cost, net of depreciation and any provision for impairment.
Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment by
equal instalments over their estimated useful economic lives at the following rates:
Freehold property
Plant and equipment
– 2% per annum on cost
– 33.3% and 25% per annum on cost
Material residual value and useful life estimates are updated as required, but at least annually. Freehold land is carried at
acquisition cost. As no finite useful life for land can be determined, related carrying amounts are not depreciated.
No depreciation is provided on freehold land.
1 Accounting policies cont.
1.8 Investments
Fixed asset investments are stated at cost less provisions for diminution in value.
1.9 Intangible assets
Expenditure on development activities is capitalised if the product or process meets the recognition criteria for development
expenditure as set out in IAS 38 ‘Intangible Assets’. The expenditure capitalised includes all directly attributable costs, from
the date that the intangible asset meets the recognition criteria, necessary to create, produce and prepare the asset to be
capable of operating in the manner intended by management.
Development expenditure is identified as being capital in nature if the costs can be measured reliably, the product is
technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient
resources to complete development and to use or sell the asset. Other development expenditure not meeting these
criteria is recognised in profit or loss as incurred. Once the asset is ready for use, the capitalised development expenditure
is stated at cost less accumulated amortisation (see below) and impairment losses. Intangible assets not yet ready for use
are tested for impairment annually.
Residual values and useful lives are reviewed at each reporting date. In addition, intangible assets are subject to annual
impairment reviews or a review whenever there is an indication of impairment.
The following useful lives are applied:
Development costs
Reports
– five to ten years
– ten years
Amortisation for Development costs is included within ‘Administrative costs’ and amortisation of Reports is included in
‘Cost of sales’.
1.10 Income taxes
Current tax is the tax currently payable or receivable based on the taxable profit or loss for the year.
R&D expenditure credits are included as a credit in administrative expenses. Tax losses surrendered for R&D tax credit
refunds are included in tax charges/credits on the consolidated statement of comprehensive income.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally
provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the
related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences
associated with shares in subsidiaries is not provided if the reversal of these temporary differences can be controlled by
the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be
carried forward as well as other income tax credits are assessed for recognition as deferred tax assets.
Deferred tax assets and liabilities are calculated in full, with no discounting. Deferred tax assets are recognised to the
extent that it is probable that the underlying deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted at the end of the reporting period.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in profit or loss, except where
they relate to items that are charged or credited directly to equity (in which case, the related deferred tax is also charged
or credited directly to equity), or where they relate to items of other comprehensive income (in which case, they are
recognised in other comprehensive income).
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for the year ended 31 December 2020
1 Accounting policies cont.
1.11 Equity
Equity comprises the following:
• ‘Share capital’ represents the nominal value of equity shares
• ‘Share premium account’ represents the excess over nominal value of the fair value of consideration received for equity
shares, net of expenses of the share issue
• ‘Merger relief reserve’ represents the premium on shares issued to acquire ERCL and Exprodat Consulting Limited
• ‘Share option reserve’ represents the fair value of share options in accordance with IFRS 2 ‘Share-based Payment’
• ‘Retained earnings’ represents retained profits
1.12 Significant areas of judgement and estimation uncertainty
In applying the above accounting policies, management has made appropriate estimates in key areas, and the actual
outcomes may differ from those calculated.
Significant areas of judgement
The key sources of judgement at the end of the reporting period are as follows:
Control over H2 Green Limited (“H2 Green”)
As described more fully in note 12, in November 2020 the Company entered into an option to acquire the entire ordinary
share capital of H2 Green for initial consideration of £500,000 and contingent deferred consideration of up to £500,000,
exercisable at the option of the Company. The option runs for a 9 month period. Concurrently to this the Company also
entered into a loan commitment to provide up to £20,000 per month for up to 6 months (extendable by 3 months at
mutual agreement), covering all working capital spending of H2 Green for the period. Getech retain the rights to terminate
both agreements at any time, for any reason.
Control can take a number of forms and whilst this would usually include legal ownership of the shares, potential voting
rights and other rights to direct operations or finances also form part of this judgement. The two agreements when taken
together carry indicators of control for Getech, however on balance management have taken a view that this control is not
so pervasive that control has been obtained prior to the year end. In addition, H2 Green is a start up business created to
develop specific intellectual property, and so there is a secondary key judgement as to whether, at the date control may
have been obtained, this represents a business as defined in IFRS 3.
Recognition of revenue from multiple element contracts
Management uses judgement in determining the fair value of multiple element contracts in order to appropriately
recognise the revenue attributable to each element. The value of revenue recognised in the period is dependent on an
assessment of work to completion.
Capitalisation of development costs
The capitalisation of development expenditure is dependent on the costs meeting the recognition criteria in accordance
with IAS 38 ‘Intangible Assets’. In assessing the criteria, management makes judgements on the level of future economic
benefits of the asset flowing to the Company. Management is assisted in making these judgements through the
monitoring both of sales forecasts and of the level of future cost benefits arising.
Deferred taxation
Management judgement is required in determining provisions for deferred tax liabilities and assets. The process involves
estimating the actual current tax exposure together with assessing temporary differences resulting from the different
valuation of certain assets and liabilities in the financial statements and the tax returns. Management must assess the
probability that the deferred tax assets will be recovered from future taxable income.
1 Accounting policies cont.
1.12 Significant areas of judgement and estimation uncertainty cont.
Significant areas of estimation uncertainty
The key sources of estimation uncertainty at the end of the reporting period are as follows:
Multiple element contracts
Management uses estimates in determining the fair value of individual elements of the multiple element contracts in order
to appropriately recognise the revenue attributable to each element. A value is assigned to each element of the contract,
based on an estimate of the value of that element if it were sold individually; the ratio of these values is then used to
calculate a fair value for each element. The value of revenue recognised during the year is also dependent on estimates of
work to completion, as with long-term contracts. Were the proportion of work completed to total work to be performed to
differ by 5% from management’s estimates, the amount of revenue recognised would increase/decrease by £29,000.
Carrying amount of non-current assets
Where there is an indication of impairment, a review of the carrying values of non-current assets is undertaken as follows:
• Intangible non-current assets and investments are estimated on the basis of value in use
The value is calculated from the present value of future cash flows expected to be derived from the asset under review.
The key elements of estimation are the calculation of future cash flows. For intangible assets and investments, future cash
flows are forecast revenues from the associated asset or cash-generating unit. Further estimation is made in determining
an appropriate discount rate that reflects the specific risks associated with the asset or cash-generating unit. See note 5
for further details of assumptions made and sensitivity testing regarding Investments.
Share options
Share-based payments are valued using the Black Scholes valuation model. Estimates are made in expected volatility and
the risk-free rate. Where appropriate, management uses historical market data as a basis for estimating the fair value
of share options on grant. Increasing the risk-free rate by 2% and increasing the volatility window in the calculation of
volatility from 5 days to 30 days made no material difference to the valuation of share options issued during the year.
2 Employees
The employee benefit expenses during the year were as follows:
Short-term employee benefits
Government grants received
Social security costs
Pension costs
Share-based payment charge
The average number employed by the Company, including Executive Directors, was as follows:
Directors
Administration
Technical
2020
£’000
2,134
(80)
239
241
31
2,565
2019
£’000
2,661
—
285
120
59
3,125
2020
£’000
2019
£’000
3
11
39
53
3
11
37
51
86
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Financial StatementsGetech Group plc Annual Report and Accounts 2020Getech Group plc Annual Report and Accounts 2020Strategic ReportStrategic ReportStrategic ReportGovernanceFinancial Statements Notes to the Parent Company’s Financial Statements cont.
for the year ended 31 December 2020
3 Intangible assets
5 Investments
Cost
At 1 January 2020
Additions
At 31 December 2020
Amortisation and impairment
At 1 January 2020
Amortisation charge
At 31 December 2020
Net book value
At 31 December 2020
At 1 January 2020
Development
costs
£’000
Reports
£’000
Other
£’000
4,708
786
5,494
1,989
724
2,713
2,781
2,719
399
—
399
399
—
399
—
—
5
—
5
2
2
4
1
3
See note 9 of the Consolidated accounts for details of the company’s impairment reviews.
4 Property, plant and equipment
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
Depreciation on disposal
At 31 December 2020
Net book value
At 31 December 2020
At 1 January 2020
Freehold
property
£’000
Plant and
equipment
£’000
Right-of-use
assets
£’000
2,798
—
—
2,798
445
36
—
481
2,317
2,353
1,026
21
(212)
835
995
25
(212)
808
27
31
641
—
—
641
162
129
—
291
350
479
Total
£’000
5,112
786
5,898
2,390
726
3,116
2,782
2,722
Total
£’000
4,465
21
(212)
4,274
1,602
190
(212)
1,580
2,694
2,863
The net book value of freehold land in the Parent Company, not subject to depreciation, amounted to £1,000,000
(2019: £1,000,000).
The Company continues to explore the future sale of Kitson House. The requirements of IFRS 5 have been reviewed and
based on the expected timeframe for disposal it is considered appropriate to continue to classify the land and buildings
as a non-current asset rather than an asset held for sale.
Gross carrying value
At 1 January 2020
Additions
At 31 December 2020
Accumulated impairment
At 1 January 2019
Charge for the year
At 31 December 2020
Net book value
At 31 December 2020
At 1 January 2020
Subsidiary
undertakings
£’000
7,228
—
7,228
5,468
—
5,468
1,760
1,760
Total
£’000
7,228
—
7,228
5,468
—
5,468
1,760
1,760
The Parent Company owns 100% equity interest in Geophysical Exploration Technology Inc. (trading as Getech Inc.),
a company incorporated in the USA. The principal activity of Geophysical Exploration Technology Inc. is the marketing
of gravity and magnetic data, services and geological evaluations. The cost of US$10 capital stock was £1 and this has been
written off in an earlier period. The results of Getech Inc. are included in the consolidated figures for the year.
The Parent Company owns 100% of the Ordinary Share capital in ERCL Limited, a company incorporated in England and
Wales. The principal activity of ERCL is specialist international upstream oil and gas consultancy.
The Parent Company owns 100% of the Ordinary Share capital in Exprodat Consulting Limited, a company incorporated
in England and Wales. The principal activity of Exprodat Consulting Limited is providing Geospatial and information
management solutions to the energy and minerals industries.
The Parent Company holds an call option to acquire H2 Green Limited, a company incorporated in England and Wales.
This call option is recognised within trade and other receivables at the year end. The principal activity of H2 Green is
building and managing a network of Hydrogen Hubs across the UK.
On 31 March 2021 Getech exercised its option to acquire 100% of the share capital of H2 Green.
The investment in subsidiary undertakings has been tested for impairment and in the opinion of the Directors, the
aggregate value of the Company’s investment in subsidiary undertakings is not less than the amount included in the
balance sheet.
In extrapolating future cash flows have been modelled with a 2% rate of inflation on costs and industry growth annually.
Sales volumes over the five-year period are based on past performance and management’s expectations of a market
recovery staggered over that period, reflected by 5% year-on-year growth; no additional growth has been factored
in to the calculation of the assets terminal values.
The discount rate applied of 7.7% takes into consideration the industry-wide risks as well as those specific to the
Company’s operating segment.
Sensitivity analysis is carried out on all budgets, strategic plans and discount rates used in the calculations. The cash flow
model is sensitive to short-term market recovery.
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for the year ended 31 December 2020
6 Deferred tax
The movement on the deferred tax liability in the year is shown below:
Deferred tax liability
Liability at 1 January
Accelerated capital allowances
Intangible assets on capitalised development costs
Post employment benefits
Tax losses
Share-based payments
Liability at 31 December
Analysis of deferred tax balances by category
Share-based payments
Accelerated capital allowances
Tax losses
Post-employment benefits
Intangible assets on capitalised development costs
Net deferred tax (asset)/liability
2020
£’000
2019
£’000
95
11
(5)
(1)
(3)
(13)
84
(52)
99
(24)
(5)
66
84
25
2
72
—
—
(4)
95
(39)
88
(21)
(4)
71
95
The deferred tax asset in respect of the UK company is calculated at 19% (2019: 17%) in light of the future tax
rates announced.
Tax losses not recognised as a deferred tax asset amounted to £946,000 (2019: £nil).
7 Trade and other receivables
Trade receivables
Amounts owed by Group undertakings
Fair value through profit and loss derivative
Other receivables
Prepayments and accrued income
2020
£’000
382
285
10
38
479
1,194
2019
£’000
132
393
—
14
1,049
1,588
All amounts are short term. The carrying amounts of trade and other receivables are considered to be reasonable
approximations to fair value.
All of the Company’s trade receivables have been reviewed for expected credit loss. Any credit loss against receivables was
found to be immaterial. In addition, some of the unimpaired trade receivables are past due as at the reporting date. The
age of financial assets past due but not impaired is as follows:
Not more than three months
More than three months but not more than six months
More than six months but not more than one year
2020
£’000
232
—
150
382
2019
£’000
—
—
—
—
Expected credit losses – other receivables
Included within other receivables are gross receivables from H2 Green Limited (“H2 Green”), a company in which the Group
holds an option to acquire 100% of the ordinary share capital of. This option was exercised in March 2021, as described
in note 25. As part of this option agreement, the Group provided working capital facilities to H2 Green in the form of
debts advanced prior to the year end of £53,606 (2019: £nil), and maximum committed loans to be advanced in January
2021 of £20,000 (2019: £nil). In the event that the option is exercised all such loans are waived as part of the terms of the
acquisition of H2 Green.
The Directors, when performing the fair value exercise on the option, have determined that the Group has an implied
associated expected credit loss under IFRS 9 in respect of these loans and loan commitments of 95.2%, which is presented
as follows:
Other receivables
Loan commitment
Gross receivable/
commitment
£’000
Expected
credit loss
£’000
Net receivable/
commitment
£’000
54
—
(51)
(19)
3
(19)
The loan commitment is presented as an other payable in note 10.
Option to purchase
The option associated with the purchase of H2 Green and described above is designated as a fair value through profit
and loss derivative, as required by IFRS 9. The option was entered into in November 2020, alongside the loan commitment;
as at 31 December 2020 the underlying value of the option has been calculated to have increased by £9,524.
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for the year ended 31 December 2020
8 Cash and cash equivalents
11 Share capital and equity
Cash at bank and in hand
2020
£’000
1,119
2019
£’000
2,681
9 Borrowings
The bank loan carries a variable interest rate of 2.75% above bank base rate and is repayable in equal monthly
instalments. The loan is secured by land and buildings owned by the Parent Company, with a current carrying value of
£2,317,000 (2019: £2,353,000).
Borrowings – held at amortised cost
78
113
643
Within
one year
£’000
In one to
two years
£’000
In two to
five years
£’000
10 Trade and other payables
10.1 Trade and other payables due within one year
Trade payables
Amounts owed to Group undertakings
Social security and other taxes
Other payables
Lease liabilities
Accruals and deferred income
2020
£’000
486
1,032
65
38
148
178
1,947
Other payables includes £19,000 of expected credit losses on loan commitments entered into, as described further
in note 7.
10.2 Trade and other payables due after one year
Lease liabilities
Dilapidation provisions
2020
£’000
257
25
282
2020
£’000
834
2019
£’000
673
1,120
85
26
145
198
2,247
2019
£’000
396
25
421
The carrying amounts of trade and other payables are considered to be reasonable approximations to fair value. The
lease liabilities relate to long-term property leases.
Authorised
90,000,000 Ordinary Shares of 0.25p each (2019: 90,000,000)
Issued, called up and fully paid
37,563,615 Ordinary Shares of 0.25p each (2019: 37,562,415)
Shares issued, called up and fully paid
Balance brought forward
Balance carried forward
2020
£’000
225
94
2019
£’000
225
94
2020
Number
2019
Number
37,563,615
37,563,615
37,563,615
37,563,615
On 30 March 2021, shareholders approved the issue of 29,303,065 shares at a premium of 22p. These shares were
subsequently called up and fully paid. As at 1 April 2021, there were 66,866,680 shares in issue, called up and fully paid.
12 Related party transactions
The remuneration of the Directors of the Parent Company is set out in Note 6 to the consolidated financial statements.
During the period Getech made payments to Zinc Consultants Limited amounting to £11,000 (2019: £12,000) for
recruitment services, a company of which Chris Flavell is a director. All transactions were conducted under standard
commercial terms.
Getech loaned £3,000 to H2 Green Limited interest free, net of expected credit losses. The full amount was outstanding at
the year end. Getech and H2 Green Limited have a non-executive director in common.
The Directors consider that there is no ultimate controlling party.
13 Subsidiaries
Details of the Company’s subsidiaries as at 31 December 2020 are as follows:
Name of undertaking and country
of incorporation or residency
Nature of business
Class of
shareholding
% held
directly
% held
indirectly
Exprodat Consulting Limited1
ERCL Limited1
Geophysical Exploration
Technology Inc2
England & Wales
England & Wales
Consultancy
Consultancy
Ordinary
Ordinary
United States of America Sales & Marketing agency
Ordinary
100
100
100
—
—
—
Getech Group Plc has provided, under s479C Companies Act 2006, a guarantee which permits its wholly-owned subsidiary
ERCL Limited (company number 08743541, registered in England & Wales) to not obtain an audit of its individual financial
statements for the year ended 31 December 2020.
It has also provided, under s479C Companies Act 2006, a guarantee which permits its wholly-owned subsidiary Exprodat
Consulting Limited (company number 04371594, registered in England & Wales) to not obtain an audit of its individual
financial statements for the year ended 31 December 2020.
The registered offices of the subsidiaries listed above are as follows:
1 as the Company.
2 3000 Wilcrest Drive, Suite 155, Houston, TX 77042, USA.
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Notice of Annual General Meeting
Notice is given that the twenty-seventh Annual General Meeting of Getech Group plc (hereafter referred to as the
Company) will be held at DoubleTree – West End, 92 Southampton Row, London WC1B 4BH on 30 June 2021 at 12.00
noon to consider and, if thought fit, pass the resolutions below. Resolutions 10 and 11 will be proposed as special
resolutions; all other resolutions will be proposed as ordinary resolutions.
Ordinary Business
To consider and, if thought fit, pass resolutions 1 to 7 as ordinary resolutions.
1. To receive the Report of the Directors, the Strategic Report and the audited accounts of the Company for the year
ended 31 December 2020.
Special Business cont.
For the purposes of this resolution 8, ‘Rights Issue’ means an offer or invitation to: i) holders of Ordinary Shares in
proportion (as nearly as may be practicable) to the respective numbers of Ordinary Shares held by them on the
record date for such allotment, and ii) holders of other classes of equity securities if this is required by the rights of
such securities (if any) or, if the Directors of the Company consider necessary, as permitted by the rights of those
securities, to subscribe for further securities, but subject in both cases to such exclusions or other arrangements
as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements,
treasury shares, record dates or legal, regulatory or practical difficulties that may arise under the laws of, or the
requirements of, any recognised regulatory body or any stock exchange in any territory or any other matter
whatever.
2. To re-elect Stuart Paton, in accordance with article 35 of the Company’s Articles of Association, who offers himself for
9. To authorise the Company to send or supply documents or information to members by making them available on a
re-election as a Director of the Company.
website or by electronic means.
3. To re-elect Jonathan Copus, in accordance with article 35 of the Company’s Articles of Association, who offers himself
for re-election as a Director of the Company.
4. To re-appoint Richard Bennett, who was appointed since the last Annual General Meeting, in accordance with article
30 of the Company’s Articles of Association, as a Director of the Company.
5. To re-appoint Michael Covington, who was appointed since the last Annual General Meeting, in accordance with article
30 of the Company’s Articles of Association, as a Director of the Company.
6. To re-appoint Grant Thornton UK LLP as auditor of the Company to hold office until the conclusion of the next general
meeting at which accounts are laid before the Company.
7. To authorise the Directors to determine the auditor’s remuneration.
Special Business
To consider and, if thought fit, pass the following resolutions which in the case of resolutions 8 and 9 will be proposed as
ordinary resolutions and in the case of resolutions 10 and 11 will be proposed as special resolutions.
In the subsequent resolutions, the following words and expressions shall have the following meanings:
‘Act’
‘Latest Practicable Date’
‘Ordinary Shares’
‘Rights’
– the Companies Act 2006 (as amended)
– close of business on 3 June 2021
– Ordinary Shares of 0.25p each in the capital of the Company
– rights to subscribe for or to convert any security into shares in the Company
8. To authorise the Board generally and unconditionally pursuant to Section 551 of the Act to exercise all powers of the
Company to allot shares in the Company and to grant Rights:
8.1. up to an aggregate nominal amount of £55,165 (being approximately one-third of the issued share capital of the
Company as at the Latest Practicable Date); and
8.2. comprising equity securities (within the meaning of Section 560 of the Act) up to an aggregate nominal amount
of £110,330 (after deducting from such amount any shares allotted under the authority conferred by virtue of
resolution 8.1) in connection with or pursuant to a Rights Issue (as defined below), provided that:
a) such authorities shall expire on the earlier of either midnight on 30 September 2022 or the date of the next
Annual General Meeting of the Company after the passing of this resolution unless varied, revoked or renewed
by the Company in a general meeting (save that the Board may, before the expiry of the authorities granted by
this resolution, make a further offer or agreement that would or might require shares to be allotted or Rights
to be granted after such expiry and the Board may allot shares and grant Rights in pursuance of such an offer
or agreement as if the authorities conferred by this resolution had not expired); and
b) the authorities granted by this resolution are in substitution for all previous authorities granted to the Directors
to allot shares and grant Rights which (to the extent that they remain in force and unexercised) are revoked but
without prejudice to any allotment or grant of Rights made or entered into prior to the date of this resolution 8.
Special Resolutions
10. To empower the Board (subject to the passing of resolution 8) pursuant to Sections 570 and 573 of the Act to allot
equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred upon them
by resolution 8 or where the allotment constitutes an allotment of equity securities by virtue of Section 560(3) of the
Act as if Section 561(1) and sub-sections (1)–(6) of Section 562 of the Act did not apply to any such allotment, provided
that this power shall be limited to:
10.1. the allotment of equity securities in connection with or pursuant to a Rights Issue (as defined in resolution 8); and
10.2. the allotment (otherwise than pursuant to sub-paragraph 10.1 above) of equity securities up to an aggregate
nominal value of £25,075 (being approximately 15% of the issued share capital of the Company as at the Latest
Practicable Date),
and provided that the authorities given by resolution 10 shall expire on the earlier of either midnight on 30 September
2022 or the date of the next Annual General Meeting after the passing of this resolution, unless renewed or extended
prior to such expiry, save that the Company may, before the expiry of any power contained in this resolution, make a
further offer or agreement that would or might require equity securities to be allotted after such expiry and the Board
may allot equity securities in pursuance of such offer or agreement as if the powers conferred by this resolution had
not expired.
11. To authorise the Company generally and unconditionally for the purpose of Section 701 of the Act to make one or
more market purchases (within the meaning of Section 693(4) of the Act) of Ordinary Shares provided that:
11.1. the maximum aggregate number of Ordinary Shares authorised by this resolution to be purchased is 6,686,668
(representing 10% of the Company’s issued share capital as at the Latest Practicable Date);
11.2. the minimum price that may be paid for such Ordinary Shares is 0.25p per share (exclusive of expenses);
11.3. the maximum price (exclusive of expenses) that may be paid for an Ordinary Share is the higher of a) 5%
above the average of the middle market quotations for an Ordinary Share as derived from the London Stock
Exchange Daily Official List for the 5 business days immediately preceding the day on which the Ordinary Share
is purchased and b) the higher of the price quoted for i) the last independent trade of or ii) the highest current
independent bid for any number of Ordinary Shares on the trading venue where the purchase is carried out; and
11.4. unless previously revoked or varied, the authority conferred by this resolution shall expire on the earlier of
either midnight on 30 September 2022 or the date of the next Annual General Meeting of the Company after
the passing of this resolution, save that the Company may, before such expiry, make a contract or contracts to
purchase Ordinary Shares after such expiry as if the power conferred by this resolution had not expired.
By order of the Board
Andrew Darbyshire
Company Secretary
4 June 2021
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Notice of Annual General Meeting cont.
Notes
The following notes explain your general rights as a shareholder to vote at this meeting (the Meeting or AGM) or to
appoint someone else to vote on your behalf.
1. IMPORTANT NOTICE REGARDING THE COVID-19 PANDEMIC
The Company’s clear preference with regard to the AGM would be for all shareholders to be able to attend in person
if they so wish, particular having regard to the constraints faced in holding last year’s annual general meeting and the
general meeting held on 30 March 2021. However, as at the date of this Notice, and in light of the COVID-19 pandemic,
the ability of the Company to hold an AGM which shareholders can attend in person remains subject to the restrictions
set out in and pursuant to The Health Protection (Coronavirus, Restrictions) (Steps) (England) Regulations 2021 (the
COVID Roadmap Regulations). In particular:
• Whilst shareholders are not prohibited from attending the AGM, there will be a limit on the number of shareholders
who can legally attend. We strongly recommend that shareholders do not attend the AGM, and instead, submit
their vote by appointing the Chairman of the AGM as their proxy.
• If you do intend to attend the AGM in person, you must email: info@getech.com in advance to confirm your
attendance. You will be required to provide various contact details for the purposes of NHS Track and Trace.
• Only registered shareholders (or their duly appointed proxies) are permitted to attend the AGM. Guests will not be
admitted.
• Attendees will be required to follow social distancing guidelines and face coverings must be worn.
You must not attend the AGM if you have any symptoms of COVID-19, if you have had recent contact with anyone who
has tested positive or is symptomatic, or if you have been told to self-isolate by NHS Test and Trace.
The COVID Roadmap Regulations are not due to expire until the end of 30th June 2021. The UK Government has
indicated that it hopes to be in a position to remove all legal limits on social contact by 21st June 2021; however, it is
unclear whether it will do so, or whether the COVID Roadmap Regulations will be extended, amended or replaced.
On the basis that attendance at the AGM will be limited and shareholders could be prohibited from attending
the Meeting in person, shareholders wishing to vote on the resolutions should submit their vote by appointing
the Chairman of the AGM as their proxy. Details of how shareholders can vote by proxy are set out in notes 3 – 11
below.
Shareholders who would have raised questions at the AGM are invited to instead submit their questions by email
to: info@getech.com in advance of the AGM. We will endeavour to promptly provide answers to questions from
shareholders which would ordinarily have been raised and answered at the AGM.
Shareholders should note that the current situation is still evolving and that further announcements may be required.
In particular, shareholders should note that further legislation may come into force before the AGM which will have
an impact on it, including legislation prohibiting shareholders from attending the Meeting in person, in which case,
any shareholder attempting to attend the meeting would be refused entry. We would strongly recommend that
shareholders do not attend the AGM due to unpredictable circumstances, and instead, submit their vote
by appointing the Chairman of the AGM as their proxy. If shareholders do plan to attend, they are strongly
encouraged to check the Company’s website regularly for updates.
2. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the
number of votes they may cast), shareholders must be registered in the Register of Members of the Company at close
of business on 28 June 2021. Changes to the Register of Members after the relevant deadline shall be disregarded in
determining the rights of any person to attend and vote at the Meeting.
3. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to attend and to
speak and vote on their behalf at the Meeting. Whilst the current COVID Roadmap Regulations remain in force, only
shareholders (or their duly appointed proxies) will be permitted to attend the AGM, subject to the pre-registration
and the other restrictions set out in detail in note 1 above. Therefore, we strongly recommend that shareholders
appoint the Chairman of the meeting as their proxy in order to ensure their vote can be counted. Subject to
the COVID Roadmap Regulations, delivery of an appointment of a proxy will not preclude a shareholder from attending
and voting in person if he/she wishes to do so.
4. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which
the names of the joint holders appear in the Company’s Register of Members in respect of the joint holding (the first
named being the most senior).
Notes cont.
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for
or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her
discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is
put before the Meeting.
6. You can vote:
• by logging on to www.signalshares.com and following the instructions;
• by requesting a hard copy form of proxy directly from the registrars, Link Group (the Registrar), on Tel: 0371 664
0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday excluding
public holidays in England and Wales; or
• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the
procedures set out below.
In order for a proxy appointment to be valid a completed form of proxy must be received by the Registrar at 10th
Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL by 12 noon on 28 June 2021 (together with, in the case of a
hard copy form of proxy, the original or a certified copy of any power of attorney or other authority pursuant to which
such form of proxy has been signed).
Shareholders are strongly encouraged to vote, in the case of CREST members, by utilising the CREST electronic proxy
appointment service, and otherwise, by logging on to www.signalshares.com.
7. If you return more than one proxy appointment, either by paper or electronic communication, the appointment
received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to
read the terms and conditions of use carefully. Electronic communication facilities are open to all shareholders and
those who use them will not be disadvantaged.
8. The return of a completed form of proxy, electronic filing or any CREST Proxy Instruction (as described in note 11
below) will not prevent a shareholder from attending the Meeting and voting in person if he/she wishes to do so and if
such attendance is permitted by the COVID Roadmap Regulations or any successor legislation.
9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may
do so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual
(available from www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members,
and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting
service provider(s), who will be able to take the appropriate action on their behalf.
10. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message
(a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required for such instructions, as described in the CREST Manual. The
message must be transmitted so as to be received by the issuer’s agent (ID RA10) by 12 noon on 28 June 2021. For this
purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message
by the CREST application host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should
be communicated to the appointee through other means.
11. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear
UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system
timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility
of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored
member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by
any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system
providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the
CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
12. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its
behalf all of its powers as a shareholder provided that no more than one corporate representative exercises powers in
relation to the same shares.
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Notice of Annual General Meeting cont.
Notes cont.
13. As at 3 June 2021 (being the latest practicable business day prior to the publication of this Notice), the Company’s
ordinary issued share capital consists of 66,866,680 Ordinary Shares, carrying one vote each. Therefore, the total
voting rights in the Company as at 3 June 2021 are 66,866,680.
14. Under Section 527 of the Companies Act 2006, shareholders meeting the threshold requirements set out in that
section have the right to require the Company to publish on a website a statement setting out any matter relating
to: (i) the audit of the Company’s financial statements (including the Auditor’s Report and the conduct of the audit)
that are to be laid before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to
hold office since the previous meeting at which annual financial statements and reports were laid in accordance with
Section 437 of the Companies Act 2006 (in each case) that the shareholders propose to raise at the relevant meeting.
The Company may not require the shareholders requesting any such website publication to pay its expenses in
complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement
on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditor
not later than the time when it makes the statement available on the website. The business which may be dealt with at
the Meeting for the relevant financial year includes any statement that the Company has been required under Section
527 of the Companies Act 2006 to publish on a website.
15. Any shareholder attending the Meeting (if permitted by the COVID Roadmap Regulations) has the right to ask
questions. In light of the ongoing COVID-19 pandemic, in order to keep the number of persons speaking at the AGM
to a minimum, we would invite shareholders to submit any questions by email to: info@getech.com in advance of the
AGM. The Company must cause to be answered any such question relating to the business being dealt with at the
Meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the Meeting
or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of
an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the Meeting that
the question be answered.
16. Copies of the Directors’ letters of appointment or service contracts are available for inspection during normal business
hours at the registered office of the Company on any business day from the date of this Notice until the time of the
Meeting and may also be inspected at the Meeting venue, as specified in this Notice, from 11.45 am on the day of the
Meeting until the conclusion of the Meeting. If you would like to request an electronic copy of these documents,
please email: info@getech.com.
17. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in
either this Notice or any related documents (including the form of proxy) to communicate with the Company for any
purposes other than those expressly stated.
18. All references to times in this Notice are to UK time.
A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the
Company’s website at www.getech.com.
Explanation of Resolutions
Resolution number 1 – accounts
The Directors of the Company are obliged to present to shareholders the report of the Directors and the accounts for
the Company for the year ended 31 December 2020. That report and those accounts, and the report of the Company’s
auditor on those accounts, are set out on pages 32 to 93 of this document.
Resolution numbers 2,3,4 and 5 – re-election and re-appointment of Directors
At each general meeting, one-third of the Directors for the time being (other than those appointed since the latest Annual
General Meeting) are required to retire. If the number of relevant Directors is not a multiple of three, the number nearest
to but not less than one-third of the Directors should be obliged to retire. Directors due to retire by rotation are those
who have been longest in office since their last re-election and as between persons who become or were last re-elected
on the same day, those due to retire shall (unless they otherwise agree among themselves) be determined by lot. A
retiring Director is eligible for re-election. Stuart Paton and Jonathan Copus retire by rotation and are offering themselves
for re-election. The Directors have agreed to appoint Richard Bennett and Michael Covington to the board with effect
from 28 January 2021 and 13 May 2021 respectively. In accordance with the articles of association they therefore offer
themselves for re-appointment by the shareholders at the general meeting.
Resolution number 6 – re-appointment of auditor and approving its remuneration
At each general meeting at which accounts are laid, the Company is required to appoint an auditor to hold office until the
next general meeting. The present auditor, Grant Thornton UK LLP, is willing to continue in office for a further year, and
this resolution proposes its re-appointment.
Resolution number 7 – authority to determine auditor’s remuneration
In accordance with standard practice, this resolution will authorise the Directors to determine the level of the auditor’s
remuneration.
Resolution number 8 – authority to allot shares
The resolution grants the Directors authority to allot relevant securities up to an aggregate nominal amount of £55,165,
being approximately one-third of the Company’s Ordinary Share capital in issue at 3 June 2021.
In line with guidance issued by the Association of British Insurers, resolution 8 also grants the Directors of the Company
authority to allot unissued share capital in connection with a Rights Issue in favour of ordinary shareholders up to an
aggregate nominal amount of £110,330 (representing approximately two-thirds of the Company’s Ordinary Share capital
in issue at 3 June 2021) as reduced by the nominal amount of any shares issued under resolution 8.1.
It is not the Directors’ current intention to allot relevant securities pursuant to this resolution. This authority replaces
the existing authority to allot relevant securities but does not affect the ability to allot shares under the Company’s share
option schemes.
Resolution number 9 – electronic communications
This resolution authorises the Company to send or supply documents or information to members by making them
available on a website or by electronic means.
Resolution number 10 – disapplication of statutory pre-emption rights
This resolution disapplies the statutory pre-emption rights that would otherwise apply on an issue of shares for cash
and is limited to allotments in connection with Rights Issues or other pre-emptive offers and, otherwise, authorises the
Directors to allot securities on a non-pre-emptive basis for cash up to a nominal value of £25,075, being approximately
of the Company’s Ordinary Share capital in issue at 3 June 2021. This replaces the existing authority to disapply pre-
emption rights and expires at the conclusion of the next Annual General Meeting of the Company after the passing of this
resolution or 15 months after the date of the Annual General Meeting, whichever is the earlier.
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Advisors
Resolution number 11 – purchase of own shares
In certain circumstances, it may be advantageous for the Company to purchase its own shares, and this resolution seeks
authority to do this. The Directors would only consider making purchases if they believed that such purchases would be in
the best interests of shareholders generally, having regard to the effect on earnings per share and the Company’s overall
financial position.
The resolution gives general authority for the Company to make purchases of up to 6,686,668 Ordinary Shares (being 10%
of the Company’s Ordinary Share capital in issue at 3 June 2021) at a minimum price of 0.25p and a maximum price being
the higher of a) 105% of the average of the middle market quotations for Ordinary Shares for the 5 business days prior to
the purchase or b) the higher of the price of the last independent trade and the highest current independent bid on the
trading venue where the purchase is carried out.
Companies are permitted to retain any of their own shares that they have purchased as treasury stock with a view to
possible re-issue at a future date, rather than cancelling them. The Company will consider holding any of its own shares
that it purchases pursuant to the authority conferred by this resolution as treasury stock. This would give the Company
the ability to re-issue treasury shares quickly and cost effectively and would provide the Company with additional flexibility
in the management of its capital base.
Registered office for the Parent Company
Kitson House
Elmete Hall
Elmete Lane
Leeds
LS8 2LJ
Nominated advisor and broker
Cenkos Securities plc
6 7 8 Tokenhouse Yard
London
EC2R 7AS
Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside
Whitehall Road
Leeds
LS1 4BN
Solicitors
Womble Bond Dickinson
1 Whitehall Riverside
Leeds
LS1 4BN
Principal bankers
National Westminster Bank Plc
PO Box 183
8 Park Row
Leeds
LS1 1QT
Registrars
Link Asset Services
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0GA
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Notes
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Design and Production
www.carrkamasa.co.uk
Getech Group plc Annual Report and Accounts 2020
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Getech Group plc
Kitson House
Elmete Hall
Elmete Lane
Leeds
LS8 2LJ
UK
+44 (0)113 322 2200
info@getech.com
www.getech.com