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A N N U A L R E P O R T A N D F I N A N C I A L S TAT E M E N T S
WE ARE
POSITIONED AT
THE HEART OF
GLOBAL EFFORTS
TO DECARBONISE
FUEL AND ENERGY.
Dr Graham Cooley
ITM Power Plc, CEO
SHAPING A
RENEWABLE
HYDROGEN
FUTURE
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
5
Shaping a renewable hydrogen future
In a world in which fossil fuel energy is becoming
ever more scarce and expensive, countries
are struggling to meet their carbon reduction
and air quality obligations, hydrogen solutions
have finally reached the top of energy agendas.
ITM Power Plc, manufactures integrated hydrogen
energy solutions to enhance the utilisation of renewable
energy that would otherwise be wasted. These products
meet the requirements for grid balancing and energy
storage services, and for the production of clean fuel
for transport, renewable heat and chemicals.
Air quality regulations are
stimulating the need for hydrogen
as a clean fuel for clean transport
emissions, in city regions around
the world.
Energy storage provision has
started to become a mandatory
requirement in areas of the world
such as California; it is recognised
as an essential prerequisite for
renewable energy deployment.
Grid balancing and rapid
response demand-side
services are crucial for the
integration of high proportions
of renewable energy supply
on the electricity grid.
Energy security and fuel
security has risen to the top
of the geopolitical agenda.
Price volatility of fossil
fuels is driving an industrial
substitution to more sustainable
chemical processes.
Auto OEMs are rolling out Fuel
Cell Electric Vehicles (FCEVs)
that require a high purity hydrogen
fuel. Hyundai and Toyota have
commercial vehicles in production
with Honda being the latest
Company to also offer a FCEV.
Global Hydrogen Refuelling
Station infrastructure programmes
are underway with significant
deployment plans in place.
CONTENTS
08
10
12
14
26
32
34
35
36
38
42
68
72
76
81
85
Company updates
hannover Messe
renewable chemistry
energy storage
Clean fuel
report and financial statements
about us
officers and professional advisers
highlights
board of directors
Strategic report
directors’ report
Corporate governance report
independent auditor’s report
Consolidated financial statements
Company financial statements
141
2017/18 regulatory news announcements
COMPANY
UPDATES
ITM Power Plc has a growing commercial pipeline of leading
refuelling and energy storage products to deliver to more
and more customers around the world, and is well placed
to continue it’s growth in a market that is becoming more
established. This is in no small part down to the dedication
of the staff over the last year.
Prof. Roger Putnam
itM power plc, Chairman
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
11
CoMpany updateS
HANNOVER
MESSE
23 – 27 April 2018
The 71st Hannover Messe took place in April and
attracted over 210,000 visitors, with over 70,000
coming from across the globe. The energy halls
were centered on energy efficiency in direct
correlation with climate protection. The focus
was on decentralised, smart energy systems
and infrastructure solutions for the environmentally
friendly mobility of the future, ensuring that the
Hydrogen and Fuel Cell area had a high
concentration of interested visitors.
ITM Power Plc attracted a large number of interesting
visitors to the stand, which was positioned in the
heart of the Hydrogen Zone. The company showcased
a complete 80kg/day PEM electrolyser, as well
as the more recent 2.2MW stack design, both
of which received a great level of interest.
Dr Simon Bourne gave a presentation on the
Refhyne project, Hydrogen for refinery applications:
building the world’s largest PEM electrolyser
which was very well attended; and Calum McConnell,
Geschäftsführer, ITM Power GmbH, presented on
HyDiesel Treibhausgas Reduzierung mit grünem
Wasserstoff. Both presentations can be
viewed on the company’s YouTube channel.
12
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
CoMpany updateS
REFHYNE KICK OFF
January 18th marked the project kick-off for the
Refhyne project to install a 10MW electrolyser to
produce hydrogen at the Shell owned Wesseling
refinery site within the Rheinland Refinery Complex
in Germany.
The kick-off event was attended by numerous
representatives from politics and business in the
Rhineland refinery which included: Principal Adviser
to the Director-General for Energy at the Commission
of the European Union; Brussels; Head of Climate
Protection Department; Ministry of Economy,
Innovation, Digitization and Energy of North Rhine-
Westphalia; and Executive Director, EU Fuel Cell
and Hydrogen Joint Undertaking, Brussels.
Renewable electricity can support decarbonisation
not only of the power sector, but, through sectoral
integration also of other carbon intensive industries,
such as refining. Green hydrogen is a key enabler
in this process, contributing to the Energy Union
objectives both in terms of emission reductions
and increased renewables share. Therefore,
we strongly support innovation activities, and
the Refhyne project is a great illustration thanks
to the world’s largest PEM electrolyser application
in a refinery.
Tudor Constantinescu
principal adviser to the director-general for
energy at the Commission of the european
union, brussels
Thanks to the different European research projects
by the FCH JU in this area, there is now a window
of opportunity for these new generation electrolysers
to prove themselves in heavy industries like refineries.
We are proud to see the scaling-up of PEM
electrolysers to 10MW to decarbonise the
industry sector.
Bart Biebuyck
executive director, eu fuel Cell and
hydrogen Joint undertaking, brussels
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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CoMpany updateS
FUEL CONTRACTS
ITM Power Plc continue to grow the number of fuel
contracts signed to supply hydrogen gas as a transport
fuel. In July, a contract was signed with Honda UK
to supply hydrogen from any of ITM Power Plc’s stations.
Honda joined other companies such as Toyota
GB plc, Hyundai Motor UK Ltd, Commercial Group,
Skanska, UlemCo Ltd, Arval UK Ltd, UK Government
Car Service, Arcola Energy, Johnson Matthey, Europcar,
The Science Museum, JCB, Anglo American, Green
Tomato Cars, Yorkshire Ambulance Service and
Northern Gas Networks, who now all use
ITM Power Plc stations.
In July, the new UK Government Air Quality Plan was
announced. It stated that it would ban all new non-zero
emission passenger cars by 2040 which represented
an historic first step towards cleaner and greener
transport in the UK. This means that no further petrol
and diesel passenger cars (including hybrids) would
be available from this date.
20 TONNE/DAY
HYDROGEN
REFUELLING
STATION DESIGNS
In August, ITM Power Plc attended the first Hydrogen
and Fuel Cells North America event, which ran
alongside the large solar power event in Las Vegas.
The large-scale refuelling station designs are based
around electrolyser configurations of up to 50MW in
size with the capability to produce up to 20 tonnes
of hydrogen per day. This is in response to industry
demand for larger scale industrial installations for
refuelling heavy logistics vehicles, such as road
haulage vehicles, ships and trains.
INDUSTRY
DEVELOPMENTS
On 13 November, the Hydrogen Council published
a first-of-a kind study detailing hydrogen’s potential
to be a key pillar of the energy transition. The study
concluded that when deployed at scale, hydrogen
could account for almost one-fifth of total final energy
consumed by 2050. This would reduce annual CO2
emissions by roughly six gigatons compared to today’s
levels, and contribute roughly 20% of the abatement
required to limit global warming to two degrees Celsius.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
CoMpany updateS
WORLD’S LARGEST HYDROGEN ELECTROLYSIS
IN SHELL’S RHINELAND REFINERY
On the 1st September 2017, ITM Power Plc
announced a 10MW Refinery Hydrogen Project
with Shell called Refhyne. The project will install a
large-scale electrolyser to produce hydrogen at the
Wesseling refinery site within the Rheinland Refinery
Complex. With a capacity of ten megawatts, this will
be the largest unit of its kind in Germany and the
world’s largest PEM (Polymer Electrolyte Membrane)
electrolyser. This electrolyser technology is also
suitable to improve the stability of the electricity
grid with a growing share of intermittent renewable
energy sources, such as from solar and wind.
Today, the refinery uses approximately 180,000 tonnes
of hydrogen per year in their various plants. The
hydrogen is currently produced as a byproduct of
the refining process or through natural gas reforming,
while electrolysis uses electricity to split water into
the base components of hydrogen and oxygen.
Lori Ryerkerk
Shell Manufacturing,
executive Vice president
Dr Graham Cooley
itM power plc, Ceo
Dr. Thomas Zengerly
Shell rheinland refinery,
general Manager
A unit of this kind brings a
flexibility that can help the
stability of the power grid,
thereby facilitating more use
of renewable electricity. In
addition, if powered by renewable
electricity, the green hydrogen
will help reduce the carbon
intensity of the site – a key
goal for us.
Decarbonising hydrogen
production in the chemical and
refining industries worldwide is
potentially a very large market.
This pioneering project with Shell
aims to demonstrate what can be
achieved using our industrial scale
electrolysers which can also use
low cost renewable energy and
help to balance electricity grids.
The envisaged hydrogen
electrolysis would be a step into
the future – opening the door to
many new development options
for the refinery. The location will
also allow the refinery to later
expand its facilities to supply
hydrogen to potential new
customers outside the refinery.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
15
CoMpany updateS
The project aims to enable the construction and
operation of a large-scale 10MW electrolyser that
can produce high quality hydrogen and CO2 free
hydrogen, while demonstrating technology and
cost improvements through upscaling and new
business applications. Electrolysis using low-cost
renewable electricity could be a key technology
for a potential CO2 free hydrogen production in
the Shell Rheinland Refinery.
Detailed technical planning and the approval
process will now begin. The project, named ‘Refhyne’
is scheduled to be in operation in 2020 and will be the
first industrial scale test of the PEM technology process.
Brian Davis
integrated energy Solutions
at Shell, Vice president
Bart Biebuyck
eu fuel Cell & hydrogen Joint
undertaking, executive director
Johannes Daum
now national organisation,
program Manager
Hydrogen is a promising
technology, even beyond direct
use as a cleaner fuel for transport.
In the future, it is also expected
to play a key role in integrating
energy storage and power grid
balancing, thus enabling a reliable
and growing share of renewables
in the energy system.
Thanks to the different European
research projects by the FCH JU
in this area, there is now a window
of opportunity for these new
generation electrolysers to prove
themselves in heavy industries
like refineries. We are proud
to see the scaling-up of PEM
electrolysers to 10 MW to
decarbonise the industry sector.
Major projects such as 10MW
PEM electrolysis demonstrate
the suitability for everyday use
of processes on an industrial
scale and improve the profitability
of producing hydrogen. They are
an important step in the integration
of hydrogen into the energy
system and make a decisive
contribution to implementing
the energy transition in all
consumption sectors.
ENERGY
STORAGE
These new EU directives are fundamentally important for
unlocking the potential of rapid response grid balancing using
electrolysis and for the deployment of Power-to-Gas energy
storage across Europe. The guarantee of origin scheme
also differentiates green hydrogen as a fuel for transport.
Dr. Simon Bourne
itM power plc, Chief technology officer
18
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2017
energy Storage
energy Storage
HYDEPLOY
PROJECT
The National Grid HyDeploy project is well underway
and excellent progress has been made across the
programme. The HyDeploy project seeks to address
a key issue for the UK, namely how to reduce the
carbon footprint as a result of heating homes.
The UK has a world class gas grid delivering heat
conveniently and safely to over 83% of homes.
Emissions could be reduced by lowering the carbon
content of gas through blending with hydrogen.
HyDeploy is a Network Innovation Competition (NIC)
funded project which aims to establish the level of
hydrogen that can be safely blended with natural
gas for transport and use in the UK gas network.
ITM Power Plc has started work examining the potential
deployment of large-scale Power-to-Gas energy
storage within the boundaries of the Northern Gas
Networks gas distribution system. The work, funded
by the Department for Business, Energy and Industrial
Strategy (BEIS) as part of the Energy Storage Feasibility
Study Competition launched in January 2017, that was
completed in Q1 2018.
BEIS is also undertaking a £25m project to explore the
potential use of hydrogen gas for heating UK homes
and businesses. The project will run from 2017 to 2021
and will aim to define a hydrogen quality standard, and
to explore, develop and test domestic and commercial
hydrogen appliances.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2017
19
energy Storage
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
energy Storage
WORLD FIRST TIDAL
POWER TO GENERATE
HYDROGEN
In August, ITM Power Plc became the first company
to generate hydrogen using electricity from tidal power
in the world. This took place at the European Marine
Energy Centre (EMEC) in Orkney.
The hydrogen was generated by harnessing the
power of the tide at EMEC’s tidal energy test site
at the Fall of Warness, Eday, Orkney, prototype
tidal energy converters, which then fed power into
the ITM Power’s electrolyser situated next to EMEC’s
onshore substation.
ITM Power Plc, won a competitive tender to supply
a system to EMEC back in 2015. The electrolyser is
a 0.5MW system and is housed in a standard 20’
by 10’ ISO container with hydrogen generation
capacity of up to 220kg/24hours and comes with
integrated compression and up to 500kg of storage.
Whilst the initial driver behind buying an electrolyser
was to provide a storage solution to circumvent local
grid constraints, the purchase has sparked off other
pioneering projects around Orkney looking to use
hydrogen in various means. So we’re now looking
towards the development of a hydrogen economy
in Orkney.
Neil Kermode
eMeC, Managing director
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
21
energy Storage
SURF ’N’ TURF
PROJECT
One of the projects that will be using EMEC’s
electrolyser is the Surf ’n’ Turf project being led by
Community Energy Scotland in partnership with
Orkney Islands Council, EMEC, Eday Renewable
Energy and ITM Power Plc.
The Surf ‘n’ Turf project will see the electrolyser
producing hydrogen using electricity from EMEC’s
test site as well as power from a 900kW Enercon wind
turbine owned by the Eday community. The hydrogen
will then be transported to Kirkwall, where a fuel cell
installed on the pier will convert the hydrogen back
into electricity for use as auxiliary power for ferries
when tied up overnight. The project is also developing
a training programme with a view to green hydrogen
eventually being used as a fuel source on the inter-
island ferries themselves.
It’s fantastic to see this achievement. Getting the most
out of the islands’ renewable resources is the driving
force behind the Surf ‘n’ Turf project of which this
electrolyser is a key part.
Mark Hull
Community energy Scotland, head of innovation
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
energy Storage
LARGE-SCALE
POWER-TO-GAS
ENERGY STORAGE
DEPLOYMENT STUDY
In November, ITM Power Plc announced that it has
secured funding from the Department for Business,
Energy and Industrial Strategy (BEIS) as part of the
Energy Storage Feasibility Study Competition launched
in January 2017, to collaborate with Northern Gas
Networks (NGN) to undertake a study examining the
potential deployment of large-scale Power-to-Gas
energy storage.
The feasibility study will focus on deployments capable
of operating cost-effectively from 50MWh energy
storage capacity upwards within the boundaries of
the NGN gas distribution network. The study will
provide detailed technical, economic and site-specific
information about large-scale Power-to-Gas energy
storage which will enable a decision on a potential
large-scale energy storage demonstration project.
The whole systems approach and Power-to-Gas
technology are incredibly exciting prospects for
the UK’s future energy mix. As renewable power
generation increases, effective storage and
transmission of surplus power will become ever
more important. Instead of being lost, this surplus
power has the potential to be turned into alternative
green fuels such as hydrogen, and stored in the gas
network for later use in transport, heat or generation.
Mark Horsley
northern gas networks, Ceo
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
23
energy Storage
NORTHERN GAS
NETWORKS
DEPLOYMENT
STUDY FINDINGS
The focus of the study was on deployments
capable of operating cost-effectively from 50MW
energy storage capacity upwards within the
boundaries of the NGN gas distribution network.
Findings
Four locations would be suitable for a large-scale
first-of-a-kind Power-to-Gas demonstration supplying
the stored energy to either majority domestic or
industrial gas customers. Of the four locations
Low Thornley in Gateshead is recommended as
the most suitable site for deployment of a large-scale
first-of-a-kind Power-to-Gas demonstration facility in
the size range 50–100MW.
Low Thornley’s close proximity to the A1 and the
urban centres of Newcastle and Gateshead would
provide opportunity for local export of hydrogen
necessary to develop a local hydrogen refuelling
station network, which would enable Fuel Cell
Electric Vehicles to travel from London to Aberdeen.
The recommended next steps are:
− Undertake a Front End Engineering Design (FEED)
study for a large-scale Power-to-Gas demonstrator
in the size range 50–100MW to be built at the
NGN’s Low Thornley site, to fully scope the
programme and to establish the cost to build,
install, commission and demonstrate the facility.
− Develop and agree a UK-wide gas network
industry strategy for the wider demonstration
and deployment of Power-to-Gas energy storage
as a near-term contribution to the decarbonisation
of heat and as a means to support the wider
deployment of renewable generation by providing
a route to a proven technology which can bridge
the power and energy networks.
Process
Areas of existing network constraint on the electricity
distribution network were identified and the system
balancing mechanisms in use by the System Operator
were reviewed. Candidate locations were identified
within the area of NGN’s two Local Distribution Zones
(LDZ), that could form the basis for large-scale Power-
to-Gas energy storage demonstration-sites on NGN’s
large-scale distributed gas network.
Hydrogen production and efficiency data was taken
from ITM Power’s existing electrolysers and extrapolated
to provide a long-list of hydrogen production rates up
to 100MW size that could accommodate hydrogen
injection at 20%vol. The long-list sites were categorised
based on their ability to support the volumes of
hydrogen energy produced by electrolysis at different
scales and gas demand conditions.
Cross-sector export opportunities for hydrogen as
a transport fuel for Fuel Cell Electric Vehicles (FCEV)
in the North and North East regions were investigated
using the rollout strategy set out by the industry/
Government led UK Hydrogen Mobility (UKH2Mobility).
Conclusions were drawn and suggestions made for
the location and scale for a next step first-of-a-kind
deployment and demonstration of large-scale
Power-to-Gas energy storage project in the region.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
energy Storage
SALE OF 1.1MW SYSTEM
TO ENERGYSTOCK
In September, ITM Power Plc announced that
EnergyStock, a subsidiary of Gasunie, the Dutch
gas transmission network operator, purchased an
ITM Power 1.1MW rapid-response PEM electrolyser.
The sale was won in a competitive tender process
and includes an after-sales support contract.
The electrolyser will be located at EnergyStock’s
Zuidwending salt cavern storage facility in northern
Netherlands, and the generated hydrogen will be
either used on-site within EnergyStock’s systems,
or dispensed into tube trailers for supply to future
hydrogen refuelling stations. Power will be delivered
to the equipment via TenneT’s high voltage
electricity network.
Converting excess renewable electricity into
renewable gas and/or long-term storable clean
energy enables a utility like Holyoke Gas and Electric
to achieve benefits for both sides of our business.
Holyoke Gas and Electric is looking forward to
assessing the potential benefits and use cases
for this technology with ITM Power Plc.
Brian Beauregard
holyoke gas and electric, Superintendent
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
25
energy Storage
MASSACHUSETTS
POWER-TO-GAS
FEASIBILITY STUDY
In April, ITM Power Plc announced the award of a
grant from the Massachusetts Clean Energy Center
(MassCEC) to undertake a multi-MW Power-to-Gas
(P2G) feasibility study for the Massachusetts region.
The study will assess the potential for P2G energy
storage and hydrogen fuel for the Massachusetts
region in collaboration with Holyoke Gas and Electric
(HG&E), a local gas and electricity utility, and will
determine the technical and economic feasibility
for P2G and hydrogen fuel derived from renewable
energy sources.
In December 2016, The Massachusetts Department
of Energy Resources (DOER) adopted a 200
Megawatt hour (MWh) energy storage target for
electric distribution companies to procure viable
and cost-effective energy storage systems to
be achieved by January 1st, 2020.
This technology has the potential to make British
Columbia a major player in the worldwide hydrogen
economy. This project is a clear indicator that,
as we move toward a strong, sustainable energy
future, B.C.’s renewable and innovative clean
energy resources make us an attractive
destination for global investment.
Michelle Mungall
Mines and petroleum resources,
british Columbia’s Minister of energy
BRITISH COLUMBIA
RENEWABLE
HYDROGEN STUDY
In March, ITM Power Plc announced an award of a
grant from the British Columbia Government Ministries
of Energy, Mines and Petroleum Resources and Jobs,
Trade and Technology to undertake a Power-to-Gas
(P2G) feasibility study.
In the initial phase of the project, ITM Power Plc
will undertake a techno-economic feasibility study for
the large-scale centralised production of renewable
hydrogen in the province of British Columbia (B.C.).
The project team includes ITM Power Plc, Chiyoda
Corporation, Mitsui & Co. Ltd. and G&S Budd
Consulting Ltd. The project is due to commence
in Q2 2018 and has a duration of 12 months.
There is a growing demand for hydrogen in parts
of the world that are leading the transition away
from conventional energy sources to renewable,
clean energy for both motive and stationary power
applications. British Columbia’s grid is one of the
cleanest in the world in terms of carbon emissions,
with 92% of the power generated by hydro, and
has competitive electricity rates. This positions
B.C. as a strong candidate for production of
renewable hydrogen generated via electrolysis.
CLEAN
FUEL
ITM POWER’S UK
ELECTROLYSER
GENERATING CAPACITY
TO HIT THREE TONNE A
DAY, 1K TONNE A YEAR,
FOR TRANSPORT FUEL.
dr Simon bourne
itM power plc, Chief technology officer
28
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
Clean fuel
NEW SHELL
HYDROGEN FUELLING
STATION OPENED
AT BEACONSFIELD
In March, ITM Power Plc, along with Shell opened the
first ‘under the canopy’ in the UK – at Beaconsfield
Services on the M40. This new hydrogen refuelling station,
situated at one of the busiest service stations in the UK,
will be fully owned and operated by ITM Power Plc.
Situated at one of the UK’s busiest service stations,
Shell Beaconsfield on the M40, will be the first site
in the UK to bring hydrogen under the same canopy
as petrol and diesel; providing drivers with a range
of fuel choices to co-exist with traditional transport
fuels. The hydrogen is generated on-site using an
electrolyser that requires only water and electricity
to generate the hydrogen gas.
The hydrogen station at Beaconsfield, is the fifth
hydrogen refuelling site in the UK to be supplied
by ITM Power Plc and will be the first to be opened
as part of the H2ME project. The initiative has
been partially funded by the European Fuel Cells
and Hydrogen Joint Undertaking (FCH JU), and
the UK’s Office of Low Emission Vehicles (OLEV).
A new hydrogen station in Beaconsfield is the first
to sit on the main forecourt, alongside the petrol
and diesel pumps. This shows a big step forward
in offering a clean, green fuel, which is generated
on-site.
Dr Graham Cooley
itM power plc, Ceo
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
29
Clean fuel
The FCH JU is proud to see its support significantly
boosting market entry of hydrogen technologies for
clean mobility. The opening of this new station at the
Beaconsfield forecourt proves that hydrogen is now
even more the fuel of the future, and is ready to offer
an everyday green solution to citizens. We need to
continue building on these achievements, and enable
the transition towards a low-carbon transport system.
Bart Biebuyck
fCh Ju, executive director
WE’RE DELIGHTED TO
BE OPENING A NEW
REFUELLING SITE AT
SHELL BEACONSFIELD,
DEMONSTRATING OUR
ONGOING COMMITMENT
TO HYDROGEN AS A VITAL
PART OF THE UK’S FUTURE
TRANSPORT SYSTEM.
Mike Copson
Shell, hydrogen business development Manager
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
Clean fuel
£8.8M OLEV FUNDING FOR REFUELLING
INFRASTRUCTURE AND FCEVS
In March, ITM Power Plc announced that a consortium
including ITM Power Plc, Shell, Toyota, Honda
and Hyundai has won £8.8m in funding from the
Department for Transport (DfT), to improve access
to an expanded network of hydrogen refuelling
stations to support the continued roll-out of hydrogen
Fuel Cell Electric Vehicles (FCEVs) in the UK.
Out of the £8.8m total, ITM Power Plc will receive
£4.9m from the DfT to build four new hydrogen
refuelling stations and to upgrade five existing
hydrogen refuelling stations to increase capacity
to support a larger fleet of FCEVs. The project has
further funding support from the European Fuel
Cells and Hydrogen Joint Undertaking (FCH JU).
Decarbonising our roads is an essential part of meeting our climate targets. The innovative new
technologies involved present great opportunities for our increasingly low carbon economy.
Hydrogen has huge potential, especially for those making longer journeys and clocking up high
mileage. That is what makes this project truly exciting. Not only is it demonstrating the technology
in action, but it is also developing the refuelling infrastructure needed for the future.
Jesse Norman
roads Ministery
New greener police cars to run on hydrogen
Police cars and taxis will be among nearly 200
new hydrogen powered vehicles switching to
zero emission miles, thanks to a multi-million
pound Government boost.
The zero emission vehicles are part of a project that has
won £8.8m in funding from the DfT to improve access to
hydrogen refuelling stations up and down the country and
increase the number of hydrogen cars on our roads from
this summer.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
31
Clean fuel
FUEL CONTRACT WITH
THE METROPOLITAN POLICE
ITM Power Plc also signed a fuel contract with the
Metropolitan Police.
The Met is committed, alongside the Mayor, to making
their service as environmentally friendly as possible and
a big part of that work is ensuring that the fleet is green.
Since late 2015, the Met have been actively exploring
ways to hybridise and electrify their fleet as well as
exploring other new technologies such as hydrogen.
This is enabling the Met to make great strides towards
their ambition of procuring 550 vehicles as zero- or
ultra-low emission by 2020.
We are working closely with ITM Power Plc to roll-out
our new fleet of zero emission vehicles. The quick
refuelling time, comparable to that of a traditional
internal combustion engine vehicle, and long
driving range make Toyota’s hydrogen powered
Fuel Cell Electric Vehicle an ideal zero emission
response vehicle.
Jiggs Bharij
Metropolitan police, head of fleet Services
REPORT AND
FINANCIAL
STATEMENTS
YEAR ENDED 30 APRIL 2018
This financial year has been a period of significant development for
ITM Power Plc. With revenue increasing by 53%, the Company has
been focussed on the expansion of staff and the planning of the new,
larger production facilities. We’ve also been learning how to maximise
a growing portfolio of revenue generating assets in the shape of the
first real hydrogen refuelling network in the UK. Finally, Power-to-Gas
is now demonstrating real traction around the world and we remain
very well placed to benefit from this development with our long-running
reference plant in Germany.
Dr Graham Cooley
itM power plc, Ceo
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
about uS
ABOUT US
ITM Power Plc manufactures integrated hydrogen energy solutions,
which are rapid response and high pressure that meet the requirements
for grid balancing and energy storage services, and for the production
of clean fuel for transport, renewable heat and chemicals. ITM Power Plc
was admitted to the AIM market of the London Stock Exchange in 2004
and raised its initial funding of £10m gross in its IPO. Further funding
rounds of £28.5m in 2006, £5.4m in 2012, £2m in 2013 and £10m
in 2014 have been completed. The Company received £4.9m as a
strategic investment from JCB in March 2015. The Company currently
has £30.6m of projects under contract or in the final stages of negotiation.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
35
offiCerS and profeSSional adViSorS
OFFICERS AND
PROFESSIONAL ADVISORS
Directors
Sir R Bone
Dr S Bourne
Dr G Cooley
Lord R Freeman
P Hargreaves (resigned 31/10/17)
R Pendlebury
Prof R Putnam
Dr R Smith
A Allen (appointed 21/05/18)
REGISTRARS
Link Asset Management
The Registry
34 Beckenham Road
Beckenham, BR3 4TU
COMPANY SECRETARY
A Allen
REGISTERED OFFICE
22 Atlas Way, Sheffield,
South Yorkshire, S4 7QQ
NOMINATED ADVISOR
AND BROKER
Investec Bank plc
30 Gresham Street
London, EC2V 7QP
BANKERS
National Westminster Bank Plc
Stamford Branch
52 High Street, Stamford
Lincolnshire, PE9 2YH
SOLICITORS
Burges Salmon LLP
One Glass Wharf
Bristol, BS2 0ZX
AUDITOR
Grant Thornton UK LLP
Statutory auditor
2 Broadfield Court,
Sheffield, S8 0XF
PRESS AND INVESTOR
ENQUIRIES
Tavistock Communications Ltd
1 Cornhill,
London, EC3V 3ND
36
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
highlightS
HIGHLIGHTS
COMMERCIAL PROGRESS IN YEAR
hydrogen fuel
− £8.8m OLEV funding as part of the delivery of the largest expansion of hydrogen refuelling
station (HRS) infrastructure in the UK
− 14 wholly owned HRS assets in ITM Power Plc’s portfolio:
▪
▪
▪
six are open to the public
three are already under construction and due to open Q3 2018
five further stations now fully funded and in the planning stages due to open Q2 2019
− UK Electrolyser HRS Generating Capacity to hit 3 Tonne/day, 1k Tonne/year
− Fuel contract with the Metropolitan Police and others to refuel 200 new FCEVs
− New hydrogen refuelling station opened at Shell Beaconsfield on the M40
− Hydrogen fuel contracts are now 20 in total
− Fuel sales increased to 16 tonnes for the period, up 672%
power-to-gas (p2g)
− Completed large-scale P2G Deployment Study with Northern Gas
− Grant to undertake a multi-MW P2G feasibility study for the Massachusetts region
− Grant to evaluate P2G in British Columbia with BC Hydro, Chiyoda and Mitsui
renewable chemistry
− 10MW refinery hydrogen project with Shell to build the world’s largest PEM electrolyser
at the Rhineland refinery, Germany
Since year end
− Strategic Partnership Agreement with Sumitomo Corporation for product sales in Japan
and other territories
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
37
highlightS
KEY FINANCIAL RESULTS FOR
THE YEAR ENDED 30 APRIL 2018
− Total Revenue and Grant Funding of £14.1m (2017: £9.2m) up 53%, comprising:
▪ Product revenue – £3.3m (2017: £2.4m) up 36%
▪ Grant income recognised on the income statement – £4.1m (2017: £4.2m) down 0.5%
▪ Grant income recognised on the balance sheet – £6.7m (2017: £2.7m), up 152%
− Loss from operations £6.5m (2017: £3.6m), up 83%, including £0.9m of one-off items
− EBITDA loss of £4.8m (2017: £2.3m), up 109%
− Available cash balance of £20.4m at year-end (2017: £1.6m) post the December 2017 fund raise
− Net current assets excluding stock of £30.1m (2017: £7.4m)
CORPORATE DEVELOPMENT
POST YEAR END
− New factory premises identified and heads of terms agreed, detailed space planning underway.
Terms are expected to be signed in Q4 of this calendar year
− Significant investment in expansion of the manufacturing and after sales support teams
− Creation of Australian subsidiary, ITM Power Pty Ltd, and appointment of Dr Neil Thompson as MD
− Appointment of Andy Allen as Financial Director
− Working Capital Funding Round sucessfully raising £29.4m gross via a placing and open offer
− Non-contracted tender opportunity pipeline increased to £250m (September 2017: £200m),
illustrating the growth in the hydrogen economy
38
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
board of direCtorS
BOARD OF DIRECTORS
Dr Graham Cooley
Chief Executive Officer
(Age 54)
Dr Graham Cooley joined ITM Power Plc on 29 June 2009 as Chief Executive
Officer. Before joining, Graham was CEO of Sensortec and Universal Sensors,
founding CEO of Metalysis Ltd, a spin out of Cambridge University, and founding
CEO of Antenova Ltd. Graham spent 11 years in the power industry developing
conducting polymers, fuel cells, batteries and energy storage technologies. He
was Business Development Manager for National Power plc and International
Power plc and developed the Regenesys energy storage technology which
was acquired by RWE from Innogy. He has a Degree in Physics, PhD in
Materials Technology and an MBA.
Dr Simon Bourne
Chief Technology Officer
(Age 43)
Dr Simon Bourne joined ITM Power Plc at its incorporation in 2002 as a Technical
Manager and has been one of the leading scientists involved in the development
of ITM’s product platform. Before joining ITM, Simon was a project engineer with
Sonatest plc and a researcher with the Ministry of Defence. Simon has a BSc
Hons in Materials Science from UMIST and a PhD from Cranfield University.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
39
board of direCtorS
Dr R Smith
Executive Director
(Age 43)
Dr Rachel Smith joined ITM Power Plc at its incorporation in 2002 as a Scientific
Manager and has been one of the leading scientists involved in the development
of the Group’s core IP. Rachel has developed and led various externally funded
projects from the EU and UK and now acts as the funding co-ordinator for the
Group’s activities. Rachel also manages the Group’s patent and trademark
portfolio.
Prof Roger Putnam
Non-Executive Chairman
(Age 72)
Roger Putnam, the former Chairman of Ford of Britain and President of the
Society of Motor Manufacturers and Traders was a member of the Government’s
Energy Review Partnership. The Partnership reported to the Chancellor on the
country’s future energy strategy. He was also Chairman of the DTI’s Retail Motor
Strategy Group and a member of the Department for Business, Enterprise and
Regulatory Reform (DBERR)’s Automotive Innovation and Strategy Team. Roger’s
distinguished career in the automotive industry began at Lotus Plc. In 1982 he
joined Jaguar Cars Ltd as Director, Global Marketing and UK Sales Operations.
In 1985 Roger was appointed to the board of Jaguar as Director, Sales and
Marketing, a role he retained until he was appointed Chairman of Ford of
Britain in 2002.
40
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
board of direCtorSContinued
BOARD OF DIRECTORS
CONTINUED
Lord Roger Freeman
Non-Executive Director
(Age 76)
Lord Roger Freeman joined ITM Power Plc in October 2010 as a non-executive
director. Lord Freeman is a member of the House of Lords and is currently a
member of the Advisory Boards of Thales SA and PricewaterhouseCoopers (UK).
During a distinguished political career, Lord Freeman was the Conservative MP
for Kettering from 1983 to 1997 and served as the Parliamentary Secretary for
the Departments of Health and Armed Forces and as Minister of State for
Public Transport and Defence Procurement. He concluded his political career
as a Cabinet Minister in the government of John Major. He became a Life Peer
in 1997. Lord Freeman is a graduate of Balliol College and a Chartered
Accountant. He was a Partner and Managing Director with Lehman Brothers
in New York and London (1972 to 1985), specialising in cross border mergers
and acquisitions. Other directorships include: Chemring Group plc,
Big DNA Ltd and Parity Group plc.
Robert Pendlebury
Non-Executive Director
(Age 76)
Mr Bob Pendlebury has worked in senior management positions in both Ford
Motor Company and JCB. Joining JCB in 1991, he became their Engineering
and Research Director. He remains a consultant to JCB, Associate Engineering
Director to the JCB Academy and a Visiting Professor to Loughborough
University. He is a Mechanical Engineering graduate of Leeds University,
Chartered Engineer and Fellow of the Institution of Mechanical Engineers.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
41
board of direCtorSContinued
Sir Roger Bone
Non-Executive Director
(Age 74)
Sir Roger was President of Boeing UK from 2005 to 2014. He is the senior
independent director of Foreign and Colonial Investment Trust plc, and Chairman
of Over-C Ltd, a small high tech company in the telecoms sector. He is a non-
executive director and trustee of the National Centre for Universities and Business
(NCUB), and was one of the Prime Minister’s honorary Ambassadors for British
business from 2009 to 2015. He was British Ambassador to Brazil from 1999
to 2004 and to Sweden from 1995 to 1999, and prior to that an Assistant Under-
Secretary of State in the Foreign and Commonwealth Office. He is a Trustee of
the Royal United Services Institute, and is an honorary fellow of the Institution
of Engineering Designers. He was educated at Oxford University and holds
an honorary doctorate in engineering from Sheffield University.
Andy Allen
Chief Financial Officer and Company Secretary
(Age 36)
Mr Andy Allen joined ITM Power Plc in 2011 as Financial Controller
and later served as Chief Financial Officer and Company Secretary.
Sumitomo
Mr. Tsuyoshi Oikawa, Mr. Shuichi Suzuki, Mr. Kenji Okayasu
itM power
Prof Roger Putnam, Roger Bone, Dr Graham Cooley, Dr Simon Bourne
STRATEGIC
REPORT
I was delighted to report earlier in the year that ITM Power Plc
had raised £29.4m of working capital. Our plans for expansion
of staff and production capacity are on track and I am delighted
to note the significant increase in our top line result. As always,
I would like to thank the staff for another year of hard work
and enthusiastic dedication to our business ambition to help
decarbonise the world’s energy markets.
Prof. Roger Putnam
itM power plc, Chairman
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
STATEMENT
OF SCOPE
The purpose of the Strategic report is to inform the
members as to how the Directors have performed
in their duty to promote the success of the Group.
The Strategic Report contains certain forward-
looking statements. These statements are made
by the Directors in good faith based on the information
available to them up to the time of their approval
of this report and such statements should be
treated with caution due to the inherent uncertainties,
including both economic and business risk factors,
underlying any such forward-looking information.
This Strategic Report has been prepared for the
Group as a whole and therefore gives greater
emphasis to those matters which are significant
to ITM Power Plc and its subsidiary undertakings
when viewed as a whole.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
45
StrategiC report
BUSINESS
MODEL
Summary
ITM Power Plc designs and manufactures integrated
hydrogen energy systems for energy storage,
clean fuel production and renewable chemistry.
The Group has a suite of product platforms based
on Proton Exchange Membrane (PEM) technology.
The Group has a product offering that is scalable
above 100MW in size. Of particular importance
is the ability to respond rapidly and to generate
hydrogen at a pressure, flow rate and purity
appropriate to its application.
The overarching principle is the capacity to
take excess energy from the power network,
convert it into hydrogen and use it in one of
three broad applications.
Power-to-Gas
Demand for energy storage solutions is being driven
by the increasing proportion of power from renewables
in electricity generation in many countries. This, in
turn, is being driven by emissions reduction targets
set out most recently in the COP21 Paris Agreement
on climate change. We believe that the simplest and
most cost effective solution to address the need to
store intermittent renewable power is electrolysis with
the hydrogen produced then used either as clean
fuel or injected into a gas grid.
The Power-to-Gas model is a commercial proposition
which offers utility companies energy storage options
of a scale and duration relevant to the challenges
presented by the growing deployment of renewable
power generation. The equipment provides grid
balancing services which consumes excess energy
in the power network converting it to hydrogen for
injection into the gas network.
46
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
Clean fuels
The refuelling model is one that incorporates the
work of national hydrogen infrastructure initiatives
to support the growth of hydrogen as a transport fuel,
both for use in cars and buses initially, and with further
transport applications in the future. The roll-out of Fuel
Cell Electric Vehicles (FCEVs) is underway, led by
Toyota and closely followed by Hyundai, and Honda.
A hydrogen station produces hydrogen on-site via
ITM Power Plc’s rapid response electrolyser system,
and can refuel a fuel cell electric vehicle in minutes.
A growth market is in bus refuelling. Inner city air
quality is a major new driving force for Fuel Cell
Electric Bus (FCEB) deployment, as air pollution
is a major contributor to poor health in the UK.
Renewable chemistry
Refineries currently use hydrogen to improve the
quality of fractional distillation products and most
of this hydrogen is produced from steam-reforming.
15% of the total CO2 emissions from the European
refinery sector can be attributed to hydrogen
production. In order to comply with stringent
legislation and avoid fines, refineries need a
cost effective green hydrogen solution that
reduces carbon emissions while allowing
them to maintain output.
AT THE HEART
OF ALL OF THESE
APPLICATIONS
IS AN ITM POWER
ELECTROLYSER
SYSTEM.
In addition, natural gas reformers have long
start-up times. With their rapid start-up times,
ITM Power Plc’s PEM electrolysers could provide
an immediate backup solution to prevent
production downtime and preserve security
of hydrogen supply.
Finally, in steel making, iron ore requires chemical
reduction before being used to produce steel; this
is currently achieved through the use of carbon, in
the form of coal or coke. When oxidised, this leads
to emissions of about 2.2 tonnes of CO2 for each
tonne of liquid steel produced. The substitution
of hydrogen for carbon has the potential to
significantly reduce CO2 emissions, because
hydrogen is an excellent reducing agent and
produces only water as a by-product.
48
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
−
Revenue streams for the Group
As well as having potential revenue streams from
three large application markets, opportunities exist
globally for ITM Power Plc. The Group has a model
of locating agents in key territories to position
ITM Power Plc as a world leading developer and
supplier of electrolyser products. There are a variety
of ways in which the company can generate revenue:
− Sales of systems
ITM Power Plc positions itself as the provider
of hydrogen systems solutions and can sell
electrolysers and full systems to customers
globally. The Group offers both standard systems
and modules as well as bespoke offerings based
around standard core stack modules in order
to meet customer specifications.
− Design and consultancy revenue
Many system contracts that are bespoke
are preceded by a design study or a Front End
Engineering Design (FEED) contract that defines
solutions to customer-specific specifications.
− Maintenance revenue
ITM Power Plc offers warranties on systems,
which are valid alongside ITM Power Plc
maintenance contracts and thus the Group
expects to manage a growing income stream
as system deployments continue.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
49
StrategiC report
− Fuel sales revenue (own and operate model)
The Group has been the beneficiary of
funding from EU bodies, which has helped
accelerate research activity as well as
infrastructure development.
− Grant funding for innovation and scale up
The Group utilises funding from grant bodies to
contribute towards the technical advancement of
the electrolyser product through offering greater
efficiencies which manifest as cost reduction of
the ITM Power Plc systems.
Events after the balance sheet date
There are no material events that have occurred
after the balance sheet date.
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StrategiC report
BUSINESS
ENVIRONMENT
TODAY ITM POWER PLC IS A
GLOBALLY RECOGNISED EXPERT
IN HYDROGEN TECHNOLOGIES
WITH APPLICATIONS IN CLEAN
FUEL FOR TRANSPORT, ENERGY
STORAGE AND INDUSTRY.
We believe that all of these markets will grow
significantly over the next few years based
on the increasing drive for improved air quality
worldwide, and exacerbated by the growth
of planted renewables in the energy mix and
the need to decarbonise industrial processes.
Power-to-Gas
Proposals during the year from the EU include
energy storage involving the conversion of electricity
to another energy carrier, such as hydrogen. Ongoing
work includes investigating hydrogen/methane blends
and establishing admissible concentration levels for
hydrogen in natural gas grids across Europe. These
developments will enable Europe-wide deployment
of Power-to-Gas plant for injecting hydrogen into
the gas grid while offering balancing services to the
electricity grid. These balancing services can be
an important source of revenue for operators and
ITM Power’s Plc’s rapid response Proton Exchange
Membrane (PEM) technology allows units to be turned
on and off in under one second making them eligible
for the UK National Grid’s Enhanced Frequency
Response Payments.
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51
StrategiC report
ITM Power Plc enjoys a unique position having supplied
the world’s first PEM Power-to-Gas electrolyser in 2014,
with the project concluding in the year in review, having
injected hydrogen into the German gas distribution
network for over three years. The Group also contracted
with National Grid as part of the HyDeploy project for a
0.5MW electrolyser to inject into a UK gas network
for deployment later in the calendar year 2018.
Clean fuel
ITM Power Plc has won contracts to supply on-site
hydrogen generation equipment for refuelling in the
UK, the US, and to France, and is currently rolling
out a network of 13 hydrogen refuelling stations
in the UK of which five are now open for public
access. In the year, the Group dispensed 16
tonnes of hydrogen from its refuelling stations.
Having won its first bus refuelling station in the
year ended April 2017, ITM Power Plc will deploy this
station in Birmingham in the year ending April 2019,
and will start to receive a fuel revenue in that period.
This will prove that ITM Power Plc’s systems are now
at a scale where a fleet of buses can be supported by
one electrolyser on a return to base principle and large
schemes are now being envisaged, for applications
such as heavy logistics, trains and ships.
Renewable chemistry
In the year, ITM Power Plc won a 10MW renewable
chemistry contract with Shell, which was in the design
phases in the financial year in review. This plant will
serve as a reference plant for future bids into the industry.
The scale of hydrogen production capacity required in
the renewable chemistry market means that this market
will likely adopt the larger scale, multi-MW systems.
ITM Power Plc showcased a series of large scale
electrolyser designs up to 50MW in size, at Las Vegas
in September 2017, attracting significant interest from
potential customers worldwide.
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StrategiC report
KEY FINANCIALS
A summary of the financial KPIs is set out in the table below and discussed in this section.
Total projects income, being sales and grants receivable
(as split below)
Of which: Sales revenue
Of which: Grant recognised in the income statement
Of which: Grant recognised on the balance sheet (grant income against
assets plus grant income against pro-forma less grant income against
pro-forma recognised in prior year)
Pre-tax loss
Projects under contract or in final stage of negotiation*
Non-current assets
Net assets
2018
£14.1m
£3.28m
£4.14m
£6.68m
£6.48m
£30.6m
£4.81m
£35.59m
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
53
StrategiC report
2017
2016
2015
2014
2013
£9.23m
£8.19m
£5.06m
£3.08m
£1.44m
£2.42m
£1.93m
£1.64m
£1.13m
£0.09m
£4.16m
£3.19m
£1.777m
£1.370m
£1.35m
£2.65m
£3.07m
£1.65m
£0.58m
£nil
£3.55m
£4.36m
£5.71m
£7.95m
£6.17m
£35.46m
£16.32m
£10.46m
£9.25m
Not measured
£4.90m
£3.28m
£2.55m
£1.76m
£1.46m
£13.07m
£11.64m
£10.34m
£11.00m
£7.38m
*Contracts can take a period longer than 12 months to unwind through the accounts. In the year ended 30 April 2018, income recognised
was £14.1m against a pipeline reported at the results announcement of £35.5m (2017: £16.3m). Therefore, of the contracted pipeline, the
Group delivered on projects equivalent to 40% (2017: 57%).
Projects under contract and in the final stage of negotiation are a non-statutory measure that the Board of Directors use to assess progress
and monitor the Group. Items under contract are contract projects that are being progressed. Projects in negotiation are added once the
Directors are absolutely certain that a contract will get signed, and represents future revenue. These numbers are reported via the Regulatory
News Service (RNS) with each announcement. The Directors do not make representations as to the timing of the revenue recognition
associated with the projects under contract or in the final stages of negotiation.
54
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StrategiC report
FINANCIAL
PERFORMANCE
ITM Power Plc continues to be first and foremost
a manufacturer, with the majority of revenue coming
from construction contracts to build full hydrogen
systems. Revenues in the year were mainly generated
across five build projects to provide electrolysers in
each of our three target markets.
Meanwhile, consultancy income reduced. This is
likely to be cyclical as consultancy services are often
procured with a view to sourcing units in competitive
tenders. A new revenue stream has been recognised
in the accounts this year for fuel sales, as our refuelling
stations begin to attract greater volumes of customers
and sales.
Total collaborative project funding recognised in the
year was £10.82m of which £4.14m is recognised
on the income statement (2017: £6.81m, of which
£4.16m was recognised on the income statement).
This increase in asset builds supported through project
funding has allowed ITM Power Plc to develop a suite
of hydrogen generation equipment that it will own and
operate as part of the collaborative projects, with
data and knowhow to be incorporated into new
generations of electrolysers.
The pre-tax loss for the year under review increased
to £6.48m (2017: £3.55m). The increase in loss in
the year being reported can be attributed to three
major factors; firstly, the impact of producing first
of a kind plant and the non-recurring engineering
costs associated with these builds; secondly,
inefficiencies associated with testing large plant
at ITM Power Plc’s existing facilities; and finally
increased costs of recruitment in the year as
the Group seeks to prepare for delivery of ITM
Power Plc’s future order book, both contracted
and speculative. In each of these cases, these
costs represent on-off expenses that will not be
expected to be replicated once in the new factory
that has been identified is completed.
Net cash burn before fund raise increased to £9.50m
(2017: £5.85m). Cash burn is a non-statutory measure
the Directors use to monitor the Group, and is
calculated by deducting from the cash flow the effects
of any equity fund raise. The cash burn increase is a
result of delayed grant receipts on high outlay projects.
The timing of grant receipts is often not aligned in the
same period as the expenditure. This cash outflow,
which is significantly greater than the losses in the
year, shows the continued commitment of ITM Power
Plc to being a refuelling system owner and operator
as the industry grows in the UK in order to gain market
share and improve opportunities for FCEV adoption.
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FINAL RESULTS
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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StrategiC report
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FINANCIAL
POSITION
In the year, the Group capitalised development
costs of £0.07m (2017: £0.15m). This is for product
developments that will continue to keep the Group
at the forefront of PEM electrolysis but also towards
the design of standard products that will facilitate
our offering to the markets. The Directors see
continued product development as key to
building commercial traction.
ITM POWER IS NOW
IN A POSITION TO BE
COST COMPETITIVE
WITH OTHER FORMS
OF FUEL SOLUTIONS.
ITM Power Plc has seen a slight reduction in fixed
assets to £4.454m from 4.519m in the prior year.
The impact of depreciation just exceeding the effect
of contining to build and then open refuelling stations
under the H2ME and H2ME2 projects that will supply
a growing hydrogen fuel sales market in the UK. The
total value of refuelling assets was £2.5m (2017:£2.3m).
In previous years, there had been an impairment
against one refuelling asset that was a result of
future discounted net cash flows being lower than
the holding value.
The previous impairment was reversed in the year
as new income streams became available for that
specific system.
At year end, ITM Power Plc had current assets totalling
£39.558m (2017: £14.846m). Funds in the bank
amounted to £21.975m (2017: £3.004m), of which
amounts on guarantee totalled £1.57m (2017: £1.45m).
Presently, the Group is required to place amounts on
guarantee as cash cover, which limits working capital
available to the company mid-contract. ITM Power Plc
continues to structure quotes to include upfront
payment with orders so that working capital is
not impacted adversely by increased activity.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
59
StrategiC report
Trade and other receivables excluding restricted cash
amounts have increased from £11.08m to £16.9m
at the year ends in 2017 and 2018 respectively. This
movement is dominated by delayed trade debtors
and stage payments made to suppliers for stock
items required in the next wave of units through
production and equipment for refuelling stations.
The trade debtors at the end of the year under review
predominantly relate to grant income debtors (while
2017 was predominantly trade debtors). Prepayments
and accrued income was £11.15m in 2018, up £2.38m
in the year (2017: £8.77m).
Creditors have increased from £6.67m to £7.93m
at the year ends in 2017 and 2018 respectively. This
movement is a result of an increase in accruals and
deferred income from £5.6m to £6.4m, which reflect
both money received up front for construction contracts
and also accruals for goods received that have not
yet been invoiced. At year end, the Group had trade
creditors of £1.4m against a prior year balance of
£0.92m. This number has predominantly increased
due to the size and stage of progress on contracts
in the pipeline.
OUTLOOK
Today, ITM Power Plc is a globally recognised
expert in hydrogen technologies with applications
in clean fuel for transport, energy storage and
renewable chemistry. We continue to believe
that all of these markets will grow significantly
over the next few years based on the increasing
drive for improved air quality in inner cities
worldwide, the growth of renewables in the
energy mix and the need to decarbonise the
production of hydrogen for industry. We also
believe that ITM Power Plc remains uniquely
placed to capture segments of each market.
With markets growing rapidly, and air quality in
particular being a major issue throughout 2017,
ITM Power Plc looks forward to developing
further contracts in the pipeline. The trend
noticed regarding enquiries is that of demand
for greater capacity systems, often including
ancillary hydrogen energy systems and after
sales support contracts. The growing fuel
and after sales support contracts shall represent
recurring revenue for ITM Power Plc now and
increasingly in the future.
The Board looks forward to reporting progress
as contracts are awarded, and to providing an
update at the AGM.
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STRATEGIES AND OBJECTIVES
ITM Power Plc has the following near and
mid-term objectives;
− new territories: Gaining a foothold in new markets
through deployment of sales personnel and kit.
Most recently, ITM Power Plc have expanded to
include a subsidiary company in Australia.
− product scale up: The market for larger
electrolysers is gathering pace and recognised
through enquiries both in the business development
function and at the Hannover fair that ITM Power Plc
exhibits at annually. As such, building a modular
system allows ITM Power Plc to access and scale
the tenders appropriately as they are received.
− Cash flow: The Board are committed to growing
cash flow in the mid-term. In the short-term there
will be a move to the new factory and as such
cashflow will be a KPI throughout the build
phase and into the new factory.
− break-even: The Board have break-even
as a key objective for the Group.
− growing pipeline and delivery of contracted
orders annually: The Group need to grow the
contracted pipeline in the near-term as it signals
the revenue that the Group will deliver in the
forthcoming periods. As such, pipeline remains
a key objective for the Board. The key objective
then becomes project delivery.
ITM Power Plc is now firmly focussed on large scale
solutions. The current strategy is to use the existing
designs to form a suite of standard products that can
meet many needs of customers, as well as offering
larger scale bespoke solutions for kit above 2MW
and into multi-MW solutions.
Using the same initial platform, the Group will also
be able to show demonstrable success in existing
products to market to further potential customers.
In the medium-term, the national mobility programmes,
in which ITM Power Plc has positioned itself as a key
partner for refuelling through electrolysis, will drive
refuelling station sales.
ITM Power Plc is currently positioned as a refueller
of hydrogen, and will also be able to gain market share
for hydrogen sales as vehicle adoption accelerates.
The results in the current year show a 672% increase
in hydrogen sales, to 16 tonnes in the year.
Product development, and in particular upscaling of
product offering, will be achieved through securing and
utilising project funding. This serves the dual purpose
of reducing cash outflow and creating strong key
partnerships within industry.
Short-term cash flow is aided but not totally mitigated
by ITM Power Plc quoting for sales with upfront
payments, which reduces reliance on working capital.
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61
StrategiC report
NON-FINANCIAL KEY
PERFORMANCE INDICATORS
FUEL DISPENSED (KG)
FUEL CONTRACTS SIGNED
13,036
1,043
–
20
14
1
Given the early stage of the refuelling market, no
expectation has been set with regards to the KPI
performance in the current year but these KPIs
will act as a baseline for future performance.
2018
2017
2016
HYDROGEN
PRODUCTION
CAPACITY UNDER
CONTRACT IN KW
2018
21,873
2017
12,138
2016
2015
2014
2013
5,948
2,685
1,613
472
62
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
PRINCIPLE RISKS AND UNCERTAINTIES
The principle and commercial risks to the Group are as follows:
Description
Impact
ITM Power Plc does not achieve sufficient commercial success before existing competitors
or new entrants.
The current plans the Group has may not be realised, and ultimately the Group may have
to re-evaluate its forecasts.
Assessment of change
in risk year-on-year
There is greater commercial traction in the current year, both for ITM Power Plc and
some of its competitors.
As the movement towards better air quality and renewable energy gathers momentum,
larger entrants could enter the market with greater resource than ITM Power Plc.
Mitigation
The Board considers the knowhow and field experience owned by the Group creates
a significant barrier to entry for new competitors, and for existing competitors to
threaten the Group’s market position.
Description
ITM Power Plc continues to be in a cash consumption phase.
Impact
There is a risk that the Group may face working capital and cash flow challenges
associated, with receipts often large and intermittent, both for sales contracts but
particularly for grants.
Assessment of change
in risk year-on-year
Due to the funding round achieved in September 2017, the Board consider this risk
reduced. However, there remains a working capital requirement with every sale which
will need to be handles appropriately as pipeline grows.
Mitigation
There are a number of options available to the Group, which include structuring sales
beneficially, and requiring money up front, or alternatively in recognition of a series of
more frequent milestones.
Historically, ITM Power Plc has continued to meet obligations through equity fund raises.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
63
StrategiC report
Description
Alternative technologies are adopted in preference to the Group’s technology.
Impact
The Group could struggle to gain market share or may find itself operating in a smaller
market than is currently anticipated.
Assessment of change
in risk year-on-year
For Power-to-Gas applications, the Board consider this risk diminished year-on-year,
as the need for grid balancing and to decarbonise the gas grid increase, and hydrogen
presents the only viable large scale solution.
Mitigation
For refuelling applications, the Board considers this risk the same as the prior year; whilst
alternative technologies exist, ITM Power Plc believe that hydrogen shall be part of the mix
for cars, and will be prioritised for larger vehicles.
The Board considers the technological proposition of the Group and through both review
and strong targeting considers the technology to be superior to that currently on the
market. Through targeted improvements in technology development the Board seeks
to retain that competitive advantage.
For refuelling, the technology used in Battery Electric Vehicles is the same technology
that is found in Fuel Cell Electric vehicles, with the exception of the energy storage device
– which in the case of a FCEV is in the form of a hydrogen tank. As such, the Board
welcomes the development of battery vehicles, whilst recognising the advantages
of refuel time and range of the Hydrogen vehicles.
Description
Impact
Foreign Currency fluctuations could adversely affect the profitability of certain contracts
by impacting the supply chain, sales cycle or valuation of receivables and payables.
The profitability of the Group could be affected if exchange rates fluctuate significantly
during the course of a contract.
Assessment of change
in risk year-on-year
This risk has continued to be high, as was the case last year, despite the Group
considering more sophisticated mitigation strategies.
Mitigation
Where possible, ITM Power Plc operates a natural hedge, using currency accounts to
mitigate against immediate risks. The Group also consider the use of forward contracts
and will monitor exchange rates more closely in the future as the value of contracts
continues to grow.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
Description
Impact
ITM Power Plc has previously been well-funded by EU sponsored programmes
and the certainty of this pipeline may be impacted by the UK Referendum on Brexit.
It may be harder to win contracts from a source that has historically been a successful
strategy for ITM Power Plc.
Assessment of change
in risk year-on-year
This risk increased significantly upon the announcement of the referendum result
on 24th June 2016, and has remained a moderate-to-high risk.
Mitigation
The Group has a number of options. One option is to utilise the presence of an EU
subsidiary company (ITM Power GmbH) to apply for the same funds as before, with
negligible impact to project viability.
There are other precedents in the UK for accessing the same EU funding pot (Horizon
2020), but also to broaden the scope of projects to ensure this potential risk is resolved.
The Group is transitioning towards a more even mix of income, with sales revenue
increasing. Therefore reliance on grant funding reduces year on year.
Description
Impact
Brexit may pose a risk to the Group as ITM Power Plc is an exporter, and there is currently
limited visibility of the likely trade deal that will emerge from Brexit negotiations.
This could have significant impact on the profitability of contracts previously signed, and
spanning the period March 2019, as well as leave uncertainty over prospective contracts.
Assessment of change
in risk year-on-year
This risk increased significantly upon the announcement of the referendum result on
24th June 2016.
Mitigation
The Group are in the process of considering a number of mitigating items for Brexit,
not least taking advice on the likely impact of the ‘greatest change’ scenario. This
shall inform as to how future sales are structured.
The Board of Directors meet regularly to review specific and general risks that face the Group and strives
to position the Group in a way that any risks can be minimised and met, should the need arise.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
StrategiC report
CORPORATE SOCIAL
RESPONSIBILITY
ITM Power Plc’s products are being continually
developed to meet and maintain our own and our
customers high standards; in providing the global
marketplace with a sustainable alternative energy
solution, creating a reduction in the global carbon
footprint and a reduction in global greenhouse
gas emissions.
We operate management systems in accordance
with ISO 14001 2015 and OHSAS 18001 2007.
Our aim in the coming year, is to incorporate all
of our management systems under one integrated
management system and to continue with our
UKAS accreditation program.
Our commitment to source our products and services
locally where possible, has seen ITM Power Plc
develop a supplier control program that assists
and develops our supply chain with Health, Safety
and Environmental goals and objectives.
Our global commitment to promote and develop
ITM Power Plc’s Health, Safety and Environmental
ethics within the global supply chain.
We have recently engaged a program for full recycling
of all waste materials where possible, controlled with
AATF’s and environmentally aware recycling partners,
we will define a charity partner from our local area or
a global environmental awareness charity each year
to receive a monitory percentage of our recycled
items value.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
67
StrategiC report
GOING
CONCERN
The Directors have prepared a cash flow forecast
(the “Forecast”) for the period ending 31 August 2019
(“The forecast period”). This forecast indicates that
the Company and Group would expect to remain
cash positive without the requirement for further
funding based on delivering existing pipeline, for
a period of at least 12 months from the date of
approval of these financial statements. The
accounts have therefore been prepared on
a going concern basis.
Approved by the Board and signed on its behalf by:
Dr. Simon Bourne
ITM Power Plc, Director
Date: 10 August 2018
68
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
direCtorS’ report
DIRECTORS’
REPORT
The Directors present their annual report and audited
financial statements on the affairs of ITM Power Plc
(the “Company”) and its subsidiaries (the “Group”),
together with the financial statements and auditor’s
report, for the year ended 30 April 2018.
The Directors believe that the financial statements
are fair, balanced and understandable.
The following disclosures have been made in the
Strategic Report and are cross-referenced here:
business review including KPIs, principle risks
and uncertainties, and future prospects.
Research and development
During the year the Group incurred research
and development related costs of £1.79m
(2017: £2.023m).
Charitable and political contributions
During the year, the Group made no charitable
or political donations (2017: £nil).
Dividends
The Directors do not recommend a dividend
payment for the year (2017: £nil).
Capital structure
Details of the Group’s capital structure are provided
in notes 20 and 25 to the financial statements.
Directors
The following Directors served throughout the
year and subsequently, unless stated otherwise:
Sir R Bone
P Hargreaves (resigned 31 October 2017)
Dr S Bourne
Prof R Putnam
Dr G Cooley
R Pendlebury
Lord R Freeman
Mr A Allen (appointed 21 May 2018)
Dr R Smith
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
69
direCtorS’ report
The Directors who served during the year and their interests in the shares of ITM Power Plc
(including those of their spouse or civil partner and children under the age of 18) were as follows.
Sir R Bone
Dr S Bourne
Dr G Cooley
Lord R Freeman
P Hargreaves
R Pendlebury
Prof R Putnam
Dr R Smith
ordinary shares of 5p each
at 30 april 2018 and as
at 20 august 2018
ordinary shares of 5p each
at 30 april 2017
No.
133,710
326,830
1,062,726
5,000
28,621,793
37,269
27,129
80,886
No.
67,000
326,830
987,726
5,000
22,908,643
12,269
27,129
80,886
Directors’ indemnities
The Company has made qualifying third party
indemnity provisions for the benefit of its Directors,
which were made during a preceding year and
remain in force at the date of this report.
Future developments and
post balance sheet events
There are no material events that have
occurred after the balance sheet date.
Supplier payment policy
The Group’s policy is to settle terms of payment
with suppliers when agreeing each transaction,
ensuring that suppliers are made aware of the
terms of payment and abide by the terms of
payment. At 30 April 2018, the trade creditors
balance equated to 59 days (2017: 57 days),
based on daily total costs excluding payroll.
Substantial shareholdings
On 30 April 2018 the Company had been notified,
in accordance with chapter 5 of the Disclosure and
Transparency Rules, of the following voting rights
as a shareholder of the Company:
name of holder
JCB Research
Allianz Global Investors
P Hargreaves
Schroder Investment Management
Quilter Cheviot
Herald Investment Management
percentage of voting rights
and issued share capital
no. of
ordinary shares
12.6%
11.2%
8.8%
5.5%
5.5%
3.6%
40,970,365
35,027,162
28,621,793*
17,825,000
17,750,088
11,647,336
* of this total 3,439,000 are held by a discretionary trust on behalf of the shareholder.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
direCtorS’ report
branches outside the uK
The Group has subsidiary companies, comprising
marketing offices, in Germany and the United States.
A further subsidiary in Australia has been set up
around the year-end.
auditor
Each of the persons who is a Director at the date
of approval of this annual report confirms that:
− so far as the Director is aware, there is no relevant
audit information of which the Company’s auditor
is unaware; and
− the Director has taken all the steps that he ought to
have taken as a Director to make himself aware of
any relevant audit information and to establish that
the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of s418 of the
Companies Act 2006.
Grant Thornton UK LLP have expressed their
willingness to continue in office as auditor.
Disabled employees
Applications for employment by disabled persons
are always fully considered, bearing in mind the
aptitudes of the applicant concerned. In the event
of staff becoming disabled every effort is made to
ensure that their employment with the Group continues
and that appropriate training is arranged. It is the policy
of the Group that the training, career development and
promotion of disabled persons should, as far as possible,
be identical to that of other employees.
employee consultation
The Group places considerable value on
the involvement of its employees and has
continued to keep them informed on matters
affecting them as employees and on the various
factors affecting the performance of the Group.
This is achieved through formal and informal
meetings. Employee representatives are
consulted regularly on a wide range of matters
affecting their current and future interests.
Key employment policies
We have consistently sought to recruit and retain the
best employees in our sector and this has contributed
to the advancement and successes of the products
we manufacture. We also recognise the importance
of employee retention and we offer our staff benefits
including childcare vouchers and a cycle purchase
scheme as well as formal training relevant to the
employee’s role. We believe this maintains high
levels of employee satisfaction and motivation.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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direCtorS’ report
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose
with reasonable accuracy, at any time, the financial
position of the Company and enable them to
ensure that the financial statements comply with
the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Approved by the Board and signed on its behalf by:
Dr. Simon Bourne
itM power plc, director
Date: 10 August 2018
The Directors are responsible for preparing the
Strategic Report and Directors’ 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 to prepare the financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the
European Union, and have elected to prepare parent
company financial statements in accordance with
United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards
and applicable laws), including FRS 101 ‘Reduced
Disclosure Framework’. 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 and profit or loss of
the Company and Group for that period. 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 and prudent;
− state whether applicable IFRSs as adopted
by the European Union have been followed,
subject to any material departures disclosed
and explained in the financial statements;
− prepare the financial statements on the
going concern basis unless it is inappropriate
to presume that the company will continue
in business.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
Corporate goVernanCe report
CORPORATE
GOVERNANCE REPORT
Principles of corporate governance
ITM Power Plc (the “Company”) is committed
to high standards of Corporate Governance.
The Board is accountable to the Company’s
shareholders for good governance in its
management of the affairs of the Group. The
Directors acknowledge the importance of the
principles of corporate governance contained
in the UK Corporate Governance Code. As an
AIM quoted company, ITM Power Plc is not obliged
to comply with the full requirements of the UK
Corporate Governance Code; however, the Board
intends to comply with its main provisions as far
as reasonably practicable having regard to the
size of the Group.
The Board recognises the importance to shareholders
of Corporate Governance disclosure and to this
end the Company has developed a set of disclosures
that it feels are consistent with the Group’s size and
the constitution of the Board and intends to continue
to develop these disclosures as the Group grows.
The Directors intend to comply with Rule 21 of
the AIM Rules relating to Directors’ dealings as
applicable to AIM companies and will also take
all reasonable steps to ensure compliance by
the Group’s applicable employees.
The Board
The Board currently comprises the following members
who are also members of the following committees
of the Board:
director
role
remuneration
Committee
audit
Committee
nominations
Committee
executive
Committee
Manufacturing
& engineering
Committee
Dr S Bourne
Dr G Cooley
Dr R Smith
Lord R Freeman
Prof R Putnam
Sir R Bone
Mr R Pendlebury
Chief Technology
Officer
Chief Executive
Officer
Executive
Director
Non-executive
Director
Non-executive
Chairman
Non-executive
Director
Non-executive
Director
Mr A Allen
Executive Director
•
•
•
•
•
•
•
N.B. Mr P Hargreaves previously sat on the Remuneration and Nominations committees.
•
•
•
•
•
•
•
•
•
•
•
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
73
Corporate goVernanCe report
The Remuneration Committee’s role is to determine
and recommend to the Board the terms and conditions
of service, the remuneration and grant of options to
Executive Directors under the EMI scheme adopted
by the Company.
The Audit Committee’s primary responsibilities are
to monitor the quality of internal control, ensuring that
the financial performance of the Company is properly
measured and reported on and for reviewing reports
from the Company’s auditor relating to its accounting
and internal controls in all cases having due regard
to the interests of the shareholders.
The Nominations Committee leads the process for
Board appointments. It vets and presents to the Board
potential new Directors, particularly Non-Executives.
All new appointees undergo a rigorous nomination
process before the Board agrees on their appointment.
The Executive Committee comprises Prof Roger
Putnam as Chairman, Dr Graham Cooley (CEO),
Dr Rachel Smith, Dr Simon Bourne (CTO) and
Mr Andy Allen (FD). The Committee regularly meets
to consider business development, management
issues and the financial performance of the Company.
The Manufacturing and Engineering committee
comprises Robert Pendlebury, Simon Bourne,
Andy Allen and Rachel Smith and technical staff
from departments within the Company. The primary
responsibilities of the committee is to review the
Company’s product portfolio and development
plans and assess the cost composition of the
product portfolio and the suitability of existing
process to satisfy anticipated market developments.
Balance of the Board
ITM Power Plc has a separate Chairman and Chief
Executive Officer, each having his own separate
responsibilities. The Chairman is responsible for
the effective working of the Board and the Chief
Executive Officer is responsible for all operational
matters and the financial performance of the Group.
The Board is balanced, both numerically and in
experience, with the intention that no individual or
small group of individuals should be able to dominate
decision-making. The Board has not appointed a
Senior Independent Director. However, any of the
Non-Executive Directors are available on request
as a conduit of communication to the Board in the
event that the Chairman and/or the Chief Executive
Officer are not appropriate conduits for shareholder
concerns and issues.
Matters reserved to the Board’s attention
The Board has a formal schedule of matters
reserved for its decision covering the following areas:
− Management structure and appointments;
− Strategic/Policy considerations;
− Material transactions;
− Finance; and
− General governance and capital matters.
Committees
The Board operates through clearly identified Board
committees to which it delegates certain powers.
These are the Remuneration Committee, the Audit
Committee, the Nominations Committee and the
Executive Committee. They are properly authorised
under the constitution of the Company to take
decisions and act on behalf of the Board within the
guidelines and delegations laid down by the Board.
The Board is kept fully informed of the work of these
committees and each committee has access and
support from the Company Secretary. Any issues
requiring resolution are referred to the full Board.
74
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
Corporate goVernanCe report
Board meetings
The Board scheduled three regular meetings in the year ended 30 April 2018 and two additional meetings
were convened when required. The table below shows the attendance of Directors at regular Board meetings
and at meetings of the Committees during the year.
The Board is supplied in a timely manner with information in a form and of a quality appropriate to enable
it to discharge its duties.
no. of meetings held
non-executive directors
Lord R Freeman
Mr P Hargreaves
Prof R Putnam (Chairman)
Sir R Bone
Mr R Pendlebury
executive directors
Dr S Bourne
Dr R Smith
Dr G Cooley
Board performance appraisal
With the full support of the Board, the Chairman
leads an evaluation of the performance of the
Board and its Committees on a yearly basis.
The last review concluded that the Board and
its Committee, are currently effective and each
Director continues to demonstrate commitment
to their role.
board
Meetings
remuneration
Committee
audit
Committee
5
5
4
5
4
5
5
5
5
1
1
1
1
1
–
–
–
–
2
2
–
2
2
–
–
–
–
Re-election of Directors
New Directors are subject to election at the first
Annual General Meeting of the Company following
their appointment. In addition, all Directors who
have been in office for three years or more since
their election or last re-election are required to
submit themselves for re-election at the Annual
General Meeting of the Company. At each Annual
General Meeting of the Company all those Non-
Executive Directors who have been in office for
nine years or more since the date on which they
were originally elected as a Non-Executive Director
of the Company are required to retire from office,
but may stand for re-appointment.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
75
Corporate goVernanCe report
Board independence
The Board recognised that Peter Hargreaves’
shareholding was a factor which, under the UK
Corporate Governance Code, may have appeared
to impair his independence. Peter Hargreaves was
viewed as independent as he was not personally
dependent on the success of ITM Power Plc for
income. The Board considers all the Non-Executive
Directors to be independent in character and
judgement. The Non-Executive Directors have provided
excellent independent advice and challenge throughout
the year. In concluding that all its Non-Executive
Directors are independent, the Company considered,
inter-alia, the fact that all of the Non-Executive Directors
are Directors of other corporations and are not reliant
on any shares or share options they hold in, or
income they receive from, ITM Power Plc.
Internal control and risk management
The Board is responsible for the Group’s system
of internal control. Such a system can only be
designed to manage rather than eliminate the risk
of failure to achieve business objectives and can
provide only reasonable, and not absolute, assurance
against material misstatement or loss. Given its size,
it would not be practical for the Group to maintain
a dedicated Internal Audit function. However, the
Group has always maintained an open culture
that encourages staff to consider the processes
in which they are involved and report any control
weaknesses directly to senior management.
Segregation of duties is maintained wherever
possible, with reviews performed to identify
any issues and mitigate risk. As the Group
grows, it is recognised that more regular review
will be necessary, with line managers and middle
managers becoming established to take on some
of this responsibility. The Group also has in place
the appropriate culture to deal with the identification,
assessment and management of major business
risks through regular communications with
senior management.
Relations with shareholders
The Company values the views of shareholders
and recognises their interests in the Group’s
strategy and performance.
Overall responsibility for ensuring that there is
effective communication with investors and that the
Board understands the views of major shareholders
rests with the Chief Executive Officer, who makes
himself available to meet shareholders for this purpose.
Press coverage packs and analyst notes are made
available to the Board at each regular Board meeting.
The Chief Executive Officer is often accompanied
at investor presentations by either the Chairman
or the Chief Financial Officer. Shareholder
communication is mainly co-ordinated by the
company’s Corporate Communications Consultants,
Tavistock Communications Limited. ITM Power Plc
is committed to maintaining a good dialogue with
shareholders through proactively organising meetings
and presentations with fund managers, retail brokers
and analysts, as well as responding to a wide range of
enquiries. The Company also recognises the importance
of communicating appropriately any significant company
developments, this is done via the Stock Exchange
Regulatory News Service that can be accessed through
the Company’s new website.
The Company reports to shareholders twice a year.
The report and accounts are available on the
Company’s website: www.itm-power.com
All shareholders are encouraged to attend the
Company’s Annual General Meeting, at which
the Chairman and CEO give an account of the
progress of the business over the year and provides
the opportunity for shareholders to ask questions.
The Board attends the meeting and is available
to answer questions from shareholders present.
In all communications and events, care is taken
to ensure that no price sensitive information is released
and that any price sensitive information is released
to all shareholders at the same time in accordance
with AIM Rules.
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
independent auditor’S report to the MeMberS of itM power plC
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS
OF ITM POWER PLC
opinion
our opinion on the financial statements
is unmodified
We have audited the financial statements of ITM
Power Plc (the ‘parent company’) and its subsidiaries
(the ‘Group’) for the year ended 30 April 2018, which
comprise the consolidated income statement and
other comprehensive income, the consolidated
and company statements of changes in equity, the
consolidated and company balance sheets, the
consolidated cash flow statement and notes to the
financial statements, including a summary of significant
accounting policies. The financial reporting framework
that has been applied in the preparation of the group
financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by
the European Union. 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 April 2018 and of
the Group’s loss for the year then ended;
− the Group financial statements have been properly
prepared in accordance with IFRSs as adopted
by the European Union;
− 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.
who we are reporting to
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.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
77
independent auditor’S report to the MeMberS of itM power plC
Conclusions relating to going concern
We have nothing to report in respect of the following
matters in relation to which the ISAs (UK) require us
to report to you where:
− the Directors’ use of the going concern basis
of accounting in the preparation of the financial
statements is not appropriate; or
− the Directors have not disclosed in the financial
statements any identified material uncertainties
that may cast significant doubt about the Group’s
or the parent company’s ability to continue to adopt
the going concern basis of accounting for a period
of at least twelve months from the date when the
financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
that we identified. These matters included those that
had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters
were addressed in the context of our audit of the
financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate
opinion on these matters.
overview of our audit approach
− Overall materiality: £215,000, which represents
approximately 3% of the Group’s revenue and
other operating income – grant income
− The key audit matter was identified as improper
revenue recognition of revenue from contracts
and grant income
− We performed full-scope audit procedures on
the financial statements of ITM Power Plc and
on the financial information of all non-dormant
subsidiaries. We performed analytical procedures
over the non-significant components in Germany
and the United States.
78
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
independent auditor’S report to the MeMberS of itM power plC
Key audit Matter – group
how the matter was addressed in the audit – group
Improper revenue recognition of revenue from contracts
and grant income.
There is a risk that revenue from contracts and grant
income may be misstated due to improper recognition.
In respect of contractual arrangements with customers,
there is a risk that revenue is misstated as each contract’s
outcome and stage of completion requires management
judgement.
In respect of grant income, there is a risk that grant
income is not recognised in accordance with the terms
of the grant and the accounting policy of the group.
There is a further risk that accrued and deferred income
may be incorrectly calculated due to the complexity of
the underlying calculations and there is a recoverability
risk in respect of accrued income due to the significant
values involved.
We therefore identified improper revenue recognition
of revenue from contracts and grant income recognition
as a significant risk, which was one of the most significant
assessed risks of material misstatement.
Our audit work included, but was not restricted to:
− Assessing whether the Group’s accounting policies
for revenue from contracts and grant income are in
accordance with International Accounting Standard
(IAS) 11 ‘Construction Contracts’ and IAS 20
‘Accounting for Government Grants and Disclosure
of Government Assistance’;
− Testing whether revenue (predominantly from
constructions contracts) and grant income had been
accounted for in accordance with this policy;
− Testing a sample of contracts and grants to original
signed contractual agreements/terms;
− For a sample of construction contracts, recalculating
the percentage completion based on the costs incurred
to date against forecasted costs and assessing the
robustness of the forecasting with project managers;
− Testing whether costs associated with revenue
from contracts recorded to date were accurate
and appropriately allocated to the correct contract;
− Recalculating accrued and deferred income in
respect of revenue from contracts, based on revenue
recognised to date and progress billings;
− For a sample grant income, agreeing the funding level
to grant agreements and recalculating the amounts
recognised, deferred, or accrued based on actual
costs incurred to date and, where appropriate,
claims submitted;
− Testing whether costs associated with grant income
recorded to date are accurate and appropriately
allocated to the correct grant project; and
− In respect of the recoverability of accrued income,
documenting our understanding of the claim
submission process. Cash receipts in respect of
a sample of prior year claims were corroborated to
bank statements to ensure the Group was receiving
funds following a submission.
The Group’s accounting policies on revenue from
contracts and grant income are shown in note 3
to the financial statements.
Key observations
Based on our audit work, we have found that revenue from
contracts and government grants are being accounted for
in accordance with the group’s accounting policies, IAS 11
and IAS 20.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
79
independent auditor’S report to the MeMberS of itM power plC
We did not identify any key audit matters relating to the audit of the financial statements of the parent company.
our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality
in determining the nature, timing and extent of our audit work and in evaluating the results of that work.
Materiality measure
group
parent
Financial statements as a whole
£215,000, which is approximately
3% of the Group’s revenue and other
operating income – grant income.
This benchmark is considered the
most appropriate because revenue
and other operating income – grant
income is a key performance
indicator for the group.
£210,000, which is 2% of the
parent company’s net assets. This
benchmark is considered the most
appropriate given that the activities
of the parent company are those of
a holding company, which has no
trading activities, and therefore the
assets of the Company reflect the
most appropriate measure.
Performance materiality used
to drive the extent of our testing
Specific materiality
60% of financial statement materiality.
60% of financial statement materiality.
We also determine a lower level of
specific materiality for certain areas
such as Directors’ remuneration and
all other related party transactions.
We also determine a lower level of
specific materiality for certain areas
such as Directors’ remuneration and
all other related party transactions.
Communication of misstatements
to the audit committee
£10,750 and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
£10,500 and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
an overview of the scope of our audit
Our audit approach was a risk-based approach
founded on a thorough understanding of the
Group’s business, its environment and risk profile
and in particular included:
− evaluation by the Group audit team of identified
components to assess the significance of that
component and to determine the planned audit
response based on a measure of materiality,
considering each as a percentage of the Group’s
total assets, revenue and loss before tax, to assess
the significance of the component and determine
the planned audit response;
− performing a full-scope audit of the group
financial statements, and of the UK subsidiaries.
The components that were subject to full-scope
audit procedures made up 86 per cent of the
group’s revenue and 90% of the Group’s loss
before tax; and
− Analytical procedures were performed on the
non-significant Group components, Germany
and the United States, with a focus on the key
audit matters as identified above and the
significance to the Group’s balances.
80
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
independent auditor’S report to the MeMberS of itM power plC
other information
The Directors are responsible for the other information.
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover
the other information and, except to the extent
otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information
is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify
such material inconsistencies or apparent material
misstatements, we are required to determine whether
there is a material misstatement in the financial
statements or a material misstatement of the other
information. If, based on the work we have performed,
we conclude that there is a material misstatement
of this other information, we are required to report
that fact.
We have nothing to report in this regard.
our opinion on other matters prescribed
by the Companies act 2006 is unmodified
In our opinion, based on the work undertaken
in the course of the audit:
− the information given in the strategic report and
the Directors’ report for the financial year for which
the financial statements are prepared is consistent
with the financial statements; and
− the strategic report and the Directors’ report have
been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report
under the Companies act 2006
In the light of the knowledge and understanding of
the Group and the parent company and its environment
obtained in the course of the audit, we have not
identified material misstatements in the strategic
report or the Directors’ report.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
− adequate accounting records have not been kept
by the parent company, or returns adequate for
our audit have not been received from branches
not visited by us; or
− the parent company financial statements are not
in agreement with the accounting records and
returns; or
− certain disclosures of directors’ remuneration
specified by law are not made; or
− we have not received all the information
and explanations we require for our audit.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
81
independent auditor’S report to the MeMberS of itM power plC
responsibilities of directors for the
financial statements
As explained more fully in the Directors’ responsibilities
statement set out on page 21, the Directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the Directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group’s and the
parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related
to going concern and using the going concern basis
of accounting unless the Directors either intend to
liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms
part of our auditor’s report.
Michael Redfern
Senior Statutory auditor
For and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants,
Sheffield
Date: 10 August 2018
2018
2018 CONSOLIDATED
FINANCIAL
STATEMENTS
Year Ended 30 April 2018
84
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
ConSolidated inCoMe StateMent year ended 30 april 2018
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 30 APRIL 2018
revenue
Cost of Sales
gross (loss)/profit
operating costs
Distribution expenses
− Research and development
− Prototype production and engineering
− Sales and marketing
Administration expenses
other operating income
Grant income
loss from operations before tax
Investment income
loss before tax
Tax
loss for the year
other total comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences on foreign operations
net other total comprehensive income
note
5
2018
£’000s
3,283
(3,438)
(155)
(1,792)
(4,144)
(1,455)
(7,391)
(3,086)
2017
£’000s
2,415
(1,757)
658
(2,023)
(2,615)
(1,528)
(6,166)
(2,202)
5
6
9
4,138
4,160
(6,494)
(3,550)
18
–
(6,476)
(3,550)
360
(230)
(6,116)
(3,780)
267
267
(250)
(250)
total comprehensive loss for the year
(5,849)
(4,030)
loss per share
Basic and diluted
10
(2.1p)
(1.7p)
All results presented above are derived from continuing operations and are attributable to owners of the Company.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
85
ConSolidated StateMent of ChangeS in equity year ended 30 april 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 APRIL 2018
Called-
up share
capital
Share
premium
account
notes
£’000s
10,845
£’000s
58,151
Merger
reserve
£’000s
(1,973)
foreign
exchange
reserve
retained
loss
£’000s
£’000s
54
(55,442)
total
equity
£’000s
11,635
At 30 April 2016
transactions with owners
Issue of shares
20
1,686
3,779
total transactions
with owners
Loss for the year
Other
comprehensive
income
total
comprehensive
income
19 20
1,686
3,779
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,465
5,465
(3,780)
(3,780)
(250)
–
(250)
(250)
(3,780)
(4,030)
at 30 april 2017
20
12,531
61,930
(1,973)
(196)
(59,222)
13,070
transactions with owners
Issue of shares
20
3,669
24,701
total transactions
with owners
Loss for the year
Other
comprehensive
income
total
comprehensive
income
20
3,669
24,701
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
28,370
28,370
(6,116)
(6,116)
267
–
267
267
(6,116)
(5,849)
at 30 april 2018
20
16,200
86,631
(1,973)
71
(65,338)
35,591
86
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
ConSolidated balanCe Sheet year ended 30 april 2018
CONSOLIDATED BALANCE SHEET
YEAR ENDED 30 APRIL 2018
non-current assets
Intangible assets
Property, plant and equipment
total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
total current assets
Current liabilities
Trade and other payables
Provisions
total current liabilities
net current assets
net assets
equity
Called-up share capital
Share premium account
Merger reserve
Foreign exchange reserve
Retained loss
total equity
note
12
11
14
16
17
18
19
20
20
20
20
20
2018
£’000s
355
4,454
4,809
655
18,500
20,403
39,558
(7,928)
(848)
(8,776)
30,782
35,591
16,200
86,631
(1,973)
71
(65,338)
35,591
restated
2017
£’000s
380
4,519
4,899
760
12,528
1,558
14,846
(6,666)
(9)
(6,675)
8,171
13,070
12,531
61,930
(1,973)
(196)
(59,222)
13,070
In the prior year, amounts relating to cash held on
guarantee for construction contracts were included as
cash equivalents amounting to £1,446,000. These have
been reclassified to other receivables as they are not
considered to be highly liquid and therefore do not
meet the definition of a cash or cash equivalent.
The financial statements of ITM Power Plc, registered
number 05059407, were approved by the Board of
Directors and authorised for issue on 10 August 2018.
Signed on behalf of the Board of Directors
Dr Simon Bourne
itM power plc, director
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
87
ConSolidated CaSh flow StateMent year ended 30 april 2018
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 30 APRIL 2018
net cash used in operating activities
investing activities
Purchases of property, plant and equipment
Capital Grants received against purchases
of property plant and equipment
Proceeds on disposal of property, plant and equipment
Payments for intangible assets
net cash used in investing activities
financing activities
Issue of ordinary share capital
Costs associated with fund raise
Interest received
net cash from financing activities
decrease/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of year
note
21
2018
£’000s
(8,005)
restated
2017
£’000s
(5,048)
(8,622)
(3,293)
7,130
1
(76)
(1,567)
29,358
(988)
18
28,388
18,816
1,558
29
20,403
2,646
4
(151)
(794)
5,732
(267)
–
5,465
(377)
1,890
45
1,558
In the prior year, amounts relating to cash held on guarantee for construction contracts were included as cash
equivalents amounting to £1,446,000. These have been reclassified to other receivables as they are not considered
to be highly liquid and therefore do not meet the definition of a cash or cash equivalent.
88
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. GENERAL INFORMATION
ITM Power Plc is a public company incorporated
in England and Wales under the Companies Act
2006. The registered office is at 22 Atlas Way,
Sheffield, South Yorkshire S4 7QQ. The entity is
a parent and the nature of the Group’s operations
and its principal activities are disclosed in the
Directors’ Report.
These financial statements are presented in
pounds sterling which is also the functional
currency because that is the currency of the
primary economic environment in which the
Group operates.
2. ADOPTION OF NEW
AND REVISED STANDARDS
amendments to ifrSs that are
mandatorily effective for the current year
In the current year, the Group has applied a
number of amendments to IFRSs issued by the
International Accounting Standards Board (IASB)
that are mandatorily effective for an accounting
period that begins on or after 1 January 2017.
Their adoption has not had any material impact
on the disclosures or on the amounts reported
in these financial statements.
− IAS 12 (amendments) Recognition of Deferred
Tax Assets for Unrealised Losses
− IAS 7 (amendments) Disclosure Initiative
new and revised ifrSs in issue but not
yet effective
At the date of authorisation of these financial
statements, the Group has not applied the following
new and revised IFRSs that have been issued but
are not yet effective and had not yet been adopted
by the EU:
− IFRS 9 Financial Instruments
This could impact both the measurement and
disclosures of financial instruments. Specifically,
the Group undertake long-term contracts which
are high in value and low volume. Whilst the
Group does not have a history of bad debt from
customers, IFRS 9 will require greater review
and disclosure.
− IFRS 16 Leases
This will impact on the reported assets, liabilities,
income statement and cash flows of the Group.
Furthermore, extensive disclosures will be required.
Currently all our sites are leased, and the Group
are in the process of procuring a new larger
facility, which will also be leased.
− IFRS 15 Revenue from Contracts
with Customers
A preliminary assessment of the impact
of this new standard has been undertaken
and is reported below.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
89
noteS to the ConSolidated finanCial StateMentS
revenue recognition under new financial
standard ifrS 15 ‘revenue from Contracts
with Customers’ effective from 1st May 2018
In May 2014, the International Accounting
Standards Board (IASB) jointly with US Financial
Accounting Standards Board (FASB) published
IFRS 15 ‘Revenue from Contracts with Customers’
to replace IAS 11 ‘Construction Contracts’ for
annual reporting periods commencing on or
after January 2018. Early adoption is permitted.
It is the Group’s current plan to adopt the new
standard on the required effective date using
the modified retrospective method.
Considering the nature of ITM Power Plc’s projects,
in that they are complex, long-term construction
contracts, application of the new standard could have
a significant impact on the future reported revenue
figures and their timings. The Group has performed
a preliminary assessment of the impact of IFRS15,
which is subject to changes due to the bespoke nature
of its sales contracts. Management consider that the
new standard is likely to have a material impact on the
presentation of its revenues in future periods but the
timing of such an impact is uncertain and can only be
judged in the nearer term once contracts are known.
Further detail is included below.
impact of the new standard application
IFRS 15 provides a single, principles based 5-step
model to be applied to all sales contracts. It is based
on the transfer of control of goods and services to
customers and replaces the separate models for
goods, services and construction contracts currently
included in IAS 11 Construction Contracts and IAS
18 Revenue.
ITM Power Plc has conducted an assessment of its
current contracts in order to illustrate the impact of
IFRS15 on the current year figures.
Key areas of judgement
The sales contracts of our build projects are split
between standard products (or repeat business) and
bespoke (first-time) products. Revenues on these
contracts would previously all have been recognised
by stage of completion. Under IFRS15, revenue
recognition is permitted to be recognised by reference
to stage of completion only where performance
obligations are satisfied over time, i.e. if one of the
following criteria is met:
− the customer simultaneously receives and
consumes the benefits provided by the seller’s
performance as the seller performs;
− the seller’s performance creates or enhances
an asset that the customer controls as the asset
is created or enhanced; or
− the seller’s performance does not create an
asset with an alternative use to the seller and
the seller has an enforceable right to payment
for performance completed to date.
Under IFRS 15, revenue will be treated differently
depending on whether the product is standard
or bespoke;
− Revenue from standard products will be recognised
only when the contractual obligation has been
fulfilled and ownership of the goods has transferred
i.e. at site acceptance, which is the official handover
of the goods in working order to the customer. This
is due to the “transferability” of such products and
their components up until handover, so the asset
generated has an alternative use to the Group
until handover;
− Bespoke contracts by their nature do not create
an asset with an alternative use to the seller,
and as there is also an enforceable right to
payment for performance completed to date,
their revenues will be recognised over time
according to their individual contractual
milestones or performance obligations.
90
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
Refuelling sales or sales of spares will be unaffected
as transfer of ownership of the goods passes
immediately at the point of sale.
If the current year contracts had been treated under
the new rules, revenue for the year would have
looked more like:
Similarly, for consulting contracts where the IFRS
15 criteria for performance over time are met (in this
case that the customer simultaneously receives and
consumes the benefits of the service), revenue will be
recognised by reference to stage of completion of the
contract. For those contracts where these criteria are
not met, revenue will be recognised on completion of
the contract. This will impact the financial statements
where contracts cross the year-end.
Maintenance contracts usually involve two annual
visits so revenues will be recognised in two instalments
against the costs of those visits. As such, revenues will
be affected only where maintenance years do not
align with our own financial year. However, where
remote monitoring forms part of the contract, revenue
for this performance obligation may be recognised
over time as the customer simultaneously receives
and consumes the benefits of such a service.
Revenue from construction contracts
Consulting services
Maintenance services
Fuel sales
Other
2018
under existing rules
2018
under ifrS 15
£’000s
2,903
141
48
161
30
£’000s
1,925
113
36
161
30
revenue in the consolidated income statement
3,283
2,265
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
91
noteS to the ConSolidated finanCial StateMentS
The potential impact has been limited in the current
assessment due to the group being in a phase of
developing technology and markets, where many
of our contracts have been “first-of-a-kind” bespoke
projects. However, as more repeat business or
similar projects are undertaken, revenue recognition
is likely to become further aligned with recognition
upon transfer.
The Group see a particular sensitivity around the
timings of a transfer of ownership to a customer,
in that the amount of revenue recognised may differ
significantly between two financial periods depending
on how many project obligations are fulfilled before
the end of each financial period. This will require
extra disclosure year on year to enable appropriate
comparison between financial years.
effect of the new policy on the reported
revenue figures
When projects do not satisfy the exemption criteria
for revenue recognition under progress towards
completion method, revenue will be reflected in the
balance sheet as either accrued or deferred income
depending on progress billings and advances received
from customers. Costs incurred on projects to date
will not be included in the statement of comprehensive
income but will be accumulated on the balance sheet
as work in progress and only transferred to cost of
sales once the revenue applicable to those costs
can be recognised in the accounts.
Unless an extended warranty is specifically
purchased under the sales contract and thus,
together with its maintenance obligations, creates
a separate performance obligation under that contract,
warranty provisions will continue to be treated under
IAS 37 as they are by nature an assurance warranty.
3. SIGNIFICANT
ACCOUNTING POLICIES
basis of accounting
The consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards (IFRSs), as adopted by the
European Union.
The financial statements have been prepared
under the assumption that the Group operates on
a going concern basis and on the historical cost
basis. Historical cost is generally based on the fair
value of the consideration given in exchange for
goods and services.
basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made
up to 30 April each year. Control is achieved when
the Company:
− has the power over the investee;
− is exposed, or has rights, to variable return
from its involvement with the investee; and
− has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls
an investee if facts and circumstances indicate that
there are changes to one or more of the three
elements of control listed above.
92
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
When the Company has less than a majority of
the voting rights of an investee, it considers that it
has power over the investee when the voting rights
are sufficient to give it the practical ability to direct
the relevant activities of the investee unilaterally.
The Company considers all relevant facts and
circumstances in assessing whether or not the
Company’s voting rights in an investee are
sufficient to give it power, including:
− the size of the Company’s holding of voting
rights relative to the size and dispersion of
holdings of the other vote holders;
− potential voting rights held by the Company,
other vote holders or other parties;
− rights arising from other contractual arrangements;
and
− any additional facts and circumstances that indicate
that the Company has, or does not have, the current
ability to direct the relevant activities at the time
that decisions need to be made, including voting
patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the
Company obtains control over the subsidiary and
ceases when the Company loses control of the
subsidiary. Specifically, the results of subsidiaries
acquired or disposed of during the year are included
in the consolidated income statement from the date
the Company gains control until the date when the
Company ceases to control the subsidiary.
Profit or loss and each component of other
comprehensive income are attributed to the owners
of the Company and to the non-controlling interests.
Total comprehensive income of the subsidiaries is
attributed to the owners of the Company and to the
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the
accounting policies used into line with the Group’s
accounting policies.
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between the members of the Group are eliminated
on consolidation.
going concern
The Directors have prepared a cash flow forecast
(the “Forecast”) for the period ending 31 August 2019
(“The forecast period”). This forecast indicates that
the Company and Group would expect to remain
cash positive without the requirement for further
funding based on delivering existing pipeline, for
a period of at least 12 months from the date of
approval of these financial statements.
The financial statements do not include the
adjustments that would result if the Company
was unable to continue as a going concern.
prior year adjustment
In the prior year, amounts relating to cash held
on guarantee for construction contracts were
included as cash equivalents amounting to
£1,446,000. These have been reclassified to
other receivables.
revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable and represents
amounts receivable for goods and services provided
in the normal course of business, net of discounts,
VAT and other sales-related taxes.
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As a manufacturer of large units, much of the
Group’s revenue is derived from construction
contracts (see separate note below). However,
other forms of sale are discussed here:
Sale of goods
Revenue from the sale of goods (e.g. hydrogen road
fuel) is recognised when all the following conditions
are satisfied:
− the Group has transferred to the buyer the
significant risks and rewards of ownership
of the goods;
− the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods sold;
− the amount of revenue can be measured reliably;
− it is probable that the economic benefits associated
with the transaction will flow to the entity; and
− the costs incurred or to be incurred in respect
of the transaction can be measured reliably.
rendering of services
Revenue from a contract to provide services
(e.g. for maintenance or consulting contracts) is
recognised by reference to the stage of completion
of the contract. The stage of completion of the
contract is determined as follows:
− for maintenance contracts, which include remote
monitoring, revenue is recognised straight-line over
the contracted time period to which it relates; and
− revenue from time and material contracts is
recognised at the contracted rates as labour
hours are delivered and direct expenses incurred.
Construction contracts
When the outcome of a construction contract
can be estimated reliably, revenue and costs are
recognised by reference to the stage of completion
of the contract activity at the balance sheet date.
This is normally measured by the proportion that
contract costs incurred for work performed to date
bear to the estimated total contract costs, except
where this would not be representative of the stage
of completion. Variations in contract work, claims
and incentive payments are included to the extent
that the amount can be measured reliably and its
receipt is considered probable.
Where the outcome of a construction contract
cannot be estimated reliably, contract revenue
is recognised to the extent of contract costs
incurred where it is probable they will be recoverable.
Contract costs are recognised as expenses in
the period in which they are incurred.
When it is probable that total contract costs
will exceed total contract revenue, the expected
loss is recognised as an expense immediately.
For contracts where progress billings exceed
contract costs incurred to date plus recognised
profits less recognised losses, the surplus is shown
as the amounts due to customers for contract work
(deferred income). As such, any amounts received
before the related work is performed are included in
the consolidated balance sheet, as a liability. When
contract costs incurred to date plus recognised
profits less recognised losses exceed progress
billings, the surplus is shown as amounts due from
customers for contract work (accrued income), until
such time that it can be billed. Amounts billed for
work performed but not yet paid by the customer
are included in the consolidated balance sheet
under trade and other receivables.
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grants
Government and other grants are included in other
operating income in the period that the expenditure to
which they relate is incurred, unless relating to property,
plant and equipment when they are netted against the
cost of the assets acquired on the balance sheet.
Where prefinance has been received at the start
of the grant and continues to exceed expenditure
incurred to date, the surplus is shown as deferred
income and is included in the consolidated balance
sheet as a liability. When expenditure incurred to date
exceeds receipts from the grant body, the surplus is
shown as accrued income until such time that it can
be claimed. Where a claim has been submitted to the
grant body but not yet paid, the amount of the claim
is included in the consolidated balance sheet under
trade and other receivables.
In specific instances where grant income shall
subsidise a sale, Grant income can be recognised
against appropriate expenditure on agreed projects
and shown as receivable from the time of the expense.
This means that grant income can be recognised
against stage payments made on larger items. Thus,
a further category of grant income receivable against
pro forma payments has been established within
deferred income on the balance sheet to allow for
a difference in treatment in grant-subsidised sales.
Once the items have been received, this grant income
will come to be shown as “grant income against cost
of sales” in profit and loss.
leasing
Rentals payable under operating leases are charged
to the income statement on a straight-line basis over
the term of the relevant lease.
foreign currencies
The individual financial statements of each
group company are presented in the currency
of the primary economic environment in which
it operates (its functional currency). For the
purpose of the consolidated financial statements,
the results and financial position of each group
company are expressed in pounds sterling, which
is the functional currency of the Group, and the
presentation currency for the consolidated financial
statements. The financial statements are presented
in round thousands.
In preparing the financial statements of the individual
companies, transactions in currencies other than
the entity’s functional currency (foreign currencies)
are recognised at the rates of exchange prevailing
on the dates of the transactions. At each balance
sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated
at the rates prevailing at that date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are translated
at the rates prevailing at the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences are recognised in profit or
loss in the period in which they arise except for:
− exchange differences on monetary items
receivable from or payable to a foreign operation
for which settlement is neither planned nor likely
to occur (therefore forming part of the net
investment in the foreign operation), which are
recognised initially in other comprehensive income
and reclassified from equity to profit or loss on
disposal or partial disposal of the net investment.
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For the purpose of presenting consolidated
financial statements, the assets and liabilities of
the Group’s foreign operations are translated at
exchange rates prevailing on the balance sheet
date. Income and expense items are translated at
the average exchange rates for the period, unless
exchange rates fluctuate significantly during that
period, in which case the exchange rates at the date
of transactions are used. Exchange differences arising,
if any, are recognised in other comprehensive income
and accumulated in equity (attributed to non-controlling
interests as appropriate).
taxation
The tax expense represents the sum of the tax
currently payable and deferred tax.
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
amounts of assets and liabilities in the financial
statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted
for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable
profits will be available against which deductible
temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial
recognition (other than in a business combination)
of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from net profit as reported
in the income statement because it excludes items of
income or expense that are taxable or deductible in
other years and it further excludes items that are never
taxable or deductible. The Group’s liability for current
tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in
subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control
the reversal of the temporary difference and it is
probable that the temporary difference will not
reverse in the foreseeable future.
Research and development tax credits are all
recognised on an accruals basis, and are reported in
the income statement above the line.
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to
be recovered.
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Deferred tax is calculated at the tax rates that
are expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax is charged
or credited in the income statement, except when it
relates to items charged or credited directly to equity,
in which case the deferred tax is also dealt with in equity.
property, plant and equipment
Leasehold improvements, laboratory and test
equipment, production plant and equipment,
computer equipment and office furniture and fittings
are stated at cost less accumulated depreciation
and any recognised impairment loss.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities, and when they relate to
income taxes levied by the same taxation authority,
and the Group intends to settle its current tax assets
and liabilities on a net basis.
Assets in the course of construction are carried at cost,
less any recognised impairment loss. Depreciation
of these assets, on the same basis as other property
assets, commences when the assets are ready for their
intended use.
Depreciation is charged so as to write off the cost
of assets, other than land and properties under
construction, over their estimated useful lives, using
the straight-line method, on the following bases:
Category
Laboratory and test equipment
Production plant and equipment
Computer equipment
Office furniture and fittings
Leasehold improvements
period
recognition in profit and loss
4 years
4 years
3 years
4 years
4 years
or the remainder of the lease term, if shorter
Distribution costs
Distribution costs
Administration costs
Administration costs
Administration costs
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The gain or loss arising on the disposal or retirement
of an asset is determined as the difference between
the sales proceeds and the carrying amount of the
asset and is recognised in income.
intangible assets – software
Software purchased from external companies
has been recognised at cost under the heading
of intangible assets. Amortisation is charged so
as to write off the cost of assets over an estimated
useful life of three years (in-line with our policy
for computer equipment), using the straight-line
method. This is recognised in administrative costs.
internally-generated intangible assets –
research and development expenditure
Expenditure on research activities is recognised
as an expense in the period in which it is incurred,
except where the costs of activities are considered
development for the purposes of capitalising
development costs.
An internally generated intangible asset arising from
the Group’s product development is recognised only
if all of the following conditions can be demonstrated:
− the technical feasibility of completing the intangible
asset so that it can be made available for use
or sale;
− the intention to complete the intangible asset
to use or sell it;
− the availability of adequate technical, financial
and other resources to complete the development
and to use or sell the intangible asset
− an asset is created that can be separately
identified for use or sale;
− it is probable that the asset created will
generate future economic benefits; and
− the development cost of the asset can
be measured reliably.
As these assets form the basis of the Group’s product
range (being the development of new processes,
standard products or new product features that
improve the capacity or efficiency of the electrolysers)
amortisation is recognised on a straight-line basis in
Distribution costs over their useful lives, considered to
be four years, in line with expected product life cycles.
Each asset is assessed on an annual basis to ensure
that it still meets the criteria and will still contribute to
the Company’s products. If not, an impairment will be
recognised. Where no internally generated intangible
asset can be recognised, development expenditure
is recognised as an expense in the period in which
it is incurred.
impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the
carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of each asset
(or cash-generating unit) is estimated to determine the
extent of the impairment loss.
The recoverable amounts of non-current assets are
derived from value-in-use calculations. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific
to the group of units.
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If the recoverable amount of an asset is estimated to
be less than its carrying amount, the carrying amount
is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit and loss.
Where an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the
carrying amount that would have been determined
had no impairment loss been recognised in prior
years. A reversal of an impairment loss is recognised
immediately in profit or loss. The value of any
impairment (or its reversal) is recognised within the
same cost line that the depreciation or amortisation
would normally appear in.
inventories
Inventories are stated at the lower of cost and
net realisable value. Cost comprises direct materials
and, where applicable, direct labour costs and
those overheads that have been incurred in bringing
the inventories to their present location and condition.
Cost is calculated using the “first in first out” (FIFO)
method. Net realisable value represents the estimated
selling price less all estimated costs of completion
and costs to be incurred in marketing, selling
and distribution.
financial instruments
Financial assets and financial liabilities are recognised
in the Group’s balance sheet when the Group becomes
a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted
from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately
in profit or loss.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the
risks and rewards are transferred. A financial liability
is derecognised when it is extinguished, discharged,
cancelled or expires.
trade and other receivables
Trade and other receivables that have fixed or
determinable payments that are not quoted in an
active market are classified as receivables. Receivables
are measured at amortised cost using the effective
interest method, less any impairment. Interest income
is recognised by applying the effective interest rate,
except for short-term receivables when the recognition
of interest would be immaterial.
Trade receivables do not carry any interest and are
stated at their nominal value. Appropriate allowances
for estimated irrecoverable amounts are recognised in
profit or loss when there is objective evidence that the
asset is impaired.
impairment of financial assets
Financial assets are assessed for indicators of
impairment at each balance sheet date. Financial
assets are impaired where there is objective evidence
that, as a result of one or more events that occurred
after the initial recognition of the financial asset, the
estimated future cash flows of the investment have
been impacted.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand
and on demand deposits, and other short-term
highly liquid investments that are readily convertible
to a known amount of cash and are subject to an
insignificant risk of change in value.
financial liabilities and equity
Financial liabilities and equity instruments are
classified according to the substance of the contractual
arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities.
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trade payables
Trade payables are not interest bearing and are
stated at their nominal value.
equity instruments
Equity instruments issued by the Company are
recorded at the proceeds received, net of direct
issue costs.
provisions
Provisions are recognised when the Group has
a present obligation (legal or constructive) as a
result of a past event, and it is probable that the
Group will be required to settle that obligation, and
that a reliable estimate can be made of the amount
of that obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required
to settle the obligation at the balance sheet date,
and are discounted to present value where the
effect is material.
Share-based payments
The Group has applied the requirements of IFRS
2 Share-based Payments. In accordance with the
transitional provisions, IFRS 2 has been applied to
all grants of equity instruments after 7 November
2002 that were unvested as of 1 May 2006, which
was the Group’s date of transition to IFRS.
The Group issues equity-settled share-based
payments to certain employees. Equity-settled
share-based payments are measured at fair value
at the date of grant. The fair value determined at
the grant date of the equity-settled share-based
payments is expensed in profit or loss on a
straight-line basis over the vesting period, based
on the Group’s estimate of shares that will eventually
vest. Fair value is measured using a Black-Scholes
options pricing model.
pension costs
The Group operates a defined contribution pension
scheme. The amount charged to the income statement
in respect of pension costs is the contributions
actually payable in the year. Differences between
the contributions actually payable and those paid
are shown as accruals or prepayments in the
consolidated balance sheet.
warranties
Provisions for the expected cost of warranty obligations
under local sale of goods legislation are recognised
at the date of sale of the relevant products, at the
Directors’ best estimate of the expenditure required
to settle the Group’s obligation.
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4. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY SOURCES
OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies,
which are described in note 3, the Directors are
required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions
are based on historical experience and other factors
that are considered to be relevant. Actual results
may differ from these estimates. The estimates
and underlying assumptions are reviewed on an
on-going basis. Revisions 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.
Critical judgements in applying the
group’s accounting policies
The following are the critical judgements, apart
from those involving estimations (which are dealt
with separately below), that the Directors have made
in the process of applying the Group’s accounting
policies and that have the most significant effect on
the amounts recognised in the financial statements.
going concern
The Directors are required to assess whether it is
appropriate to prepare the financial statements
on a going concern basis. Their assessment of
the going concern basis is set out in note 3.
useful lives of property, plant and equipment
As described above, the Group reviews the estimated
useful lives of property, plant and equipment at the
end of each reporting period. During the current year,
the Directors have reaffirmed their belief in the useful
lives of our asset categories
warranty provisions
As sales contracts have gained momentum, the Group
is recognising a higher number of warranty provisions
by the year end. These are based on Management’s
current best estimate of the potential costs involved in
diagnosing and correcting faults and the likelihood of
such faults occurring within the first year of operation
of a unit. These assumptions are built upon historical
data of units in the field so are likely to be reviewed
and revised as more information becomes available
with a higher quantity of machines in operation.
dilapidations provision
A provision has been recognised in the current year
for stripping out/reinstating our current premises for
handover to the landlords, given our intention to move.
The amount has been calculated by a value per square
metre. However, the actual work that will be required
still needs to be ascertained and quotes sought.
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recoverability of debtors
ITM Power Inc has a debtor of £456k that is long
overdue regarding a contract for the delivery of
a refuelling unit in California. At the year end, this
equipment is still in the Group’s possession.
At this stage, the Directors believe all of the debtor
is recoverable either through a novation of the current
contract or alternatively through selling the unit into
the US market.
In 2014, ITM Power Plc commissioned and paid
towards the construction of refuelling equipment.
At this stage, the Directors believe all of the debtor
is recoverable either through taking delivery of the
equipment or through repayment from the supplier.
impairment of assets
In the case of there being a trigger for a review
of impairment, the Group performs a review on
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
of impairment at the Balance Sheet date. The Group
particularly tests the net recoverable amounts of its
internally-generated assets held (or previously held)
in assets under construction to ensure that the costs
of their production have not over-run their operational
or commercial value. Typically assets are deployed in
low volume ‘batches’ in line with grant-funded projects.
As such, each batch is considered a cash generating
unit (CGU).
One such trigger for impairment review, which has
occurred in the year, is that the Group was loss making.
The key assumptions for the value in use calculations
are those regarding the discount rates, growth rates
and expected changes to hydrogen selling prices
and direct costs (electricity) during the period. There
are also assumptions based on the value of potential
incentives that are known to the Group, but that
are not yet in place. These assumptions have been
revised in the year in light of the announcements of
funding from the Office for Low Emission Vehicles
and the current economic environment, as well as field
data from the past six months of refuelling. This is the
second year that a review of the refuelling assets of the
company has been undertaken, with the financial year
ended April 2017 being the first year of deployment.
Management estimates discount rates that reflect
current market assessments of the time value of money
and the risks specific to the group of units. The Group
does not have any debt, and so discount rates are
based on a cost of equity model only.
The growth rates are based on specific known industry
growth forecasts and the management’s understanding
of a likely growth curve in adoption of Fuel Cell Vehicles.
Growth in the hydrogen refuelling industry is predicted
to be faster than in previous years as initiatives from
OLEV and the Fuel Cell and Hydrogen joint undertaking
introduce new fleets of vehicles for hydrogen.
Changes in selling prices and direct costs are based
on past practices and expectations of future changes
in the market. It is anticipated that sales volumes will
increase significantly over the next one to five years
as the Group’s strategy to open new refuelling stations,
aligned with rollout of more vehicles – both more in
number and more models – is recognised.
The rate used to discount the forecast cash flows
for refuelling stations 24.4%.
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This cash generating unit’s main customers will be
hydrogen fleet owners, including taxi companies and
high duty cycle operators, defined as travelling up to
62,000 miles per annum. As such, the Group consider
a strong growth in hydrogen sales in the next five years.
The Group has considered its cash flow forecasts for
this CGU. The hydrogen refuelling CGU has therefore
been subject to no impairment loss.
As at the balance sheet date, an impairment review was
undertaken and an impairment provision that had been
recognised in the prior year of £100,000 was reversed
as the value of future discounted cash flows now
exceeded the carrying value of all assets.
recoverability of internally-generated
intangible asset
During the year, management reconsidered the
recoverability of its internally-generated intangible
asset which is included in its balance sheet at £355k
(2017: £380k). The development projects currently
capitalised here and being amortised, relate to
technologies being used in our current sales. Further
capitalisations towards the end of the year relate to
advancements in those technologies and improved
efficiencies that should allow us to improve our
offering and gain interest in new markets.
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5. REVENUE, OTHER OPERATING INCOME AND INVESTMENT INCOME
All revenues are derived from continuing operations. An analysis of the Group’s revenue is as follows:
Revenue from construction contracts
Consulting services
Maintenance services
Fuel sales
Other
revenue in the consolidated income statement
Grant income (government grants)
Segment information
ITM Power Plc is organised internally to report to the
Group’s Chief Operating Decision Maker, the Chief
Executive Officer, on the financial and operational
performance of the Group as a whole. The Group’s
Chief Operating Decision Maker is ultimately
responsible for entity-wide resource allocation
decisions, evaluating performance on a group-wide
basis and any elements within it on a combination
of information from the executives in charge of the
Group and Group financial information.
2018
£’000s
2,903
141
48
161
30
3,283
4,138
7,421
2017
£’000s
2,086
237
59
11
22
2,415
4,161
6,576
Last year, Management identified three target
markets for our products (Power-to-Gas, Refuelling
and Renewable Chemistry). Revenue reporting has
begun to look at these three sectors to assess the
commerciality of those sales. However, decisions
for resourcing etc. cannot be made by reference
to these segments.
The Group operates a single factory that builds
units for use across all sectors. It would be hard
to assign overhead costs to particular product
segments when builds all occur in that one facility
and can run concurrently. Similarly, fixed assets
and suppliers balances cannot be assigned to the
production of one specific segment. For overhead
costs and net asset resources, therefore, decisions
are taken on a group basis.
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An analysis of the Group’s revenue, by major product (or customer group), is as follows:
Power-to-Gas
Refuelling
Renewable chemistry
Other
revenue in the consolidated income statement
2018
£’000s
1,639
753
858
33
3,283
2017
£’000s
553
428
1,290
144
2,415
geographical analysis
The United Kingdom is the Group’s country of domicile but the Group also has subsidiary trading companies in
the United States, Germany and more recently in Australia. All non-current assets were domiciled in the United
Kingdom, with the exception of one hydrogen refuelling station in California (net book value £133k, 2017:£245k).
Revenues have been generated as follows:
United Kingdom
Germany
Italy
Rest of Europe
North America
2018
£’000s
763
1,387
442
552
139
3,283
Included in revenue are the following amounts, which each accounted for more than 10% of total revenue:
Customer A – Renewable chemistry
Customer B – Power-to-Gas
Customer C – Power-to-Gas
Customer D – Refuelling
Customer E – Renewable chemistry
2018
£’000s
442
864
452
475
405
2017
£’000s
238
672
1,290
117
98
2,415
2017
£’000s
1,290
401
<10%
<10%
<10%
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
105
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6. LOSS FOR THE YEAR
loss for the year has been arrived at after charging (crediting)
Net foreign exchange losses/(gains)
Depreciation of property, plant and equipment
Reversal of impairment of assets under construction
Impairment of non-current assets
Amortisation of intangibles
Impairment of intangibles
Research and non-capitalised development costs
Loss on disposal of property, plant and equipment
Rentals under operating leases
− Land and buildings
− Other equipment
Government grants receivable
Staff costs (see note 8)
Cost of inventories recognised as an expense
2018
£’000s
198
1,611
(100)
43
101
–
1,792
2
220
220
140
(4,138)
5,122
209
2017
£’000s
(441)
1,181
–
100
20
3
1,923
22
223
223
–
(4,161)
4,123
187
106
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
7. AUDITORS REMUNERATION
The following amounts were payable to the Group’s auditor and have been charged within the loss before tax:
fees payable to the Company’s auditor for
grant thornton
2018
£’000s
The audit of the Company’s annual accounts
The audit of the Company’s subsidiaries pursuant to legislation
total audit fees
other services pursuant to legislation
Interim agreed upon procedures/review work (audit related services)
Tax services – Tax compliance
total non-audit fees
30
15
45
8
–
8
2017
£’000s
deloitte
30
25
55
8
11
19
In 2018, Deloitte were no longer auditing the Group’s financial statements but continued to provide tax services.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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8. INFORMATION REGARDING DIRECTORS AND EMPLOYEES
2017/18
name of
director
fees/basic
salary
benefits
in kind
annual
bonuses
total
excluding
pension
pension
contributions
2018
total
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
executive
Dr S Bourne
Dr G Cooley
Dr R Smith
non-executive
P Hargreaves
Prof R Putnam
Lord Freeman
B Pendlebury
R Bone
aggregate
directors
emoluments
164
194
99
23
160
35
–
35
710
other key management personnel
A Allen
Aggregate
remuneration
Employers NI
89
799
–
–
–
–
–
–
–
–
–
–
–
95
187
29
–
–
–
–
–
259
381
128
23
160
35
–
35
311
1,021
–
311
89
1,110
total payroll costs for directors and key management personnel
10
28
6
–
–
–
–
–
44
8
52
269
409
134
23
160
35
–
35
1,065
97
1,162
144
1,306
108
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
2016/17
name of
director
fees/basic
salary
benefits
in kind
annual
bonuses
total
excluding
pension
pension
contributions
2017
total
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
executive
Dr S Bourne
Dr G Cooley
Dr R Smith
non-executive
P Hargreaves
Prof R Putnam
Lord Freeman
B Pendlebury
R Bone
aggregate
emoluments
157
185
95
45
130
35
–
35
682
–
–
–
–
–
–
–
–
–
90
176
–
–
–
–
–
–
247
361
95
45
130
35
–
35
8
28
5
–
–
–
–
–
266
948
41
255
389
100
45
130
35
-
35
989
Three Directors were members of money purchase schemes during the year (2017: 3).
On 29 January 2010 the Group introduced a new EMI and Unapproved Share Option Scheme to be applied to all
subsequent issues of share options. Under the scheme rules the exercise price is deemed to be the mid-market
price of shares on the London Stock Exchange AIM market at the close of trading on the day before the grant of
the share options. Share options vest in three equal instalments on the first, second and third anniversaries of the
grant and are exercisable up to the tenth anniversary of the grant.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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Details of options for Directors who served during the year are as follows:
name of
director
Scheme
1 May 2017
number
grant
date
30 april
2018
number
exercise
price £’000
date
from which
exercisable
expiry date
Dr S Bourne
EMI
200,000
02/02/2010
200,000
18p
02/02/2014
02/02/2020
Dr S Bourne
EMI
123,596
24/01/2011
123,596
67p
24/01/2011
23/01/2021
Dr S Bourne
Unapproved
276,404
24/01/2011
276,404
67p
24/01/2011
23/01/2021
Dr S Bourne
Unapproved
100,000
01/08/2012
100,000
50p
06/08/2015
05/08/2024
Dr S Bourne
Unapproved
250,000
06/08/2014
250,000
26p
01/08/2012
05/08/2024
Dr G Cooley
Unapproved
200,000
29/06/2009
200,000
18p
29/06/2012
29/06/2019
Dr G Cooley
Unapproved
360,000
02/02/2010
360,000
18p
02/02/2014
02/02/2020
Dr G Cooley
EMI
640,000
02/02/2010
640,000
18p
02/02/2014
02/02/2020
Dr G Cooley
Unapproved
800,000
24/01/2011
800,000
67p
24/01/2011
23/01/2021
Dr G Cooley
Unapproved
250,000
19/07/2012
250,000
50p
19/07/2012
18/07/2022
Dr G Cooley
Unapproved
750,000
06/08/2014
750,000
26p
06/08/2015
05/08/2024
Prof R
Putnam
Prof R
Putnam
Lord R
Freeman
Unapproved
50,000
23/11/2009
50,000
20p
23/11/2010
23/11/2019
Unapproved
100,000
24/01/2011
100,000
67p
24/01/2011
23/01/2021
Unapproved
50,000
08/08/2011
50,000
31p
08/08/2012
07/08/2021
Dr R Smith
EMI
100,000
29/04/2010
100,000
24p
29/04/2013
29/04/2020
There were no LTIP awards granted or vested in the year for Directors.
110
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
remuneration of the highest paid director
Aggregate emoluments
Money purchase pension contributions
2018
£’000
381
28
409
2017
£’000
361
28
389
Monthly average number of persons employed
number
number
Research and development
Production and engineering
Sales and marketing
Administration
Staff costs during the year (including directors)
Wages and salaries
Social security costs
Other pension costs
17
53
9
13
92
£’000s
4,362
478
282
5,122
17
32
9
10
68
£’000s
3,562
391
170
4,123
As at 30 April 2018 pension contributions of £31k (2017 – £23k) due in respect of the current year had not
been paid over to the scheme. These were paid over in the following month and within statutory deadlines.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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9. TAX
Current taxation
Tax credit in the year (relating to research and development)
Tax credit/(charge) relating to prior year
2018
£’000s
149
211
360
2017
£’000s
–
(230)
(230)
As the Group year-end spans two UK tax years, corporation tax is calculated at the blended rate of 19%
(2017: 19.9%). Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The charge for the year can be reconciled to the income statement as follows:
loss before tax
Loss before tax
Tax on loss at 19% (2017: 19.9%)
factors affecting credit for the year
Factors affecting credit for the year:
Expenses not deductible for tax purposes
Fixed asset differences
Research and development enhanced relief
Adjustments in respect of prior years
Unrelieved tax losses carried forward
tax credit/(charge) for the year
2018
£’000s
(6,476)
1,230
(11)
(299)
149
211
(920)
360
2017
£’000s
(3,550)
706
(10)
(243)
–
(230)
(453)
(230)
112
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
factors affecting future tax charges
The Group has tax losses available to carry forward against future taxable profits, subject to agreement
with HM Revenue & Customs.
A deferred tax asset of £5.42m (2017: £4.45m) has not been recognised as there is insufficient evidence
that the asset would be recoverable in the foreseeable future. The unrecognised deferred tax asset comprises
a deferred tax asset of £4.238m (2017: £3.532m) in respect of accumulated tax losses and £1.181m (2017:
£0.914m) in respect of decelerated capital allowances. The unrecognised deferred tax asset would be
recoverable to the extent that the Group generates sufficient taxable profits in the future.
The Finance Act 2015 included provisions to reduce the rate of UK corporation tax to 19% with effect from
1 April 2017. The Finance Act 2016 included provisions to further reduce the rate of UK corporation tax to 17%
with effect from 1 April 2020. Deferred taxation is measured at tax rates that are expected to apply in the periods
in which temporary timing differences are expected to reserve based on tax rates and laws that have been enacted
or substantively enacted at the balance sheet date. Accordingly 17% has been applied when calculating deferred
tax assets and liabilities as at 30 April 2018.
10. LOSS PER SHARE
The calculation of the basic and diluted earnings per share is based on the following data:
2018
£’000
2017
£’000
loss
Loss for the purposes of basic and diluted loss per share
being net loss attributable to owners of the Company
(6,116)
(3,780)
number of shares
Weighted average number of ordinary shares for the
purposes of basic and diluted earnings per share
Loss per Share
287,311,287
222,513,007
2.1p
1.7p
The loss per ordinary share and diluted loss per share are equal because share options are only included
in the calculation of diluted earnings per share if their issue would decrease the net profit per share.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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11. PROPERTY, PLANT AND EQUIPMENT
production
plant and
equipment
laboratory
and test
equipment
Computer
equipment
office
furniture
and fittings
leasehold
improvements
assets in the
course of
construction
total
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
2,412
1,574
229
–
1,962
(96)
4,507
48
–
690
(553)
(43)
67
–
–
(129)
1,512
226
–
–
(4)
–
491
118
–
–
(1)
608
93
–
–
–
–
203
1,874
1,246
7,800
–
–
–
(2)
201
6
–
–
(1)
–
921
1,952
3,287
–
–
–
(477)
(477)
(1,962)
–
–
(228)
2,795
759
10,382
649
7,622
8,644
–
–
(15)
–
(7,130)
(7,130)
(690)
–
–
–
(573)
(43)
4,649
1,734
701
206
3,429
561
11,280
Cost
At 1 May
2016
Additions
Grant
received
Transfers
Disposals
At 1 May
2017
Additions
Grant
received
Transfers
Disposals
Foreign
exchange
at 30
april 2018
114
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noteS to the ConSolidated finanCial StateMentS
production
plant and
equipment
laboratory
and test
equipment
Computer
equipment
office
furniture
and fittings
leasehold
improvements
assets in the
course of
construction
total
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
£’000s
depreciation
At 1 May
2016
Disposals
Charge for
the year
Impairment
Foreign
exchange
At 1 May
2017
Disposals
Charge for
the year
Impairment
Foreign
exchange
at 30
april 2018
net book value
At 30
April 2017
at 30
april 2018
1,556
(93)
731
–
8
2,202
(551)
840
–
(21)
1,194
(106)
110
–
–
424
(1)
59
–
–
1,198
482
(3)
162
–
–
–
76
–
–
198
(2)
2
–
–
198
(1)
2
–
–
1,404
–
279
–
–
–
–
–
4,776
(202)
1,181
100
100
–
8
1,683
100
5,863
(15)
531
43
–
–
–
(100)
–
–
(570)
1,611
(57)
(21)
6,826
2,470
1,357
558
199
2,242
2,305
2,179
314
377
126
143
3
7
1,112
659
4,519
1,187
561
4,454
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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12. INTANGIBLE ASSETS
Cost
At 1 May 2016
Additions
At 30 April 2017
Additions
at 30 april 2018
amortisation
At 1 May 2016
Impairment
Charge for the year
At 30 April 2017
Charge for the year
at 30 april 2018
Carrying amount
At 30 April 2017
At 30 April 2018
Software
£’000s
development
costs
£’000s
total
£’000s
–
–
–
6
6
–
–
–
–
1
1
–
5
252
151
403
70
473
–
3
20
23
100
123
380
350
252
151
403
76
479
–
3
20
23
101
124
380
355
The amortisation period for externally purchased software has been set at three years (in-line with our policy for
computer equipment).
Development costs are generated internally by development of our stack technology and unit designs. They
are amortised over four years. Those currently being amortised have three further years to run at the balance
sheet date.
116
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noteS to the ConSolidated finanCial StateMentS
13. SUBSIDIARIES
A list of investments in subsidiaries, including the name, country of incorporation and proportion
of ownership interest is given in note 33 to the Company’s separate financial statements.
14. INVENTORIES
Raw materials
Work in progress
2018
£’000s
299
356
655
Inventories have been stated after a provision for impairment of £209k (2017: £187k).
15. CONSTRUCTION CONTRACTS
Contracts in progress at the balance sheet date:
Amounts due from contract customers included
in trade and other receivables
Contract costs incurred plus recognised profits
less recognised losses to date
Less: progress billings
gross amount due to customers
2018
£’000s
1,343
3,040
(3,048)
(8)
2017
£’000s
342
418
760
2017
£’000s
779
2,215
(2,734)
(519)
At 30 April 2018, retentions held by customers for contract work amounted to £Nil (2017: £33k).
Advances received from customers for contract work amounted to £438k (2017: £510k).
At 30 April 2018, £438k (2017: £808k) included in trade and other receivables and arising from construction
contracts is due for settlement after more than 12 months. N.B. This comparative figure has changed due
to the restatement of the balance sheet to include restricted cash balances in this section.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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16. TRADE AND OTHER RECEIVABLES
Amount receivable for the sale of goods
Amounts due from construction contract customers (note 15)
Amounts receivable under grant claims
Allowance for doubtful debts
Restricted cash balances
Other receivables
Corporation tax
Prepayments
Accrued sales income
Accrued grant income
2018
£’000s
17
1,343
3,178
–
1,572
882
360
6,227
370
4,551
reStated
2017
£’000s
61
779
1,133
(166)
1,446
317
191
4,368
1,026
3,373
18,500
12,528
In the prior year, amounts relating to cash held on guarantee for construction contracts were included as cash
equivalents amounting to £1,446,000. These have been reclassified to other receivables as they are not considered
to be highly liquid and therefore do not meet the definition of a cash or cash equivalent. Restricted cash balances are
held on guarantee for construction contracts and will be released upon the completion of certain milestones, which
are either technical or time-bound.
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at
amortised cost.
118
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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Their ageing is analysed as follows:
Less than 30 days
31-60 days
61-90 days
91-120 days
Greater than 120 days
2018
£’000s
12
1,675
2
10
2,839
4,538
2017
£’000s
78
319
86
5
1,484
1,972
There were receivables totalling £2,527k (2017: £1,318k) that were overdue but considered fully recoverable. £742k
has already been received post year-end. Of the remaining £1.8m, £1.4m relates to grant claims, and a sum of £405k
relates to the overdue contract in ITM Power Inc. described in note 4 – Recoverability of Debtors.
Movement in the allowance for doubtful debts
Balance at the beginning of the year
Impairment losses recognised
Amounts written off during the year as uncollectible
Released in period
2018
£’000s
(166)
(27)
27
166
–
2017
£’000s
(29)
(166)
26
3
(166)
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
119
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17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
2018
£’000s
20,403
reStated
2017
£’000s
1,558
In the prior year, amounts relating to cash held on guarantee for construction contracts were included as cash
equivalents amounting to £1,446,000. These have been reclassified to other receivables.
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three
months or less. The Directors consider that the carrying amount of these assets approximates to their fair value.
18. TRADE AND OTHER PAYABLES
trade and other payables
Trade payables
Other taxation and social security
Other creditors
Accruals
Deferred Sales income
Deferred Grant income
Grant income received against pro-formas
2018
£’000s
1,403
151
16
1,475
764
2,396
1,723
7,928
2017
£’000s
923
126
7
720
1,515
1,203
2,172
6,666
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
120
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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19. PROVISIONS
Balance at 1 May 2016
Additional provision in year
Balance at 30 April 2017
Use of the provision
Additional provision in year
balance at 30 april 2018
leasehold
property provision
£’000s
–
–
–
–
(594)
(594)
warranty
£’000s
–
(9)
(9)
92
(337)
(254)
total
£’000s
–
(9)
(9)
92
(931)
(848)
The leasehold property provision was created in the year when it became known that we would be leaving our
current premises and represents management’s best estimate for the restoration work that may be required to
return the buildings to the landlord by October 2019.
The warranty provision represents management’s best estimate of the Group’s liability under warranties granted
on products, based on historical knowledge of the products and their components. As with any product warranty,
there is an inherent uncertainty around the likelihood and timing of a fault occurring that would trigger further work
or part replacement.
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20. CALLED UP SHARE CAPITAL AND RESERVES
Called up, allotted and fully paid:
324,009,397 (2017: 250,613,176) ordinary shares of 5p each
Authorised Share capital:
324,009,397 (2017: 256,350,790) ordinary shares of 5p each
2018
£’000s
16,200
16,200
2017
£’000s
12,531
12,818
During the year the Company issued 73,396,221 ordinary shares of 5p each for a consideration of £29,358,000.
Holders of ordinary shares have voting rights at Annual General Meetings and Extraordinary General Meetings
in proportion with their shareholding.
The effect on the share premium account is shown below:
Share premium balance at start of year
Issue of shares
Expenses associated with issue of shares
Share premium balance at end of year
2018
£’000s
61,930
25,689
(988)
86,631
2017
£’000s
58,151
4,046
(267)
61,930
The merger reserve arose on the acquisition of ITM Power (Research) Ltd in 2004.
The foreign exchange reserve arises upon consolidation of the foreign subsidiaries in the Group, and accounts
for the difference created by translation of the income statement at average rate compared with the year-end
rate used on the balance sheet.
The Group’s other reserve is retained earnings which represents cumulative profits or losses, net of dividends
paid and other adjustments.
122
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
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21. NOTES TO THE CASH FLOW STATEMENT
Loss from operations
adjustments for property, plant and equipment
Depreciation
Loss on disposal
Impairment
Impairment reversal
Amortisation
Warranty provision in profit or loss
Operating cash flows before movements in working capital
Decrease/(Increase) in inventories
Increase in receivables
Increase in payables
Increase in provisions
Cash used in operations
Income taxes received
net cash used in operating activities
22. CAPITAL COMMITMENTS
The Group had no capital commitments at the balance sheet date (2017: none).
2018
£’000s
(6,494)
1,611
2
43
(100)
101
245
(4,592)
105
(5,808)
1,262
839
(8,194)
189
(8,005)
2017
£’000s
(3,550)
1,181
22
100
–
23
–
(2,224)
(469)
(5,363)
2,747
9
(5,300)
252
(5,048)
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23. OPERATING LEASE COMMITMENTS
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments
under non-cancellable operating leases, which fall due as follows:
land and buildings
Within one year
Between two and five years
Commercial vehicles
Within one year
Between two and five years
total lease commitments
Within one year
Between two and five years
2018
£’000s
2017
£’000s
212
361
14
25
226
386
229
559
–
–
229
559
Operating lease payments for land and buildings represent rentals payable by the Group for certain of its
office and laboratory properties and refuelling stations. Leases are negotiated for an average of five years
and rentals are fixed for an average of four years.
Additionally in 2018, the Group entered into operating leases for four vans. These are being leased for
three years.
24. CONTINGENT LIABILITY
receipt of government grants
The Group participates in a number of grant funded projects. Income is recognised in the accounts as
receivable based on the grant contract and the levels of expenditure incurred on the project. It is claimed
periodically according to a timetable laid down by each coordinator. The claims are audited before any money
is awarded. However, grants are ultimately funded by government or EU institutions and can be subject to
further scrutiny at later dates. This leaves grant income in the accounts subject to potential recall.
Management do not know which grants will be subject to such audit nor the time that they are likely to arise
and as such would be unable to quantify the potential financial impact of any subsequent recall of funds.
To the best of their knowledge, claims are made for expenditure agreed ahead of any project undertaking
and in accordance with grant procedure.
124
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noteS to the ConSolidated finanCial StateMentS
25. SHARED-BASED PAYMENTS
equity-settled share option scheme
The Group operates a number of share option schemes to provide employees and third parties with the
opportunity to acquire a proprietary interest in the Company as an incentive to attract and retain their services
as follows:
− Enterprise Management Incentive (EMI) options;
− Non EMI or “unapproved” options in lieu of payment for services; and
− Options under HM Revenue & Customs approved Save As You Earn scheme.
2018
number
weighted
average
exercise
price
2017
number
Outstanding at the beginning of the year
5,456,747
32p
5,737,614
Granted during the year
Exercised during the year
Expired during the year
outstanding at the end of the year
exercisable at the end of the year
–
–
(50,002)
5,406,745
5,406,745
–
–
44p
31p
31p
–
–
(280,867)
5,456,747
5,456,747
weighted
average
exercise
price
32p
–
–
54p
32p
32p
All of the Company’s share option plans were issued after 7 November 2002. In accordance with IFRS 2,
only those options that had not fully vested by 1 May 2006, being the Group’s date of transition to IFRS,
were included in the calculations.
The options outstanding at 30 April 2018 had a weighted average exercise price of 31p and a weighted
average remaining contractual life of 2 years.
Fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model
has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations. The assumptions for the Black-Scholes model are as follows:
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
125
noteS to the ConSolidated finanCial StateMentS
weighted averages
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
2018
£’000s
31p
31p
45%
2 years
4%
2017
£’000s
32p
32p
46%
2 years
4%
Expected volatility is the annual standard deviation of the share price. The expected life used in the model
has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
year issued
exercise price
last Vesting date
total shares
2009
2009
2010
2010
2010
2010
2010
2010
2011
2011
2011
2011
2011
2012
2012
2013
2013
2013
2014
0.1825
0.205
0.1875
0.1875
0.1875
0.2425
0.2425
0.2425
0.31
0.545
0.545
0.545
0.6675
0.4988
0.5
0.4062
0.4062
0.4062
0.026
2012
2010
2011
2012
2013
2011
2012
2013
2011
2012
2013
2014
2011
2012
2012
2014
2015
2016
2014
200,000
50,000
466,665
466,665
466,670
183,332
266,729
306,684
50,000
16,666
16,666
16,668
1,500,000
100,000
250,000
16,666
16,666
16,668
1,000,000
The Group has recognised share-based payment expense in the income statement for the year of £nil
(2017 – £nil).
126
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noteS to the ConSolidated finanCial StateMentS
26. FINANCIAL INSTRUMENTS
Capital risk management
The Group raised sufficient cash through issuing one
class of ordinary shares to provide the Company with
the means to fulfil the existing pipeline.
externally imposed capital requirement
The Group is not subject to externally imposed
capital requirements.
Significant accounting policies
Details of the significant accounting policies and
methods adopted, including the criteria for recognition,
the basis of measurement and the basis on which
income and expenses are recognised, in respect of
each class of financial asset, financial liability and
equity instrument are disclosed in note 3 to the
financial statements.
The current capital risk management objective
is to ensure that the existing pipeline can be
delivered without the need for further financing.
The Group manages cash balances in dollars,
euros and pound sterling, with natural hedges
occurring for most transactions. The Group also
have money placed on guarantee that can require
cash cover, which it considers to be an externally
imposed capital requirement.
During the year, the Group was not required
to comply with any externally imposed capital
requirements, with the exception of placing
on guarantee contract amounts for projects.
The capital risk management landscape has not
materially changed in the last year for the Group.
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127
noteS to the ConSolidated finanCial StateMentS
Categories of financial instruments
financial assets – amortised cost
Cash and cash equivalents
Amount receivable for the sale of goods
Amounts due from construction contract customers (note 15)
Amounts receivable under grant claims
Allowance for doubtful debts
Restricted cash balances
Other receivables
Accrued sales income
Accrued grant income
2018
£’000s
20,403
17
1,343
3,178
–
1,572
882
370
4,551
32,316
The Group’s financial assets consist of cash and receivables. The latter are largely due from grant bodies
and large organisations with a strong credit history. ITM Power Plc do not consider there to be undue risk
associated with receivables.
Categories of financial instruments
financial liabilities – amortised cost
Trade payables
Other taxation and social security
Other creditors
Accruals
2018
£’000s
1,403
151
16
1,475
3,045
2017
£’000s
1,558
61
779
1,133
(166)
1,446
317
1,026
3,373
9,527
2017
£’000s
923
126
7
720
1,776
128
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the ConSolidated finanCial StateMentS
Credit risk management
Credit risk refers to the risk that a counter party
will default on its contractual obligations resulting
in financial loss to the Group. The Group has
adopted a policy of only dealing with creditworthy
counterparties. The credit risk of liquid funds (cash,
cash equivalents and short-term deposits) is limited
because the counterparties are banks with high
credit-ratings assigned by international credit-rating
agencies. The age of financial assets that are past
due at the end of the reporting period but not
impaired is disclosed in note 16.
liquidity and interest risk management
The Group is exposed to the interest rate risks
associated with its holdings of cash and cash
equivalents and short-term deposits.
Ultimate responsibility for liquidity risk management
rests with the board of Directors, which regularly
monitors the Group’s short-, medium- and long-term
funding, and liquidity management requirements.
The Group manages liquidity risk by maintaining
adequate reserves and banking facilities, by
continuously monitoring forecast and actual
cash flows and matching the maturity profiles
of financial assets and liabilities.
fair value through profit and loss
As at 30 April 2018, the Group had no financial
instruments that were measured at fair value
through profit or loss (2017: none). The carrying
value of all financial instruments at 30 April 2018
and 30 April 2017 approximated to their fair value.
Accordingly, no fair value hierarchy table has
been presented.
financial risk management objectives and policies
The Group’s finance function monitors and manages
the financial risks relating to the operations of the
Group. The Group’s activities expose it primarily
to the financial risks of changes in interest rates.
The Group also receives and spends money in
different currencies. Significantly, contracts are
often in the currency of the customer. As such, the
company has exposure to foreign exchange variation.
This is naturally hedged where possible by paying for
supplies in the currencies in which they are invoiced,
but this does not eliminate exposure. Management
may look to use forward contracts as a means of
mitigating exposure to exchange rate volatility
on long-term contracts.
The Group seeks to minimise the effects of these
risks. The Group’s policies approved by the board
of Directors provide written principles on interest
rate risk and the investment of excess liquidity.
Compliance with policies and exposure limits
is reviewed on a continuous basis.
The treasury activities are reported quarterly
to the Group’s Board.
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129
noteS to the ConSolidated finanCial StateMentS
foreign currency risk management
The Group does not hedge its exposure of foreign investments held in foreign currencies. The monetary
assets and liabilities of the Group are only held in the functional currencies of the Group.
The table below shows the Group’s currency exposure. Such exposure comprises the monetary assets and
monetary liabilities that are not denominated in the functional currency of the operating unit involved. The
Group’s exposure to currency risk predominately arises on borrowings denominated in currencies other
than the functional currency of the operating unit excluding intercompany balances. At 30 April 2018, these
exposures were as follows:
EUR
USD
SEK
liabilities
assets
2018
£’000
160
8
–
168
2017
£’000
20
13
–
33
2018
£’000
2,363
610
38
2017
£’000
1,628
51
23
3,011
1,702
foreign currency sensitivity analysis
The table below assumes an increase/decrease of 10% change of the Euro to Pound Sterling exchange rate
and a decrease/increase of 10% change of the US Dollar to Pound Sterling exchange rate. The sensitivity analysis
is based on the subsidiaries’ profit or loss for the year and the net assets or net liabilities held at the balance sheet
date, excluding intercompany balances and intangible assets held at the date of acquisition of the Group by ITM
Power Plc.
Profit or loss
euro impact
uSd impact
2018
£’000
20
2017
£’000
12(i)
2018
£’000
42
2017
£’000
99(ii)
(i) This is mainly attributable to the exposure
outstanding on Euro to Pound Sterling receivables
and payables in the Group at the balance sheet date.
(ii) This is mainly attributable to the exposure
to outstanding US Dollars to Pound Sterling
receivables and payables at the balance sheet date.
130
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noteS to the ConSolidated finanCial StateMentS
If interest rates had been 1% higher/lower and all
other variables had remained constant, loss for the
year would have decreased/increased by £62,000
(2017: £111,000).
The Group’s financial liabilities consist of trade and
other payables as shown on the balance sheet. No
interest is paid on these balances and all amounts
are due within 3 months.
In the year, sales of hydrogen fuel to JCB Research
(a corporate shareholder, represented on the Board
by R Pendlebury) totalled £519.66 (2017: £68.39).
The balance outstanding at the year-end was £356.28
(2017: £Nil) which is deemed as being fully recoverable.
The remuneration of the Directors, who are the key
management personnel of the Group, is shown in
note 8.
fair value of financial instruments
Carrying amounts of financial instruments are
a reasonable approximation of the fair values
of those instruments.
The Group operates a defined contribution pension
scheme that is administered by Hargreaves Lansdown.
Former Board member Peter Hargreaves was also a
shareholder in Hargreaves Lansdown.
27. TRANSACTIONS
WITH RELATED PARTIES
Transactions between the Company and its
subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed
in this note. All related party transactions which were
not intra group have been conducted at arm’s length.
28. CONTROLLING PARTY
As at the date of these accounts neither the Directors
together, nor any individual shareholder, owned more
than 50% of the issued share capital of the Company
and hence, in the opinion of the Directors, there is no
controlling party at this date.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
131
CoMpany StateMent of ChangeS in equity year ended 30 april 2018
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 APRIL 2018
Called up share
capital
Share premium
account
retained loss
total equity
At 1 May 2016
Issue of shares
Loss for the year and comprehensive loss
£’000s
10,845
1,686
–
£’000s
58,151
3,779
–
at 30 april 2017
12,531
61,930
At 1 May 2017
Issue of shares
Loss for the year and comprehensive loss
at 30 april 2018
12,531
3,670
–
16,201
61,930
24,701
–
86,631
£’000s
(39,598)
–
(10,109)
(49,707)
(49,707)
–
(29,912)
(79,619)
£’000s
29,398
5,465
(10,109)
24,754
24,754
28,371
(29,912)
23,213
132
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
CoMpany balanCe Sheet year ended 30 april 2018
COMPANY BALANCE SHEET
YEAR ENDED 30 APRIL 2018
fixed assets
Tangible assets
Investments
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities, being net assets
Capital and reserves
Called-up share capital
Share premium account
Profit and loss account
Shareholders’ funds
note
32
33
34
35
36
2018
£’000s
11
4,397
4,408
321
18,809
19,130
(325)
18,805
23,213
16,200
86,631
(79,619)
23,213
2017
£’000s
13
24,612
24,625
259
115
374
(245)
129
24,754
12,531
61,930
(49,707)
24,754
The Company reported a loss for the financial year ended 30 April 2018 of £29.9m (2017: £10.1m).
The financial statements of ITM Power Plc, registered number 05059407, were approved by the
Board of Directors and authorised for issue on 10 August 2018.
Signed on behalf of the Board of Directors
Dr. Simon Bourne
itM power plc, director
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
133
noteS to the CoMpany finanCial StateMentS
29. SIGNIFICANT ACCOUNTING POLICIES
basis of preparation
The separate financial statements of the company
are presented as required by the Companies Act 2006.
The company meets the definition of a qualifying entity
under FRS 100 (Financial Reporting Standard 100)
issued by the Financial Reporting Council. Accordingly,
financial statements have been prepared in accordance
with FRS 101 (Financial Reporting Standard 101)
‘Reduced Disclosure Framework’ as issued by the
Financial Reporting Council.
As permitted by FRS 101, the company has taken
advantage of the disclosure exemptions available
under that standard in relation to share-based
payments, financial instruments, capital management,
presentation of comparative information in respect
of certain assets, presentation of a cash-flow
statement and certain related party transactions.
Where required, equivalent disclosures are given
in the consolidated financial statements.
In accordance with S408 of the Companies Act
2006, the company has taken the exemption from
presenting the parent company’s individual profit
and loss account.
The financial statements have been prepared
on the historical cost basis except for the re-
measurement of certain financial instruments to
fair value. The principal accounting policies adopted
are the same as those set out in note 3 to the
consolidated financial statements except as
noted below.
tangible fixed assets
Tangible fixed assets are stated at cost less
accumulated depreciation and any recognised
impairment loss.
Depreciation is charged so as to write off the cost,
over their estimated useful lives, using the straight-line
method, on the following bases:
Leasehold improvements 4 years or the remainder
of the lease term, if shorter
Computer equipment 3 years
Office furniture and fittings 4 years
The gain or loss arising on the disposal or retirement
of an asset is determined as the difference between
the sales proceeds and the carrying amount of the
asset and is recognised in income.
impairment of tangible and intangible assets
At each balance sheet date, the Company reviews
the carrying amounts of its tangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows
that are independent from other assets, the Company
estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset
for which the estimates of future cash flows have
not been adjusted.
134
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If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised as an
expense immediately, unless the relevant asset is
carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses,
the carrying amount of the asset (cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount
does not exceed the carrying amount that would
have been determined had no impairment loss
been recognised for the asset (cash-generating unit)
in prior years. A reversal of an impairment loss is
recognised as income immediately, unless the relevant
asset is carried at a revalued amount, in which case
the reversal of the impairment loss is treated as
a revaluation increase.
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, based
on the Group’s estimate of equity instruments that will
eventually vest. At each balance sheet date, the Group
revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non-market-
based vesting conditions. 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
equity reserves.
pension costs
The Company operates a defined contribution
pension scheme. The amount charged to the profit
and loss account in respect of pension costs is the
contributions actually payable in the year. Differences
between contributions payable and contributions
actually paid are shown as either accruals or
prepayments in the balance sheet.
investments
These are stated at cost less a provision for
any permanent impairment in value.
Share option charges
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. The fair value excludes the effect of
non-market-based vesting conditions. Details regarding
the determination of the fair value of equity-settled
share-based transactions are set out in note 25.
30. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY SOURCES
OF ESTIMATION UNCERTAINTY
The Directors are required to make judgements,
estimates and assumptions about the carrying amounts
of assets and liabilities that are not readily apparent
from other sources. The estimates and associated
assumptions are based on historical experience and
other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are
reviewed on an on-going basis. Revisions 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.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
135
noteS to the CoMpany finanCial StateMentS
There were no critical judgements that the Directors have made in the process of applying the Company’s
accounting policies.
Key sources of estimation uncertainty – Recoverability of investment
The Group tests the net recoverable amounts of assets annually for impairment, or more frequently if there
are indications that goodwill might be impaired.
During the year, management reconsidered the recoverability of its investment in subsidiary companies which
are disclosed in note 33. The subsidiaries continue to trade, but currently are trading at a loss, which is seen
as temporary by management. The main subsidiary has been impaired to nil as a result of review of the net
liability position.
31. STAFF NUMBERS AND COSTS
Monthly average number of persons employed
Staff costs during the year (including directors)
Wages and salaries
Social security costs
Other pension costs
2018
number
6
723
93
36
852
2017
number
6
694
89
32
816
136
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the CoMpany finanCial StateMentS
32. TANGIBLE FIXED ASSETS
Cost
At 1 May 2017
Additions
at 30 april 2018
depreciation
At 1 May 2017
Charge for the year
at 30 april 2018
net book value
At 30 April 2018
at 30 april 2017
Computer
equipment
office
furniture and
fittings
leasehold
improvements
£’000
£’000
£’000
186
8
194
194
173
10
183
11
13
12
–
12
12
12
–
12
–
–
10
–
10
10
–
10
–
–
total
£’000
208
8
216
195
10
205
11
13
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137
noteS to the CoMpany finanCial StateMentS
loans to
subsidiary
undertakings
Shares in
subsidiary
undertakings
£’000s
£’000s
61,320
8,011
(28)
69,303
40,301
28,226
(3,621)
64,906
4,397
21,019
3,593
–
28
3,621
–
–
3,621
3,621
–
–
total
£’000s
64,913
8,011
–
72,924
40,301
–
–
68,527
4,397
24,612
33. INVESTMENTS
Cost
At 1 May 2017
Additions
Transfers
at 30 april 2018
provisions for impairment
At 1 May 2017
Movement in year
Transfers
at 30 april 2018
net book value
At 30 April 2018
at 30 april 2017
138
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the CoMpany finanCial StateMentS
The Company holds 100% of the ordinary share of
ITM Power Inc, a company which is incorporated in
California and its principal activity is that of the sale
of electrolysis equipment and hydrogen storage
solutions. Registered office: 155 N Riverview Dr,
Suite 101, Anaheim, CA 92808.
The Company holds 100% of the ordinary share of
ITM Power Pty Ltd, a company which is incorporated
in Australia and its principal activity is that of the sale
of electrolysis equipment and hydrogen storage
solutions. Registered office: Unit 2 Level 1, 32 Main
Street, Samford Village, Queensland, Australia 4520.
The Company holds 100% of the ordinary share
of ITM Power ApS, a company which is incorporated
in Denmark and its principal activity is that of the sale
of electrolysis equipment and hydrogen storage
solutions. The company was dormant during the
year. Registered office: H.C. Andersens Boulevard
12, 1553 Copenhagen.
The Company holds 100% of the ordinary share
of Orkney Hydrogen Trading Ltd, a company which
is incorporated in Scotland and its principal activity
is that of the sale of hydrogen. The company was
dormant during the year. Registered office: Cirrus
Building, 6 International Avenue, Abz Business Park,
Dyce Drive, Dyce, Aberdeen, Aberdeenshire,
United Kingdom, AB21 0BH.
The Company holds 100% of the ordinary share
capital of ITM Power (Trading) Limited, a company
which is incorporated in England and Wales and
its principal activity is the development and
manufacturing of prototype products.
The Company holds 100% of the ordinary share
capital of ITM Power (Research) Limited, a company
which is incorporated in England and Wales and its
principal activity is the research and development
of scientific and engineering projects.
The Company holds 100% of the ordinary share
of ITM Energy Ltd, a company which is incorporated
in England and its principal activity is that of the
sale of hydrogen. The company was dormant
during the year.
The Company holds 100% of the ordinary share
of ITM Fuel Ltd, a company which is incorporated
in England and its principal activity is that of the
sale of hydrogen. The company was dormant
during the year.
ITM Power (Trading) Ltd holds 100% of the
ordinary share of ITM Motive, a company which
is incorporated in England and its principal activity
is that of the production of drivetrains for use with
Hydrogen. The company was dormant during
the year.
All of the above are registered at 22 Atlas Way,
Sheffield, South Yorkshire, S4 7QQ.
The Company holds 100% of the ordinary share
of ITM Power GmbH, a company which is incorporated
in Germany and its principal activity is that of the
sale of electrolysis equipment and hydrogen
storage solutions. Registered office: Postfach 1152,
35301 Grünberg, Mragowo Strasse 15, 35305
Grünberg, Germany
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139
noteS to the CoMpany finanCial StateMentS
34. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Other debtors
Prepayments
2018
£’000s
166
155
321
35. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Trade creditors
Payroll creditors
Accruals and deferred income
2018
£’000s
93
18
214
325
2017
£’000s
156
103
259
2017
£’000s
21
16
208
245
140
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
noteS to the CoMpany finanCial StateMentS
36. SHARE CAPITAL AND RESERVES
The movements on share capital and share premium accounts are disclosed in note 20 to the consolidated
financial statements.
The Company’s other reserve is the profit and loss reserve which represents cumulative profits or losses,
net of dividends paid and other adjustments.
37. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption included in FRS101 “Related Party Disclosures” for wholly
owned subsidiaries not to disclose transactions with entities that are part of the Group qualifying as related parties.
ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
141
2017/18 regulatory newS announCeMentS
2017/18 REGULATORY NEWS ANNOUNCEMENTS
2017/18
RNS
RNS
Contract and Hydrogen Bus Refuelling Stations Update
Change of Adviser
RNS-R
ITM Power Signs Fuel Contract with Honda (UK)
RNS
RNS
RNS
Re Government Air Quality Plan, Pipeline Increase
Launch of Large Scale HRS, Pipeline Increase
Notice of Results
RNS-R
UK Hydrogen for Transport Programme
RNS
Notice of Results
RNS-R
First Hydrogen Bus Route in France
RNS
RNS
RNS
RNS
RNS
RNS
RNS
RNS
10MW Refinery Hydrogen Project with Shell
Sale of 1.1MW Power-to-Gas Plant to Energy Stock
Proposed Placing and Open Offer
Timetable for Proposed Placing and Open Offer
Circular and Investor Presentation
Result of General Meeting and Open Offer
Holding(s) in Company
Price Monitoring Extension
05 Jun 2017
29 Jun 2017
11 Jul 2017
26 Jul 2017
07 Aug 2017
17 Aug 2017
21 Aug 2017
25 Aug 2017
01 Sep 2017
01 Sep 2017
19 Sep 2017
29 Sep 2017
29 Sep 2017
03 Oct 2017
18 Oct 2017
20 Oct 2017
23 Oct 2017
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ITM POWER PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2018
2017/18 regulatory newS announCeMentS
2017/18 REGULATORY NEWS ANNOUNCEMENTS
2017/18
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Second Price Monitoring Extn
Directorate Change
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Power-to-Gas Storage Study with Northern Gas
RNS
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Trading Update
New Australian Subsidiary and MD, Contract Update
RNS-R
Largest Hydrogen Electrolysis in Shell Refinery
RNS
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Half-year Report
Price Monitoring Extension
Second Price Monitoring Extn
Holding(s) in Company
£8.8m OLEV Funding for Refuelling Infrastructure
Operations Update
New Shell Fuelling Station Opened at Beaconsfield
British Columbia Study
Massachusetts Power-to-Gas Feasibility Study
Met Police Fuel Contract, Refuelling Update
Northern Gas Networks Deployment Study Findings
23 Oct 2017
25 Oct 2017
09 Nov 2017
30 Nov 2017
28 Dec 2017
18 Jan 2018
29 Jan 2018
29 Jan 2018
29 Jan 2018
22 Feb 2018
26 Mar 2018
26 Mar 2018
27 Mar 2018
29 Mar 2018
05 Apr 2018
10 Apr 2018
24 Apr 2018
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ITM Power Plc | 22 Atlas Way | Sheffield | S4 7QQ