Haydale
Graphene
Industries Plc
Creating
Material
Change
Annual Report
And Accounts
For the year ended
30 June 2024
Company Registration No:
07228939
Contents
About Haydale
1
STRATEGIC REPORT
Chair’s Statement
2
Strategic Report
3
GOVERNANCE
Board of Directors
10
Directors’ Report
11
Chair’s Corporate Governance Statement
14
Directors’ Remuneration Report
21
Audit Committee Report
23
FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of
Haydale Graphene Industries Plc
24
Consolidated Statements
Consolidated Statement of Comprehensive Income
29
Consolidated Statement of Financial Position
30
Consolidated Statement of Changes In Equity
31
Consolidated Statement of Cash Flows
32
Notes to the Consolidated Financial Statements
33
Parent Company Statements
Parent Company Report
62
SHAREHOLDER INFORMATION
Corporate Information
70
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
1
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
STRATEGIC REPORT
About Haydale
Haydale is a global technology solutions company comprising two complementary advanced material businesses, both leaders in
their respective fields:
•
Plasma functionalisation of nanomaterials for third party applications and manufacture of plasma functionalised graphene
enhanced products, all primarily based in the UK; and
•
Manufacture and sale of Silicon Carbide cutting tools and powders, based in the US.
Nanomaterial plasma functionalisation
Graphene has been feted for its superqualities including electrical and heat conductivity as well as its inherent mechanical strength
that if properly harnessed can make a significant difference to host materials and the products containing them. The issue is that
graphene and many other nanomaterials (such as boron nitride and carbon nanotubes) are inert and therefore do not easily disperse
within the medium to which they are added, be that water, epoxy resin, oil or solvent. The challenge has therefore always been how
to change the surface chemistry of graphene and other nanomaterials so they will properly integrate and thereby bring these
superqualities to the end product (a process known as “functionalisation”).
Haydale has a unique, patented HDPlas® process that treats nanomaterial powders by using plasma and bleeding in the required
chemistry using a precursor such as gas to achieve the necessary end result. This is a highly tunable, environmentally clean means
of functionalisation suitable for most applications and grades of nanomaterial that does not require the use of acids or surfactants
used by other chemical functionalisation processes. Haydale does not produce graphene or boron nitride, but has characterised over
250 types of third party graphenes in order to understand which ones are appropriate for different applications. Haydale acts as an
intermediary to both nanomaterial producers and end product manufacturers to functionalise their products to achieve the results
sought. The functionalised nanomaterial powders can then be incorporated by Haydale into inks, masterbatches, pre-pregs before
being shipped to the customer and being used directly in their existing production line facilities. Haydale is developing its own range
of products concentrating on the heating and sensor markets.
SiC whisker & advanced cutting tools
Silicon Carbide (“SiC”) is one of the hardest known substances after diamond. Haydale has the largest installed capacity in the world
for manufacturing silicon carbide whisker fibres and microfibres at its US facility in South Carolina. SiC whisker fibres, due to their
shape, can give lateral strength to products and thereby bring fracture resistance, increased hardness and toughness, and heat and
wear resistance to cutting tools used in the aerospace, automotive and other industries which use difficult to cut high grade steels
and other hard metals. In addition to its own SiC tooling products, Haydale also supplies third party Cubic Boron Nitride (“CBN”),
Carbide and Cermet tooling, providing a wide range of advanced cutting tools to its customers.
STRATEGIC REPORT
Chair’s Statement
Introduction
I am pleased to present Haydale Graphene Industries Plc’s
(“Haydale”, the “Group” or the “Company”) full year audited
results to 30 June 2024 (“FY24”).
During the year the Company continued to focus its activities
within its two key product areas, namely functionalised
nano-materials and silicon carbide advanced tooling. Within
each, focus has been absolute in terms of pursuit of projects
capable of yielding commercial scale revenues for Haydale in the
shortest possible timeframe. In the letter to shareholders at the
time of the recent fundraising, we explained that because
progress had been slower than anticipated, the reconstituted
board would undertake a full and rigorous review of all aspects
of the business with a view to reprioritising those areas offering
up near term profit enhancement and positive cash generation,
whilst continuing to pursue the most commercially attractive
longer term strategic options. This review is now underway.
Summary financials
Commercial revenue for FY24 of £4.82 million (FY23:
£4.30 million) was up by 12% on prior year with the UK
nanomaterials business recording a 75% growth in sales. Gross
profit margin was slightly up due to sales mix at 58% (FY23: 56%)
resulting in a gross profit of £2.81 million (FY23: £2.39 million).
Other operating income for the year of £0.38 million (FY23:
£0.38 million) was in line with last year. Adjusted administrative
expenses increased by £0.09 million (1.4%) to £6.35 million
(FY23: £6.26 million) resulting in an adjusted operating loss of
£3.16 million (FY23: £3.49 million). Total administrative
expenses were £9.15 million (FY23: £8.93 million) as a result of
the above plus a number of additional non-trading items,
namely share-based payments charges of £0.03 million, a
depreciation and amortisation charge of £1.51 million and an
impairment of US intangible assets of £1.23m (as described in
note 10). The loss for the year was £6.11 million (FY23:
£6.17 million).
Operational Highlights
The UK operation saw the business partnerships fostered in FY23
develop positively, with new contracts secured with a number
of high-profile blue-chip customers looking to use our plasma
functionalisation service and technology to improve their own
materials and end application performance. In addition, progress
was made on our own heater ink and thermal transfer fluid
products with an expectation that, in conjunction with our
partners, some of these may be market ready early next financial
year if not before across a number of end applications.
The US operations have seen a period of retrenchment whilst
infrastructure supporting the move up the value chain from SiC
powders and into cutting tool manufacture and distribution has
continued to be rolled out. The sales function has been
strengthened which has materially increased the pipeline of
opportunities albeit the sales cycle is proving to be longer than
anticipated. Crucially, the US has signed a number of key
agreements that significantly extend both the tool range it can
offer to its customers as well as increase its geographical reach
into Europe and Asia.
Staff
I would like to thank our staff for their outstanding support and
commitment, as their efforts are key to our achieving our aims.
I would also like to thank the executive management team who
continue to drive the transition towards a sustainable
commercial operation.
Funding
On 14 November 2024, the Company completed a fundraising
of £3.1million (gross) and I would like to welcome our new
shareholders and to thank our existing shareholders for their
continued support.
Outlook
The Company recognises that progress has not proceeded with
sufficient pace and therefore intends to use the recent fundraise
as a catalyst for change. As noted above and in line with our
commitment in the fundraise circular, the reconstituted Board
has embarked on a thorough review (the “Review”), including cost
restructuring and commercial focus. Our priority is to bring
forwards the Group’s break-even point and cash generation, and
we will be reporting progress to the market in due course.
Gareth Kaminski-Cook
Chair
29 November 2024
2
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
3
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
The directors present their Strategic Report for the year ended 30 June 2024.
PRINCIPAL ACTIVITIES
Haydale has three principal activities:
•
The plasma functionalisation of nanomaterials for third party applications through our patented HDPlas® process;
•
The development, manufacture and sale of products using plasma functionalised nanomaterials; and
•
The manufacture and sale of proprietary silicon carbide (“SiC”) whisker powders and high wear resistant cutting tools for use
primarily in the aerospace and automotive industries.
These activities are explained in more detail on page 1 and pages 4 to 6 below. The nanomaterial business activities are based in the
UK. The SiC and advanced tooling activities are based in North America with a sales reach into Europe and the far East.
As noted in the Chair’s statement and following the recent fundraise, the Company has announced a review of all aspects of the
business with the aim of accelerating the business achieving a positive EBITDA position. This may result in a number of activities
that have been historically pursued and reported on below being reprioritised.
At 30 June 2024, the Group had the following operational activities across its five facilities.
Haydale subsidiary Location Principal activities
Haydale Limited
Ammanford, Wales
Specialist plasma functionalisation and
manufacturing facility producing inks, resins,
fluids and masterbatches to be used in
composites and polymers for direct sales to
customers and for transfer to other Group
sites.
Haydale Composite Solutions Limited (“HCS”)
Loughborough, England
Sales of masterbatch and pre-preg composites,
elastomers, other nanomaterials and the
provision of advanced consulting.
Haydale Technologies (Korea) Limited (“HTK”)
Seoul, South Korea
Dedicated
sales
office
servicing
the
fast-moving South Korean and other APAC
markets.
Haydale Technologies (Thailand)
Bangkok, Thailand
Sales office servicing the APAC region with
Company Limited (“HTT”)
plasma functionalisation and R&D capability.
Haydale Technologies, Inc. and its
Greer, SC, USA
SiC and cutting tool manufacturing facility
wholly owned subsidiary Haydale
with sales office serving the North American,
Ceramic Technologies LLC (“HCT”)
European and East Asian markets.
BUSINESS MODEL
The Group’s business model is based on the following revenue strands:
•
Sale of plasma functionalised material in powder, ink, masterbatch, or pre-preg format;
•
Sale of own and third-party products which align with our principal activities or customer base;
•
Lease of bespoke plasma reactors with appropriate licencing for use of the patented HDPlas® functionalisation process for
specific applications; and
•
Strategic partnerships with industry players through whom products and plasma functionalised material can be taken to market;
•
Consultancy focusing on potential enhancements that our product range and engineering knowledge bring to customer
applications, with intent of securing longer term supply agreements; and
•
Sale of SiC microfibres and whiskers, SiC tooling, ceramic blends and ceramic blanks to the aerospace, automotive and steel mill
sectors and the coatings industry.
Strategic Report
STRATEGIC REPORT
4
COMMERCIAL OVERVIEW
FY24 has seen the UK operations, primarily focused on
nanomaterials, increase its revenues by 75% on the back of a
growing customer portfolio interested in its nanomaterial
functionalisation services with material progress also made in
the commercialisation of products based particularly on the
Group’s heating and cooling related IP. Of particular note, the
Group is now engaged in collaborations with an increasing
number of large multinational entities, all of which have the
potential to lead to significant longer-term revenues. US
operations, focused on advanced cutting tools, were strongly
underpinned by SiC powder sales whilst the roll-out of the
fundamental infrastructure to deliver the planned growth in SiC
tooling manufacture and distribution continued apace, albeit
the forecast growth in tooling sales has taken longer to manifest
than expected. Across the Group, turnover increased by 12%: the
third year in a row for growth whilst maintaining a gross margin
in excess of 50%.
NANOMATERIALS
The UK operations continued to make significant progress over
the year in progressing commercialisation of its proprietary
technology resulting in a 75% increase in UK revenues overall,
driven by a 190% growth in UK service type revenues. A number
of new commercial programmes have been signed with larger,
blue chip profile customers over the last half of FY24 and first
quarter of FY25 for functionalisation services that have the
potential to lead on to significant volume sales subject to
product enhancement targets being achieved.
Patented Plasma Functionalisation Technology
At the core of all our product offerings and underpinning the
Group’s future nanomaterial prospects, is Haydale’s patented
HDPlas® plasma functionalisation process which improves the
dispersibility of many nanomaterials by changing their surface
chemistry using a highly tuneable, repeatable process. Plasma
functionalisation allows Haydale to tailor advanced materials to
enhance the properties of its customers’ products to achieve pre-
agreed mechanical or conductive performance criteria. The
process is cost effective and environmentally friendly.
Specifically, we have the expertise to:
•
functionalise nanomaterials that are blended with resins,
composites and fluids to deliver enhanced electrical,
mechanical (strength) and thermal performance;
•
formulate proprietary nanomaterial-based inks for the print
and sensor markets, including biomedical, RFID and piezo
resistive inks and sensors; and
•
compound functionalised nanomaterials into a range of
elastomers to enable customers to use nanomaterials in
elastomeric products.
The Group safeguards its nanomaterials business across its sites
and the territories in which it operates through the use of
patents and trade secret protocols which protect its intellectual
property. It holds licences where that intellectual property is for
operational reasons with a third party. Haydale currently has a
portfolio of patents that are variously recognised in the following
territories – US, UK, Europe, China, Japan and Australia. Haydale
works closely with its patent advisors, Mewburn Ellis LLP, and
maintains a rolling programme of patent applications.
Plasma Functionalisation as a Service
We continue to secure commercial contracts with third party
companies to plasma functionalise nanomaterial powders
sourced by ourselves or provided by the customer which can
then be delivered as powders, inks, masterbatches or pre-preg
formats to meet the client’s production requirements. These
engagements normally start out as paid for consultancy projects
where we are given performance targets that the functionalised
material needs to meet and we work with the customer in an
iterative fashion to fine-tune the various production related
levers until the output targets are met or exceeded. The aim is
to secure long term supply agreements for the toll
manufacturing of the final plasma functionalised products, and
for the larger customers, to lease reactors that can be deployed
lineside and receive a throughput based royalty.
Customers include graphene manufacturers, who through the
HDPlas® process, are able, post production, to extend the range
of applications for which their product is suitable. We also have
customers who have an end use materials improvement focus
and require Haydale to source the best nanomaterial for the
application. One major development during FY24 is the higher
profile and larger size of customers we are now seeing approach
us for this service as the use of graphene is filtering into the
market at increasing pace (one study estimates that the
graphene market is set to grow from £570m in FY24 to £5.2bn
by 2032, a CAGR of 31.8%). These customers interactions mean
we are indirectly involved in some of the largest growing sectors
of the nanomaterial market including batteries, concrete,
composites and tyres. Examples include:
•
Saint Gobain, the French industrial conglomerate, have
worked with us since April 2023 to develop their boron
nitride powders to be competitive in new markets and in
August 2024 launched a new product to the market
(Adaptiflex™ Boron Nitride Powders) which is enhanced
using our plasma functionalisation process which we toll
manufacture to their order.
•
Petronas, the petrochemical giant, continues to work with
us on a number of parallel projects to primarily help them
take their own graphene product, refined from a byproduct
of their main petrochemical business, and functionalise it
so it potentially can be recycled into other applications.
•
Vittoria are a leading performance bicycle tyre
manufacturer with whom we have developed a graphene
enhanced elastomer used in their premium tyres.
Strategic Report (continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
5
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Plasma Functionalised Products Sales:
Heating
Geopolitical events and the UK Government’s net zero strategy
continue to bring an impetus for solutions in the energy efficient
heating space, where Haydale has been active for a number of
years initially with its range of off-the-shelf flexible
graphene-based functional heater inks that can be printed
roll-to-roll and onto a wide variety of substrates.
Using those heater inks, and in partnership with a number of
leading firms, we have made significant strides in the
development of a number of prototype low power heating
applications that can operate from a battery and some of which
are in the final stages of development, the main ones being:
•
Underfloor heating. The prototype graphene-based heater
sheets can now be printed roll to roll and then cut to size,
so they can easily be rolled out under the flooring surface
and connected to a DC supply. We were granted a UK
patent for this innovation during the year. We are working
with a number of partners to commercialise the ink and
underfloor heating product, including Staircraft, part of
Travis Perkins Plc, that fit flooring for many of the major UK
house builders. Separately, we have concluded an
agreement to trial our own underfloor heating solution via
a large house builder in the Channel Islands.
•
Portable hot water & portable radiators: Having taken both
the battery powered portable hot water unit and radiator
to prototype stage, Cadent have now engaged and are
paying us for the next phase to commercialise the
prototypes so they can be deployed to their estimated
4 million vulnerable customers, to whom they have a legal
requirement to support in off gas situations. With the
freedom to take these products to the other energy utilities
and into parallel leisure markets, we believe this represents
a significant growth opportunity.
In FY23 we noted that we had developed our own graphene
based thermal transfer fluid for use in heating and cooling
systems that gives a much enhanced performance compared
with existing fluids on the market, for which we have since been
granted a UK patent. Work performed with Hydratech, a
specialist heating fluid engineering firm, to finesse the
formulation to work with the necessary additives is almost
complete and we have now started the external validation
process to verify the product meets applicable industry
standards before being deployed, initially into Hydratech’s
customer base.
Sensors
We have a range of off-the-shelf functional inks appropriate for
use in biomedical and other sensor applications that can
potentially detect a wide range of medical conditions. These inks
have a high sensitivity and are therefore able to replace lower
grade carbon inks and potentially metallic based inks in existing
sensor products. Our work with a leader in the glucose
monitoring and diabetes management sector, whilst testing
successfully, has had a hiatus due to internal reorganisations
within the customer. We have however sold some product in the
market and have other potential routes for this product,
including China. We continue to work on other sensors including
chlorine.
Composites
Our Thermal Tooling product is currently being tested at several
UK OEMs in the Automotive and Aerospace sectors. We are also
engaged with a major international defence company on
graphene enhanced composite materials.
Focused research and development
We continue to work on customer-paid and grant-funded
projects to develop plasma functionalised nanomaterial
solutions where there is a clear problem statement and we
believe there to be a volume demand at the end of the process
for any product created. We are selective and, before proceeding,
require a clear business case that results in a requirement for
plasma functionalised material for third party applications or
intellectual property that vests in Haydale. Grant funded work
has resulted in new patents being granted in the UK for the
graphene based underfloor heating and thermal transfer fluid
products which both have large accessible markets.
Asia Pacific
The performance of the Asian operations was disappointingly at
the lower end of expectation and their future will form part of
the Review.
SILICON CARBIDE POWDERS AND TOOLING
SiC advanced cutting tools used to cut very hard metals is, in
itself, a $957m global market and sits at the premium end of the
industrial cutting tool markets. We understand that Haydale are
one of only two US based manufacturers of the SiC whisker that
is required to manufacture these tools. In addition, there are a
range of other lower grade advanced cutting tools used for
complementary tasks such as roughing and finishing, including
Cubic Boron Nitride (CBN), Cermets and Carbide based tools,
each of which have their own sizeable markets.
As reported last financial year, in FY23 Haydale established the
tooling sales infrastructure to sell within the US through the
establishment of a manufacturer representative network and
tooling catalogue. During FY24, these initiatives have been
supplemented by the implementation of a MRP system and a
tooling sales orientated website to properly support the US sales
function. The Company has also taken steps to reinforce the
Manufacturer Representative network.
However, the major change in FY24 has seen Haydale take the
necessary steps to ensure that it maximises its ability to capture
STRATEGIC REPORT
6
market share by both increasing its reach into markets outside
of the US and extending the range of advanced cutting tools it
can offer customers as a one stop shop thereby better able to
entirely displace competitors from accounts. The key actions
taken were twofold:
•
Extend the territories serviced by Haydale beyond North
America:
•
White label distribution agreement with a major
European player signed covering UK and Eire which
has led to some sizeable accounts being secured in
FY24H2 and the arrangement being extended to cover
the EU with discussions also ongoing in respect to
the USA;
•
White
label
manufacturing
and
distribution
agreement signed in Q1 of FY25 for distribution of SiC
tooling into the China market which accounts for circa
22.5% of the global market;
•
Extend the range of advanced cutting tooling that Haydale
can offer to include CBN (itself a £1.3bn Global market),
Cermets and Carbide through agreements with Asian
partners signed in FY24 Q4 and FY25 Q1.
Whilst the SiC tooling business has seen increasing traction on
the back of the steps taken and we are in or awaiting testing
with a number of large company accounts, the timescales to
convert opportunities into sales is taking longer than expected
which resulted in revenues being lower than originally forecast.
That said, there is a sizeable pipeline of opportunities which are
being progressed. Given the commodity nature of the products
and the limited number of suppliers, the sales process is believed
to be relatively straightforward being largely determined on
price and tool life/performance. Haydale scores highly on both
measures.
Haydale’s traditional SiC powder business performed well over
FY24 with significant sales to its repeat customer base, however
this will likely mean that FY25 powder sales will be more
subdued. SiC stock is usually manufactured on a two year cycle
and to ensure that we maintain adequate stock levels, the
production line and furnaces were turned on in June 2024 for a
four month campaign which concluded at the end of September.
Other products
There continues to be interest in CeramycGuard™, a one stop
solution to significantly extend the surface life of concrete assets
utilising Haydale’s SiC powder and for which Haydale holds the
distribution rights for the UK market. The product is currently
undergoing tests on the Thames flood defences with the
Environmental Agency which, if successful, could result in a
material supply contract.
PRODUCTION CAPACITY
Haydale’s FY22 investment in production capacity for its plasma
functionalisation process and ink production means it has
sufficient capacity to meet its forecasts for the next few years.
Should additional capacity be required, Haydale has a scaling
plan to affordably and materially increase its own internal
capacity on relatively short timescales or, depending on
anticipated volumes, arrange for a machine to be leased to a
customer and charge a volume based royalty.
Likewise, there is also more than sufficient capacity for the
manufacture of SiC powder in the US to meet the business plan
for the next few years. Arrangements have been made to secure
additional external tooling manufacturing capacity to support
the planned short term growth.
OVERHEADS
There have been some large inflationary pressures in certain
areas of the cost base over the financial year. Whilst we have
kept a tight lid on recruitment during FY24, due to the growth
seen in the UK, we have had to strengthen certain functions
towards the end of FY24 and early FY25. Likewise in the US, with
the infrastructure now in place, we have had to make modest
increases to the sales team to support growth.
At the same time, the Group has continued to take selective
measures to reduce costs around the organisation and this will
continue as part of the Review.
FUTURE STRATEGIC DIRECTION
As noted above, the US operations have potential for strong
growth in the short term through the manufacture and sale of
specialised SiC tooling and complementary products in all of the
key global cutting tool markets. Having put the necessary
infrastructure in place, the focus is now on managing the
networks of US regional manufacturing representatives and
distributors (both in the US and overseas) and supply chain to
get the tooling into key end user sites.
On the nanomaterials front, we believe that with the size and
nature of the customers that are coming to us, the potential for
nanomaterials is increasing apace – however it is recognised that
there is a significant time lag for these projects to progress into
being commercial volumes. The focus for the UK continues to be
on building business partnerships that will get its plasma
functionalised nanomaterial solutions into the market, targeting
customers that both recognise and are willing to share the
commercial value such development process can provide either
through the fee structure or sharing the downstream benefits
in a more equitable way. It is further believed that certain of our
own strategic products, primarily underfloor heating, can provide
a quick route to revenue at scale and securing the necessary
accreditations, commercial relationships and distribution
channels will be fundamental to this.
Whilst the opportunity for Haydale’s technologies as outlined
above are compelling, the Directors are mindful that the
Company has to be more focused in the allocation of resources
towards the most profitable and cash generative near term
opportunities.
Strategic Report (continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
FINANCIAL REVIEW
The Financial Review should be read in conjunction with the
consolidated financial statements of the Group and the notes
thereto. The consolidated financial statements are presented
under International Financial Reporting Standards and are set
out on pages 29 to 61. The financial statements of the Company
continue to be prepared in accordance with FRS 101 and are set
out on pages 62 to 69.
Statement of Comprehensive Income
In the year under review, the Group’s principal areas of income
were sales of specialty inks, fluids and graphene enhanced
composites and associated consultancy services from the UK and
APAC operations and sale of SiC fibres, whiskers, particulate,
blanks and tooling from the US operation. The Group’s revenue
for the year ended 30 June 2024 of £4.82 million (FY23:
£4.30 million) represents a 12% increase compared with the
previous year. Revenue derived from product sales was
consistent with prior year (See note 4, Segmentation Analysis).
The Group’s Gross Profit, which excludes Other Operating
Income, was £2.81 million (FY23: £2.39 million) delivering a
Gross Profit margin of 58% (FY23: 56%) which is slightly higher
due to sales mix.
Other operating income, which is principally grant funded
projects, was £0.38 million (FY23: £0.38 million) consistent with
prior year.
Adjusted administrative expenses increased by £0.09 million
(1.4%) to £6.35 million (FY23: £6.26 million) reflecting
inflationary rises partially offset by cost savings resulting in an
adjusted operating loss of £3.16 million (FY23: £3.49 million).
Total administrative expenses for the year were £9.17 million
(FY23: £8.93 million) which, in addition to the above, reflects a
significant reduction in non-cash related share-based payment
expenses of £0.56 million primarily related to the expiry of the
FY22 warrants. FY24 total administrative expenses also included
a non-cash charge of £1.23 million related to an impairment of
the historic intangible assets, as described in Note 10 (FY23:
£0.53 million relating to an impairment of fixed assets held in
the US).
The Loss from Operations was £5.96 million (FY23:
£6.17 million). Finance costs, which include interest payable on
the Group’s debt, for the year were £0.39 million (FY23:
£0.41 million).
The Group continued to direct resources to research and
development with the focus for that investment on products
and processes that could develop into sustainable and profitable
revenue streams. R&D spend for the year was £1.39 million1
(FY23: £1.52 million1), of which £0.50 million was capitalised
(FY23: £0.42 million). During the year the Group claimed R&D
tax credits of £0.24million (FY23: £0.40 million) which has largely
reduced due to changes in the scheme and it is expected that
this claim will be received during the current financial year.
Total comprehensive loss for the year, was £5.80 million
(FY23: £5.80 million) which in FY24 included £1.23 million (FY23:
£0.53m related to tangible assets) of one off charges relating to
impairment of intangible assets.
The loss per share for the year was 0.4 pence (FY23: 0.8 pence).
Statement of Financial Position and Cashflows
As at 30 June 2024, net assets amounted to £5.68 million
(2023: £6.97 million), including cash balances of £1.72 million
(2023: £1.38 million). Other current assets marginally increased
to £3.39 million at the year-end (2023: £3.15 million) with
modest reductions across most areas offset by an increase in
trade debtors of £0.52 million reflecting a large year end sale in
the US. Current liabilities increased slightly to £2.38 million
(2023: £2.01 million) principally due to an increase in trade and
other payables.
The Right of Use Asset in respect of its leased assets decreased
to £1.79 million (FY23: £2.20 million) due to the continuing run
out of lease agreements and reduction in the number of discrete
property leases as part of the planned cost savings. The Lease
Liability, which is split between Current and Non-Current
Liabilities, similarly decreased to £2.01 million (FY23:
£2.44 million) as a result of the lease payments made
throughout the year. The Company will amortise these balances
over the remaining life of the leases which varies across the sites.
The Group’s US Pension Obligations of £0.30 million (FY23:
£0.58 million) has reduced in the year due to a combination of
positive movements on investments, exchange and discount
rate movements and contributions made.
Net cash outflow from operating activities before working
capital movements for the year reduced to £3.35 million (FY23:
£3.67 million), the principal contributing factors being the Loss
after Taxation of £6.1188 million (FY23: £6.17 million). Cash used
in Operations decreased by £0.73 million in the year to
£3.36 million (FY23: £4.09 million). The Group received an R&D
tax credit inflow of £0.40 million in the year (FY23: £0.43 million).
Net cash used in operating activities decreased to £2.96 million
(FY23 £3.66 million).
Capital expenditure in the year, excluding the IFRS 16
adjustments, was £0.02 million (FY23: £0.20 million). The Group
invested in a scanning electron microscope, acquired under lease
arrangements, for the nanomaterial business, to be able to bring
certain analysis services in house to improve quality control and
reduce time taken to meet customer requirements.
1 Based on calculations submitted to HMRC for the R&D tax credit.
7
STRATEGIC REPORT
8
Capital Structure and Funding
On 3 October 2023, the Company raised £5.1 million (gross)
through the placing, open offer and subscription of
1,012,609,000 new Ordinary Shares at 0.5 pence per share. Save
for 576 shares issued following an exercise of warrants on
13 September 2023, all other warrants issued following the
fundraise on 13 September 2022 of 138,758,392 lapsed on
14 September 2023 and are no longer exercisable. Consequently,
at 30 June 2024 the Company had 1,798,462,051 ordinary shares
in issue (2023: 785,852,475). No options were exercised into
ordinary shares during the year (FY23: Nil).
The Group’s total borrowings at the year-end were £1.41 million
(2023: £1.37 million), of which £1.23 million was in the UK and
the balance in the Group’s US subsidiaries. The UKRI Innovation
loan has a quarterly liquidity covenant with which the Group has
been in full compliance through the reporting period. There are
no financial covenants extant in respect of the UK bounceback
loan of £0.02 million (FY23: £0.03 million) or the Group’s US
borrowings.
Post Balance Sheet Event
On 14 November 2024, the Company raised £3.1 million (gross)
through a £2.6m placing, retail offer and subscription of
1,960,633,907 new Ordinary Shares at 0.1326 pence per share
and the issue of a £500,000 convertible loan note with a
10% coupon and 5 year tenor. The funds raised will be principally
used to fund the general working capital needs of the business.
As part of this process, the Company’s share capital was
restructured to in effect reduce the nominal value of each
ordinary share from 0.1 pence to 0.01 pence.
Key Performance Indicators
The Group has historically reported financial metrics of revenues,
gross profit margin, adjusted operating loss, cash position and
other metrics as its key performance indicators and these are set
out below.
FY24 (£m) FY23 (£m)
Revenue 4.82 4.30
Gross profit margin 58% 56%
Adjusted operating loss (3.16) (3.49)
Cash position 1.72 1.38
Borrowings 1.41 1.37
During the year under review, management also used a UK sales
tracker, as a non-financial performance metric, to monitor the
revenue pipeline of the business. The sales tracker monitors the
number of accredited leads and assigns a probability of revenue
realisation to those leads. For the US business, specific tooling
related pipeline analysis has also been introduced to monitor the
health and progress of opportunities through the sales funnel.
SECTION 172(1) STATEMENT
The Directors acknowledge their duty under s.172 of the
Companies Act 2006 (“s.172”) and consider that they have both
individually and together acted in the way that, in good faith,
would be most likely to promote the success of the Company for
the benefit of its members as a whole, having regard to the
matters set out in s.172.
The Directors have set out the ways in which they look to fulfil
their duties in the year at section 3 of the Chair’s Corporate
Governance Statement on page 14.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board considers that the principal risks and uncertainties
facing the Group may be summarised as follows:
Timely Adoption of the Group’s Products
While the Group makes every effort to establish realistic
timelines for customer engagement, testing and purchasing of
Haydale’s products, there are often unforeseen delays (by both
parties) in forecasting the commencement of sales. There may
be regulatory hurdles to overcome and end-customer risk
aversion in accepting a new nanomaterial enhanced product or
other competitive considerations. The focus on commercial
product sales remains an absolute priority, notwithstanding that
the timing and adoption of Haydale’s newly developed product
lines remains difficult to predict.
Financing Risk
Until such time as the Group is profitable and cash flow
generative, it will periodically need to raise additional funding to
cover its ongoing working capital needs. The Group may be
unable to access additional debt or equity capital or to raise funds
on acceptable terms. In the event that the resources available to
the Group are insufficient then this could have a materially
adverse impact on the implementation of the Group’s strategy,
operations and financial status. The Group mitigates this risk by
active engagement with its major shareholders, advisers and
bankers.
Scaling to Meet Demand Risk
Whilst the Group has put measures in place to try and ensure it
has the capacity to meet US tooling demand as its pipeline of
opportunities are converted, there remains a risk that sales are
secured for orders that cannot be met on a timely basis either
due to constraints in the Group’s own manufacturing capacity
or that of the wider supply chain. The US operation looks to
mitigate that risk by maintaining a number of sources of
overflow production capacity where possible and good
relationships with both its customers and supply chain.
Intellectual Property Risk
The Group’s success will depend in part on its ability to continue
to innovate to keep itself ahead of the competition, especially in
and around plasma functionalisation, and maintain adequate
protection of its resulting IP portfolio, covering its manufacturing
Strategic Report (continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
process, additional processes, products and applications. The IP
on which the Group’s business is based is a combination of
granted patents, patent applications and confidential know-how.
Internal procedures and controls are in place to capture and
exploit all generated IP as well as to protect, limit and control
disclosure to third parties and partners. The Group aims to
mitigate any risk that any of the Group’s patents will not be held
valid if challenged, or that third parties will claim rights in, or
ownership of, the patents and other proprietary rights held by
the Group through general vigilance, regular international IP
searches as well as monitoring activities and regulations for
developments in copyright/intellectual property law and
enforcement. The Group retains third party professional experts
to advise and assist on all matters relating to IP.
Information and Communications Technology (“ICT”) Risk
The inability to access data for a period of time either due to
systems failures or the unauthorised intervention of malicious
parties may severely impact the Group’s ability to conduct its
day-to-day business, lead to the loss of sensitive information or
result in loss of funds in a ransomware attack. The Group aims to
mitigate these threats by maintaining a third-party ICT support
agreement with a respected contractor, ensuring industry
standard cyber security procedures are followed, setting out clear
internal procedures for communicating potential ICT breaches
and by providing adequate staff training on the cyber security risk
that all users face. In the event that these procedures are
inadequate the Group maintains a business continuity plan with
our service provider that covers longer term denial of access.
Dependence on Key Personnel
The Group’s business, development and prospects are dependent
upon the continued services and performance of its Directors and
other key executives. The experience of the Group’s personnel
helps provide the Group with a competitive advantage. The
Directors believe that the loss of services of any existing key
executives, for any reason, or failure to attract and retain necessary
additional personnel, could adversely impact on the business,
development, financial condition, results of operations and
prospects of the Group. The Group aims to mitigate this risk by
providing well-structured and competitive reward and benefit
packages that allow it to attract and retain key employees.
Health and Safety
Many of the Group’s products are advanced materials that are
nano in size and, although there is little actual evidence of any
health risks associated with the handling of the Group’s products,
there is a theoretical risk that the Group’s products could be a
danger to health if an individual is exposed to and/or
inhales/ingests some of the Group’s products. The Group takes
health and safety very seriously and manages the potential health
and safety risk by regular staff training, well maintained facilities
and restricting activities to only certain qualified individuals. The
UK facilities are ISO 9001 and ISO 14001 accredited and the
Thailand and the US facilities have ISO 9001 accreditation.
A detailed health and safety report is provided to the Board each
month and is a standing agenda at scheduled Board meetings.
By order of the Board
Gareth Kaminski-Cook
Chair
29 November 2024
9
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
GOVERNANCE
10
Gareth Kaminski-Cook,
Executive Chair
Gareth has 30 years' experience in market-leading industrial
international organisations spanning a number of business
sectors, including as Chief Executive Officer of Autins Group plc,
a UK and continental Europe based industrial materials
technology business and formerly the Director of a global
division within Low & Bonar plc, a fully listed international
performance materials group. He has also worked previously for
Saint Gobain, Rexam, BPB and Danaher and lived and worked in
Asia, the US and Europe, Gareth brings a deep understanding of
the manufacture and application of specialist thermal materials
across relevant industrial markets such as Automotive and
Building Products, as well as skills and experience in
performance materials across a number of industries and
internationally. Gareth is a former Officer in the Corps of Royal
Engineers and a Civil Engineering graduate from Birmingham
University. He joined the board in January 2024.
Patrick Carter,
Chief Financial Officer
Prior to joining the Company, Patrick has had over 20 years’
experience as CFO across a range of business sectors with a
number of AIM listed and private equity backed international
businesses undergoing change. Before that he worked for
Deloitte. Patrick joined Haydale as CFO in June 2023. He is a
qualified Chartered Accountant and Barrister and brings
significant commercial experience to the role.
Theresa Wallis,
Non-Executive Director
Theresa Wallis worked for the London Stock Exchange for
13 years, where from 1995 to 2001 she was COO of AIM, having
managed the market’s development and launch. From 2001 to
2006 she was a principal executive of ANGLE plc, a venture
management and consulting business focusing on the
commercialisation of technology. Since 2001 she has held a
number of non-executive directorships, including LiDCO Group
plc where she was non-executive chair, Veriton Pharma Ltd and
the Quoted Companies Alliance. Prior to joining the LSE, she
worked for Hambros Bank and then Canadian Imperial Bank of
Commerce in London.
Theresa brings a range of corporate governance, business
development, financial and commercialisation experience to the
Company and holds a Diploma in Company Direction from the
Institute of Directors. Theresa joined the Board of Haydale in
June 2020.
Simon Turek,
Non-Executive Director
Simon has over 15 years’ experience in environmental and financial
market and has held a number of senior director roles across a range
of companies and sectors. He is currently Chair of PNZ Carbon,
a leading carbon market project developer. His background includes
being Executive Director at Chicago Mercantile Exchange (CME)
Group, where he managed international government relations,
as well as roles in financial regulation within the UK and EU.
He began his career as a lawyer in New Zealand. Simon has been a
Chair and Non-Executive Director on several boards, in financial
services and the social housing sector, and a trustee of several
charities. He joined the board in November 2024. Simon brings
commercial acumen, including legal and financial experience, and
insight of key target environmental markets.
Brief biographies of each of the directors are set out below.
Board of Directors
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Directors’ Report
The directors present their report and the audited financial statements for Haydale Graphene Industries Plc (the “Company”), a public
company incorporated and registered in England and Wales with company number 07228939, and its subsidiaries (together the
“Group”) for the year ended 30 June 2024.
There are a number of items required to be included in the Directors’ Report which are covered elsewhere in the annual report.
Details of directors’ remuneration and share options are given in the Directors’ Remuneration Report, details of the use of financial
instruments and financial risk management objectives and policies are given in note 22 of the financial statements and the Strategic
Report on pages 3 to 9 covers the following matters:
•
Review of the Business and Future Developments;
•
Post Balance Sheet Events;
•
Key Performance Indicators; and
•
Research and Development.
Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial Statements
The directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected
to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the UK
(IFRSs) in conformity with the requirements of the Companies Act 2006 and the Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under
company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and Company and of the profit or loss for the Group for that period. The directors are also required
to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the
AIM market.
In preparing these financial statements, the directors are required to:
–
Select suitable accounting policies and then apply them consistently;
–
Make judgements and accounting estimates that are reasonable, relevant, reliable and prudent;
–
State whether they have been prepared in accordance with IFRSs in conformity with the requirements of the Companies
Act 2006;
–
For the Parent Company financial statements, state whether applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements; and
–
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure
that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Group’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Dividends
The directors do not propose the payment of a dividend (2023: Nil).
Directors
Except as stated below, the following current directors have held office since 1 July 2023 and up to the date of signing the financial
statements:
David Banks (resigned 13 November 2024)
Graham Eves (resigned 7 December 2023)
Keith Broadbent (resigned 13 November 2024)
Theresa Wallis
Patrick Carter
Ryan Howard (resigned 1 August 2023)
Simon Turek (appointed 21 November 2024)
Gareth Kaminski-Cook (appointed 1 January 2024)
11
Directors’ Report (continued)
GOVERNANCE
Directors’ Interests in Ordinary Shares
The directors had the following interests in ordinary shares of the Company at 30 June 2024:
Number of
Shares at
% of
30 June
Share
Director
2024
Capital
David Banks
8,000,000
0.44
Keith Broadbent
4,952,381
0.28
Patrick Carter
1,000,000
0.06
Graham Eves
142,857
0.01
Theresa Wallis
2,011,904
0.11
Gareth Kaminski-Cook
200,000
0.01
Simon Turek
–
–
Post 30 June 2024 David Banks, Keith Broadbent and Graham Eves retired as Directors of the company.
Directors’ and Officers’ Liability Insurance
Qualifying indemnity insurance cover has been arranged in respect of the personal liabilities which may be incurred by directors and
officers of the Group during the course of their service with the Group. This insurance has been in place during the year and on the
date of this report.
Foreign Currency, Interest Rate, Credit and Liquidity Risk
The directors do not consider any of these potential risks to pose a significant risk to the Group or its operations over the coming
year. See note 22, Financial Instruments, for further details.
Going Concern
The directors have prepared and reviewed detailed financial forecasts of the Group and, in particular, considered the cash flow
requirements for the period from the date of approval of these financial statements to the end of June 2026. These forecasts sit
within the Group’s latest estimate and within the longer-term financial plan, both of which have been updated on a regular basis.
The directors are also mindful of the impact that the other risks and uncertainties set out on pages 8-9 may have on these estimates
and in particular the speed of adoption of new products. The forecasts may also substantively change as a result of actions arising
out of the Review.
After due consideration of the forecasts prepared, the Group’s current cash resources after the equity fund raise in November 2024
and the terms of its debt facilities, the directors consider that the Company and the Group have adequate financial resources to
continue in operational existence for the foreseeable future and for this reason the financial statements have been prepared on the
going concern basis.
Whilst the directors believe that the going concern basis is appropriate at the date of this report, the Board is mindful that,
notwithstanding the actions being taken to refocus the Company’s activities pursuant to the Review, the net proceeds of the fund
raise may be insufficient to fund the cash requirements of the Group through to a position where it is able to fund itself from its
own cashflow within 12 months of the date of this report. The Board continues to pursue the possibility of securing additional debt
facilities to provide additional liquidity. In the event that such debt facilities are not available or are unavailable in sufficient quantum
it is very likely that the Group would need to raise additional equity funding. In the current economic conditions, there is inherent
uncertainty over whether such future equity or debt funding would be available. Formally, these circumstances represent a material
uncertainty that casts significant doubt upon the Company’s ability to continue as a going concern and therefore it may be unable
to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making enquiries and considering
the uncertainties described above, the Directors have a reasonable expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future. For these reasons they continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
12
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Disclosure of information to auditors
All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any information
needed by the Company’s auditors for the purposes of their audit and to establish that the auditors are aware of that information.
The directors are not aware of any relevant audit information of which the auditors are unaware.
Independent auditors
The auditors have expressed their willingness to continue in office and a resolution concerning their reappointment will be proposed
at the annual general meeting.
Statement by the Directors
The directors consider the annual report and accounts, taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
By order of the Board
Gareth Kaminski-Cook
Chair
29 November 2024
13
GOVERNANCE
14
Overview
As Chair of the Board of Directors of the Group, it is my responsibility to ensure that Haydale has both sound corporate governance
and an effective Board. Haydale adopts the Quoted Companies Alliance Corporate Governance Code (2018) (“QCA Code”) and this
report follows its structure and explains how we have applied it. The principal methods of communicating our application of the
QCA Code are this Annual Report and through our website, at www.haydale.com.
Below are the Company's explanations of how it has complied with the 10 principles of the QCA Code during the year.
QCA principles
1. Establish a strategy and business model which promotes long-term value for shareholders
The Group’s business model and strategy, together with the principal risks and uncertainties facing the Group, are set out in the
Strategic Report on pages 3 to 9 of this Annual Report. The Company aims to grow organically and, if necessary, by acquisition,
to extend the Group's customer base and geographical penetration and use its existing expertise and global reach to generate
commercial opportunities in the high growth advanced materials industry. The directors intend that the strategy will deliver medium
and long-term shareholder returns initially through capital appreciation and eventually through distributions via dividends.
The Group’s values and culture underpin its approach to growth and are addressed in Principle 8.
2. Seek to understand and meet shareholder needs and expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.
The directors meet shareholders and other investors or potential investors during the year, especially following the announcement
of the Annual and Interim Results. The Company also hosts broker and analyst meetings. The website provides contact details for
investor relations enquiries and Gareth Kaminski-Cook is the director appointed as the main point of contact for shareholder liaison.
The Company intends to have close ongoing relationships with its larger private shareholders, institutional shareholders and analysts
and for them to have the opportunity to discuss issues and provide feedback at meetings with the Company. The Company receives
reports from its corporate registrar to facilitate these relationships. When possible, the whole Board attends the Company’s Annual
General Meeting (“AGM”), which is regarded as an opportunity to meet, listen and present to shareholders, all of whom are
encouraged to attend. The Company held its 2023 AGM on 7 December 2023 (“2023 AGM”). As with recent AGMs, provision was
made to allow those shareholders who were unable to attend the AGM to ask questions of the directors by email as well as submit
their votes in advance by proxy. The outcomes of each of the AGM votes are announced following the meeting. If there is a resolution
passed at a general meeting with a significant number of votes against, the Board engages with the relevant shareholders, where
possible, to understand the reason for the result and, where appropriate, takes suitable action.
Cavendish as the Company’s broker and nominated advisor regularly briefed and kept the Company appraised of market and
regulatory developments as they affect the Company and feedback from shareholders and potential investors. Investor feedback is
communicated via the brokers to the Board.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board is mindful of its statutory duty under s.172 of the Companies Act and the directors have acted in a way that they considered,
in good faith, to be most likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing
so, had regard amongst other matters to the:
•
foreseeable or likely consequences of any decision in the long term;
•
interests of the Company’s employees at each of its five facilities;
•
need to foster the Company’s business relationships with suppliers, customers and other stakeholders;
•
impact of the Company’s operations on the community and the environment;
•
importance of the Company maintaining a reputation for high standards of business conduct; and
•
the need to act fairly as between members of the Company.
Chair’s Corporate Governance Statement
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
The Board recognises the Company is reliant upon the efforts of the employees of the Company and its collaboration partners,
suppliers, regulators and other stakeholders whether they are identified under s.172 or not. The Board ensures that there is close
oversight and contact with its key resources and relationships by various means. The following paragraphs set out how we engage
with our stakeholders.
Everyone within the Group is a valued member of the team, and we seek to help employees achieve their full potential. We offer
equal opportunities regardless of race, gender, gender identity or reassignment, age, disability, religion or sexual orientation. Health
and safety remains a priority, and appropriate protocols are maintained at our sites. The Company is still of a size where the executive
directors know all of the team and employees are aware that they are able to contact the senior leadership directly to ask questions
on any topic that concerns them.
The Group has continued to invest in staff training to ensure that employees have the skills to meet their responsibilities as part of
a modern international operation including specific focus on health and safety related training which has been rolled out across the
Group’s sites as it prepares for higher material throughput.
The Company prepares a detailed budget annually which takes into account the Group’s strategy and its available key resources
including staffing, working capital, production capacity and functionalisation capabilities. In-depth analysis and reviews inform the
development of each business unit’s budget and taken together these form the basis of the Company’s annual budget. Subsequently,
the ongoing review of performance against the budget facilitates an on-going dialogue on the goals, targets and aspirations of the
Company and of each of the business units. This two-way communication provides each business unit with the opportunity to raise
issues and provide feedback to the Board via the executive members. These feedback processes seek to ensure that the Company
can respond to new issues and opportunities that arise to further the success of the Group.
The Company has close on-going relationships with a broad range of its stakeholders and provides them with the opportunity to
raise issues and provide feedback to the Company. The Company seeks regular feedback from its stakeholders which include
employees, industry participants, such as customers, graphene producers, R&D facilities, including universities and academic
institutions, whilst simultaneously embracing influential movers within the advanced materials industry who may positively
influence perception of the Company. This feedback is generally but not exclusively received through formal performance reviews
(employees) and meetings held in the ordinary course of business with external stakeholders. Feedback received is reviewed and
appropriate actions taken. The Company communicates with its stakeholders and takes account of their feedback with a view to
develop products that meet the needs of customers and that may potentially be supplied reliably, cost effectively and in line with
applicable standards.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board oversees and reviews the Group’s risk management and internal control mechanisms.
The Company maintains a risk register which was reviewed during the year by the executive directors as well as the Audit Committee
at each of its meetings. The risk register sets out the assessed risks and the key actions, controls and processes to mitigate those
risks and the individual or group responsible for ensuring that these are performed.
The review process is led by the Chief Financial Officer and involves the review and identification of risks, assessment to determine
the relative likelihood of them impacting the business and the potential severity of the impact and determination of what needs to
be done to minimise their likelihood and/or mitigate their impact.
The principal risks and uncertainties to the business and steps to mitigate them are set out in the Strategic Report in this Annual
Report on pages 8-9.
The Company has established reporting and control mechanisms. The system of internal control is structured around the risks set
out in the risk register and is designed to address those risks that are considered to be material.
15
GOVERNANCE
Chair’s Corporate Governance Statement
(continued)
16
Further key features of the Company’s internal control system include the following:
•
Close management of the business by the executive directors;
•
Monthly management accounts information is prepared and reviewed by the Board, including variances against the annual
budget, latest expectations, market guidance issued by the Company’s brokers and prior year;
•
There is a schedule of matters reserved for decision by the Board;
•
A clearly defined organisational structure was in place during the year, with clearly delegated authorities, reporting lines
and roles;
•
Defined levels/limits for authorisation of expenditure and placing of orders and clearly set out authorisation procedures; and
•
Quality management systems are implemented and regularly audited by an independent third party. The UK operations are
ISO 9001:2015 and ISO 14001:2015 certified; the Thailand facility is ISO 14001:2015 and the US facility is ISO 9001:2015
5. Maintain the Board as a well-functioning, balanced team led by the Chair
During the year, the Board comprised two executive directors and three non-executive directors as follows:
Executives
•
Chief Executive Officer: Keith Broadbent;
•
Chief Financial Officer: Patrick Carter;
Non-executives
•
Non-executive Chair: David Banks;
•
Non-executive: Ryan Howard (resigned 1 August 2023);
•
Non-executive: Graham Eves (resigned on 7 December 2023)
•
Non-executive: Theresa Wallis; and
•
Non-executive: Gareth Kaminski-Cook (from 1 January 2024)
As noted above, the board composition changed post year end. Biographical details of the current Directors can be found here at
https://www.haydale-ir.com/content/investors/board and in this Annual Report on page 10. All the non-executive directors were
considered to be independent.
All the non-executive directors are expected to dedicate at least 24 days per annum to the Company. Mr Broadbent and Mr Carter
were full time. Any director who was not appointed or re-appointed at one of the preceding two annual general meetings shall retire
from office and be subject to re-election at the next AGM.
Senior management may also be invited to meet with the Board, providing further insights into the Company’s activities and
performance. Regular board meetings are scheduled in advance, but the Board also meets as and when required. In order to be
efficient, the directors meet formally and informally in person, by videoconference or telephone. Board papers are prepared by the
relevant personnel and usually circulated to the Board at least 48 hours before meetings, allowing time for consideration and
clarifications before the meetings.
The non-executive directors meet online or in person without the presence of the executive directors during the year, and also
maintain ongoing communications with executives between Board meetings.
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
17
During the year ended 30 June 2024, the Company held 28 board meetings (FY23: 28), with each member's attendance as follows:
Number of board meetings attended
Scheduled
Ad hoc Total
Total
Director
FY24
FY24 FY24
FY23
David Banks
7/7
21/21 28/28
28/28
Keith Broadbent
7/7
20/21 27/28
28/28
Graham Eves
2/3
15/16 17/19
27/28
Theresa Wallis
7/7
20/21 27/28
28/28
Patrick Carter
6/7
20/21 26/28
3/3
Gareth Kaminski-Cook
4/4
4/4 8/8
–
Attendance at the Company’s audit, remuneration and nomination committee meetings during FY24 and the prior year was as
follows:
Number of committee meetings attended
Committee member Audit Remuneration Nomination
FY24
FY23
FY24
FY23 FY24
FY23
David Banks
3/3
4/4
8/8
9/9 3/3
5/5
Graham Eves
1/1
4/4
6/6
9/9 3/3
5/5
Theresa Wallis
3/3
4/4
8/8
9/9 3/3
5/5
Gareth Kaminski-Cook
1/2
–
1/3
– –
–
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Company believes that the directors have an appropriate breadth and depth of skills, knowledge and experience to fulfil their
roles, reflecting a broad range of personal, commercial and professional skills across geographies and relevant sectors and experience
of public markets. Details of the directors' experience and areas of expertise and the relevant skills each director brings to the Board
are outlined on page 10 of this Annual Report and on the Company’s website.
In addition to their general board responsibilities, non-executive directors may be involved in site visits and meetings, in line with
their individual areas of expertise.
If required, the directors are entitled to take independent professional advice at the Company’s expense in accordance with the
relevant Board agreed procedure. During the year, the Remuneration Committee obtained external advice in relation to the grant
and surrender of share-based incentives grant across the Group (see Directors’ Remuneration Report on pages 21 to 22).
In addition, during the year the Company was a member of the QCA and as such all the directors had access to briefings issued by
the QCA. Directors also access briefings, updates and events offered by other professional advisory firms.
GOVERNANCE
18
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The Chair performs a continuous assessment of the individual and collective performance of the Board in an informal and collegiate
way through dialogue and meetings. No formal evaluation was undertaken in the financial year. The Chair intends to undertake a
formal evaluation once the restructured executive team has had time to complete actions following the Review and establish a
revised operational modus operandi. Realistically this will be late 2025. Information regarding the last board evaluation was set out
in last year’s Annual Report.
Making recommendations relating to board succession planning is one of the responsibilities of the Nomination Committee as set
out with regard to Principle 9 below. Below the main Board, the CEO seeks board approval for his recommendations on changes to
the directors of subsidiary companies.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions will impact the corporate culture of the Company as a whole and that this will impact the
performance of the Company. The Board is aware that the tone and culture set by the Board will greatly impact all aspects of the
Company as a whole and the way that employees behave.
The Company is working towards the goal of a “one team” shared culture that supports an open and respectful dialogue with
employees, clients and other stakeholders, and is underpinned by sound ethical values and behaviours. These values are reinforced
at the regular team and site performance reviews and also at inter-site meetings which, amongst other areas, cover sales, marketing,
technical and health and safety matters. The Board monitors the corporate culture through the above activities (see also the
explanations regarding Principle 3 above) the findings of which are communicated to the Board by the CEO and an employee survey
was conducted during the year.
The Company has implemented a quality system based on the rigorous standards of BS EN ISO 9001 and 14001 and adherence to
this quality system is mandatory throughout the Company. All employees are encouraged to take responsibility for the quality of
their own workmanship and to work with their colleagues towards maintaining our ISO standards.
To ensure we meet the high standards that we set ourselves employees are normally formally appraised each year and clear personal
objectives are set out within personal development plans. Individual training needs are defined by these reviews and this training is
combined with wider department and group training initiatives. New employees receive an induction.
The Board attaches great importance to the health and safety of its employees and stakeholders who handle or use the Group’s
products. Health and safety is a standing item on the Board’s agenda, with reports reviewed by the Board at each scheduled board
meeting. The Company’s Health and Safety policy and the respective site Health and Safety plans are enforced rigorously.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Board is committed to, and ultimately responsible for, high standards of corporate governance, and has chosen to adopt the
QCA Corporate Governance Code. We review our corporate governance arrangements regularly and expect to evolve these over time.
The Chair is responsible for the leadership and effectiveness of the Board and ensuring its effectiveness in all aspects of its role. He is
also responsible for creating the right Board dynamic and for ensuring that all important matters receive adequate time and attention
at Board meetings. He is also the director appointed as the main point of contact for shareholder liaison. During the year, the CEO
was responsible for the day-to-day running of the business as well as developing corporate strategy. On 13 November 2024 Gareth
Kaminski-Cook was appointed interim Executive Chair, assuming responsibility for the overall management of Haydale until a new
CEO is appointed,
The non-executive directors are tasked with, for example, constructively challenging the decisions and recommendations of executive
management and satisfying themselves that the systems of business risk management and internal financial controls are
appropriate.
The Board delegates responsibilities to committees and individuals as it sees fit
Chair’s Corporate Governance Statement
(continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
19
The Board has adopted appropriate delegations of authority which sets out matters which are reserved to the Board as summarised
below:
•
The Group's strategy and vision;
•
Determining management's performance;
•
Board membership and membership of subsidiary boards;
•
Approval of major capital expenditure;
•
Financial reporting, risk management and internal controls;
•
Material contracts, including potential acquisitions or investments in new projects or products;
•
Corporate governance;
•
Approval of annual budgets;
•
Approval of annual and interim reports;
•
Approval of changes in equity or debt funding; and
•
Dividend recommendations and policy.
The Board delegates certain duties and, where applicable, authority, to the following three board Committees. During the year the
Committees comprised independent non-executive directors only and met independently of Board meetings.
Terms of reference for each of the Board's Committees are published on the Group's website (https://www.haydale-
ir.com/corporate/corporate-governance). The Company believes that the Committees have the necessary skills and knowledge to
discharge their duties effectively. Summaries of the key activities of each of the Board’s Committees during the year under review
are set out below.
Audit Committee
During the year, the Audit Committee had three members, Theresa Wallis (Chair), Gareth Kaminski-Cook and David Banks. The CFO,
CEO and external auditors attend meetings by invitation. The Audit Committee is responsible for assisting the Board in fulfilling its
financial and risk responsibilities. The Audit Committee oversees financial reporting, risk management and internal control, advises
the Board on the appointment and removal of the external auditor and discusses the nature, scope and results of the audit with the
auditors. The Audit Committee reviews the extent of non-audit services provided by the auditors and reviews with them their
independence and objectivity. The Audit Committee plans to meet not less than three times in each financial year. The activities of
the Audit Committee during the year are described in the Audit Committee Report on page 23.
Remuneration Committee
During the year, the Remuneration Committee had three members, David Banks (Chair), Gareth Kaminski-Cook and Theresa Wallis.
The remit of the Committee is primarily to ensure that the Company’s executive directors are provided with appropriate
remuneration packages. The Committee reviews the performance of the executive directors and considers matters relating to their
terms of employment and remuneration, including short term bonus and long-term incentives. The Remuneration Committee
considers the granting of share options pursuant to the Company's share option schemes. The Directors’ Remuneration Report is
on pages 21 to 22.
Nomination Committee
The Nomination Committee has responsibility for evaluating the structure, size and composition of the Board in order to ensure a
suitable balance of experience, knowledge, skills and independence, as well as for recommending to the Board the appointment of
executive and non-executive directors.
During the year, the Nomination Committee had three members, David Banks (Chair), Gareth Kaminski-Cook and Theresa Wallis.
Until his resignation from the Board in December 2023 Graham Eves chaired the Committee.
GOVERNANCE
20
The process for board appointments includes preparing a job description and person specification that is reviewed by the Nomination
Committee, having identified the skills and experience that are required. Members of the Committee interview candidates, who
also meet relevant executives. Searches are conducted either through search firms or through the Company’s network and references
or recommendations are obtained.
The Committee met three times during the year in relation to the appointment of a new independent non-executive director to
replace Graham Eves. The Committee considered the skills and experience of the existing board members and those that were
required and a description of the role and capabilities was prepared and reviewed. The Committee also reviewed and considered a
list of possible NED candidates provided by the Company’s Nomad (Cavendish) against the criteria before recommending that the
Board appoint Mr Kaminski-Cook.
As with many small companies, due to financial constraints and limited human resources, internal opportunities for succession to
Board director roles are circumscribed.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant
stakeholders
As stated in relation to Principle 2, the Board is committed to maintaining effective communication and having constructive dialogue
with its shareholders. We communicate through our Interim and Annual Reports along with Regulatory News Service announcements.
We also use the Company's website for both financial and general news relevant to shareholders. The Company’s AGM results are
available to view on the Company’s website and all resolutions tabled at the Company’s 2023 AGM were passed.
The Company keeps in mind the proportions of direct, nominee and institutional shareholders, and distributes communications
accordingly.
The latest corporate documents (including Annual Reports and Notices of AGMs) can be found on the Company’s website.
Investors also have access to the latest information about the Group which is set out on the Company’s website at www.haydale.com.
The Company uses electronic communications with shareholders, where possible, to maximise efficiency.
A summary of the work carried out by the Audit, Remuneration and Nomination committees during the year is set out in
Principle 9 above.
By order of the Board on 29 November 2024
Gareth Kaminski-Cook
Chair
Chair’s Corporate Governance Statement
(continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
21
REMUNERATION COMMITTEE
The Company’s remuneration policy for executive directors is the responsibility of the Remuneration Committee. The terms of
reference of the Remuneration Committee are outlined below and, in the Chair’s Corporate Governance Statement on pages 14 to 20.
The members of the Remuneration Committee during the year under review were David Banks (Chair), Graham Eves (resigned on
7 December 2023), Theresa Wallis and Gareth Kaminski-Cook (appointed on 1 January 2024). The provisions of the 2006 Companies
Act in respect of the Directors’ Remuneration Report have been applied to this report.
The Remuneration Committee terms of reference require it to determine remuneration packages needed to attract, retain and
motivate executives of the quality required (but to avoid paying more than is necessary for this purpose) and to ensure that
performance related elements of remuneration are designed to support alignment with the long-term interests of shareholders
and to give such executives incentives to perform at the highest levels. The Committee met nine times during the year to discuss
these matters.
Under the terms of reference of the Remuneration Committee, the remuneration of the Company's non-executive directors (including
the chair of the Board, if a non-executive) is a matter for the Board.
The Remuneration Committee meets at least twice a year, with additional and meetings as and when required. The Committee
met nine times during the year in order to consider the executive directors’ salaries and bonuses as well as the equity-based schemes
and awards described below.
Directors’ remuneration for the year to 30 June 2024 is set out on page 22.
Equity Based Incentive Schemes
The Remuneration Committee believes that equity-based incentive schemes provide a strong incentive for retaining and attracting
high calibre individuals. During the year the Committee reviewed the options and stock appreciation rights (SARs) that had been
granted in the past and concluded that given the current share price, these were no longer serving to incentivise directors and
employees across the Group. Following careful consideration including obtaining advice, the Committee decided to grant new options
with revised terms that would properly incentivise them, conditional upon the surrender of their existing options and SARs.
Accordingly, on 25 January 2024, the Company adopted the revised 2020 EMI share option scheme (“EMI Scheme”) pursuant to
which all UK based employees were granted a total of 151,500,000 options “EMI Options” including 50,000,000 and 30,000,000
options granted respectively to Keith Broadbent (CEO) and Patrick Carter (CFO) and 35,000,000 to the directors of UK subsidiaries.
Similarly, on 30 April 2024 the Company adopted a revised Stock Appreciation Rights Plan (“SAR Scheme”) for the Group’s wholly
owned US subsidiary, Haydale Technologies Inc. pursuant to which 44,000,000 SARs were granted to employees of the US subsidiaries
including 7,500,000 to a US director. In addition, on the same day 12,500,000 options were granted to certain overseas based
employees under the EMI Scheme.
The above-mentioned EMI Options and the SARs (together the “Options”) have an exercise price of 0.5p per Ordinary Share. 50% of
the Options become exercisable in three equal tranches from the first, second and third anniversary of grant. The remaining Options
are subject to certain performance criteria linked to the share price of the Company being met in the period to November 2027 and
can only be exercised after the third anniversary of Grant. All Options must be exercised before the tenth anniversary of Grant
("Exercise Period").
The Committee sought the advice of KPMG’s reward team in relation to the above-mentioned grants and surrender of options and
SARs, in order to help ensure that the package served to reward and retain executive directors and staff across the Group while
balancing this with the interests of shareholders.
The EMI Scheme and the SAR Scheme are designed to align the interests of the Directors and other employees with those of
shareholders. Full details of the principal conditions and performance requirements of the grants are set out in the RNS
announcements dated 26 January and 2 May 2024 and can be found on the Company’s website at www.haydale.com.
Directors’ Remuneration Report
Directors’ Remuneration Report (continued)
GOVERNANCE
22
DIRECTORS’ INTERESTS IN SHARE OPTIONS
The interests of directors of the Company in options over ordinary shares at the year-end were as follows:
Number
First
Exercise
Director
EMI Options
Date of Grant
Exercise Date
Price
Expiry Date
Keith Broadbent
50,000,000
25 January 2024
25 January 2027
0.5p
25 January 2034
Patrick Carter
30,000,000
25 January 2024
25 January 2027
0.5p
25 January 2034
No options were exercised by the directors during the year under review.
The mid-market closing price of the Company’s ordinary shares at 30 June 2024 was 0.30p (2023: 1.05p). During the year to
30 June 2024, the mid-market closing price ranged from 0.30p to 1.33p (2023: 0.98p to 5.60p).
DIRECTORS’ CONTRACTS
The executive directors have service contracts with the period of notice being six months. The non-executive directors have a letter
of engagement which provides for a one month notice period.
DIRECTORS’ REMUNERATION
The aggregate remuneration received by directors who served during the years ended 30 June 2024 and 30 June 2023 was as follows:
Year Ended June 2024
Year Ended June 2023
Total
Total
Total
Total
exc.
inc.
exc.
inc.
£’000 Salary/Fee
Benefits
pension
Pension
pension
pension
Pension
pension
Executive Directors
K Broadbent
237
16
253
21
274
269
24
293
P Carter
145
12
157
8
165
12
1
13
M Chapman
–
–
–
–
–
127
14
141
Non-Executive Directors
D Banks
58
–
58
–
58
65
–
65
T Wallis
30
–
30
–
30
30
–
30
G Kaminski-Cook
15
–
15
–
15
–
–
–
G Eves
15
–
15
–
15
30
–
30
R Howard
3
–
3
–
3
20
–
20
503
28
531
29
560
553
39
592
By order of the Board
Gareth Kaminski-Cook
Chair
29 November 2024
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
During the year the Committee comprised all three non-executive directors of the Company and is chaired by Theresa Wallis. Its terms
of reference can be found on the Company’s website.
During the year the Committee met three times. The Committee met in October 2023 to consider the draft report and accounts for
the year ended 30 June 2023, including the key judgements and estimates including revenue recognition, going concern, carrying
value of intangible assets, valuation of the defined benefit pension scheme which it subsequently recommended to the Board for
approval. In doing so the Committee reviewed the feedback from the auditors (Crowe UK LLP) as set out in their draft Audit Status
Update to the Board, as well as approving the independence of the auditors and their fees. The impairment of certain fixed assets
held in the US was also reviewed.
The second meeting of the Committee was held in February 2024 to consider the draft interim results and receive updates on the
risk register and the Group’s internal control mechanisms.
The third meeting of the Committee was held in June 2024. The meeting considered the audit planning report for the Group for the
FY24 audit prepared by Crowe UK LLP and the terms of engagement between them and the Company. The Committee reviewed
the independence of the auditors and confirmed their independence, having taken account of Crowe’s confirmation that they comply
with the FRC Ethical Standard for Auditors, and that, in their professional judgment, they are independent of the Company. The June
2024 year end is Crowe’s third year of acting as auditors having been appointed in 2022 following a tender process, they have
provided no non-audit services to the Group. At the June 2024 meeting, the Committee also considered the whistleblowing policies
and their communication across the group and noted that no matters were raised under the policy during the year.
The Audit Committee met with the auditors in November 2024 prior to the approval of the annual report and heard from them
regarding their audit findings and observations, this included discussion of the impairment of intangibles and intercompany
receivables recognised in the group and parent company financial statements.
The risk register was considered by the Audit Committee at each of its meetings through the period.
At the October 2023 and November 2024 meetings, a discussion took place between the Audit Committee and the auditors without
management being present.
Theresa Wallis
Non-Executive Director and Chair of the Audit Committee
29 November 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
23
Audit Committee Report
FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Haydale Graphene Industries Plc (the “Parent Company”) and its subsidiaries
(the “Group”) for the year ended 30 June 2024, which comprise:
•
the consolidated statement of comprehensive income for the year ended 30 June 2024;
•
the consolidated statement of financial position and parent company balance sheet as at 30 June 2024;
•
the consolidated and parent company statements of changes in equity for the year then ended;
•
the consolidated statement of cash flows for the year then ended; and
•
the notes to the financial statements, including material accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and
UK-adopted international accounting standards. 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
30 June 2024 and of the Group’s loss for the year then ended;
•
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
•
the Parent Company financial statements have been properly prepared in accordance with 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.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which indicates that the Group and Parent Company will need to continue
to pursue the possibility of securing additional debt facilities to provide additional liquidity, and in the event that such debt facilities
are not available or are unavailable in sufficient quantum it is very likely that the Group and Parent Company would need to raise
additional equity funding within the next 12 months. As stated in note 1, these events or conditions, along with the other matters
as set forth in note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s and Parent Company’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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. We have highlighted going concern as a key audit matter due to the estimates
and judgements the directors are required to make in their going concern assessment, and their effect on our audit strategy. Our
evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
•
Obtaining and reviewing management’s cashflow forecast for the going concern assessment period;
•
Checking the mathematical accuracy of the cashflow forecast and agreeing opening positions used;
•
Assessing management’s ability to forecast accurately by comparing approved budgets to actual results;
24
Independent Auditor’s Report to the Members
of Haydale Graphene Industries Plc
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
•
Challenging management on the assumptions underlying the cashflow forecast, including reviewing evidence of the sales
pipeline, and considering whether these are consistent with our understanding of the business obtained during the audit;
•
Agreeing cash raised post year end from the fund raise;
•
Reviewing the severe, but plausible downside scenario, and challenging management on the assumptions applied;
•
Reviewing mitigating actions that could be taken by management to conserve cash;
•
Assessing the completeness and accuracy of the disclosures made on going concern in the annual report and financial
statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be
expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus
our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole to be
£250,000 (2023: £300,000), based on 5% of the Group’s loss before tax adjusted for non-recurring items relating to impairment of
assets. Materiality for the Parent Company financial statements as a whole was set at £150,000 (2023: £190,000) based on 1% of
the Parent Company’s total assets before recognition of impairment of amounts owed by group companies.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk
and our evaluation of the specific risk of each audit area having regard to the internal control environment. This is set at £175,000
(2023: £210,000) for the group and £105,000 (2023: £133,000) for the parent.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and
directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £12,500 (2023: £15,000). Errors below that
threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
Full scope audit were performed for Haydale Graphene Industries Plc, Haydale Ltd and Haydale Ceramic Technologies LLC. Specified
procedures on higher risk audit areas were performed for Haydale Composite Solutions Limited. The other group entities were subject
to analytical review procedures:
% coverage
% coverage % coverage
Loss
Scope Revenue Assets
before tax
Full scope
88 91 83
Specific procedures
9 8 11
Analytical review
3 1 6
All audit work was performed by the same team at Crowe U.K. LLP.
25
25
25
Independent Auditor’s Report to the Members
of Haydale Graphene Industries Plc (continued)
FINANCIAL STATEMENTS
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 year and include the most significant assessed risks of material misstatement (whether or not due
to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We set out below, together with the material uncertainty related to going concern above, those matters we considered to be
key audit matters. This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
We obtained management’s impairment assessment and performed the
following procedures:
•
We obtained an understanding of the processes and key controls
relating to the impairment assessment;
•
We reviewed and challenged the key assumptions used in the model,
including the discount rate;
•
We held discussions with management to understand the budgets
and growth plans for the US business including obtaining supporting
agreements for key items;
•
We obtained and reviewed the sales pipeline, including obtaining
evidence of orders received post year end to support the revenue
assumptions for the coming financial year;
•
We reviewed post year end management accounts and compared
actual results to forecast;
•
We engaged our valuations specialist to assist us with reviewing and
challenging the discount rate and long-term growth rate used by
management;
•
We performed sensitivity analysis on the key assumptions to the
impairment model to understand the impact that reasonably possible
changes to these key inputs would have on the overall carrying
amount of the CGU; and
•
We reviewed the completeness and accuracy of the disclosures
included in the financial statements.
Valuation of goodwill in respect of Haydale Ceramic
Technologies LLC (HCT) – Group (see note 10)
As at 30 June 2024, the Group had goodwill balance of
£Nil (2023: £1,059,000). In the current year, an
impairment loss was recognised to fully write off the
goodwill balance.
The directors are required to test goodwill for
impairment at least annually. The process of measuring
and recognising impairment of assets is complex and
highly judgemental. We considered the risk that the
Cash Generating Unit (CGU) to which the goodwill
relates to was impaired given the losses incurred in the
CGU in the year.
We considered management’s impairment assessment alongside our
consideration of the valuation of goodwill. Our procedures are consistent
with the procedures performed around goodwill impairment above. We
also compared the carrying amount of the investment to the net asset
position of the investee company for any potential indicators of
impairment.
Impairment of investments in subsidiaries and
intercompany debtors – Parent Company (see notes 6
and 7)
The Parent Company holds investments and
intercompany debtor balances with its subsidiary
undertakings, a £9m provisions was recognised against
the intercompany balances in the financial year. The
assessment of impairment in relation to investments
in subsidiaries and intercompany debtor balances
involve significant judgements and estimates. We
considered the risk that the investments were impaired
due to the losses incurred in the year.
26
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Key audit matter
How the scope of our audit addressed the key audit matter
Other information
The directors are responsible for the other information contained within the annual report. 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.
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 this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our 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.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters where 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.
We performed the following procedures as part of our audit of revenue:
•
We obtained an understanding of the processes and controls relevant
to each revenue streams. We also assessed the design and
implementation of key controls over revenue recognition;
•
We tested a sample of revenue items and confirmed that the revenue
recognition criteria has been met by agreeing to supporting
documentation, including sales invoices, delivery notes and cash
receipts; and
•
We tested the cut off of revenue by agreeing a sample of revenue
items around the year end to supporting evidence such as delivery
notes and contractual terms, ensuring that revenue is recognised in
the correct accounting period.
Revenue recognition – Group (see note 3c)
The Group has various revenue streams where revenue
recognition policy varies depending on the underlying
contract which could result in revenue being recognised
at a point in time and over time.
We considered there is increased risk around cut off due
to the nature of the Group’s revenue from material
sales on when the customer obtains control of the
goods. As such, we consider this to be a key audit
matter.
27
27
27
FINANCIAL STATEMENTS
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 11, 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 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
•
Understanding the principal legal and regulatory frameworks relevant to the Group, these included the requirements of the
Companies Act 2006, laws relating to taxation and health and safety;
•
Making enquiries of management and other personnel regarding their knowledge of any actual, suspected or alleged fraud;
•
Performing substantive audit procedures in areas of significant audit risk, including revenue recognition;
•
Performing specific testing on journal transactions with a focus on those journals, which, in our opinion, displayed higher risk
characteristics; and
•
Considering accounting estimates, both individually and in aggregate, and reporting to the Audit Committee our view of the
judgements made by management.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the 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.
Matthew Stallabrass
(Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
29 November 2024
28
Independent Auditor’s Report to the Members
of Haydale Graphene Industries Plc (continued)
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
Year ended
Year ended
30 June
30 June
2024
2023
Note
£’000
£’000
REVENUE
4
4,820
4,301
Cost of sales
(2,008)
(1,911)
––––––––––––––––––––––––––––––
Gross profit
2,812
2,390
Other operating income
5
376
377
Adjusted administrative expenses
(6,346)
(6,260)
––––––––––––––––––––––––––––––
Adjusted operating loss
(3,158)
(3,493)
Adjusting administrative items:
Share based payment expense
(25)
(589)
Depreciation and amortisation
(1,514)
(1,552)
Restructure costs
(34)
–
Impairment
(1,227)
(531)
––––––––––––––––––––––––––––––
(2,800)
(2,672)
––––––––––––––––––––––––––––––
Total administrative expenses
(9,146)
(8,932)
––––––––––––––––––––––––––––––
LOSS FROM OPERATIONS
(5,958)
(6,165)
––––––––––––––––––––––––––––––
Finance costs
(393)
(407)
––––––––––––––––––––––––––––––
LOSS BEFORE TAXATION
6
(6,351)
(6,572)
Taxation
8
241
407
––––––––––––––––––––––––––––––
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS
(6,110)
(6,165)
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
52
(341)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit pension schemes
261
702
––––––––––––––––––––––––––––––
TOTAL COMPREHENSIVE LOSS FOR THE YEAR FROM CONTINUING OPERATIONS
(5,797)
(5,804)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Loss for the year attributable to:
Owners of the parent
(6,110)
(6,165)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Total comprehensive loss attributable to:
Owners of the parent
(5,797)
(5,804)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Loss per share attributable to owners of the Parent
Basic (pence)
9
(0.40)
(0.80)
Diluted (pence)
9
(0.40)
(0.80)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The notes from pages 33 to 61 form part of these financial statements.
29
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Company Registration No. 07228939
30 June
30 June
2024
2023
Note
£’000
£’000
ASSETS
Non-current assets
Goodwill
10
–
1,059
Intangible assets
10
1,338
1,386
Property, plant and equipment
11
4,867
5,915
––––––––––––––––––––––––––––––
6,205
8,360
––––––––––––––––––––––––––––––
Current assets
Inventories
12
1,670
1,733
Trade receivables
13
1,088
564
Other receivables
14
376
446
Corporation tax
14
251
406
Cash and bank balances
1,717
1,378
––––––––––––––––––––––––––––––
5,102
4,527
––––––––––––––––––––––––––––––
TOTAL ASSETS
11,307
12,887
––––––––––––––––––––––––––––––
LIABILITIES
Non-current liabilities
Bank loans
20
(1,392)
(1,363)
Pension Obligation
25
(304)
(577)
Other payables
19
(1,558)
(1,962)
––––––––––––––––––––––––––––––
(3,254)
(3,902)
––––––––––––––––––––––––––––––
Current liabilities
Bank loans
20
(14)
(11)
Trade and other payables
19
(2,186)
(1,899)
Deferred income
15
(178)
(103)
––––––––––––––––––––––––––––––
(2,378)
(2,013)
––––––––––––––––––––––––––––––
TOTAL LIABILITIES
(5,632)
(5,915)
––––––––––––––––––––––––––––––
TOTAL NET ASSETS
5,675
6,972
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital
16
16,730
15,717
Share premium account
16
35,374
31,912
Share-based payment reserve
408
833
Foreign exchange reserve
(301)
(353)
Retained losses
(46,536)
(41,137)
––––––––––––––––––––––––––––––
TOTAL EQUITY
5,675
6,972
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The financial statements on pages 29 to 61 were approved and authorised for issue by the Board of directors on 29 November 2024
and signed on its behalf by:
Gareth Kaminski-Cook
Patrick Carter
Chair
Chief Financial Officer
30
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share-based
Foreign
Share
Share
payment
exchange
Retained
Total
capital
premium
reserve
reserve
losses
equity
£’000
£’000
£’000
£’000
£’000
£’000
At 30 June 2022
10,207
31,912
244
(12)
(35,303)
7,048
Comprehensive loss for the year
Loss for the year
–
–
–
–
(6,165)
(6,165)
Other comprehensive income/(loss)
–
–
–
(341)
702
361
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
10,207
31,912
244
(353)
(40,766)
1,244
Contributions by and distributions to owners
Recognition of share-based payments
–
–
589
–
–
589
Issue of ordinary share capital
5,510
–
–
–
–
5,510
Share Issue Cost
–
–
–
(371)
(371)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
15,717
31,912
833
(353)
(41,137)
6,972
Comprehensive loss for the year
Loss for the year
–
–
–
–
(6,110)
(6,110)
Other comprehensive income/(loss)
–
–
–
52
261
313
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
15,717
31,912
833
(301)
(46,986)
1,175
Recognition of share-based payments
–
–
25
–
–
25
Share based payment charges – lapsed warrants
–
–
(450)
–
450
–
Issue of ordinary share capital
1,013
4,050
–
–
–
5,063
Share issue cost
–
(588)
–
–
–
(588)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
16,730
35,374
408
(301)
(46,536)
5,675
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
Year ended
Year ended
30 June
30 June
2024
2023
Note
£’000
£’000
Cash flow from operating activities
Loss after taxation
(6,110)
(6,165)
Adjustments for:
Amortisation and impairment of intangible assets
10
1,614
335
Depreciation and impairment of property, plant and equipment
11
1,128
1,747
Share-based payment charge
17
25
589
Finance costs
393
407
Pension: employer contribution
25
(161)
(180)
Taxation
(241)
(407)
––––––––––––––––––––––––––––––
Operating cash flow before working capital changes
(3,352)
(3,674)
––––––––––––––––––––––––––––––
Decrease/(increase) in inventories
63
(218)
(Increase)/decrease in trade and other receivables
(454)
304
Increase/(decrease) in payables and deferred income
383
(503)
––––––––––––––––––––––––––––––
Cash used in operations
(3,360)
(4,091)
––––––––––––––––––––––––––––––
Income tax received
397
427
––––––––––––––––––––––––––––––
Net cash used in operating activities
(2,963)
(3,664)
––––––––––––––––––––––––––––––
Cash flow used in investing activities
Purchase of plant and equipment
(16)
(203)
Purchase of intangible assets
(503)
(421)
––––––––––––––––––––––––––––––
Net cash used in investing activities
(519)
(624)
––––––––––––––––––––––––––––––
Cash flow from financing activities
Finance costs
(174)
(209)
Finance costs – lease liability
(95)
(116)
Additional bank borrowing
42
–
Payment of lease liability
(446)
(261)
Proceeds from issue of share capital
16
5,063
5,510
Share capital issues costs
16
(588)
(371)
Repayments of borrowings
28
(10)
(53)
––––––––––––––––––––––––––––––
Net cash flow from financing activities
3,792
4,500
––––––––––––––––––––––––––––––
Net increase in cash and cash equivalents
310
212
Effects of exchange rates changes
29
(20)
Cash and cash equivalents at beginning of the financial year
1,378
1,186
––––––––––––––––––––––––––––––
Cash and cash equivalents at end of the financial year
1,717
1,378
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
32
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Accounting policies
Basis of preparation
The Group consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards
(collectively “IFRSs”) and with the requirements of the Companies Act 2006.
The Group’s financial statements have been prepared under the historical cost convention except for pension obligation which is
measured at the present value of future benefits that the employees earn for services provided less fair value of plan assets.
The consolidated financial statements are presented in sterling amounts.
Amounts are rounded to the nearest thousands, unless otherwise stated.
Under Section 479A of the Companies Act 2006, exemptions from an audit of the accounts for the financial year ended 30 June
2024 have been taken by Haydale Limited (04790862) and Haydale Composite Solutions Limited (02675462). As required, the
Company guarantees all outstanding liabilities to which the subsidiary companies listed above are subject at the end of the financial
year, until they are satisfied in full and the guarantee is enforceable against the parent undertaking by any person to whom the
subsidiary companies listed above is liable in respect of those liabilities.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
made up to the reporting date. The Company controls an investee if all three of the following elements are present: power over the
investee, exposure to variable returns from the investee, and the ability of the investee to use its power to affect the variable returns.
Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
All intra-group transactions, balances, income and expenditure are eliminated on consolidation. The consolidated financial
statements have been prepared using the acquisition method of accounting.
Under the acquisition method, the results of the subsidiaries acquired or disposed of are included from the date of acquisition or up
to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined, and these values are
reflected in the Consolidated Financial Information. The cost of acquisitions is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Haydale Graphene Industries
Group in exchange for control of the acquisition. Any excess of the purchase consideration of the business combination over the fair
value of the identifiable assets and liabilities acquired is recognised as goodwill. Goodwill, if any, is not amortised, but reviewed for
impairment at least annually. If the consideration is less than the fair value of assets and liabilities acquired, the difference is
recognised directly in the statement of comprehensive income. Acquisition-related costs are expensed as incurred.
Going concern
The directors have prepared and reviewed detailed financial forecasts of the Group and, in particular, considered the cash flow
requirements for the period from the date of approval of these financial statements to the end of June 2026. These forecasts sit
within the Group’s latest estimate and within the longer-term financial plan, both of which have been updated on a regular basis.
The directors are also mindful of the impact that the other risks and uncertainties set out on pages 8 to 9 may have on these estimates
and in particular the speed of adoption of new products. The forecasts may also substantively change as a result of actions arising
out of the Review.
After due consideration of the forecasts prepared, the Group’s current cash resources after the equity fund raise in November 2024
and the terms of its debt facilities, the directors consider that the Company and the Group have adequate financial resources to
continue in operational existence for the foreseeable future and for this reason the financial statements have been prepared on the
going concern basis.
Whilst the directors believe that the going concern basis is appropriate at the date of this report, the Board is mindful that
notwithstanding the proposed actions being taken pursuant to the Review to refocus the Group Company’s activities, the net
proceeds of the fund raise may be insufficient to fund the cash requirements of the Group through to a position where it is able to
fund itself from its own cashflow within 12 months of the date of this report. The Board continues to pursue the possibility of securing
additional debt facilities to provide additional liquidity. In the event that such debt facilities are not available or are unavailable in
sufficient quantum it is very likely that the Group would need to raise additional equity funding. In the current economic conditions
there is inherent uncertainty over the whether such future equity or debt funding would be available. Formally, these circumstances
represent a material uncertainty that casts significant doubt upon the Company’s and Group’s ability to continue as a going concern
and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after
making enquiries and considering the uncertainties described above, the Directors have a reasonable expectation that the Company
and Group have adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue
to adopt the going concern basis of accounting in preparing the annual financial statements.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
FINANCIAL STATEMENTS
2. Changes in accounting policies
The Group has applied the following amendment for the first time for their annual reporting period commencing 1 July 2023:
•
IFRS 17 Insurance Contracts
•
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
•
Definition of Accounting Estimates – Amendments to IAS 8: and
•
Deferred Tax related to Assets and Liabilities from a Single Transaction – Amendments to IAS 12
The amendments listed above did not have any impact on the amounts recognised in the prior periods and are not expected to
significantly affect the current or future periods.
New standards and interpretation not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2024 reporting
periods and have not been early adopted by the Group. None of these are expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable future transactions.
3. Summary of material accounting policies
a)
Intangible assets
Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as
intangible assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure
is capitalised if, and only if an entity within the Group can demonstrate all of the following:-
i)
its ability to measure reliably the expenditure attributable to the asset under development;
ii)
the product or process is technically and commercially feasible;
iii)
its future economic benefits are probable;
iv)
its ability to use or sell the developed asset;
v)
the availability of adequate technical, financial and other resources to complete the asset under development; and
vi)
its intention to use or sell the developed asset.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development
expenditure initially recognised as an expense will not be restated as an asset in a subsequent period.
Historic capitalised development expenditure is amortised on a straight-line basis over a period of up to 20 years when the products
or services are ready for use. The maximum 20 years amortisation period is based on UK Patents being 20 years from the date of
filing of the application, under Article 60 of the European Patent Convention, and, although the Group now has patents granted in
other jurisdictions, the directors believe that 20 years is appropriate. New projects will be reviewed on completion, to determine the
useful economic life. In the event that it is no longer probable that the expected future economic benefits will be recovered, the
development expenditure is written down to its recoverable amount. Amortisation is included within administrative expenses.
Acquired intangible assets
An intangible resource acquired with a subsidiary undertaking is recognised as an intangible asset if it is separable from the acquired
business or arises from contractual or legal rights, is expected to generate future economic benefits and its fair value can be measured
reliably. Acquired intangible assets (excluding development expenditure which is in line with the above policy), including customer
relationships, are amortised through the Consolidated Statement of Comprehensive Income on a straight-line basis over their
estimated economic lives of ten years.
34
35
Goodwill
Business combinations are accounted for by applying the purchase method. The cost of a business combination is a fair value of the
consideration given, liabilities incurred or assumed and of equity instrument issued.
Contingent consideration is initially recognised at estimated amount where the consideration is probable and can be measured
reliably. Where (i) the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes
probable or (ii) contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost
of the business combination if the remeasurement occurs within a year of the transaction and relates to information that was
available at the point of acquisition. Otherwise, any remeasurements of contingent consideration is reflected in the statement of
comprehensive income.
On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair
value cannot be measured reliably, in which case the value is incorporated in goodwill. Where the fair value of contingent liabilities
cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.
Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase consideration over the
fair value to the Group’s interest in the identifiable net assets, liabilities and contingent liabilities acquired.
b)
Impairment of goodwill and other non-financial assets
The carrying value of goodwill, and the cash-generating unit to which it relates, is reviewed at the end of each reporting period for
impairment regardless of whether there is an indication that the asset may be impaired. Other non-financial assets are considered
for indicators of impairment at each reporting date and full impairment reviews carried out if indicators of impairment exist.
Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount
of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted
future cash flow. An impairment loss is recognised in administrative expenses within the Statement of Comprehensive Income
immediately it is identified.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount,
a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised
to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no
impairment loss been recognised. The reversal is recognised in profit or loss immediately.
c)
Revenue
To determine whether to recognise revenue, the Group follows a five step process:
1.
Identifying the contract with a customer
2.
Identifying the performance obligations
3.
Determining the transaction price
4.
Allocating the transaction price to the performance obligations
5.
Recognising revenue when/as performance obligation(s) are satisfied.
Revenue arises mainly as:
i)
Goods
Revenue represents sales to external customers at invoiced amounts less value added tax or local taxes on sales. Revenue
is recognised at the point where control is considered to pass to the customer when all performance obligations have been
fulfilled. In all instances the transaction price is agreed with the customer prior to transfer of goods on a stand-alone basis.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
FINANCIAL STATEMENTS
3. Summary of material accounting policies (continued)
ii)
Services
Engineering design and research revenue is recognised on the percentage of completion method unless the outcome of
the contract cannot be reliably determined, in which case contract revenue is only recognised to the extent of contract
costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably
ascertained that the contract will result in a loss.
The Group recognises revenue over time based upon the percentage of completion method, whereby the stage of
completion is determined based on the proportion of contract costs incurred compared to total estimated costs. In all cases,
the total transaction price for a contract is allocated amongst the various performance obligations based on their relative
stand-alone prices.
At each reporting period, receivables are recognised for revenues yet to be invoiced or settled to the extent that it is highly
probable that there will not be a significant reversal of the amounts accrued in the future.
Where invoices are raised to the client in excess of the value of the consideration recognised as revenue based on the stage
of completion, deferred income balances are recorded that represent unfulfilled performance obligations. These
performance obligations are expected to be fulfilled within a year of the reporting date.
d)
Financial instruments
i)
Financial assets
Financial assets and financial liabilities are recognised in the Group balance sheet when the Group becomes a party to the
contractual provisions of the instrument. Financial assets are classified as either fair value through profit or loss, fair value
through other comprehensive income, or amortised cost. Classification and subsequent re-measurement depends on the
group’s business model for managing the financial asset and its cash flow characteristics. The Group has financial assets
in the categories of amortised cost only. The Group does not have financial assets at fair value through other comprehensive
income or fair value through profit or loss. Detailed disclosures are set out in note 22.
ii)
Amortised cost
These assets arise principally from the provision of goods and services to customers (such as trade receivables), but also
incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash
flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value
once the Group’s right to consideration is unconditional and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime
expected credit losses. During this process, the probability of the non-payment of trade receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, such provisions are recorded in a separate provision account with
the loss being recognised in the income statement. On confirmation that the trade receivable will not be collectable, the
gross carrying value of the asset is written off against the associated provision.
Impairment provisions for other receivables are recognised based on a forward-looking expected credit loss model. The
methodology used to determine the amount of the provision is based on whether at each reporting date, there has been
a significant increase in credit risk since initial recognition of the financial asset. For those financial assets where the credit
risk has not increased significantly since initial recognition, twelve month expected credit losses along with gross interest
income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with
the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit
losses along with interest income on a net basis are recognised.
36
iii)
Financial liabilities:
Financial liabilities are comprised of trade and other payables, borrowings and other short-term monetary liabilities, which
are recognised at amortised cost.
Trade payables, other payables and other short-term monetary liabilities, are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To
the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
e)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The cost of an
item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable
to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by
management.
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated
useful lives. The principal annual rates used for this purpose are:-
Leasehold improvements 10-20% per annum straight line
Plant and machinery 15-33% per annum straight line
US Plant and machinery Time in use
Furniture and fittings 20-33% per annum straight line
Motor vehicles 33% per annum straight line
Under the depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each
reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and
the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and
equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the
cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the
cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the
day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from
its use or disposal. The gain or loss on retirement or disposal is determined as the difference between any sales proceeds and the
carrying amounts of the asset and is recognised in the Statement of Comprehensive Income within administrative expenses.
f)
Income taxes
The charge for taxation is based on the loss for the period and takes into account deferred taxation.
Current tax is measured at amounts expected to be paid using the tax rates and laws that have been enacted by the balance
sheet date. The substantively enacted rate has been used for deferred tax balances, which are recognised in respect of all timing
differences that have been originated but not reversed by the reporting date, except that the recognition of deferred tax assets
is limited to the extent that the Company anticipates making sufficient taxable profits in the future to absorb the reversal of
the underlying timing differences.
The Group receives research and development tax credits for the work it performs in the field of nano-technology. Using the
SME and large company schemes, these credits generate cash reimbursement in exchange for the sacrifice of applicable losses,
such tax credits are recognised in income tax within the Statement of Comprehensive Income, in the period in which they relate.
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37
FINANCIAL STATEMENTS
3. Summary of material accounting policies (continued)
g)
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank balances, deposits with financial institutions and short-term, highly
liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value
and have maturities of 3 months or less from inception.
h)
Inventories
Inventories are recorded at the lower of cost and net realisable value. Cost represents materials, direct labour, other direct costs
and related production overheads, and is determined on the First-In-First-Out (FIFO) method. Net realisable value is based on
estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for slow-moving,
obsolete and defective inventories where appropriate.
The value of inventories used in the fulfilment of commercial or developmental programmes are charged to cost of sales in the
Statement of Comprehensive Income on an accruals basis, with some costs for ongoing projects being held as WIP at the year
end prior to being charged to cost of sales.
i)
Employee benefits
i)
Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which
the associated services are rendered by employees of the Group.
ii)
Defined contribution plans
The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate.
Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.
iii)
Defined Benefit Pension plans
The group accounts for its defined benefit pension scheme such that the net pension scheme position is reported on the
balance sheet with actuarial gains and losses being recognised through the statement of comprehensive income. A number
of key assumptions have been made in calculating the fair value of the Group’s defined benefit pension scheme which
affect the balance sheet position and the group’s reserves and income statement. Refer to note 25 of the notes to the
consolidated accounts for a summary of the main assumptions and sensitivities. Actual outcomes may differ materially
from the assumptions used and may result in volatility in the net pension scheme position.
j)
Provisions
Provisions are recognised when the Group has a present or constructive obligation as a result of past events, when it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate
of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted to reflect the
current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated
expenditure required to settle the obligation.
k)
Government grants
Revenue grants are accounted for under the accruals model, with grants being recognised within Other operating income on a
systematic basis over the period in which the group recognised the related costs for which the grant is intended to compensate.
Grants received in advance of the income being recognised in the Statement of Comprehensive Income are included in grant
creditors.
When grant income is received for capital expenditure, it is held as deferred income on the balance sheet and released on a
straight line basis over the useful economic life of the asset to which it relates. All income relating to government grants is
included as ‘Other operating income’ within the Statement of Comprehensive Income.
l)
Share-based payment arrangements
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the
equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based
transactions are set out in note 17 to the Consolidated Financial Statements.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, with a corresponding increase in equity. At the end of each reporting period, the Group revises its
estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any,
is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment
to other reserves.
38
m) Leases
Leased assets
The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, that conveys the right to use an
asset for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets
all three key criteria which are whether;
•
The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group.
•
The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout
the period of use, considering its rights within the defined scope of the contract.
•
The Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether
it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of lease as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet.
The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease
payment made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight line basis from the lease commencement date to the earlier of the
end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for
impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payment unpaid at that
date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental
borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments, amounts expected to be
payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payment made and increased for interest. It is remeasured
to reflect any reassessment or modification, or if there are changes in substance to the fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if
the right-of-use asset is already reduced to zero.
Measurement and recognition of lease as a lessor
The Group leases out elements of plant and machinery. The Group has classified these leases as operating leases.
The Group has applied IFRS 15 Revenue from Contracts with customers to allocate consideration in the contract to each lease
and non-lease components.
n)
Transactions and balances in foreign currencies
Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the
exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting
period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates
that existed when the values were determined. All exchange differences are recognised in profit or loss.
Overseas operations which have a functional currency different to the group presentation currency have been translated using
the monthly average exchange rate for consolidation into the statement of comprehensive income. The amounts included in
the group statement of financial position, have been translated at the exchange rate ruling at the statement date. All resulting
exchange differences are reported in other comprehensive income.
o)
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in conformity with IFRSs requires the use of certain critical accounting estimates. It
also requires the directors of the Group to exercise their judgement in the process of applying the accounting policies which are
detailed below. These judgements are continually evaluated by the directors and management and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
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39
FINANCIAL STATEMENTS
3. Summary of material accounting policies (continued)
The key estimates and underlying assumptions concerning the future and other key sources of estimation uncertainty at the
statement of financial position date, that have a significant risk of causing material adjustment to the carrying amounts of
assets and liabilities within the next financial period are reviewed on an ongoing basis. Revision to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
Defined Benefit Pension Scheme (estimate)
In determining the pension valuation movement and the defined benefit obligation of the Group’s pension scheme, a number
of assumptions are used in order to produce a valuation, which is sensitive to changes in the assumptions. These assumptions
include an appropriate discount rate, the levels of salary increases, price inflations and mortality rates. Further details are included
in note 25, including sensitivity analysis.
Impairment of non-financial assets (judgement and estimate)
The carrying value of goodwill, and the cash generating units (CGUs) to which it relates, is assessed annually for impairment
through comparing the recoverable amount to the CGU’s carrying value. The value in use calculations require estimates in
relation to uncertain items, including management’s expectations of future revenue growth, operating costs, profit margins,
operating cashflows and the discount rate applied.
Future cash flows used in the value in use calculations are based on our latest longer term projections reviewed by the Board.
Expectations about future growth reflect expectations of growth in the markets applicable to the Group. The future cashflows
are discounted using a pre-tax discount rate that reflects current market assessments of the time value of money. The discount
rate used is adjusted for the specific risk to the group, including the countries to which cash flows will be generated. Further
details are included in note 10, including sensitivity analysis.
Useful economic lives of tangible and intangible assets (judgement)
The annual depreciation charge for tangible assets is sensitive to change in the estimated useful economic lives and residual
values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended where necessary
to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical
condition of the assets. See note 11 for the carrying amounts of the property plant and equipment, and the depreciation
accounting policy for the useful economic lives for each class of assets.
Share Based Payments (judgement and estimate)
The costs of the share-based payments plans (and warrant plans) are determined on the basis of the fair value of the equity
instrument at grant date. Determining the fair value assumes choosing the most suitable valuation model for these equity
instruments, for which the characteristics of the grant have a decisive influence. This assumes also the input into the valuation
model of some relevant judgments, like the estimated expected life of the equity instrument and the volatility. The judgments
made and the model used are further specified in note 17.
R&D Capitalisation (judgement)
The capitalisation of development expenditures involves management judgement against criteria set in IAS 38. Management
reviewed the methodology used to capitalise development costs and satisfied itself that it was in conformity with IFRS.
p)
Alternative Performance Measures
Disclosure has been adjusted in the Statement of Comprehensive Income. Adjusted Administrative expenses have excluded
the following non-cash and other non-recurring items share based payment charges, impairment charges, depreciation and
amortisation, and restructuring costs. We believe removing these balances better reflects the underlying trading performance
of the Group and provides more meaningful information to the user of the Financial Statements as aligned to management’s
internal KPI’s. This additional disclosure is a non-GAAP measure and may not be comparable with similarly described amounts
in other entities.
40
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41
4. Segment analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker (which is the Chief Executive Officer and Chief Financial Officer) as defined in IFRS 8,
in order to allocate resources to the segment and to assess its performance.
For management purposes, the Group is organised into the following reportable regions:
•
UK & Europe (focusing on functionalisation of nano materials, high performance ink & master batches, elastomers and the
composites market in Europe);
•
North America (focusing on SiC & blank products for tooling); and
•
Asia Pacific (focusing on sales to the Asian markets)
2024
Adjustments,
UK & North
Central &
Europe America
Asia Pacific
Eliminations
Consolidated
£’000 £’000
£’000
£’000
£’000
REVENUE 1,375
3,294
151
–
4,820
Cost of sales (722)
(1,209)
(77)
–
(2,008)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Gross profit 653
2,085
74
–
2,812
Other operating income 376
–
–
–
376
Adjusted administrative expenses (2,162)
(2,016)
(292)
(1,876)
(6,346)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Adjusted operating loss (1,133)
69
(218)
(1,876)
(3,158)
Administrative expenses
Share based payment expense (12)
(21)
(2)
10
(25)
Depreciation & amortisation (702)
(658)
(27)
(127)
(1,514)
Restructuring cost (16)
–
(18)
–
(34)
Impairment cost –
–
–
(1,227)
(1,227)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(730)
(679)
(47)
(1,344)
(2,800)
Total administrative expenses (2,892)
(2,695)
(339)
(3,220)
(9,146)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
OPERATING LOSS (1,863)
(610)
(265)
(3,220)
(5,958)
Finance costs
(393)
–––––––––––––––
LOSS BEFORE TAXATION
(6,351)
Taxation
241
–––––––––––––––
LOSS AFTER TAXATION
(6,110)
–––––––––––––––
–––––––––––––––
Additions to non-current assets 650
6
25
–
681
Segment assets 3,958
5,904
230
1,215
11,307
Segment liabilities (2,527)
(2,699)
(69)
(337)
(5,632)
FINANCIAL STATEMENTS
4. Segment analysis (continued)
2023
Adjustments,
UK & North
Central &
Europe America
Asia Pacific
Eliminations
Consolidated
£’000 £’000
£’000
£’000
£’000
REVENUE 786
3,190
325
–
4,301
Cost of sales (467)
(1,231)
(213)
–
(1,911)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Gross profit 319
1,959
112
–
2,390
Other operating income 377
–
–
–
377
Adjusted administrative expenses (2,270)
(1,836)
(538)
(1,616)
(6,260)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Adjusted operating loss (1,574)
123
(426)
(1,616)
(3,493)
Administrative expenses
Share based payment expense (34)
(43)
(1)
(511)
(589)
Depreciation & amortisation (681)
(693)
(48)
(130)
(1,552)
Impairment –
(531)
–
–
(531)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(715)
(1,267)
(49)
(641)
(2,672)
Total administrative expenses (2,985)
(3,103)
(587)
(2,257)
(8,932)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
OPERATING LOSS (2,289)
(1,144)
(475)
(2,257)
(6,165)
Finance costs
(407)
–––––––––––––––
LOSS BEFORE TAXATION
(6,572)
Taxation
407
–––––––––––––––
LOSS AFTER TAXATION
(6,165)
–––––––––––––––
–––––––––––––––
Additions to non-current assets 658
–
80
–
738
Segment assets 3,607
6,447
312
2,521
12,887
Segment liabilities (2,391)
(3,138)
(99)
(287)
(5,915)
Geographical information
All revenues of the Group are derived from its principal activities as set out on page 3. The Group’s revenue from external customers
by geographical location are detailed below.
2024
2023
£’000
£’000
By destination
United Kingdom
965
563
Europe
128
813
United States of America
2,135
1,822
China
261
180
Thailand
66
61
South Korea
84
145
Japan
901
678
Rest of the World
280
39
––––––––––––––––––––––––––––––
4,820
4,301
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
During 2024, £1.23 million (26%) (2023: £0.95 million (22%)) of the Group’s revenue depended on a single customer. During 2024
£0.90 million (19%) (2023: £0.68 million (16%)) of the Group’s revenue depended on a second single customer.
All amounts shown as other operating income within the Statement of Comprehensive Income are generated within and from the
United Kingdom, EU and the US. These amounts include income earned as part of a number of grant funded projects in the United
Kingdom and EU.
42
STRATEGIC REPORT
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FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
Dis-aggregation of revenues
The split of revenue by type:
2024
2023
£’000
£’000
Services
899
387
Reactor rental
124
124
Products (Goods)
3,797
3,790
––––––––––––––––––––––––––––––
4,820
4,301
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
2024
UK &
North
Asia
Europe
America
Pacific
Total
£’000
£’000
£’000
£’000
Services 878
–
21
899
Reactor rental 124
–
–
124
Products (Goods) 373
3,294
130
3,797
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
1,375
3,294
151
4,820
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
2023
UK &
North
Asia
Europe
America
Pacific
Total
£’000
£’000
£’000
£’000
Services 303
–
84
387
Reactor rental 124
–
–
124
Products (Goods) 359
3,190
241
3,790
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
786
3,190
325
4,301
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Services and reactor rental revenues are recognised over time, whereas goods and reactor sales are recognised at a point in time.
5. Other Operating Income
2024
2023
£’000
£’000
Grant Income
376
377
––––––––––––––––––––––––––––––
376
377
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
There are no unfulfilled conditions attached to the above income.
43
FINANCIAL STATEMENTS
44
6. Loss before taxation
Loss before taxation is arrived at after charging:
2024
2023
£’000
£’000
Amortisation of intangibles
387
335
Impairment of intangible
1,227
–
Depreciation of property, plant and equipment
1,128
1,216
Impairment of property, plant and equipment
–
531
Foreign Exchange
52
105
Restructuring costs
34
–
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The service fees of the Group’s auditor, Crowe U.K. LLP are analysed below:
2024
2023
£’000
£’000
Fees payable to the Company’s auditor for the audit of the Group’s financial statements
65
62
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
There are no other fees payable to the Company’s auditors and its associates for other services (2023: £Nil).
7. Employees
The average number of employees during the year, including executive directors, was:
2024
2023
No.
No.
Administration
24
27
Research, development and production
39
40
––––––––––––––––––––––––––––––
63
67
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Staff costs for all employees, including executive directors, consist of:
2024
2023
£’000
£’000
Wages and salaries
3,434
3,224
Social security costs
380
397
Defined contribution pension costs
147
221
Share-based payment expense
24
366
––––––––––––––––––––––––––––––
3,985
4,208
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Directors’ remuneration
2024
2023
£’000
£’000
Short-term employee benefits and fees
553
553
Post-retirement benefits
30
39
––––––––––––––––––––––––––––––
583
592
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The total amount payable to the highest paid director in respect of emoluments was £253,000 (2023: £269,000), excluding pension
costs of £21,000 (2023: £24,000). Further details on Directors’ Remuneration can be found in the Directors’ Remuneration Report
on pages 21 to 22.
8. Income tax
2024
2023
£’000
£’000
Current tax credit
Total income tax credits:
– for the financial year
241
406
– under provision in the previous financial year
–
1
––––––––––––––––––––––––––––––
Total current tax
241
407
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The reason for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United
Kingdom applied to the losses for the year are as follows:
2024
2023
£’000
£’000
Loss for the year
(6,110)
(6,165)
Income tax credit
(241)
(407)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Loss before income taxes
(6,351)
(6,572)
Tax using the Group’s domestic tax rates of 25% (2023: 20.5%)
1,588
1,347
Expenses not deductible for tax purposes
(226)
(376)
Income not taxable
557
581
Different tax rates applied in overseas jurisdictions
(5)
(5)
R&D enhancement
244
410
Surrender for R&D tax credit
(555)
(571)
Adjustment for over provision in comparative year
4
1
Movement in unrecognised losses carried forward
(1,328)
(955)
Non qualifying assets
(38)
(25)
––––––––––––––––––––––––––––––
Total tax credit
241
407
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Factors affecting the future tax charge
The main rate of corporation tax for UK companies is currently 25%.
The Group has tax losses that are available indefinitely for the UK and a maximum of 20 years for the US to be offset against future
taxable profits of the companies approximately amounting to £34.79 million (2023: £31.82 million). US tax losses of £0.4m are
expected to expire in 12 years, with all other losses being available indefinitely. The group currently expects to be able to utilise its
US tax losses in the foreseeable future and a deferred tax asset has been recognised in respect of these tax losses up to the value of
the timing difference of fixed assets and therefore no overall deferred tax asset has been created.
9. Loss per share
The calculations of loss per share are based on the following losses and number of shares:
2024
2023
£’000
£’000
Loss after tax attributable to owners of Haydale Graphene Industries Plc
(6,110)
(6,165)
–––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––
Weighted average number of shares:
Basic and Diluted
1,534,906,164
729,239,439
–––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––
Loss per share:
Basic (pence) and Diluted (pence)
(0.40)
(0.80)
–––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––
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FINANCIAL STATEMENTS
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45
FINANCIAL STATEMENTS
9. Loss per share (continued)
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the
diluted earnings per ordinary share are identical to those used for basic earnings per share. This is because the exercise of share
options would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS 33. At 30 June
2024, there were 208,750,000 (2023: 242,033,392) options and warrants outstanding as detailed in note 17. All of the options are
potentially dilutive.
Post year end 1,960,633,907 of new Ordinary Shares were issued on 14 November 2024, these Ordinary Shares are dilutive. As part
of this process, the Company’s share capital was restructured to in effect reduce the nominal value of each ordinary share from
0.1 pence to 0.01 pence.
10. Intangible assets
Customer
Development
Relationships
Expenditure
Goodwill
Total
£’000
£’000
£’000
£’000
Cost
At 1 July 2022
1,158
2,661
2,117
5,936
Additions
–
421
–
421
FX translation
(50)
–
(72)
(122)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
1,108
3,082
2,045
6,235
Additions
–
503
–
503
FX translation
–
–
1
1
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
1,108
3,585
2,046
6,739
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Accumulated amortisation and impairment
At 1 July 2022
809
1,698
986
3,493
Charge for the year
87
248
–
335
FX translation
(38)
–
–
(38)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
858
1,946
986
3,790
Charge for the year
87
300
–
387
Impairment
166
1
1,060
1,227
FX translation
(3)
–
–
(3)
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
1,108
2,247
2,046
5,401
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net book value
At 30 June 2024
–
1,338
–
1,338
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
250
1,136
1,059
2,445
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2022
349
963
1,131
2,443
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
All of the above Development Expenditure is currently in use.
Goodwill
Goodwill of £24,000 arose on the acquisition of Haydale Ltd on 21 May 2010. On 9 September 2016, goodwill of £327,151 arose on
the acquisition of Innophene Co. Ltd (now Haydale Technologies Thailand Ltd (“HTT”)). Goodwill arose on the acquisition of ACM
(now Haydale Composite Technology LLC (“HCT”) on 13 October 2016 of £1,102,620.
Customer Relationships
The customer relationships intangible asset arose on the fair value of assets on the acquisition of HCT on 13 October 2016 amounting
to £868,676.
Development costs
Development costs brought forward are made up of three areas. The first relates to the fair value of assets on the acquisition of
Haydale Ltd on 21 May 2010 for development of nano-technology projects, where it is anticipated that the costs will be recovered
through future commercial activity. The second relates to capitalised patent costs that were acquired as part of the acquisition of
46
Innophene Co Ltd. (now HTT) in 2016. The third relates to the development of nano enhanced products within Haydale Limited and
Haydale Composite Solutions Limited (“HCS”).
Development expenditure of £503,000 was capitalised during the year in accordance with IAS 38 in connection with the Group’s
expenditure with the development of nano enhanced products (including inks, epoxy resins, elastomers underfloor heating, thermal
fluid and composites), where the Directors believe that future economic benefit is probable (2023: £421,000). Capitalised
development expenditure is not amortised until the products or services are ready for use.
Amortisation
Capitalised development costs are amortised over the estimated useful life of between 5 and 20 years. The amortisation charge is
recognised in administrative expenses.
The Customer relationships intangible is amortised over the estimated useful life of 10 years. The amortisation charge is recognised
in administrative expenses.
Goodwill impairment
Goodwill acquired in a business combination is allocated at acquisition to the CGUs that are expected to benefit from that business
combination. Following the acquisitions of Haydale, HCT and HTT, the Group is operating a number of different CGUs and therefore
Haydale and HCT goodwill has been considered against the future forecast trading outcomes of HCT, and Haydale as separate CGU’s.
HTT Goodwill has previously been fully impaired.
An analysis of the pre-tax discount rates used and the goodwill balance as at the year-end by principal CGU’s is shown below:
2024
2023
2024
2023
%
%
£’000
£’000
Haydale
10%
10%
–
24
HCT
15%
14%
–
1,035
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
The Group tests goodwill at least annually for impairment or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts of the CGUs are determined from value-in-use calculations. The key assumptions for the value-in-use are
those regarding the discount rates, the growth rates and expected changes to cash flows during the period for which management
have detailed plans. Discount rates are estimated using pre-tax rates that reflect current market assessments of the time value of
money and the risks specific to the CGUs.
The impairment calculations for the current year have been derived from the 5 year longer term forecasts (the “Forecasts”) that have
been approved by the Board.
The HCT model assumes that its turnover is in line with the Forecasts and then reduces to 2% growth in perpetuity. The growth
rates used are based on management’s internally estimated growth forecasts which are predicated on continued recovery in the
aerospace industry and growth in the US tool product range. Further information on this trading unit is given in the Strategic Report
on pages 5 and 6 under the subheading ‘Silicon Carbide powders and tooling”.
As part of the impairment sensitivity analysis several performance assumptions were adjusted which involved either reducing
forecasted revenue or increasing the WACC to a point where the carrying value of the assets were equal to the HCT discounted
cashflows. One of the sensitivity scenarios adjusted the model by the following criteria, resulting in the carrying value being equal
to the HCT discounted cashflow.
Turnover reduction GP% reduction Admin Expenses
WACC
30% 15% +3%
+2%
Notwithstanding the sensitivity noted above, it is management’s opinion that the markets for the legacy powder sales of the
US business are insufficient to sustain the business in its current form without the new revenue streams being pursued for finished
tooling. This assessment along with the previous financial loss position has resulted in the Board implementing an impairment of
the historical Goodwill and Customer Relationships.
Due to uncertainty over the timings of the recovery in revenue at HTT the Directors impaired the intangible assets of HTT in the year
ending June 2022.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
47
FINANCIAL STATEMENTS
11. Property, plant and equipment
Leasehold Plant
and leasehold and Fixtures
Motor
improvements machinery and fittings
vehicles
Total
£’000 £’000 £’000
£’000
£’000
Cost
At 1 July 2022
4,930 8,651 566
33
14,180
Additions
120 170 27
–
317
FX translation
(161) (218) (17)
(1)
(397)
Disposals
(93) – (1)
–
(94)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
4,796 8,603 575
32
14,006
Additions
162 10 6
–
178
FX translation
15 20 (1)
–
34
Disposals
(246) (94) (10)
–
(350)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
4,727 8,539 570
32
13,868
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Accumulated depreciation and impairment
At 1 July 2022
1,996 4,184 388
33
6,601
Charge for the year
567 599 50
–
1,216
Impairment
– 531 –
–
531
FX Translation
(66) (85) (11)
(1)
(163)
Disposals
(93) – (1)
–
(94)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
2,404 5,229 426
32
8,091
Charge for the year
529 548 51
–
1,128
FX Translation
3 7 –
–
10
Disposals
(143) (76) (9)
–
(228)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
2,793 5,708 468
32
9,001
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Net book value
At 30 June 2024
1,934 2,831 102
–
4,867
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––—–
At 30 June 2023
2,392 3,374 149
–
5,915
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––—–
At 30 June 2022
2,934 4,467 178
–
7,579
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––—–
Included in the net carrying amount of property, plant and machinery are right-of-use assets as follows:
30 June
30 June
2024
2023
£’000
£’000
Leasehold and leasehold improvements cost
3,981
4,044
Leasehold and leasehold improvements depreciation
(2,191)
(1,842)
––––––––––––––––––––––––––––––
Leasehold and leasehold improvement NBV
1,790
2,202
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Plant and Machinery Impairment
The group tests for fixed asset impairment at least annually. During the year ending June 2023 an impairment charge of £531,000
was recognised in respect of one asset where the useful economic life, which is based on an estimate of the units produced, was
reassessed. If the estimate of units produced increased/decreased by 5% the resulting impairment charge would have been
reduced/increased by £76,000.
48
12. Inventories
2024
2023
£’000
£’000
Raw materials
239
279
Work in progress
709
460
Finished goods
722
994
––––––––––––––––––––––––––––––
1,670
1,733
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The total value of inventories recognised in cost of sales during the year was £2,008,000 (2023: £1,910,950). Raw materials and
finished goods comprise of SiC, blanks, functionalised carbon, chemicals and associated raw materials. Work in progress comprises
recoverable costs on contracts.
13. Trade receivables
2024
2023
£’000
£’000
Trade receivables
1,088
564
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
14. Other receivables
2024
2023
£’000
£’000
Other receivables
127
188
Prepayments and accrued income
249
227
Lease Asset
–
31
––––––––––––––––––––––––––––––
376
446
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
2024
2023
£’000
£’000
Corporation tax
251
406
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
15. Deferred income
Deferred income is recognised for both capital and revenue grants from governments and other funding parties and released as
income in accordance with the relevant conditions of the grant concerned. All income will be recognised within one year.
2024
2023
£’000
£’000
Commercial deferred income
178
103
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
As at 30 June 2024, deferred income of £67,964 (2023: £58,561) arose in relation to the rental of a reactor, which had been invoiced
during the year for a full year’s rental charge. The charge is being released over the course of the year. The remaining deferred income
relates to grant income which will be recognised in the profit and loss within a year.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
49
FINANCIAL STATEMENTS
16. Share capital and share premium
Number of
Share
Share
shares
capital
premium
Total
No.
£’000
£’000
£’000
ORDINARY
At 30 June 2022
510,335,691
10,207
31,912
42,119
Issue of ordinary shares
275,516,784
5,510
–
5,510
–––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
785,852,475
15,717
31,912
47,629
Issue of ordinary shares
1,012,609,576
1,013
3,462
4,475
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Ordinary Shares as at 30 June 2024
1,798,462,051
16,730
35,374
52,104
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––
DEFERRED
At 30 June 2022
–
–
–
–
Effect of subdivision of ordinary shares
785,852,475
–
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Deferred Shares as at 30 June 2024
785,852,475
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Shares as at 30 June 2024
2,584,314,526
16,730
35,374
52,104
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Allotted, called up and fully paid
2024
2023
No.
No.
2p Ordinary Shares
–
785,852,475
0.1p Ordinary Shares
1,798,462,051
–
1.9p Deferred Ordinary Shares
785,852,475
–
–––––––––––––––––––––––––––––––
2,582,314,526
785,852,475
–––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––
At a general meeting of the Company held on 3 October 2023, the Company’s shareholders approved resolutions to subdivide each
ordinary share of 2 pence each into 1 new ordinary share of 0.1 pence each and 1 deferred ordinary share of 1.9 pence each (“Deferred
Shares”).
As a result, on 4 October 2023, the Company issued 1,012,609,000 new ordinary shares of 0.1p each. Issue costs amounting to
£588,000 have been charged to the Share Premium Account (2023: £371,000, charged through the Retained Losses Account due to
the shares issue being at nominal value).
The ordinary shares of 0.1 pence carry the same rights as those previously attached to the ordinary shares of 2 pence (save for the
reduction in nominal value).
The Deferred Shares do not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company
or to receive a dividend or other distributions or to participate in any return of capital on a winding up unless and until the holders
of Ordinary Shares have each been paid £10,000,000 per Ordinary Share held. The Company retains the right to purchase the Deferred
Shares from any Shareholder for a consideration of not more than £1 in aggregate for all that Shareholders Deferred Shares. As such,
the Deferred Shares effectively have no value. Share certificates will not be issued in respect of the Deferred Shares.
50
17. Share-based payment transactions
Options
The Company operates both an approved EMI share option scheme and an unapproved share option scheme for the benefit of
employees and directors of the Group. Following careful consideration including obtaining advice, the Remuneration Committee
decided to grant new options with revised terms that would properly incentivise them, conditional upon the surrender of their
existing options and SARs.
The exercise price of the new 2020 EMI options granted on 25 January 2024 and 1 May 2024 were 0.5p per Ordinary Share (being
respectively 2% and 9.89% premium to the closing mid–market price of the Company’s Ordinary Shares on the last trading day before
the grant). The options vest over three years from the date of grant.
The options are accounted for as equity settled share-based payment transactions.
The following table which illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options
during the year:
Number
2024
Number
2023
of options
WAEP
of options
WAEP
No.
Pence
No.
Pence
Balance at beginning of year
101,275,000
2.65
47,685,000
2.25
Granted
207,000,000
0.05
55,450,000
2.25
Lapsed
(27,400,000)
2.42
(1,860,000)
6.03
Forfeited
(74,125,000)
2.66
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––
Balance at end of year
206,750,000
0.50 101,275,000
2.65
–––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024, there were options outstanding over 206,750,000 un-issued ordinary shares, equivalent to 11.5% of the issued
share capital as follows:
Number of
Exercise
Earliest exercise
Latest
shares
price
date
exercise date
Unapproved scheme
1 May 2024
56,500,000
0.50p
1 May 2027
1 May 2034
Approved EMI scheme
25 January 2024
150,250,000
0.50p
25 January 2027
25 January 2034
––––––––––––
206,750,000
––––––––––––
––––––––––––
The estimated fair value was calculated by applying a Black-Scholes option pricing model.
Share
Fair
price
value
Risk
Expected
at date of
per
Award
free
volatility
Type of
Number
grant
option
life
rate
rate Performance
award
of shares
(p)
(p)
(years)
(%)
(%)
conditions
1 May 2024
Unapproved
56,500,000
0.45
0.03
10
0.50
64.7
See below
25 January 2024
EMI
150,250,000
0.49
0.01
10
0.50
64.7
See below
––––––––––––
206,750,000
––––––––––––
––––––––––––
January & May 2024 Performance Conditions
50% of the options have no performance conditions. These option vest and are exercisable in three equal tranches from the first,
second and third anniversary of the date of grant, provided the participant has remained in continuous employment within
the Group.
Should the Company’s closing mid-market share price reach and remain at or above £0.01 for at least 15 consecutive trading days,
commencing after the grant date and ending on or before 31 December 2025, 15% of share options are capable of vesting.
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
51
FINANCIAL STATEMENTS
17. Share-based payment transactions (continued)
Should the Company’s closing mid-market share price reach and remain at or above £0.02 for at least 15 consecutive trading days,
commencing after the grant date and ending on or before 31 December 2026, 15% of share options are capable of vesting.
Should the Company’s closing mid-market share price reach and remain at or above £0.03 for at least 15 consecutive trading days,
commencing after the grant date and ending on or before 31 December 2027, 20% of share options are capable of vesting.
The weighted average remaining contractual life of share options outstanding at 30 June 2024 is 9 years (2023: 8 years). The charge
for the year for share-based payment amounted to £0.02 million (2023: £0.03 million).
Warrants
2024
2023
Weighted
Weighted
average
average
Number of
exercise
Number of
exercise
warrants
price
warrants
price
No.
Pence
No.
Pence
Balance at beginning of year
140,758,392
2.04
1,000,000
8.00
Lapsed
(138,757,816)
2.00
–
–
Granted
–
– 139,758,392
2.00
Exercised
(576)
2.00
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––––
Balance at end of year
2,000,000
5.13 140,758,392
2.04
––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––
No warrants outstanding at 30 June 2024 were held by employees (2023: 500,000, which lapsed during the year).
Warrants granted in July 2021 have a share price performance condition of £0.16 for 15 consecutive working days on or before
30 September 2023.
Warrants granted in September 2022 were issued as part of the September 2022 fundraise and did not have share performance
conditions and lapsed on 14 September 2023.
The same pricing model was used for calculating the cost of warrants to the Group as was used for calculating the cost of the options
to the Group.
The weighted average remaining contractual life of warrants outstanding at 30 June 2024 is 7.5 years (2023: 0.4 years). The charge
for the year for warrant payment amounted to £10,000 (2023: £460,000).
18. Reserves
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
The share premium account represents the amount received on the issue of ordinary shares in excess of their nominal value, less
any costs associated with the issuance of the shares, and is non-distributable.
Share-based payment reserve
The share-based payment reserve comprises the cumulative expense representing the extent to which the vesting period of share
options has passed and management’s best estimate of the achievement or otherwise of non-market conditions and the number
of equity instruments that will ultimately vest.
Retained Losses
The retained profits and losses reserves comprise the cumulative effect of all other net gains, losses and transactions with owners
(e.g. dividends) not recognised elsewhere.
Foreign Exchange
The foreign exchange reserve comprises the translation differences arising from the translation of the overseas subsidiary results
into pound sterling.
52
19. Trade and other payables
Current
Non-Current
Liabilities
Liabilities
2024
2023
2024
2023
£’000
£’000
£’000
£’000
Trade payables
696
789
–
–
Tax and social security
116
70
–
–
Lease liability
451
473
1,558
1,962
Accruals and other creditors
923
567
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––
2,186
1,899
1,558
1,962
––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––
20. Bank loans
2024
2023
£’000
£’000
Bank loans
1,406
1,374
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The borrowings are repayable as follows:-
–
within one year
14
11
–
in the second year
593
605
–
in the third year and above
799
758
––––––––––––––––––––––––––––––
1,406
1,374
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The Group’s borrowings are denominated in US dollars and Pounds Sterling. The directors consider that there is no material difference
between the fair value and carrying value of the Group’s borrowings.
2024
2023
Average interest rates paid
6.87%
6.85%
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
In June 2020, as part of the Government Bounce Back Loan scheme, HCS entered into a six year loan agreement with NatWest for
£50,000. The loan had a repayment holiday and did not accrue interest during the first 12 months. Following the initial 12 months,
interest has been charged at 2.5% p.a. and the loan and interest are repayable in equal instalments over the remaining period.
In March 2021, HCS secured a five year loan of £1,100,000 from Innovate Loans UK Limited. At the year end the Company had fully
drawn down this facility. The loan has a repayment holiday until July 2024 and is fully repayable by July 2026. Interest will be charged
at 7.4% p.a. for the period of the loan. For the initial 36 months interest will be paid at 3.7% p.a. and for the final 24 months interest
with be paid at 10.7% p.a. There are no penalties for early repayment. During the year HCS agreed an extension to the loan period
of two years, being an additional year to the repayment holiday period (to July 2025) and an additional year to the repayment period.
This means the loan will be fully repaid by July 2028.
During the year ended June 2022, the US operation secured a loan through the COVID-19 Economic Injury Disaster Loan scheme of
$200,000. The loan is for a period of 30 years with a fixed interest rate of 3.75% and deferred repayments for the first two years.
At the year end the balance on the loan was £173,000.
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
53
FINANCIAL STATEMENTS
21. Related party disclosures
Balances and transactions between Haydale Graphene Industries Plc and its subsidiaries are eliminated on consolidation and are
not disclosed in this note. Balances and transactions between the Group and other related parties are disclosed below.
Remuneration of directors and key management personnel
The remuneration of the directors of the Company is set out below in aggregate for each of the categories specified in IAS 24 ‘Related
Party Disclosures’.
2024
2023
£’000
£’000
Short-term employee benefits and fees
550
553
Social security costs
69
73
Post-retirement benefits
30
39
––––––––––––––––––––––––––––––
649
665
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Other transactions – Group and parent company
Fees totalling £34,925 (2023: £26,750) were paid to Evesco International Business for support to 31 December 2023. Mr G Eves
served as a director of the Company to 31 December 2023 and is a director of Evesco International Business Services. At 30 June
2024, the balance owed to Evesco International Business Services was £Nil (2023: £Nil).
22. Financial instruments
The Group’s activities are exposed to a variety of market risk (including foreign currency risk and interest rate risk), credit risk and
liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Group’s financial performance.
a)
Financial risk management policies
The Group’s policies in respect of the major areas of treasury activity are as follows:
i)
Market risk
Foreign currency risk
The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than
Pounds Sterling. The currencies giving rise to this risk are primarily the United States Dollar and the Euro. Foreign currency
risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. The Group maintains
the ability to provide a natural hedge wherever possible by matching the cash inflows (revenue stream) and cash outflows
used for purposes such as operational expenditure in the respective currencies.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the end of each
reporting period were as follows:
United States
Dollar
Euro
Total
£’000
£’000
£’000
2024
Financial assets
132
5
137
––––––––––––––––––––––––––––––––––––––––––––––––––
Financial liabilities
2
–
2
––––––––––––––––––––––––––––––––––––––––––––––––––
2023
Financial assets
51
2
53
––––––––––––––––––––––––––––––––––––––––––––––––––
Financial liabilities
36
57
93
––––––––––––––––––––––––––––––––––––––––––––––––––
54
55
Foreign currency sensitivity analysis
The following table details the sensitivity analysis to possible changes in the relative values of foreign currencies to which
the Group is exposed as at the end of the respective financial periods, with all other variables held constant:
2024
2023
Increase/
Increase/
(decrease)
(decrease)
Effects on loss after taxation / equity
£’000
£’000
United States Dollar:
– strengthened by 10%
14
2
– weakened by 10%
(12)
(1)
Euro:
– strengthened by 10%
1
(8)
– weakened by 10%
(1)
5
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
ii)
Interest rate risk
The Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets. The Group’s policy is to
obtain the most favourable interest rates available, while ensuring minimal risk to capital. Any surplus funds will be placed
with licensed financial institutions to generate interest income.
Interest rate risk sensitivity analysis
A 100 basis points strengthening or weakening of the interest rate as at the end of each financial period would have an
immaterial impact on loss after taxation and / or net assets. This assumes that all other variables remain constant.
b)
Credit risk
The Group’s exposure to credit risk, or the risk of third parties defaulting, arises mainly from trade and other receivables.
The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures
on an ongoing basis. For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing
exclusively with high credit rating financial institutions.
The Group establishes an allowance for impairment that represents its expected credit losses in respect of the trade and other
receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually
significant exposures, and a collective loss component established for groups of similar assets in respect of losses that are
expected but not yet identified. Impairment is estimated by management based on prior experience, current market and third
party intelligence while considering the current economic environment.
Credit risk concentration profile
To date, modest sales have meant that the credit risk profile of the Group has tended to focus on a handful of customers only.
As such, no meaningful analysis can be drawn from the customer profile of the receivables outstanding at each period end
under review.
Exposure to credit risk
As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the
financial assets at the end of each financial period.
The exposure of credit risk for trade receivables by geographical region as at the year-end is as follows:
2024
2023
£’000
£’000
United Kingdom
180
39
Europe
2
19
North America
250
230
Rest of the world
656
276
––––––––––––––––––––––––––––––
1,088
564
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
FINANCIAL STATEMENTS
56
22. Financial instruments (continued)
Maturity analysis
The ageing analysis of the Group’s trade receivables as at the year-end is as follows:
2024
2023
£’000
£’000
Not past due
955
530
Past due:
– less than 3 months
45
20
– between 3 and 6 months
43
13
– more than 6 months
45
1
––––––––––––––––––––––––––––––
Gross amount
1,088
564
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
At the end of each financial period, trade receivables that are individually impaired are those in significant financial difficulties
and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.
Collective impairment allowances, are determined based on estimated irrecoverable amounts from the sale of goods and
services, determined by reference to past default experience. Impairment provision is not material and therefore has not been
recognised in either the current or prior year.
Trade receivables that are past due but not impaired
The Board believes that no further impairment allowance is necessary in respect of these trade receivables.
c)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group exposure to
liquidity risk arises primarily from mismatches of the maturity of financial assets and liabilities.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by management to ensure as
far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
All of the financial liabilities of the Group are due within one year, with the exception of certain long-term bank loans, defined
benefit pension scheme and lease liability – see note 20.
Maturity analysis
The ageing analysis of the Group’s non-derivative financial liabilities as at the year-end is as follows:
Under 1 Yr
1 to 2 Yrs
3+ Yrs
Total
2024
£’000
£’000
£’000
£’000
Trade payables
696
–
–
696
Secured bank loan
–
623
677
1,300
Unsecured bank loan
14
14
174
202
Lease liability
496
524
1,188
2,208
––––––––––––––––––––––––––––––––––––––––––––––––––
Total
1,206
1,161
2,039
4,406
––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––
Under 1 Yr
1 to 2 Yrs
3+ Yrs
Total
2023
£’000
£’000
£’000
£’000
Trade payables
788
–
–
788
Secured bank loan
–
634
636
1,270
Unsecured bank loan
11
13
173
197
Lease liability
525
529
1,647
2,701
––––––––––––––––––––––––––––––––––––––––––––––––––
Total
1,324
1,176
2,456
4,956
––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––
57
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
d)
Capital risk management
The Group defines capital as the total equity of the Group. The Group’s objectives when managing capital are to safeguard the
Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders
and to maintain an optimal capital structure to reduce the cost of capital.
e)
Classification of financial instruments (at amortised cost and fair value)
2024
2023
£’000
£’000
Financial assets
Trade receivables
1,088
564
Other receivables
251
219
Cash and bank balances
1,717
1,378
––––––––––––––––––––––––––––––
Financial Assets (at amortised cost)
3,056
2,161
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Financial liabilities
Bank loans
1,406
1,374
Trade payables
696
789
Lease Liability
2,009
2,435
––––––––––––––––––––––––––––––
Financial Liabilities (at amortised cost)
4,111
4,598
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
There is no difference between the fair value and book value for the assets and liabilities.
f)
Fair value of financial instruments
The Group has no financial assets or liabilities carried at fair values at the end of each reporting date.
23. Capital commitments
The Group had the following capital commitments in the respective years:
2024
2023
£’000
£’000
Authorised by the directors for Plant & Machinery
–
–
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
24. Ultimate controlling party
The Directors do not consider any one shareholder, individually or acting in consort with others, to have ultimate control of the Group.
25. Defined Benefit Pension Scheme
HCT operated a defined benefit pension scheme. The scheme was closed in November 2006 for any new participants and frozen in
February 2009 for all participants.
Contributions of £161,000 were made to the scheme during the year ended 30 June 2024 (2023: £180,000).
Included in the loss before tax during the year:
2024
2023
£’000
£’000
Net Interest Expense
124
122
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Included in other comprehensive income during the year:
2024
2023
£’000
£’000
Actuarial gain from demographic assumptions
71
495
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
FINANCIAL STATEMENTS
58
25. Defined Benefit Pension Scheme (continued)
The following table sets forth the pension plan’s funded status as of 30 June:
2024
2023
£’000
£’000
Accumulated benefit obligation
(3,308)
(3,307)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Projected Benefit obligation
(3,308)
(3,307)
Plan assets at fair value
3,004
2,730
––––––––––––––––––––––––––––––
Funded Status
(304)
(577)
––––––––––––––––––––––––––––––
Accrued Pension Cost
(304)
(577)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Net amount recognised in the Consolidated Statement of Financial Position as of 30 June, consisted of the following:
2024
2023
£’000
£’000
Non-current Liabilities
(304)
(577)
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
The discount rate is based on the yield curve of government bonds in the applicable region adjusted with a credit spread of one of
the two highest ratings given by a recognized ratings agency. Future cash outflows of the plans are then related with the yield curve.
The average is the discount rate. The weighted average assumptions used to develop the actuarial present value of benefit obligations
and net periodic benefit costs for the pension plan are as follows for the year ended 30 June 2024:
Discount rate for periodic benefit costs
5.50%
Discount rate for benefit obligations
5.50%
Rate of increase in compensation levels
3.61%
Investment return rate
3.67%
Mortality Assumptions are as follows:
Longevity at retirement age (current & future pensioners)
2024
2023
– Males
22.2 years
20.6 years
– Females
24.2 years
22.5 years
Plan Assets
Pension assets are managed by an outside investment manager and are rebalanced periodically. The Company establishes policies
and strategies and regularly monitors performance of the assets, including the selection of investment managers, setting long-term
strategic targets, and monitoring asset allocations. Target allocation ranges are guidelines, not limitations, subject to variation from
time-to-time or as circumstances warrant, and occasionally, the Company may approve allocations above or below a target range.
The pension plan’s investment strategy with respect to pension assets is to invest the assets in accordance with ERISA and fiduciary
standards. The long-term primary objective for the pension plan assets are to protect the assets from erosion of purchasing power
and to provide a reasonable amount of long-term growth of capital, without undue exposure to risk. Currently, the strategic targets
are 45% for equity securities, 50% for debt securities, and no more than 5% for other categories.
The fair value of the Company’s pension plan assets valued at 30 June 2024, by asset category were as follows:
Assets/
Fair Value Measurements at
Total
Liabilities
30 June 2024 using
Carrying
Measured at
Level 1
Level 2
Description
Amount
Fair Value
Inputs
Inputs
£’000
£’000
£’000
£’000
Cash
204
204
204
–
Corporate Equities
1,771
1,771
1,771
–
Fixed Income:
US Government
391
391
–
391
Corporate debt
183
183
–
183
Mutual Funds
455
455
455
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
3,004
3,004
2,430
574
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
59
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
All corporate equities are quoted securities.
The changes in the fair value of the Company’s pension plan assets for the year ending 30 June 2024, were as follows:
2024
2023
£’000
£’000
Opening Balance
2,730
2,720
Contributions
161
180
Distributions
(247)
(240)
Net realised (loss)/gain
349
207
Foreign exchange gain/(loss)
11
(137)
––––––––––––––––––––––––––––––––––
Balance at Year End
3,004
2,730
––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––
Cash Flows
The Company expects benefits paid for the next five fiscal years and the five years thereafter as follows:
2024
2023
£’000
£’000
2024
290
282
2025
304
281
2026
312
281
2027
310
289
2028
303
301
Thereafter
1,377
1,360
––––––––––––––––––––––––––––––––––
2,896
2,794
––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––
The Company’s pension plan asset allocations by asset category were as follows as of 30 June 2024:
Asset Category
Cash
7%
Equity Mutual Funds
59%
Fixed Income
34%
Other
0%
Plan Obligations
2024
2023
£’000
£’000
Benefit Obligation at 1 July
(3,307)
(4,076)
Foreign exchange movement
(18)
156
Interest cost
(159)
(122)
Actuarial (loss)/gain
(71)
495
Benefits paid
247
240
––––––––––––––––––––––––––––––––––
Benefit Obligation at 30 June
(3,308)
(3,307)
––––––––––––––––––––––––––––––––––
Fair Value of Plan Assets at 1 July
2,730
2,720
Foreign Exchange movement
11
(137)
Actual Return on plan assets
349
207
Employer contributions
161
180
Benefits paid
(247)
(240)
––––––––––––––––––––––––––––––––––
Fair Value of Plan Assets at 30 June
3,004
2,730
––––––––––––––––––––––––––––––––––
Funded Status at 30 June
(304)
(577)
––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––
FINANCIAL STATEMENTS
25. Defined Benefit Pension Scheme (continued)
Defined benefit obligation – sensitivity analysis.
The impact to the value of the defined benefit obligation of a reasonably possible change to one actuarial assumption, holding all
other assumption constant, is presented in the table below:
Reasonably
Defined Benefit Obligation (£’000)
Actuarial Assumption
Possible Change
Increase
Decrease
Discount Rate
(+/- 0.25%)
(62)
64
Mortality Rate
(+/-1.00%)
(10)
10
Defined Contribution plan
HCT also has a defined contribution plan under Section 401(k) of the Internal Revenue Code which provides for voluntary
participation. All employees who have completed one hour of service are eligible to participate in this plan beginning the first pay
period of the month following the date an hour of service is first performed. Participants may contribute on a pre-tax basis from
1% to 60%, in 1% increments, of their annual base salary. Company contributions under the plan are required to be equal to 100%
of that portion of participant contributions which do not exceed 6% of the participant’s annual base compensation rate. Participants
are immediately vested in their voluntary contributions plus actual earnings and Company contributions. The Company contributions
for the year ended 30 June 2024, were £62,000 (2023: £58,000).
26. Taxes
Deferred tax is calculated in full on temporary differences under the liability method. Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting period.
There was no movement on the deferred tax account in the year and the balance at the year end is £Nil (2023 - £Nil).
Detail of the deferred tax liability, amounts recognised in profit and loss and amounts recognised in other comprehensive income
are as follows:
(Charged)/
credited
to profit
Asset
Liability
Net
or loss
2024
2024
2024
2024
£’000
£’000
£’000
£’000
Employee pension liabilities
76
–
76
(46)
Available losses
1,653
–
1,653
699
Business combination
–
(1,729)
(1,729)
(653)
––––––––––––––––––––––––––––––––––––––––––––––––––
Net tax assets/(liabilities)
1,729
(1,729)
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––
(Charged)/
credited
to profit
Asset
Liability
Net
or loss
2023
2023
2023
2023
£’000
£’000
£’000
£’000
Employee pension liabilities
122
–
122
(163)
Available losses
954
–
954
440
Business combinations
–
(1,076)
(1,076)
(277)
––––––––––––––––––––––––––––––––––––––––––––––––––
Net tax assets/(liabilities)
1,076
(1,076)
–
–
––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––
60
61
A deferred tax asset has not been recognised for the following:
2024
£’000
Accelerated capital allowances
7
Unused tax losses
7,045
––––––––––––––
7,052
––––––––––––––
––––––––––––––
The unused tax losses can be carried forward indefinitely in the UK and up to a maximum of 20 years in the US.
27. Post Balance Sheet Event
On 14 November 2024, the Company raised £3.1 million (gross) through a £2.6m placing, retail offer and subscription of
1,960,633,907 new Ordinary Shares at 0.1326 pence per share and a £500,000 convertible loan note with a 5 year tenor and 10%
coupon. The funds raised will be principally used to fund the general working capital needs of the business. As part of this process,
the Company’s share capital was restructured to in effect reduce the nominal value of each ordinary share from 0.1 pence to
0.01 pence.
28. Reconciliation of liability movement as a result of financing activities
Non-current
Current
Loans and
loans and
borrowings
borrowings
Total
£’000
£’000
£’000
At 1 July 2022
3,781
491
4,272
Interest accruing in period
117
82
199
Loan repayments in year
–
(53)
(53)
Lease liability addition
114
–
114
Lease liability repayments in year
–
(603)
(603)
Effect of foreign exchange
(113)
(7)
(120)
Loans classified as non-current at 30 June 2022
becoming current during year
22
(22)
–
Lease liability classified as non-current at 1 July 2022
becoming current during year
(596)
596
–
–––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
3,325
484
3,809
Interest accruing in period
95
94
189
Loan repayments in year
–
(63)
(63)
Lease liability addition
114
–
114
Lease liability repayments in year
–
(446)
(446)
Lease liability disposal in year
–
(121)
(121)
Effect of foreign exchange
(67)
–
(67)
Loans classified as non-current at 30 June 2023
becoming current during year
29
(29)
–
Lease liability classified as non-current at 1 July 2023
becoming current during year
(546)
546
–
–––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
2,950
465
3,415
–––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
FINANCIAL STATEMENTS
62
PARENT COMPANY BALANCE SHEET
As at 30 June 2024
Company Registration No. 07228939
PARENT COMPANY REPORT
2024
2023
Note
£’000
£’000
Fixed assets
Property, plant and equipment
–
7
Investments
6
1,350
1,317
––––––––––––––––––––––––––––––
1,350
1,324
––––––––––––––––––––––––––––––
Current assets
Debtors – within one year
7
82
154
Debtors – after more than one year
7
3,638
9,867
Cash at bank and in hand
1,012
816
––––––––––––––––––––––––––––––
4,732
10,837
––––––––––––––––––––––––––––––
Creditors: amounts falling due within one year
8
(407)
(237)
––––––––––––––––––––––––––––––
NET CURRENT ASSETS
4,325
10,600
––––––––––––––––––––––––––––––
TOTAL ASSETS LESS CURRENT LIABILITIES
5,675
11,924
Creditors: amounts falling due after more than one year
–
–
––––––––––––––––––––––––––––––
NET ASSETS
5,675
11,924
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
Capital and reserves
Called up share capital
9
16,730
15,717
Share premium account
9
35,374
31,912
Profit and loss account
(46,429)
(35,705)
––––––––––––––––––––––––––––––
SHAREHOLDER’S FUNDS
5,675
11,924
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
As permitted by section 408 of the Companies Act 2006, the Company’s profit and loss account has not been included in these
financial statements. The loss of the Company for the year ended 30 June 2024 was £10,714,000 (2023: £2,701,000).
The financial statements on pages 62 to 69 were approved and authorised for issue by the Board of directors on 29 November 2024
and signed on its behalf by:
Gareth Kaminski-Cook
Patrick Carter
Chair
Chief Financial Officer
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
63
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Share
Share
Profit and
Total
capital
Premium loss account
Equity
£’000
£’000
£’000
£’000
At 1 July 2022
10,207
31,912
(33,223)
8,896
Comprehensive Income for the year
Loss for the year
–
–
(2,701)
(2,701)
Contributions by and distributions to owners
Recognition of share-based payments
–
–
590
590
Issue of ordinary share capital, net of transaction costs
5,510
–
–
5,510
Share issue costs
–
(371)
(371)
–––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023 and 1 July 2023
15,717
31,912
(35,705)
11,924
Comprehensive Income for the year
Loss for the year
–
–
(10,714)
(10,714)
Contributions by and distributions to owners
Recognition of share-based payments
–
–
(10)
(10)
Issue of ordinary share capital
1,013
4,050
–
5,063
Share issue cost
–
(588)
–
(588)
–––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2024
16,730
35,374
(46,429)
5,675
–––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––
FINANCIAL STATEMENTS
64
NOTES TO THE PARENT COMPANY BALANCE SHEET
For the year ended 30 June 2024
1. Basis of preparation
The parent company financial statements of Haydale Graphene Industries Plc, a public company incorporated and registered in
England and Wales under the Companies Act 2006 with company number 07228939 which is limited by shares, have been prepared
in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. The principal accounting policies adopted in
the preparation of the financial statements are set out below. The policies have been consistently applied to the years presented,
unless otherwise stated.
The financial statements have been prepared on a historical cost basis. The presentation currency used is sterling and amounts have
been presented in round (“£000’s”).
Disclosure exemptions adopted
In preparing these financial statements the company has taken advantage of all disclosure exemptions conferred by FRS101.
Therefore these financial statements do not include:
–
certain comparative information as otherwise required by IFRS;
–
certain disclosures regarding the company’s capital;
–
a statement of cash flows;
–
the effect of future accounting standards not yet adopted;
–
the disclosure of the remuneration of key management personnel; and
–
disclosure of related party transactions with other wholly owned members of the group headed by Haydale Graphene
Industries Plc.
In addition, all in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are
included in the consolidated financial statements of Haydale Graphene Industries Plc. These financial statements do not include
certain disclosures in respect of:
–
Share based payments;
–
Business combinations; and
–
Financial Instruments
Going concern
The directors have concluded that the Company’s position as a going concern is dependent on that of the wider Haydale group,
which is considered in note 3 of the consolidated accounts and discussed below.
The directors have prepared and reviewed detailed financial forecasts of the Group and, in particular, considered the cash flow
requirements for the period from the date of approval of these financial statements to the end of June 2026. These forecasts sit
within the Group’s latest estimate and within the longer-term financial plan, both of which have been updated on a regular basis.
The directors are also mindful of the impact that the other risks and uncertainties set out on pages 8 to 9 may have on these estimates
and in particular the speed of adoption of new products. The forecasts may also substantively change as a result of actions arising
out of the Review.
After due consideration of the forecasts prepared, the Group’s current cash resources after the equity fund raise in November 2024
and the terms of its debt facilities, the directors consider that the Company and the Group have adequate financial resources to
continue in operational existence for the foreseeable future and for this reason the financial statements have been prepared on the
going concern basis.
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
65
Whilst the directors believe that the going concern basis is appropriate at the date of this report, the Board is mindful that
notwithstanding the proposed actions being taken pursuant to the Review to refocus the Group’s activities, the net proceeds of the
fund raise may be insufficient to fund the cash requirements of the Group through to a position where it is able to fund itself from
its own cashflow within 12 months of the date of this report. The Board continues to pursue the possibility of securing additional
debt facilities to provide additional liquidity. In the event that such debt facilities are not available or are unavailable in sufficient
quantum it is very likely that the Group would need to raise additional equity funding. In the current economic conditions there is
inherent uncertainty over the whether such future equity or debt funding would be available. Formally, these circumstances represent
a material uncertainty that casts significant doubt upon the Company’s and Group’s ability to continue as a going concern and
therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making
enquiries and considering the uncertainties described above, the Directors have a reasonable expectation that the Company and
Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to
adopt the going concern basis of accounting in preparing the annual financial statements.
2. Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material to the
company’s financial statements:
Investment in subsidiary undertakings
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the
following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor
to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be
a change in any of these elements of control.
Investments in subsidiary undertakings where the company has control are stated at cost less any provision for impairment.
Financial assets
Impairment of financial assets
The Company assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.
Assets carried at amortised cost
These assets arise principally from the provision of services and advancing of monies to the company’s subsidiaries, but also
incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and
the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment.
The Company’s financial assets measured at amortised cost comprise intercompany receivables, trade and other receivables and
cash and cash equivalents in the consolidated statement of financial position.
The intercompany receivables are interest-free loans that are repayable on demand. In applying IFRS 9 to these balances, the company
assesses the ability of the debtor subsidiary to repay the loan on demand at each reporting date. A loan is considered to be in default
where there is evidence that the borrower has insufficient liquid assets to repay the loan on demand. This is assessed with reference
to key liquidity and solvency ratios. Where the borrowing subsidiary has sufficient liquid assets to repay the loan immediately,
meaning the risk of default is very low, the loan is considered to be in Stage 1 of the expected credit loss model, meaning that there
is deemed to have been no significant increase in credit risk. However, should the borrowing subsidiary not have sufficient liquid
assets to repay the loan on demand, the loan is considered to be at Stage 3 of the expected credit loss model and credit impaired.
Where a loan is deemed to be credit impaired, an expected credit loss provision is recognised based on a ‘repay over time’ approach
applying a discounted cashflow analysis.
Cash and cash equivalents comprise cash in hand, bank balances, deposits with financial institutions and short-term, highly liquid
investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value and have
maturities of 3 months or less from inception.
FINANCIAL STATEMENTS
2. Accounting policies (continued)
Share-based payments
When the Company grants options over equity instruments directly to the employees of a subsidiary undertaking, the effect of the
share-based payment is capitalised as part of the investment in the subsidiary as a capital contribution, with a corresponding increase
in equity.
Impairment
The need for any fixed asset impairment write-down is assessed by comparison of the carrying value of the asset against the higher
of realisable value and value in use.
Taxation
The charge for taxation is based on the loss for the period and takes into account taxation deferred.
Current tax is measured at amounts expected to be paid using the tax rates and laws that have been enacted by the balance sheet
date. The substantively enacted rate has been used for deferred tax balances, which are recognised in respect of all timing differences
that have been originated but not reversed by the reporting date, except that the recognition of deferred tax assets is limited to the
extent that the Company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing
differences.
Foreign Currency
Foreign currency transactions are translated at the rates ruling when they occurred. Foreign currency monetary assets and liabilities
are translated at the rate of exchange ruling at the balance sheet date. Any differences are taken to the profit and loss account.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial information in conformity with IFRSs requires the use of certain critical accounting estimates. It also
requires the directors of the Company to exercise their judgement in the process of applying the accounting policies which are
detailed below. These judgements are continually evaluated by the directors and management and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future and other key sources of estimation uncertainty at the
statement of financial position date, that have a significant risk of causing material adjustment to the carrying amounts of assets
and liabilities within the next financial period are reviewed on an ongoing basis. Revision to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
Impairment of Investments
The Company considers the impairment of investments on an annual basis. An estimate of the values of investments is calculated
on a discounted cash flow basis. Our value in use calculations require estimates in relation to uncertain items, including
management’s expectations of future revenue growth, operating costs, profit margins, operating cashflows and the discount rate
applied.
Future cash flows used in the value in use calculations are based on our latest Board approved longer term projections. Expectations
about future growth reflect expectations of growth in the markets applicable to the group. The future cashflows are discounted
using a pre-tax discount rate that reflects current market assessments of the time value of money. The impairment of investments
has been considered under note 10 of the consolidated financial statements.
Impairment of debtors (estimate)
The Company applies the expected credit loss model under IFRS 9 in assessing the impairment of receivables. As intercompany
receivables are repayable on demand, the debtor is considered to be in default if they would be unable to repay the balance at the
reporting date. In such circumstances, the receivables are impaired to the extent that the debtor company is not considered able to
repay the receivable if it were to be recalled at the balance sheet date. Where a loan is deemed to be credit impaired, an expected
credit loss provision is recognised based on a ‘repay over time’ approach applying a discounted cashflow analysis. Further information
can be found in note 7.
66
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
67
3. Audit Fees
The audit fees of the parent company have been disclosed within note 6 of the consolidated financial statements, which form part
of these financial statements.
4. Employees
The average number of employees during the year, including executive directors, was:
2024
2023
No.
No.
Administration
13
13
––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––
Staff costs for all employees, including executive directors, consist of:
2024
2023
£’000
£’000
Wages and Salaries
886
849
Social Security Costs
101
104
Pension Costs
59
71
Share based payment expense
(10)
165
––––––––––––––––––––––––––––––
1,036
1,189
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
5. Directors’ remuneration
In respect of directors’ remuneration, the disclosures required by Schedule 5 to the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 are included in the detailed disclosures in the audited Group accounts in note 7, which are
ascribed as forming part of these financial statements.
6. Fixed asset investments
Investment
£’000
Cost
At 1 July 2023
1,317
Additions during the year
33
–––––––––––––
At 30 June 2024
1,350
–––––––––––––
–––––––––––––
The impairment reviews have been carried out on the same basis as those applied to goodwill and intangibles of the Group (see
note 10 in the Group accounts for further detail).
The undertakings in which the Company's interest at the period end is 20% or more are as follows:
Country of
Proportion of
incorporation
ordinary share
Nature of
Name of subsidiary company
or registration
capital held
business
Haydale Ltd
England & Wales
100%
R&D, sales and distribution
Haydale Composite Solutions Limited
England & Wales
100%
R&D, sales and distribution
Haydale Composites Ltd
England & Wales
100%
Dormant
EPL Composites Limited
England & Wales
100%
Dormant
Haydale Technologies Korea Co., Ltd
South Korea
100%
Sales and distribution
Haydale Technologies Incorporated LLC
North America
100%
Holding Company
Haydale Technologies Thailand Ltd
Thailand
100%
R&D, sales and distribution
Haydale Ceramic Technologies LLC
North America
100%
Sales and distribution
FINANCIAL STATEMENTS
6. Fixed asset investments (continued)
Haydale Composites Ltd & EPL Composite Limited are exempt from audit in accordance with the Companies Act 2006, as a result of
them remaining dormant throughout the current and previous financial years. Haydale Technologies Korea Co., Ltd is also exempt
from audit.
Subsidiary
Registered office
Haydale Ltd
Clos Fferws, Parc Hendre, Capel Hendre, Ammanford, Carmarthenshire, SA18 3BL
Haydale Composites Ltd
Clos Fferws, Parc Hendre, Capel Hendre, Ammanford, Carmarthenshire, SA18 3BL
EPL Composites Ltd
Clos Fferws, Parc Hendre, Capel Hendre, Ammanford, Carmarthenshire, SA18 3BL
Haydale Composite Solutions Limited
Clos Fferws, Parc Hendre, Capel Hendre, Ammanford, Carmarthenshire, SA18 3BL
Haydale Technologies Korea Co., Ltd
#1010, Dong-Tan IT Valley 2 706, Dongtan-daero, Hwaseong-si, Gyeonggi-do, Republic
of Korea 18463
Haydale Technologies Thailand Ltd
Room 510 - 515, Tower D, 5th Floor, Thailand Science Park Phahon Yothin Road, Luang
District, Pathum Thani Province, 12120, Thailand
Haydale Technologies Incorporated LLC
1446 South Buncombe Road, Greer, South Carolina. 29651, USA
Haydale Ceramic Technologies LLC
1446 South Buncombe Road, Greer, South Carolina. 29651, USA
7. Debtors
2024 2024
2023
2023
£’000 £’000
£’000
£’000
< 1 yr > 1 yr
< 1 yr
> 1 yr
Amounts owed by group companies – 3,638
–
9,867
Corporation tax 55 –
89
–
Other debtors 20 –
57
–
Prepayments and accrued income 7 –
8
–
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
82 3,638
154
9,867
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
During the year an impairment provision of £9,000,000 (2023: £118,000) was recognised in relation to the recoverability of
intercompany balances with all subsidiary operations taking into account the ongoing losses in those entities and the Group’s future
plans.
Loans to subsidiary organisations are denominated in their local currency in line with IAS21, for consolidation purposes these loans
are classified as part of the net investment in the subsidiary and foreign exchange movements on these balances are recorded
through the Other Comprehensive Income.
Amounts owed by group companies are in foreign currencies, predominantly in USD. A 1% movement in the exchange rate would
result in a gain or loss of £0.05m.
8. Creditors: amounts falling due within one year
2024
2023
£’000
£’000
Trade creditors
37
42
Other creditors including tax and social security
60
64
Accruals and deferred income
310
131
––––––––––––––––––––––––––––––
407
237
––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––
68
Haydale Graphene Industries Plc | Annual Report & Accounts 2024
9. Share capital and share premium
Number of
Share
Share
shares
capital
premium
Total
No.
£’000
£’000
£’000
ORDINARY
At 30 June 2022
510,335,691
10,207
31,912
42,119
Issue of ordinary shares
275,516,784
5,510
–
5,510
–––––––––––––––––––––––––––––––––––––––––––––––––––––
At 30 June 2023
785,852,475
15,717
31,912
47,629
Issue of ordinary shares
1,012,609,576
1,013
3,462
4,475
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Ordinary Shares as at 30 June 2024
1,798,462,051
16,730
35,374
52,1045
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––
DEFERRED
At 30 June 2022
–
–
–
–
Effect of subdivision of ordinary shares
785,852,475
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Deferred Shares as at 30 June 2024
785,852,475
–
–
–
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Total Shares as at 30 June 2024
2,584,314,526
16,730
35,374
52,104
–––––––––––––––––––––––––––––––––––––––––––––––––––––
–––––––––––––––––––––––––––––––––––––––––––––––––––––
Allotted, called up and fully paid
2024
2023
No
No
2p Ordinary Shares
–
785,852,475
0.1p Ordinary Shares
1,798,462,051
–
1.9p Deferred Ordinary Shares
785,852,475
–
––––––––––––––––––––––––––––––––
2,582,314,526
785,852,475
––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––
At a general meeting of the Company held on 3 October 2023, the Company’s shareholders approved resolutions to subdivide each
ordinary share of 2 pence each into 1 new ordinary share of 0.1 pence each and 1 deferred ordinary share of 1.9 pence each (“Deferred
Shares”).
As a result, on 4 October 2023, the Company issued 1,012,609,000 new ordinary shares of 0.1p each. Issue costs amounting to
£588,000 have been charged to the Share Premium Account (2023: £371,000, charged through the Retained Losses Account due to
the shares issue being at nominal value).
The ordinary shares of 0.1 pence carry the same rights as those previously attached to the ordinary shares of 2 pence (save for the
reduction in nominal value).
The Deferred Shares do not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company
or to receive a dividend or other distributions or to participate in any return of capital on a winding up unless and until the holders
of Ordinary Shares have each been paid £10,000,000 per Ordinary Share held. The Company retains the right to purchase the Deferred
Shares from any Shareholder for a consideration of not more than £1 in aggregate for all that Shareholders Deferred Shares. As such,
the Deferred Shares effectively have no value. Share certificates will not be issued in respect of the Deferred Shares.
10. Ultimate controlling party
The directors do not consider any one shareholder, individually or acting in consort with others, to have ultimate control of
the Company.
11. Related party transactions
The Company is exempt from disclosing transactions with wholly owned subsidiaries within the Group. Other related party
transactions are included within those given in note 21 of the Group accounts.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
69
70
Registered and Clos Fferws, Parc Hendre,
Head Office Capel Hendre, Ammanford,
Carmarthenshire,
Wales, SA18 3BL
Company Number 07228939
Investor Relations investor.relations@haydale.com
Independent Auditor Crowe U.K. LLP
55 Ludgate Hill, London,
EC4M 7JW
Corporate Solicitors Field Fisher LLP
Riverbank House, 2 Swan Lane,
London EC4R 3TT
Registrars Share Registrars Limited
3, The Millennium Centre,
Crosby Way, Farnham,
Surrey, GU9 7XX
Secretary Mark Heycock
cosec@haydale.com
Website www.haydale.com
General enquiries info@haydale.com
Nominated Advisor Cavendish
and Broker One Bartholomew Close,
London, EC1A 7BL
Intellectual Property Mewburn Ellis LLP
Solicitors 33 Gutter Lane, London,
EC2V 8AS
Corporate Information
Investor relations
The shares of Haydale Graphene Industries Plc are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
Tradeable Instrument Display Mnemonic (TIDM): HAYD
Stock Exchange Daily Official List (SEDOL) code: BKWQ113
International Securities Identification Number (ISIN): GB00BKWQ1135
In accordance with AIM Rule 26 regarding company information disclosure, various investor orientated information is available on
our website at www.haydale-ir.com/
Registrars
Enquiries relating to matters such as loss of a share certificate, dividend payments or notification of a change of address should be
directed to Share Registrars Limited who are the Company’s registrars by post: 3, The Millennium Centre, Crosby Way, Farnham,
Surrey, GU9 7XX; by email: enquiries@shareregistrars.uk.com; or by telephone: 01252 821390.
Donate your shares to charity
The Company supports ShareGift, the charity share donation scheme administered by The Orr Mackintosh Foundation (registered
charity number: 1052686).
Through ShareGift, shareholders who only have a small number of shares which might be considered uneconomic to sell are able
to donate them to charity. Donated shares are aggregated and sold by ShareGift, the proceeds being passed onto a wide range of
UK charities.
Donating shares gives rise neither to a gain or loss for UK capital gains tax purposes and UK taxpayers may also be able to claim
income tax relief on such gifts of shares.
Full details about ShareGift can be obtained from their website at www.sharegift.org or by contacting them by email at
help@sharegift.com.
SHAREHOLDER INFORMATION
Haydale Graphene
Industries Plc
Clos Fferws, Parc Hendre,
Capel Hendre, Ammanford,
Carmarthenshire, SA18 3BL
T: +44 (0)1269 842946
F: +44 (0)1269 831062
www.haydale.com