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safer performance | leak-proof | reduced costs
A N N U A L R E P O R T
2 0 2 1
Plexus in July 2021 was recognized by the London
Stock Exchange as contributing to the global green
economy by deriving more than 50% of revenues
from environmental solutions. Plexus has been
protecting the environment for over 30 years,
initially with its ‘through the BOP’ (Blow Out
Preventer) wellhead designs, and subsequently with
its POS-GRIP® proprietary metal-to-metal
leak-proof wellhead sealing system.
W W W . P L E X U S P L C . C O M
mechanism.
markets.
P L E X U S
P O S - G R I P T E C H N O L O G Y
P O S - G R IP ®
P R O P R I E TA R Y M E T H O D O F
F R I C T I O N G R I P E N G I N E E R I N G
POS-GRIP friction-grip technology is based
on a very simple concept. A compressive
force is applied on the outside of a wellhead
or pipe, to flex it inwards. As the bore of
the vessel moves inwards, it makes contact
with an inner pipe (or hanger) on the inside.
Sufficient contact force is generated to fix
the inner member (hanger) in place through
friction between the two components.
In wellheads, POS-GRIP can replace the
conventional load shoulder or slips to
provide an improved hanger support
Utilising our patented POS-GRIP technology,
we are continually developing new wellhead
equipment to meet our customers’
requirements, delivering solutions for
the surface, subsea and decommissioning
P O S - G R IP ®
P O S - G R I P ®
P ROPRIETARY METHOD O F
P ROPRIETARY METHOD O F
F RICTION GRIP EN GIN EERING
F RICTION GRIP EN GIN EERING
POS-SET Connector recently deployed
for a well decommissioning project
Plexus HG® technology, is a simple scientific
POS-GRIP friction-grip technology is based
method of design for metal interface seals, used to
on a very simple concept. A compressive
permanently contain METHANE GAS in wellheads,
force is applied on the outside of a wellhead
throughout the life of a producing well.
or pipe, to flex it inwards. As the bore of
the vessel moves inwards, it makes contact
The seal system comprises of multiple integral
with an inner pipe (or hanger) on the inside.
radiused bump rings, which interact directly with
Sufficient contact force is generated to fix
the wellhead bore, to halve the number of leak paths
the inner member (hanger) in place through
past the annulus, using a series of redundant gallery
friction between the two components.
seals. A preload above yield is carefully delivered
and recorded by the externally controlled horizontal
In wellheads, POS-GRIP can replace the
deflection of the housing wall against solid hanger
conventional load shoulder or slips to
bodies, thereby equally distributing perimeter
provide an improved hanger support
stress, in compliance with the principles of Hertzian
mechanism.
Stress Theory (HST).
POS-GRIP is ideal for high integrity, low
fatigue connector applications. Wellhead
connectors, riser connectors, subsea jumper
connectors, pipeline connectors, and even
vessel mooring connectors can benefit from
the simplicity of POS-GRIP.
Production wellheads and surface subsea
have all benefitted from POS-GRIP. Casing and
tubing hangers can be gripped, but POS-GRIP
can also be used to support wearbushings,
BOP test tools and seal sleeves.
P O S - G R I P A P P L I C AT I O N S
Connectors
Wellheads
A potential low cost application of
POS-GRIP in an “HG” Tubing Head
Metal-to-metal sealing
Wellheads and connectors can both benefit
from the direct contact created when the
POS-GRIP metal to metal HG® seal is activated,
delivering an unrivalled gas-proof seal.
Utilising our patented POS-GRIP technology,
The system stays permanently rigid, guarantees
we are continually developing new wellhead
life-cycle integrity and is maintenance-free, using
equipment to meet our customers’
re-usable components. By matching materials at the
requirements, delivering solutions for
seal interface, bi-metallic corrosion is prevented and
the surface, subsea and decommissioning
multiple metal seals are used to anticipate the pace
markets.
of chemical degradation, throughout field-life.
POS-GRIP in OPEN Position
A potential low cost application of
POS-GRIP in CLOSED Position
POS-GRIP in an “HG” Tubing Head
P L E X U S
P L E X U S
P O S - G R I P T E C H N O L O G Y
P O S - G R I P T E C H N O L O G Y
Plexus has always maintained that
PREVENTION is a better way of addressing
fugitive emissions as well as being a more
effective way of achieving Net Zero at the
wellhead, compared to simply pursuing a
monitoring and cure approach.
Such logic has been clear to see for
hundreds of years:
Benjamin Franklin famously
advised fire-threatened Philadelphians
in 1736 that:
“ An ounce of
prevention is worth
a pound of cure.”
POS-GRIP “HG” production wellhead is assembled ready for testing ahead of
drilling and producing a new North Sea well
P L E X U S
P O S - G R I P T E C H N O L O G Y
POS-SET Connector recently deployed
POS-GRIP
POS-GRIP
for a well decommissioning project
Production Wellhead System
Production Wellhead System
POS-GRIP “HG” production wellhead is assembled ready for testing ahead of
drilling and producing a new North Sea well
P L E X U S
P O S - G R I P T E C H N O L O G Y
P OS-G RIP AP PL ICAT IO NS
P OS-G R IP APP LIC AT ION S
Wellheads
Production wellheads and surface subsea
Wellheads
have all benefitted from POS-GRIP. Casing and
Production wellheads, both surface and subsea
tubing hangers can be gripped, but POS-GRIP
have all benefitted from POS-GRIP. Casing
can also be used to support wearbushings,
and tubing hangers can be gripped, but
BOP test tools and seal sleeves.
POS-GRIP can also be used to support
wearbushings, BOP test tools and seal
Connectors
sleeves.
POS-GRIP is ideal for high integrity, low
fatigue connector applications. Wellhead
Connectors
connectors, riser connectors, subsea jumper
POS-GRIP is ideal for high integrity, low
connectors, pipeline connectors, and even
fatigue connector applications. Wellhead
vessel mooring connectors can benefit from
connectors, riser connectors, subsea jumper
the simplicity of POS-GRIP.
connectors, pipeline connectors, and even
vessel mooring connectors can benefit from
Metal-to-metal sealing
the simplicity of POS-GRIP.
Wellheads and connectors can both benefit
from the direct contact created when the
Metal-to-metal sealing
POS-GRIP metal to metal HG® seal is activated,
Wellheads and connectors can both benefit
delivering an unrivalled gas-proof seal.
from the direct contact created when the
POS-GRIP metal to metal HG® seal is
activated.
Financial and Corporate Overview
Following the sale in 2018 of Plexus’ wellhead exploration equipment services business for Jack-up
applications (‘the Jack-up Business’) to FMC Technologies Limited (‘TFMC’), a subsidiary of one of the
leading oil and gas service and equipment companies TechnipFMC (Paris:FTI) (NYSE:FTI), the year-end
results and comparative prior year period have been reported as required on a continuing and a discontinued
operations basis.
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Continuing operations sales revenue £2,017k (2020: £525k)
o
Discontinued operations sales revenue £nil (2020: £nil)
Adjusted EBITDA on continuing activities £2.69m loss (2020: £3.08m loss), (page 10).
Continuing operations operating loss £4,546k (2020: £5,681k)
o
Discontinued operations operating profit £20k (2020: loss £2,432k)
Continuing operations operating loss after tax £4,110k (2020: £4,058k)
o
Discontinued operations loss after tax £392k (2020: £2,549k loss)
Basic loss per share from continuing activities 4.09p (2020: 3.92p loss)
o
Basic loss per share from discontinued activities 0.39p (2020: 2.47p earning)
Cash and cash equivalents of £5.18m (2020: £4.09m)
Bank borrowing of £2.04m (2020: nil) relating to a drawn down Lombard facility
The Group has £3.04m invested in financial assets (2020: £3.0m)
Operational Overview
Building a portfolio of licensing and direct sales revenue streams centred around establishing Plexus’ leak-proof
POS-GRIP® wellhead equipment as the go-to technology for energy markets whilst making a genuine
contribution to the oil and gas industry’s ESG and NetZero goals by championing “through the BOP” (Blow-out
Preventer) designs, and lifetime leak-proof wellhead metal-to-metal sealing systems
Licence Agreements
New Licence Agreement
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November 2020 – non-exclusive licence signed with Cameron International Limited (‘Cameron’) for
POS-GRIP surface production wellhead technology – Cameron is a group company of Schlumberger,
the world’s leading oilfield services provider
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Agreement allows Cameron to use the Company’s POS-GRIP and “HG” metal to metal seal
method of engineering for the development of conventional and unconventional oil and gas surface
wellheads
Currently collaborating with Cameron on the development of an inaugural low-cost wellhead
design incorporating the POS-GRIP method of engineering
Existing Licence Agreements
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Continued focus on IP and R&D to support licensees and generate future revenue through royalties and
new Plexus products
Existing IP Collaboration Agreement in place with TFMC
In Russia, strategy centred on supporting licensing partner Gusar’s ongoing efforts to pursue contract
opportunities for POS-GRIP Jack-up exploration rental wellheads
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Following successful installation of first wellhead in 2019 under inaugural contract secured by
Gusar with global energy giant Gazprom, a planned second well did not go ahead in 2020 due to
COVID-19
Drilling programmes have begun to resume this year, which potentially will deliver further revenues
under this contract
New markets
o
Active targeting of new markets in line with strategy to deliver safe, reliable and cost-effective
solutions to the energy industry resulted in post period end re-entry into the Jack-up Exploration
(Adjustable) Wellhead rental business
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Plexus Holdings plc Annual Report 2021
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August 2021 – Agreement with Cameron will see Exact-15 (“Exact”) system rental wellhead
inventory and Centric-15 (“Centric”) mudline system equipment transferred to Plexus – Cameron
to provide manufacturing support and assistance in sales lead generation in return for royalty fee
Exact is a ‘through the BOP’ (“Blow-out Preventer”) wellhead system originally designed by Plexus
that delivers improved rig personnel safety by enabling the BOP to be kept in place during
operations and thereby importantly reducing the risk of blow outs
Plexus intends to build on the historic success of the Jack-up Business which the Company sold to
TFMC in 2018
Direct sales activity
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Focused on securing orders for surface production wellheads, particularly in the UK and European
North Sea regions
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Surface production wellhead system order awarded by Spirit Energy in July 2020 for North Sea
Participating in the tender process for a range of projects which have been delayed due to
COVID-19 associated economic downturn
Post period end
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July 2021 – Plexus received London Stock Exchange’s Green Economy Mark in recognition of
contributing to the global green economy, and demonstrating alignment with Net Zero and ESG
principles
Plexus Holdings plc Annual Report 2021
2
Chief Executive Ben van Bilderbeek said:
“There were a number of positive milestones during the year – a near quadrupling in full year revenues to £2
million; the signing of a non-exclusive licensing agreement with top tier supplier Cameron for our POS-GRIP
surface production wellhead technology; and the award of a surface production wellhead order from Spirit
Energy. However, I am particularly proud of one more – Plexus receiving the London Stock Exchange’s Green
Economy Mark in July 2021 in recognition of its contribution to the global green economy. This achievement
best sums up what the Company is about, what we are looking to achieve, and the important role our green
leak proof technology can play in the energy transition as the focus on ESG and NetZero goals intensifies.
This is particularly relevant in view of this year’s COP 26 climate change conference in Glasgow where the
reduction of methane emissions is high on the agenda.
“What we are about. Plexus is the developer and owner of POS-GRIP, a friction grip method of engineering,
which has been deployed on over 400 wells by blue-chip operators all around the world. Our wellhead
equipment has raised the bar in terms of gas proof sealing performance, safety, and reliability not only out
in the field but also in testing, both in-house and externally. Apart from offering safer “through the BOP”
(Blow-out Preventer) operating procedures, POS-GRIP can also deliver true and verifiable leak-proof
performance during the life of a well and beyond where patented HG® metal-to-metal seals are used. This is
achieved by applying an external force to squeeze a housing until it engages with the components inside
(casing or tubing hangers in wellheads). This generates a gripping force that eliminates assembly clearances
and activates the “HG” seals, delivering what is believed to be a lifetime leak-proof metal seal solution. As
the process is controlled by hydraulic pressure and occurs within the elastic limits of the material, the
connection is reversible. Compare all this with rival ‘conventional’ systems, which typically comprise a far
higher number of individual components – the more components, the more chance there is for seal integrity
to be compromised and for individual pieces to succumb to fretting/movement caused by temperature and
pressure variations, requiring in some cases expensive ‘shut-ins’ and regular seal maintenance.
“What we are looking to achieve. Having set a higher standard in terms of wellhead performance, reliability,
and safety and by offering operators considerable cost savings via reduced installation and downtime, we are
looking to establish POS-GRIP as the go-to leak-proof technology for the energy sector as a whole. Wherever
metal to metal wellhead sealing and Tie-Back capabilities are required, POS-GRIP can deliver a leak-proof
solution whether at the surface or subsea. Existing wells: the POS-GRIP “HG” Tubing Spool delivers leak-
free performance at the “HG” seals for the entire field life, eliminating the requirement for any annual
maintenance, which in turn generates substantial savings for operators. New wells: used on over 400 wells,
Plexus’ exploration and production wellheads are proven to deliver superior performance and cost savings.
Abandoned wells: our POS-SET Connector facilitates abandonment operations by delivering a best-in-class
solution to re-establish a connection onto rough conductor casing that has been previously cut above the
seabed – in full testing, the POS-SET Connector achieved 80% of the bending and tensile strength of the
parent pipe, a significantly superior capability when compared to conventional alternatives. Renewables: focus
is being given to develop POS-GRIP applications for the renewables sector, including geothermal, hydrogen
and nuclear. Such initiatives can also extend to the important gas storage sector whether for gas, CO2 or
hydrogen. Here the need for equipment that can offer decades of leak-proof integrity is obviously critical,
both for commercial and green reasons, and especially where equipment is inaccessible subsea. Clearly, there
is no point in using conventional equipment that may have been designed to have a lifespan of 25 years, when
a storage facility may be required for 100 years or more.
“The important role we can play in the energy transition. EU: net zero greenhouse gas emissions by 2050. US:
50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030. China: peak
carbon emissions by 2030 and net zero by 2060. There can be no doubt an energy transition is underway.
Hitting the above self-imposed targets however will require an enormous effort and considerable will,
particularly when one considers that the energy transition is set to coincide with a period of sustained energy
demand growth – in its annual International Energy Outlook report, the US Energy Information
Administration states, ‘If current policy and technology trends continue, global energy consumption and
energy-related carbon dioxide emissions will increase through 2050 as a result of population and economic
growth.’ The report’s accompanying presentation attaches a number to the forecast, ‘By 2050, global energy
use increases nearly 50%.’
“Renewables will not on their own be able to meet the forecast rise in energy demand. The EIA report goes
on to say that while renewables are expected to become ‘the primary source for new electricity generation…
oil and natural gas production will continue to grow…’ Liquid fuels will therefore have to play a major role
in energy generation for decades to come. This does not mean, however, that a rise in harmful carbon
emissions has to be a given. The oil and gas industry is in a position to take meaningful steps to satisfy rising
demand for energy while at the same time reduce its carbon footprint. The solution is centred around natural
gas, the cleanest fossil fuel by far in terms of carbon emissions when combusted. At least that is the case in
the laboratory. In the real world, the benefits to the environment from using natural gas are less clear cut as
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Plexus Holdings plc Annual Report 2021
by allowing harmful emissions, notably methane which comprises circa 80% of natural gas, to escape into
the atmosphere from leaky equipment, the advantages of natural gas over dirtier fossil fuels, such as coal, are
largely negated. This is particularly the case because methane is estimated to be up to circa 80 times more
potent in relation to climate change than carbon dioxide. If the world is serious about reaching net zero, and
if all that additional demand for energy is to be satisfied, eliminating harmful emissions from gas operations
from the well site, and in particular the wellhead all the way through to the consumer, is critical.
“For that to happen, a change of mindset among operators is required. The tried but no longer wholly trusted
approach of monitoring hardware for leaks and, when one is detected, taking remedial action which cannot
be guaranteed to be effective, is no longer sufficient. Preventing leaks from happening in the first place by
ensuring leak-proof equipment is deployed whenever and wherever possible across the supply chain is surely
what is required. Prevention after all is the best medicine and by delivering a leak-proof POS-GRIP seal
wellhead solution, POS-GRIP is the best medicine for a well site. As Benjamin Franklin famously said in
1736 “An ounce of prevention is worth a pound of cure”. If the industry changes its ways and takes action
to eliminate methane leaks from the supply chain, the prize is potentially huge, not just in terms of value
generation for stakeholders simply by avoiding economic gas loss, but also in terms of making meaningful
inroads towards achieving carbon neutrality and combatting climate change. Leak prevention promises to
set off a virtuous circle for both the industry and the environment: eliminating leaks from operations would
bolster the argument for natural gas to be formally classified as a transition fuel, which in turn would likely
spur much needed investment in gas exploration and production activity, resulting in higher levels of supply
to meet the strong growth in demand for energy expected during the transition.
“Gas supply is of course highly relevant to today’s markets, and I believe will be a key component of Plexus’
future success. There are many reasons behind this year’s extraordinary spike in global gas prices to
unprecedented levels, but years of underinvestment have contributed to today’s keenly felt shortages. The
need for more gas exploration drilling has been a central tenet of ours for some time and it was in anticipation
of this that we signed a second agreement with Cameron post period end in August 2021 to re-enter the jack-
up exploration rental wellhead market, a market we know well having run our Jack-up Business successfully
for many years before selling it on to TFMC in 2018. This latest Cameron agreement involves Plexus acquiring
and marketing proven wellhead technology which we pioneered years ago and are therefore extremely familiar
with. Together with the agreement we signed with Cameron for our POS-GRIP surface production wellhead
equipment in November 2020, Plexus is well on the road to becoming the provider of enabling technology
for the oil and gas industry that we set out to build.
“Our post period end July 2021 announcement stated that the LSE Green Economy Mark ‘is designed to
recognise both pure-play green technology companies, as well as those across all industries that make
significant contributions to the transition to a sustainable, low carbon economy…For over 30 years, Plexus
has been protecting the environment, initially with its ‘through the BOP’ (Blow-out Preventer) wellhead
designs, and subsequently with its POS-GRIP® proprietary metal-to-metal leak-proof wellhead sealing
system.’ Despite being in the business for many years, we believe our work is only half done. We have
developed proven proprietary technology to support the transition to a sustainable low carbon economy.
Now we need the industry to embrace our equipment wholeheartedly to enable us to finish the job, and by
doing so this would, in my opinion, evidence ‘real washing’ as opposed to ‘green washing’. As the respective
agreements we have in place with both Cameron and TFMC demonstrate, tier one suppliers recognise the
value of our technology. Now is the time for the industry to do the same.”
Summary of Results for the year ended 30 June 2021
2021 2020
£’000 £’000
Revenue (continuing operations) 2,017 525
Adjusted EBITDA (continuing operations) (2,692) (3,076)
Operating Loss (continuing operations) (4,546) (5,681)
Loss after taxation (continuing operations) (4,110) (4,058)
Loss profit after taxation (discontinued operation) (392) (2,549)
Loss after taxation (combined) (4,502) (6,607)
Basic loss per share (pence) (continuing operations) (4.09p) (3.92p)
Basic (loss) / earning per share (pence) (discontinued operation) (0.39p) (2.47p)
Plexus Holdings plc Annual Report 2021
4
Contents
Chairman’s Statement
Strategic Report
6
9
– Principal Activity 9
– Financial Results 9
– Operations 11
– Strategy and Future Developments 12
– Key Performance Indicators 14
– Principal Risks and Risk Management 14
– Section 172 Statement 17
Board of Directors
Directors’ Report
Corporate Governance
Audit Committee Report
Remuneration Committee Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Parent Company Statement of Financial Position
Parent Company Statement of Changes in Equity
Parent Company Statement of Cash Flows
Notes to the Parent Company Financial Statements
Corporate Information
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36
38
41
42
47
48
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50
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79
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Plexus Holdings plc Annual Report 2021
Chairman’s Statement
Business progress
With the impact of the Covid-19 pandemic on the energy market beginning to stabilise, the Company achieved
a material increase in revenues in the 12 months to 30 June 2021 amounting to £2,017k (2020: £525k).
Significantly, the global outlook on the requirement for further oil and gas development in the coming years
is becoming more positive, especially for operators and products which manage to achieve this in the most
environmentally conscious and responsible ways. There is a growing recognition that gas has an important
transitional role to play as the world moves from traditional hydrocarbon energy sources to greener
alternatives such as solar, wind, tidal, hydrogen, and even nuclear, but that this has to be done as cleanly as
possible, which is where leak free equipment, and in particular wellheads and connectors, are so essential.
The Company’s goal is to add a diverse set of revenue streams to its portfolio: the licence agreement with
Cameron for the first time brings a focus to the US and Middle East markets and complements the licence
already in place in Russia with our partner Gusar, Plexus’ organic growth in the local market in the UK and
the North Sea, and specialised projects worldwide. The post period end re-entry into the Jack-up exploration
rental wellhead business adds another dimension to this, especially as it is a market that has already been
successfully tried and tested by Plexus in the past, and where a good reputation was established.
The August 2021 cooperation agreements with Cameron allows Plexus to immediately enter the Jack-up
exploration rental wellhead market, with the proven Exact and Centric wellhead and mudline suspension
products. Plexus knows these products well, as they were initially invented and developed by Plexus in the
1980s, before being acquired by Cameron in 1996. The Exact 15 wellhead was the first through the BOP
wellhead to be introduced for Jack-up drilling, and with some modernisation and additions to the product
range over the years, together with Plexus’ reputation for agility and customer focus on a per well basis, there
is significant potential for rapid expansion of this business and revenue stream.
Beyond exploration activities, the Board remains convinced that POS-GRIP Technology is a key enabler for
the surface production and subsea wellhead markets, especially with the increasing pressure of Net Zero and
requirements for positive ESG (Environmental, Social, and Governance) credentials. Not only can POS-
GRIP deliver the technically best solution, which makes it the safest and highest integrity solution – it can
also become the most cost-effective solution. When life cycle costs are taken into account, Plexus’ technology
can be significantly better than conventional solutions. With a focus on greener, leak-free, and more efficient
operations, operators are increasingly looking to embrace the full potential of products they specify in their
procurement strategies. Plexus believes that such considerations should extend beyond simply looking at
Capex and Opex costs but should extend to Totex (total capital and operating costs over the life of a well),
which is where leak free equipment comes into its own as a result of minimising the need for intervention
and lost production down time.
This year saw signs of a pick-up in activity in Russia, and it is hoped that there will be a resumption of Jack-
up exploration drilling opportunities for Gusar, our licensee for Russian and the CIS with Gazprom. This
would build on the successful POS-GRIP wellhead deployment for a Gazprom offshore gas shallow water
exploration well that took place in the prior year. We are hopeful that this bodes well for significant further
potential for Gusar and its developing relationship not only with Gazprom, but also with other local Russian
operators.
Plexus’ 49% shareholding investment in Kincardine Manufacturing Services Limited (‘KMS’) resulted in the
receipt of £100,000 dividends in the period despite KMS revenues and profits being adversely impacted by
the Covid pandemic related downturn, which resulted in a scaling back of staff and operations. However, on
a positive note, KMS is seeing a pickup in activity and expects 2021 going into 2022 to deliver a significant
uplift in revenues as its order book continues to build. It is anticipated that dividend payments will continue,
and hopefully at an increased level.
Plexus’ primary and core strength is its patented POS-GRIP Intellectual Property (‘IP’), together with the
broad family of products and associated equipment, which is enabled by this technology. Although individual
product patents inevitably expire over time, importantly continuations and ongoing R&D form a key part of
our ongoing IP strategy, and of course it is the body of additional registered IP, including new apparatus and
method patents which we file, together with unregistered and confidential test results, know-how and
experience which give us the ability to continue to supply uniquely different friction grip technology.
Plexus Holdings plc Annual Report 2021
6
Chairman’s Statement continued
Overview
Plexus is a wellhead technology business, but unlike all other wellhead companies, our value is underpinned
by POS-GRIP and associated and derived proprietary products. Where others compete on a volume
manufacturing basis and fight for margins with very similarly conventional products, Plexus’ POS-GRIP
proposition is truly different and delivers enhanced value to customers. The Company has demonstrated that
its products perform and can be profitable without a low-cost volume manufacturing base not only
organically, but also by adopting a licensing model to reach markets that Plexus cannot naturally access.
Plexus has already demonstrated significant commercial success with POS-GRIP in the Jack-up exploration
drilling wellhead market, and we now believe that the time is right for similar success in the Production
Wellhead market – both surface and in due course subsea. The Production Wellhead licensing deal with
Cameron will shortly see the world’s largest oilfield service provider begin to market products using
POS-GRIP. Meanwhile there is also renewed urgency in Plexus’ direct sales markets, as operators react to the
increase in energy prices, together with demands for improved leak free and maintenance free products as
part of Net Zero goals, particularly in relation to methane. Plexus also continues to see significant future
potential for the patented POS-GRIP Python wellhead in the subsea market.
With significant experience and a profitable track record in the Jack-up exploration wellhead market, Plexus’
return to this sector using Cameron’s tried and tested through the BOP products is an opportunity to expand our
revenue base further as well as to re-engage with customers at the exploration stage of their development cycle.
Staff
On behalf of the Board, I would once again like to thank all our employees for their dedication and hard
work during another very challenging year. While ongoing Covid lockdown measures where appropriate and
working from home have made online video meetings the norm, there has continued to be pressure on the
industry and employment uncertainty. We are in the process of reconsolidating all Aberdeen staff back into
the Plexus House facility, which will allow a transition back to more frequent face to face meetings. Having
weathered this difficult period, I am sure that the coming developments and increase in activity will be positive
for our staff, and for future employment opportunities within Plexus.
Outlook
The recent downturn in the oil and gas sector, which was exacerbated by the global Covid-19 pandemic and
the resultant fall in economic activity, seems to be nearing the end as we start to see a cycle of rapidly rising
oil and gas prices. It is now obvious there will continue to be demand for hydrocarbons for decades to come,
particularly gas although the focus will be increasingly on extracting these resources in the most
environmentally responsible way possible, which in the case of oil and gas drilling should logically mean
specifying leak-free equipment whenever and wherever possible. We are far from being the only ones to believe
this.
The below extract taken from the website of the UK’s Oil and Gas Authority is not only in line with this
view, but it also highlights the important role technology must play if the sector is to contribute to the NetZero
energy transition whilst meeting ESG goals:
“The Oil and Gas Authority’s (‘OGA’) role is to work with the industry and government on economic recovery
of the UK’s oil and gas resources, whilst also supporting the move to net zero carbon by 2050. Our ambition is
to be a world-leading authority setting the framework for a sustainable and competitive UK oil and gas industry.
“We believe that economic recovery of oil and gas is not in conflict with the transition to net zero carbon and
that the industry has the skills, technology and capital to help unlock solutions to help the UK achieve the net
zero target. All forecasts show that oil and gas will remain a vital part of the UK’s energy mix as we move towards
net zero”.
In terms of the industry having the skills and technology, we wholeheartedly concur with the OGA: our
POS-GRIP enabled equipment can prevent leaks and reduce maintenance at the wellhead; our re-entry into
the Jack-up exploration market via Cameron’s ‘through the BOP’ (“Blow-out Preventer”) wellhead systems
7
Plexus Holdings plc Annual Report 2021
Chairman’s Statement continued
will enable us to deliver improved rig personnel safety by allowing the BOP to be kept in place during operations
and thereby cutting the risk of blow outs, and in particular ‘super-emitters’ which can leak methane in kilotons.
Reducing the risk of super-emitters neatly encapsulates the argument for using technology to prevent harmful
emissions occurring in the first place. So too does the specifying and installation of leak-free wellheads for
long term production, as well as gas storage whether gas, CO2 or hydrogen. Prevention is a win-win for all.
For operators it complements the status quo that is monitoring and potentially having to administer time
consuming and costly cures. For the environment it helps avoid emissions incidents which in the case of
‘super-emitters’ are believed to account for 75% of all methane emissions.
Interestingly, there is a growing recognition that the move to NetZero does not need to be all about ‘grand
gestures’ which can arguably create too many bumps in the road for a smooth transition. An opinion piece in
the Financial Times in September was headlined as “Forget COP26 boasts – decarbonising takes thousands
of tiny, boring steps”, and that “Truly green companies redesign their products rather than buying offsets or
planting trees”. This was clearly intended to start a debate, and Plexus would certainly subscribe to the concept
in relation to the oil and gas supply chain that every piece of equipment should be the best it can be, especially
in relation to leak-proof performance and long-term integrity. We believe that Plexus can meet such a
challenge, particularly in relation to our wellheads and connector applications.
This increased scrutiny and targeting of methane emissions gives us confidence that as the oil and gas market
starts to recover and subsequent investment by operators begins to gain momentum, we should see those
sales prospects for our leak-proof solutions that had been on hold for the duration of the downturn begin to
make progress. As well as new opportunities arising in oil and gas, we see opportunities arising in alternative
energy markets and applications, such as geothermal and gas storage. Even if activity only partially returns,
Plexus requires only a small percentage of market share to see significant growth in the specialised wellhead
market, as well as the considerable growth and market share potential arising from the licence agreements we
have in place with Cameron.
Following the two Cameron deals, the focus for the year ahead will be to use these, along with our own organic
sales activities, as a platform with which to capitalise on both the recovery in the global economy and also
the need to satisfy the world’s clear need for the ongoing recovery of hydrocarbons, particularly cleaner natural
gas, in a responsible and sustainable manner, as evidenced by our gaining the LSE “Green Economy Mark”.
Taking into consideration standard industry lead times, this would suggest shareholders will start to see the
benefits of the IP-led strategy we have put in place gain traction in the 2022/2023 financial year.
In conclusion, challenging times are often generators of significant change. We feel that now is the time for
POS-GRIP technology to come into its own. The combination of POS-GRIP’s operational, environmental,
and financial benefits ought to resonate strongly with companies operating across the energy sector. The
Board is confident that there will be an increased focus on equipment integrity and guaranteed leak-free
operation, and that this will lead to the further monetisation of our POS-GRIP technology through licensing
and direct sales which in turn will lead to growth and value for our shareholders.
J Jeffrey Thrall
Non-Executive Chairman
19 November 2021
Plexus Holdings plc Annual Report 2021
8
Strategic Report
Principal Activity
The Group markets oil and gas industry wellhead and associated equipment that utilises its patented friction
grip method of engineering known as POS-GRIP Technology. This involves squeezing one tubular member
against another within the elastic range to effect gripping between the components, and can also set metal to
metal seals, known as “HG” Seal Technology. This superior method of load support and sealing for wellheads
offers several important and unique advantages to operators, particularly for HP/HT surface and subsea
production applications, and can include improved technical performance, improved integrity of metal-to-metal
seals, significant installation time savings, reduced operating and maintenance costs and enhanced safety.
The Company has developed a range of products based on this technology, and is focused on pursuing surface
production, abandonment, subsea and geothermal wellhead opportunities, as well as connectors and the
subsea market.
In addition to Plexus’ organic activities, the Company also pursues licencing opportunities, and in November
2020 granted a non-exclusive licence for certain surface wellhead applications to Cameron International
Limited, a Schlumberger group company to enable Cameron to use the Company’s technology for the
development of conventional and unconventional oil and gas surface production wellheads. Cameron has
since been working on developing its own surface wellhead products incorporating POS-GRIP technology.
Following successful testing of its new POS-GRIP products, Cameron will begin to market these products,
which should lead to a royalty revenue stream for the Company.
As the relationship with Cameron develops, it is anticipated that further opportunities will arise. This has
already resulted in Plexus entering a cooperation agreement with Cameron in August 2021, which gives Plexus
access to Exact -15 system wellhead inventory, and Centric-15 mudline system suspension products. This
enables the Company to return to the Jack-up Exploration (Adjustable) Wellhead market where wellheads
are rented for the duration of the well, rather than sold with proven technology. Cameron will provide
manufacturing support and assist in sales leads generation in return for a licence royalty fee.
The Company retains the right to pursue Jack-up exploration rental wellhead related business with POS-GRIP
products in Russia and the CIS where it has existing licence agreements with LLC Gusar and CJSC Konar.
Business review
A review of the development and performance during the year consistent with the size and complexity of the
business together with commentary on future developments including the main trends and factors likely to affect
the business is given in the Chairman’s Statement on page 6. Where guidelines make reference to the provision
of key performance indicators the directors are of the opinion certain financial and non-financial indicators
included in the highlights on page 1, and the Directors’ Report on page 20 meet this requirement. The Directors
have provided a description of the principal risks and uncertainties facing the Group on page 14.
Financial Results
Statement of Comprehensive Income
Revenue
Continuing revenue for the year was £2,017k, an increase from £525k in the previous year. The increase in
continuing sales revenue is a result of operational project work taking place during the year compared to
none in the prior year, with the main component being licensing income.
Margin
Gross margin on continuing operations decreased to 47.3% (compared to 57.1% in the previous year). The
decrease in margin is largely driven by a change in the sales mix, with a significant portion of the prior year
revenue including royalty income which has no associated cost of sale.
Overhead expenses
Continuing activities administrative expenses have decreased when compared to the prior year with
expenditure of £5.50m (2020: £5.98m). Within this total, the continuing salary component remained the
largest at £2.79m compared to £2.90m in the prior year.
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Plexus Holdings plc Annual Report 2021
Strategic Report continued
Adjusted EBITDA
The Directors use, amongst other things, Adjusted EBITDA on continuing operations as a non-GAAP
measure to assess the Group’s financial performance. The Directors consider Adjusted EBITDA on
continuing operations, which approximates the operational cash generated by, or used in the business, to be
the most appropriate measure of the underlying financial performance of the Group in the period.
Adjusted EBITDA on continuing operations for the year was a loss of £2.69m, compared to a loss of £3.08m
in the previous year. Adjusted EBITDA on continuing operations is calculated as follows:
Operating loss
Add back:
–Depreciation
–Amortisation
Share in (loss) / profit of associate
Fair value adjustment on financial assets and investments
Other income
Adjusted EBITDA on continuing operations
2021 2020
£’000 £’000
(4,546) (5,681)
482 680
1,219 1,216
(77) 265
19 159
211 285
––––––– –––––––
(2,692) (3,076)
––––––– –––––––
Loss Before Tax
Loss before tax on continuing operations of £4.37m compared to a loss in the prior year of £5.05m. The loss
on discontinued operations was £nil compared to a loss of £2.55m in the prior year.
Tax
The Group shows a total income tax charge of £0.15m for the year compared to a tax credit of £0.87m for
the prior year. The income tax charge has been split between continuing activities (£0.26m, 2020: £0.99m)
and discontinued activities (£0.41m charge, 2020: £0.12m charge). The total income tax charge for the year is
driven by the receipt of the deferred consideration from TFMC.
Investments
In December 2018 Plexus acquired a 49% shareholding in Kincardine Manufacturing Services Limited
(‘KMS’), for a consideration of £735k plus associated legal fees of £50k. At the year-end a share in loss of
associate of £77k (2020: profit £265k) has been recognised. The loss in the period has been driven by a
reduction in business during the peak of the Covid pandemic Following an impairment review of the
investment overhead expenses include an impairment charge of £nil (2020: £134k).
EPS
The Group reports basic loss per share on continuing activities of 4.09p compared to a loss per share of 3.92p
in the prior year. The basic loss per share on discontinued activities of 0.39p, compared to a loss per share of
2.47p in the prior year.
Statement of Financial Position
Intangible Assets and Intellectual Property (‘IP’)
The net book value of goodwill and intangible assets was £9.64m, a decrease of 6.7% from £10.33m last year.
This movement represents investment of £0.24m less the annual amortisation charge of £0.92m.
Plexus owns an extensive range of IP which includes many registered patents and trademarks across a number
of jurisdictions, and actively works to develop and protect new POS-GRIP methods and applications where
deemed commercially advantageous to do so. In addition to registered IP, Plexus has developed over many
years a vast body of specialist know-how in relation to the POS-GRIP friction grip method of engineering
and related activities.
Plexus Holdings plc Annual Report 2021
10
Strategic Report continued
The Directors have considered whether there have been any indications of impairment of its IP and have
concluded, following a detailed annual asset impairment review, that there is no evidence of impairment.
Therefore, the Directors consider the current carrying values to be appropriate.
Research and Development (‘R&D’)
R&D expenditure including patents decreased from £0.36m in 2020 to £0.24m in 2021. Continued investment
as and where necessary in R&D demonstrates the Group are protecting, developing, and broadening the
range of proprietary POS-GRIP friction-grip method of engineering applications and related IP.
Tangible Assets
The net book value of property, plant and equipment including items at the year-end was £2.96m compared
to £3.27m last year. Capital expenditure on tangible assets decreased to £0.17m compared to £0.19m last year.
Cash and Cash Equivalents
Net cash at the year-end was £3.14m (cash and cash equivalents of £5.18m less the bank Lombard facility of
£2.04m) compared to net cash of £4.09m (cash and cash equivalents of £4.09m with no borrowing – in the
prior year reflecting a net cash outflow for the year of £0.95m (net increase in cash of £1.09m per Statement
of Cash Flows plus net increase in bank borrowings of £2.04m).
The increase in bank borrowing represents £2.04m which has been drawn down on a Lombard facility.
It should also be noted that the Group has financial asset investments with a value of £3.04m (2020: £3.00m)
at the reporting date. These investments are included in non-current financial investments in the statement
of financial position.
The expected future cash inflows and the cash balances held are anticipated to be adequate to meet current
on-going working capital, capital expenditure, R&D and project related commitments.
Dividends
The Company has not paid any dividends in the year and does not propose to pay a final dividend at this
time. Whilst the Company remains committed to distributing dividends to its shareholders when appropriate,
the Directors believe that it is prudent to consider the payment of dividends in light of the ongoing capital
and operational requirements of the business.
Operations
Progress has continued during the year with the Company’s strategy to build a portfolio of revenue streams
based on its POS-GRIP technology and associated products and services.
The Company’s main focus continues to be the marketing of its POS-GRIP-enabled products and supporting
licensees of the technology. Plexus continues to supply surface production wellheads and is also pursuing
supplemental business opportunities relating to well abandonments and decommissioning, which are anticipated
to be growth areas as the North Sea’s older producing oil and gas fields come to the end of their lives.
Licensing opportunities remain a key strategy for the Company. The markets with the most potential are
thought to be in geographical locations and low-cost volume markets that Plexus cannot reach. Important
progress was made during the financial year with the conclusion of a licensing deal with Cameron, a division
of Schlumberger in November 2020. The non-exclusive licence allows Cameron to use POS-GRIP technology
in a specific range of conventional and unconventional oil and gas surface production wellhead applications.
Plexus has since been working with Cameron to develop Cameron products incorporating the Plexus
technology, and it is anticipated that Cameron will begin start marketing these products in the first quarter
of calendar year 2022 after successful protype testing and qualification.
Plexus continued to invest in R&D during the year, albeit it at a lower level than prior years in reflection of
reduced activity, and the fact that Plexus’ product portfolio is well developed. Nevertheless, R&D remains an
important operational activity and further develops the value of our IP and ability to extend the range of
applications of POS-GRIP technology. Innovation in the oil and gas industry continues to be an essential
11
Plexus Holdings plc Annual Report 2021
Strategic Report continued
part of developing both cost saving initiatives and ever safer drilling methods, particularly in relation to
greener leak-proof technologies and equipment, and the Board is confident that Plexus can continue to play
an important role in delivering such solutions whilst raising wellhead standards to a level that conventional
technology cannot reach, such as passing test standards equivalent to those used for premium couplings.
Staff at the end of June 2021 (excluding non-executive directors) comprised of 33 employees, including 1
international employee, which compared to a weighted average total of 33 in the current year and 34 in the
prior year.
The OPITO accredited competency system was updated after the disposal transaction to TechnipFMC in
order to better reflect production equipment and to enhance the robust assessment of employees in safety
critical roles. A thorough review of all standards across the system took place which resulted in a complete
restructure and rework of the workshop and field service technician scopes. The revised system underwent
monitoring audits in 2019 and 2020 and post year end in September 2021 and resultantly the Company has
successfully maintained its OPITO approval throughout this period.
As part of the continuing commitment to the health and wellbeing of employees, the Healthy Working Lives
programme aims to encourage habits of wellbeing and inspires individuals to take responsibility for their
own health. Plexus continues to hold the Gold Award.
Health and Safety continues to be a pivotal part of the business and remains at the centre of everything we
do. Plexus remains fully committed to continually improving safety standards and the safety culture across
the business, and this is reflected in the business being once again lost time injury (‘LTI’) free this year. Plexus
has now passed the sixth anniversary of this milestone, in September 2021.
Plexus enhanced its Business Management System (BMS) in order to comply with the new ISO 45001
standard which replaces OHSAS 18001:2007 which became discontinued in 2021. Plexus achieved
accreditation under the new standard in May 2020. This followed the Quality Management System achieving
API Q1 accreditation in February 2020. Plexus continues to hold Licences for both API 6A and 17D. These
accreditations demonstrate Plexus’ capability and determination to operate under the highest standards.
The IT Department provides technology leadership for Plexus, including governance, information security,
software development and expertise in deploying modern information technologies to improve company
efficiency. During these challenging times for all industries due to COVID-19, Plexus has continued to develop
its in-house systems to ensure the Company is able to react swiftly to changing market requirements, and to
enhance the capability of all office-based employees to work from home as necessary, safely and securely.
Strategy and Future Developments
Technology
Plexus’ proprietary POS-GRIP technology involves applying compressive force to the outside of a wellhead
or pipe, to flex it inwards. As the bore of the vessel moves inwards, it makes contact with an inner pipe (or
hanger) on the inside. Sufficient contact force is generated to hold the inner member in place through friction
between the two components, whilst at the same time creating a superior metal to metal seal. The Company’s
strategy is primarily focused on delivering the highest standard of wellhead design for the upstream oil and
gas markets around the world, and one which has already proven to be uniquely advantageous in terms of
safety features, operational efficiency, and cost savings for Jack-up drilling, especially HP/HT applications.
The Company is now focused on replicating this past success in other wellhead markets including surface
production, subsea and geothermal, as well as other initiatives such as a POS-GRIP Crown Plugs and
POS-GRIP Lateral Trees.
POS-GRIP wellhead designs deliver many advantages over conventional “slip and seal” and “mandrel hanger”
wellhead technologies for surface exploration and land and platform production applications. These include
larger metal to metal seal contact areas, virtual elimination of movement between parts, fewer components,
simplified design and assembly, enhanced corrosion resistance, simpler manufacture, long term integrity,
annulus management, and reduced installation and maintenance costs.
Plexus Holdings plc Annual Report 2021
12
Strategic Report continued
Plexus’ POS-GRIP enabled product suite also includes the innovative Python® subsea wellhead as well as the
POS-SET Connector® for use in the growing decommissioning market. We believe the Python subsea wellhead
is important as it can eliminate the need for wear bushings, pack-offs, lock-rings, and lockdown sleeves, whilst
delivering instant rigid lock-down in all directions, and is fully reversible for ease of workover, side-tracking or
abandonment. These design simplifications and features not only reduce the risk of installation problems and
safety issues, they also significantly reduce installation time and the number of trips that are needed such that
it has been independently estimated that over ten days of savings per well can be achieved in deep-water under
certain conditions which, depending on water depth, Plexus estimates could result in a saving of over $10m for
the operator. The POS-SET Connector, which is designed to re-connect to bare conductor pipe for well re-entry
or permanent abandonment operations, creates a solid connection with reliable sealing directly against the pipe,
and retains bend and load capabilities at 80% of pipe strength. The Directors believe that such features mean
that Plexus’ wellhead equipment sets and delivers a new and superior standard. Apart from the operational time
savings and related safety benefits, at an engineering level the Company has demonstrated that its technology
can raise and even exceed the integrity of wellhead testing and sealing to that of premium couplings, which
supports its claim that wellheads no longer need to be the weak link in the well architecture chain.
POS-GRIP friction-grip technology has wide ranging applications both within and outside the oil and gas
industry. As POS-GRIP is a method of engineering and not a product in its own right, where there is an
opportunity for the technology to improve the performance of conventional products the Company will look
to integrate POS-GRIP so that the benefits together with “HG” sealing can be realised organically or in
conjunction with partners, including licensees. In line with this strategy, in November 2020 Plexus entered
into a licence agreement with Cameron International Limited, which grants the Schlumberger group company
a non-exclusive licence to use the POS-GRIP and HG® metal-to-metal seal method of wellhead engineering
for the development of conventional and unconventional oil and gas surface wellheads.
In addition to POS-GRIP Technology, Plexus is now in the process of re-entering the Jack-up Exploration
Wellhead market with Cameron’s Exact and Centric wellhead and mudline suspension products following
the Cooperation Agreement with Cameron agreed in August 2021. These products are tried and tested, and
well suited to the exploration market as they are “through the BOP” products which deliver crucial time
savings and safety benefits over conventional wellhead products.
Business Model and Markets
The Company is proprietary technology driven and its extensive patent protected IP and many years’ worth
of specialist know-how has been successfully deployed in hundreds of wells around the world. Its superior
performance, safety and operational advantages led to the Company becoming established initially as a leading
equipment and services provider to the niche Jack-up exploration wellhead market. The Directors believe
that this success can be replicated and extended to the wider and much larger energy sectors including surface
production, subsea, geothermal and fracking applications based on its POS-GRIP technology.
The licensing deal agreed with Cameron in November 2020 is an important advancement in the Company’s aim
to achieve widespread use of POS-GRIP Technology. The licence allows Cameron to pursue opportunities for
low-cost wellheads in the volume market, as well as develop POS-GRIP equipment in larger Schlumberger EPIC
(Engineering, Procurement, Installation & Commissioning) contracts which Plexus could not otherwise access.
Plexus has a good reputation for the agility and customer focus required to succeed in the Jack-up Exploration
Wellhead market, and so the recent collaboration agreement announced in August 2021 with Cameron to
allow Plexus to re-enter this market with field proven products is welcome and should see an addition to
revenues as global exploration activity increases.
Strategy
Plexus’ long-term goal is to establish POS-GRIP technology as a new industry standard for wellhead and
metal sealing designs, whilst continuing to develop new products, which can also offer multiple benefits and
advantages to the industry in terms of improved safety, functionality, and cost and time savings. An example
of such extensions for POS-GRIP technology is the Company’s connector technology, which is ideal for high
integrity, low fatigue applications. The Directors believe wellhead connectors, riser connectors, subsea jumper
connectors, pipeline connectors, tether tensioners and even vessel mooring connectors can all benefit from
the simplicity of POS-GRIP. Plexus continues to pursue direct sales to customers, and the November 2020
licensing deal with Cameron will further help develop this goal.
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Plexus Holdings plc Annual Report 2021
Strategic Report continued
Following the sale of the Jack-up Wellhead Business to TFMC in 2018, Plexus has signed in August 2021 a
collaboration agreement with Cameron to take on Cameron’s Exact and Centric adjustable wellhead and
mudline suspension products to re-enter the market. We expect that the increase in activity and revenue from
this business will be positive and will also allow Plexus to reengage with customers at the exploration stage,
which then has the potential to lead to further production and subsea opportunities. In view of lead times
associated with such projects the benefits of this new Cameron relationship will most likely be seen in the
next financial year.
As the world and the oil and gas industry strives to implement a range of ESG initiatives, particularly in
relation to achieving Net-Zero in relation to climate change, Plexus believes that its technology can make a
valuable contribution in terms of its leak-free sealing capabilities, and its ‘through the BOP’ (Blow-out
Preventer) wellhead designs. These ‘green’ features were recognised in July 2021 with the receipt of the London
Stock Exchange’s “Green Economy Mark” in recognition of contributing to the global green economy
Key Performance Indicators
The Directors monitor the performance of the Group by reference to certain financial and non-financial key
performance indicators. The financial indicators include revenue, EBITDA, profit and loss, earnings per share,
cash balances, and working capital resources and requirements. The analysis of these is included in the
financial results section of this report. Non-financial indicators include Health and Safety statistics, equipment
utilisation rates, geographical diversity of revenues and customers, the level of ongoing customer interest and
support, geo-political considerations such as emissions concerns and awareness, effectiveness of various
research and development initiatives, for example, in relation to new patent activity and inventions, and
appropriate employee headcount numbers and turnover rates. The non-financial key performance indicators
are included within the strategic report on page 9.
Principal Risks and Risk Management
There are a number of potential risks and uncertainties that could have an impact on the Group’s performance
which include the following.
(a) Political, legal and environmental risks
Plexus participates in a global market where the exploration and production of oil and gas reserves, and
even the access to those reserves can be adversely impacted by changes in political, operational, and
environmental circumstances. The current global political and environmental landscape, particularly in
relation to climate change issues and Net-Zero goals, and the relentless move away from hydrocarbons
to, for example renewables, continues to demonstrate how any combination of such factors can generate
risks and uncertainties that can undermine commercial opportunities and trading conditions. Some
risks are of course unforeseen, and one such significant risk took the form of the global pandemic
caused by COVID-19 which materialised last year and continued throughout the current year. Although
Plexus has taken all reasonable steps to mitigate the effects of this risk, both economic and to the health
and well-being of our employees, customers and suppliers by complying with legislation and taking
measures to ensure business continuity, the negative impact has clearly been felt. Such risks also extend
to legal and regulatory issues, and it is important to understand that these can change at short notice.
To help address and balance such risks, the Group where possible seeks to broaden its geographic
footprint and customer base, as well as actively looking to forge commercial relationships with large
industry players.
The Company continues to closely monitor the potential impact and risks of the UK’s exit (‘Brexit’)
from the European Union (‘EU’). This includes assessing the potential impact of the introduction of
trade tariffs and the potential supply chain disruption that could result from increased customs checks
at borders and related matters. Plexus has an IP-led business model which provides it with operational
flexibility and the ability to respond to and mitigate some of the potential impacts of the different
scenarios resulting from the UK’s exit from the EU. In the meantime, Plexus has amongst other activities
obtained an Economic Operator Registration and Identification (‘EORI’) number to enable the
Company to continue to import and export with the EU.
Plexus Holdings plc Annual Report 2021
14
Strategic Report continued
(b) Oil and Gas Sector Trends
It is readily understood that the world continues to move away from coal as part of the COP21 as well
as the recent COP26 pronouncements, together with other climate change objectives in relation to the
ongoing need to urgently reduce CO2 and CH4 (methane) emissions. However, the commercial and
environmental dynamics between traditional hydrocarbons in terms of coal, oil and gas is not the only
trend to consider. New technologies, particularly in relation to renewables such as wind and solar,
alternative energies and developments such as the increasing use of electric vehicles and corresponding
improvements in battery storage life, and wave energy, could all in the future prove very disruptive to
the traditional oil and gas industry and the corresponding demand for exploration and production
equipment and services. However, it is also recognised that the world will continue to need hydrocarbons
as an energy and materials source, and in particular gas for many years to come, and indeed currently
global demand for hydrocarbons is forecast to continue to grow for the foreseeable future. It should be
noted that the climate change impact of methane is now better understood by environmentalists,
regulators and the oil and gas industry and that it is essential that methane wellhead leaks are prevented
whenever and wherever possible. As part of this movement, the impending Methane Emissions
Reduction Act in the United States and similar legislation being progressed in Europe demonstrate,
regulations are increasingly becoming more stringent.
(c) Technology
Having originally proved the superior qualities of POS-GRIP technology within the Jack-up wellhead
exploration market which culminated in the sale of that business to FMC Technologies Limited, a
subsidiary of TechnipFMC (Paris:FTI, NYSE:FTI) (jointly “TFMC”), in early 2018, the Company has
focused on establishing its technology and equipment in other markets including surface production
wellheads, subsea and de-commissioning, both organically and through licence partners. In line with
this, in November 2020 Plexus entered into a licence agreement with Cameron International Limited,
which grants the Schlumberger group company a non-exclusive licence to use the POS-GRIP and HG®
metal-to-metal seal method of wellhead engineering for the development of conventional and
unconventional oil and gas surface wellheads.
(d) Competitive risk
The Group operates in highly competitive markets and often competes directly with large multi-national
corporations who have greater resources and are more established, and who are more resilient to
extended adverse trading conditions. This risk has become more concentrated over recent years as a
result of the large oil service company competitors becoming even larger and more influential through
a series of mergers and acquisitions. These major oil service and equipment company consolidations
have therefore magnified such issues as competitors reduce in number but increase in size, influence,
and reach. Unforeseen product innovation or technical advances by competitors could adversely affect
the Group, and lead to a slower take up of the Group’s proprietary technology. To mitigate this risk
Plexus maintains an extensive suite of patents and trademarks, and actively continues to develop and
improve its IP, including adding to its existing extensive ‘know-how’ to ensure that it continues to be
able to offer unique superior wellhead design solutions.
(e) Operational
Plexus, like many other oil service companies, has had to make significant reductions in its workforce
numbers over the past few years as a result of a lower oil price and a corresponding reduction in drilling
activity and related levels of capex spend. These adverse trading conditions have been magnified since
early 2020 by the Covid-19 pandemic, which in turn has coincided with an acceleration in the world’s
desire to reduce its dependence on hydrocarbons. Therefore, although there are now some encouraging
signs of a pick-up in drilling activity, it is possible that the industry and Plexus could experience
difficulties in rehiring past or new employees and this could deprive Plexus of the key personnel
necessary for expanding operational activities, as well as research and development initiatives, at the
rate that may be required. To help mitigate this risk Plexus has developed effective recruitment and
training procedures, which combined with the appeal of working in a company with unique technology
and engineering solutions will hopefully help to mitigate such risks.
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Plexus Holdings plc Annual Report 2021
Strategic Report continued
(f) Liquidity and finance requirements
In an economic climate that in many ways remains uncertain it has become increasingly possible for
potential sources of finance to be closed to businesses for a variety of reasons that have not been an
issue in the past. Some of these may even relate to the lender itself in terms of its own capital ratios and
lending capacity where financial pressures and constraints can apply. Furthermore, a number of large
and influential institutions have actively divested oil and gas investments and declared that further
investments and funding will not be made available for oil and gas projects as a result of climate change
concerns and as part of the move to Net-Zero.
(g) Credit
The main credit risk is attributable to trade receivables. Where the Group’s customers are large
international oil and gas companies the risk of non-payment is significantly reduced, and therefore is
more likely to be related to client satisfaction and/or trade sanction issues. Where smaller independent
oil and gas companies are concerned, credit risk can be a factor. Customer payments can potentially
involve extended periods of time especially from countries where exchange control regulations can delay
the transfer of funds outside those countries. As Plexus begins to establish international licensee
relationships there may be instances whereby certain capital and royalty payments could be due some
way into the future and as such greater credit risk than exists under normal payments terms could apply.
The Group’s exposure to credit risk is monitored continuously.
(h) Risk assessment
The Board has established an on-going process for identifying, evaluating and managing the more
significant risk areas faced by the Group. One of the Board’s control documents is a detailed “Risks
assessment & management document”, which categorises risks in terms of – business (including IT),
compliance, finance, cash, debtors, fixed assets, other debtors/prepayments, creditors, legal, and
personnel. These risks are assessed and updated on a regular basis and can be associated with a variety
of internal and external sources including regulatory requirements, disruption to information systems
including cyber-crime, control breakdowns and social, ethical, environmental and health and safety
issues.
(i) COVID-19
Plexus places the health and safety of its employees as its highest priority and in line with this has
implemented various protocols in relation to the ongoing COVID-19 pandemic. Accordingly, a business
continuity programme has been put in place to protect employees whilst ensuring the safe operation of
the Company. Following consultations with, amongst others, relevant authorities, staff and contractors,
strict protocols have been implemented to reduce the risk of transmission of COVID-19 at all the
Company’s operations. The situation in respect of COVID-19 continues to be an evolving one and the
Board will therefore continue to review its potential impact on its staff and the business.
Plexus Holdings plc Annual Report 2021
16
Strategic Report continued
Section 172 Statement
This section serves as the section 172 statement and should be read in conjunction with the full Strategic Report
and the Corporate Governance Report. Section 172 of the Companies Act 2006 requires directors to take into
consideration the interests of stakeholders in their decision making. The Directors continue to have regard to
the interests of the Company’s employees and other stakeholders, including shareholders, customers and
suppliers, Licence Partners and the community and environment, through positive engagement and when making
decisions. Acting in good faith and fairly between members, the Directors consider what is most likely to promote
the success of the Company for its members in the long term and to protect the reputation of the Company.
Shareholders
Plexus seeks to develop an investor base of long-term holders that are aligned to our strategy. By
communicating our strategy and objectives, we seek to maintain continued support from our investor base.
Important issues include financial stability and protecting and strengthening the value of our intellectual
property. Engagement with shareholders is a key element to this objective and methods of engagement are
detailed in the Corporate Governance Report on pages 23 to 35, although as a result of the Covid pandemic
such interactions have been adversely impacted. During the year, the Finance Director supported by other
members of the executive team, the Company’s broker, and the Investor Relations advisor, engaged where
possible with investors by email, presentations, direct conversations and ad-hoc meetings. The Company has
in recent times re-launched its website to provide investors and other stakeholders with an improved platform
to access information about the Company. The website includes details of the LSE “Green Economy Mark”
status, which was awarded in July 2021, and associated Net-Zero commentary.
Employees
The Group’s UK staff are engaged by the Company’s subsidiary Plexus Ocean Systems Limited based in
Aberdeen, Scotland. Being a relatively small company with just over 30 employees largely operating in one
location, there is a high level of visibility regarding employee engagement and satisfaction. The Company is
engaged with a specialist firm of benefits advisers who are able to offer a comprehensive service to employees
as well as to the Company. The Company consults with employees on matters of competency, training, and
health and safety as detailed in the Corporate Governance Report on pages 23 to 35. During the year, the
Company successfully achieved six continuous years with no Lost Time Incidents (LTI’s) and this successful
safety culture has continued beyond that anniversary to the date of writing. In the previous year, the impact
of COVID-19 and Government regulations caused a sudden migration of many staff to be required to work
from home and this has continued throughout the year under review. The challenges of maintaining close
contact with employees presented by this have been very successfully managed by use of appropriate software
such as Microsoft Teams alongside the use of a secure VPN and other network security protocols. A gradual
easing of restrictions has enabled more in-person contact to be achieved and the Company plans to have a
full return to normality as the conditions allow both internally and externally.
Customers and Suppliers
The Company is committed to acting ethically and with integrity in all business dealings and relationships.
Fostering good business relationships with key stakeholders including customers and suppliers is important
to the Company’s success. The Board seeks to implement and enforce effective systems and controls to ensure
its supply chain is maintaining the highest standard of business conduct in line with best practice including
in relation to anti-bribery and modern slavery.
Licence Partners
The Company engages with Licence Partners in a way that follows the same principles as those applied to
relationships with other customers and suppliers. Additionally, the Company engages with its Licence Partners
to support their efforts to achieve commercial success by holding as and when required technical workshops,
technical training and data transfer. As part of the transaction with TFMC in 2018, a five-year Collaboration
Agreement was signed between the two companies to explore areas where new products with commercial
opportunities can be jointly developed. The Collaboration Steering Committee contains representatives from
both companies and meets on a regular basis at each quarter. In addition, following the entering into the
non-exclusive surface wellhead licencing agreement with Cameron in November 2020 regular Teams meetings
17
Plexus Holdings plc Annual Report 2021
Strategic Report continued
have been held as part of the process of transferring Plexus’ relevant IP so that Cameron can design and
develop their own low-cost wellhead with POS-GRIP technology inside.
Community and Environment
The Company has minimal environmental impact in the localities in which it operates. This clearly helps the
Company meet its corporate objectives in this regard but is never taken for granted. In the year under review,
the Company met its target for waste management and in general continues to operate in a manner that is
open, honest, and socially responsible.
G Stevens
Director
19 November 2021
Plexus Holdings plc Annual Report 2021
18
Board of Directors
Jerome Jeffrey Thrall BBA MBA (aged 72), Non-Executive Chairman
Jeff joined Thrall Enterprises, Inc. (‘TEI’), a family owned holding company headquartered in Chicago, USA,
in 1980 as vice president of corporate development of TEI’s subsidiary, Nazdar Company, a manufacturer
and distributor of ink jet, screen printing, flexo inks and supplies. Jeff was named President of TEI in 1995.
Prior to joining TEI, Jeff’s professional career included a number of appointments in investment banking,
commercial lending and administration.
Bernard Herman van Bilderbeek BSc M.Eng (aged 73), Chief Executive
Ben founded the Plexus business in 1986. He has over 40 years’ experience in the industry in both engineering
and management roles, and previously held senior positions with Vetco Offshore Industries, Dril-Quip, and
Ingram Cactus. Following a career at Vetco, where Ben rose to the position of General Manager of UK
Engineering, he went on to found his own oil and gas consultancy company, VBC Consultants, in 1982.
During this time, his clients included Amoco, Marathon Oil, FMC Corporation and Dril-Quip. In 1986, Ben
founded Plexus and went on to merge the wellhead division of his company with Ingram Cactus where he
became President Eastern Hemisphere. In 1996 Ben regained the Plexus Ocean Systems Limited name through
which POS-GRIP technology was invented and then developed and commercialised for the oil services
wellhead equipment market.
Graham Paul Stevens BA (Hons) (aged 63), Finance Director
Graham has broad experience in financial, corporate, and operational management within both public and
private companies including J Sainsbury plc, BSM Group Limited, Sketchley Group plc, and Fii Group plc.
He has been involved in a range of industries as a director, investor, and advisor, and overseen a number of
acquisitions and disposals, as well as the implementation of turn around and growth strategies. Graham was,
until its sale to Betsson AB in 2017, a non-executive director of Netplay TV PLC, the AIM listed largest UK
interactive TV gaming company. He was previously a non-executive director of NRX Global Inc. a worldwide
Asset Information Management solutions provider used by leading companies in asset intensive industries,
including oil and gas.
Craig Francis Bryce Hendrie M.Eng (Oxon) (aged 48), Technical Director
After gaining a Master’s Degree in Engineering Science from the University of Oxford, Craig began his career
with ICI plc in 1996 as a machines engineer. He joined Plexus in 1998 and was instrumental in the
development, testing and analysis of the original POS-GRIP products. As Technical Director, Craig is
responsible for overseeing new technology and concept development, product testing and analysis, as well as
pursuing new applications for POS-GRIP technology both internally and externally.
Charles Edward Jones BSc M.Eng (Age 62), Non-Executive Director
Charles has over 30 years of senior management and Board experience in the energy sector. In 2007, Charles
was CEO of Houston-based Forum Oilfield Technology, a global oilfield products company which he
successfully merged with three other companies in 2010 to create Forum Energy Technologies (NYSE: FET)
and where he remained as President until 2013. Prior to Forum, Charles was COO of privately owned Hydril
Company LP, where he played a leading role in the US based drilling and downhole products company’s IPO
in 2000 and subsequent sale for USD$2.1 billion. Before joining Hydril, Charles served as Director of Subsea
Businesses for Cooper Cameron Corporation where he developed the global subsea production business.
Charles is a former Chairman of the Petroleum Equipment Suppliers Association, a Distinguished Alumni
of the Cullen College of Engineering at the University of Houston and graduate of the Advanced
Management Program a Harvard Business School.
Kunming Liu (Aged 44), Non-Executive Director
Kunming has over 20 years’ experience in corporate finance and financial accounting. She currently holds
the position of Vice President and Chief Administrator of HITIC Energy, an emerging oil and gas
development company based in Canada, which is a subsidiary of Jereh Oilfield Services Group, a multi-
billion-dollar Chinese oil services provider. Prior to this, Ms Liu was the Financial Director of Jereh Energy
Services Corporation, a wholly owned subsidiary of Jereh. Additionally, Ms Liu holds a major in financial
accounting from Shandong Cadres Institute of Economics and Management in China.
19
Plexus Holdings plc Annual Report 2021
Directors’ Report
The directors present their annual report together with the audited financial statements for the year ended 30
June 2021.
Directors who served during the year
J. Jeffrey Thrall
Ben van Bilderbeek
Graham Stevens
Craig Hendrie
Charles Edward Jones
Kunming Liu
Research and development
The Group actively engages in various on-going research and development initiatives designed to expand and
develop the range of commercial applications deriving from its proprietary POS-GRIP technology. For the
year research and development expenditure including capitalised wage and salary costs totalled £0.24m (2020:
£0.36m).
Results and dividends
The results for the year show a loss from continuing operations before taxation of £4.37m (2020: loss £5.05m),
and a loss from discontinued operations before taxation of £nil (2020: loss £2.43m) and are set out on page 47.
The directors do not recommend the payment of a final dividend for the year ended 30 June 2021 (2020: nil).
Corporate governance
This is the subject of a separate report set out on page 23. This is an expanded report following the adoption
of the Quoted Companies Alliance Corporate Governance Code in line with the AIM Rules of the London
Stock Exchange that require all AIM-listed companies to adopt a recognised corporate governance code
against which they must comply or explain why there is any divergence in complying with that code.
Related party transactions
Details of related party transactions are set out in Note 28 in the financial statements.
Financial instruments and risk management
The Group maintains a commercial objective of contracting in sterling whenever possible. In circumstances
where this is not possible, the Group converts foreign currency balances into sterling on receipt so far as they
will not be used for future payments in the foreign currency. The Group maintains risk management policies
which are set out in more detail in Note 25 to the accounts.
Streamlined Energy and Carbon Reporting Summary
The Group are below the threshold to report on its Greenhouse gas emissions and energy consumption.
Significant post year-end event
In August 2021, Plexus entered into a cooperation agreement with Cameron in relation to Jack-up exploration
(adjustable) wellheads. This gives Plexus access to Exact-15 system exploration wellhead inventory, and
Centric-15 mudline system suspension products. This allows Plexus to return to the Jack-up exploration
wellhead market where wellheads are rented for the duration of the well, rather than sold, and with proven
technology. Cameron will also provide manufacturing support and assist in sales leads generation in return
for a licence royalty fee.
Going concern
The directors, having made appropriate enquiries, believe that the Group has adequate resources to continue
in operational existence for the foreseeable future. The Group continues to adopt the going concern basis in
preparing the financial statements.
Plexus Holdings plc Annual Report 2021
20
Directors’ Report continued
Directors’ interests
The directors who served during the year and to the date of this report are listed below.
The interests of the directors who held office during the year in the shares of the Company at 30 June 2021
were as follows:
Number of
Number of
Ordinary Shares Ordinary Shares
of 1p each
2020
of 1p each
2021
J. Jeffrey Thrall1
Ben van Bilderbeek2
Graham Stevens
Craig Hendrie
Charles Edward Jones
Kunming Liu
44,307,513
58,077,461
15,100
12,600
–
–
44,307,513
58,077,461
15,100
12,600
–
–
1. J. Jeffrey Thrall has an indirect beneficial interest in a company which controls 32.477% of Mutual
Holdings Limited. The number of Ordinary shares held by Mutual Holdings Limited in the Company at
30 June 2021 was 42,700,001 (2020: 42,700,001). Additionally, J. Jeffrey Thrall has both a direct and an
indirect beneficial interest in Nazdar Limited, a company which holds 1,591,512 Ordinary shares in the
Company, and he holds 16,000 Ordinary shares directly.
2. Ben van Bilderbeek is settlor of a trust which controls 59.962% of the shares of Mutual Holdings Limited
and the entire issued share capital of OFM Investment Limited. At 30 June 2021, Mutual Holdings Limited
held 42,700,001 shares and OFM Investment Limited held 15,069,767. Additionally, Ben van Bilderbeek
holds 307,693 Ordinary shares directly.
Retirement and re-election of Directors
Mr van Bilderbeek and Mr Hendrie will retire by rotation at the Annual General Meeting and, being eligible,
will offer themselves for re-election.
Substantial shareholdings and interests in Shares
At the date of this Annual Report the Company is aware of the following shareholdings in excess of 3% of
the Company’s issued ordinary share capital:
Shareholder
Mutual Holdings Limited
OFM Investment Limited
Liontrust Asset Management
CGWL Nominees Limited
Jereh International (Hong Kong) Co. Ltd
Shares Held
42,700,001
15,069,767
14,880,000
6,527,132
4,468,537
% Issued
share capital
42.51%
15.00%
14.82%
6.50%
4.45%
Executive 2005 Share Option Scheme and Non-Executive 2005 Share Option Scheme
Details of the Executive and Non-Executive Schemes in addition to details of the directors’ remuneration
can be found in the Remuneration Committee Report on page 38.
Plexus is a non-discriminatory employer who aim to eliminate unfair discrimination, harassment,
victimisation, and bullying. The Group is committed to ensuring that all individuals are treated fairly, with
respect and are valued irrespective of disability, race, gender, health, social class, sexual preference, marital
status, nationality, religion, employment status, age or membership or non-membership of a trade union.
21
Plexus Holdings plc Annual Report 2021
Directors’ Report continued
Disclosure of information to auditors
The directors who held office at the date of approval of this Directors’ Report confirm that, so far as they
are each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each
director has taken steps that they ought to have taken as a director to make themselves aware of any relevant
audit information and to establish that the Company’s auditor is aware of that information.
Annual General Meeting
The Annual General Meeting of the Company will be held on 20 December 2021. The Notice convening the
meeting may be found on the Company’s website www.plexusplc.com under the Investors tab.
Because of ongoing concerns and uncertainties about potential future restrictions that could be imposed by
the Government as a consequence of the COVID-19 pandemic, the Directors consider it prudent to hold this
year’s AGM in the same manner as for the prior year, with the intention of holding a conventional AGM in
2022. The detailed arrangements are set out in the Notice convening the meeting which will be sent to all
shareholders and available on the Company’s corporate website as herein mentioned.
The Notice comprises the usual resolutions that will be proposed at the Annual General Meeting. Your
attention is drawn to the Notes on each of these resolutions at the foot of the Notice and to the Notes
generally.
Your attention is drawn to the Notes on each of these resolutions at the foot of the Notice and to the Notes
generally.
Auditors
Crowe U.K. LLP has indicated its willingness to be reappointed as statutory auditor. In accordance with
Section 489 of the Act, two resolutions for the re-appointment of Crowe U.K. LLP as auditor of the Company
and authorising the directors to determine its remuneration will be proposed at the forthcoming Annual
General Meeting.
Company number
The Company is registered in England and Wales under Company Number 03322928.
By order of the Board
G Stevens
Director
19 November 2021
Plexus Holdings plc Annual Report 2021
22
Corporate Governance
Chairman’s Introduction
Plexus’ long-term goal is to establish POS-GRIP friction grip technology as a superior industry standard for
wellhead and metal sealing systems, whilst continuing to develop new POS-GRIP based products, which can
also offer multiple benefits and advantages to the industry in terms of improved safety, functionality, and
cost and time savings. Key to this is the Board ensuring the Company is managed for the long-term benefit
of all shareholders, by effective and efficient decision making which may only happen where a culture of
corporate governance is engendered.
Plexus remains committed to a culture built on its objectives of developing the products described above for
the stated purposes, and its strategic aims and business model are consistent with that culture. The Board
promotes a healthy culture within the business by actively encouraging a collegiate manner of working
amongst all staff. It monitors and assesses the culture from time to time through contact as appropriate with
staff at all levels which it is able to do because of the relatively small number of staff Plexus employs. The
Board also has the benefit if required of feedback from the annual personal development appraisal reviews
which all staff are required to complete.
The Board has adopted the Quoted Companies Alliance Corporate Governance Code in line with the AIM
Rules of the London Stock Exchange that require all AIM companies to adopt a recognised corporate
governance code against which they must comply or explain why there is any divergence in complying with
that code. The Board considers Plexus complies in all material respects with the principles of the QCA
Corporate Governance Code although as indicated in the summary below, the adoption of certain informal
procedures rather than formal procedures to reflect the size of the Company and the composition of the
Board, does not constitute full compliance in all respects. The disclosures made within the principles
comprising the QCA Corporate Governance Code are anticipated to evolve over time.
Principle 1: Establish a strategy and business model which promotes long-term value for shareholders
Plexus has developed a range of products and applications based on its patent-protected POS-GRIP
friction-grip method of wellhead engineering. The Company is focused on establishing this technology and
equipment in a range of sectors including surface production wellheads, subsea and de-commissioning, both
organically and through licence partners. In line with this strategy, in November 2020 Plexus entered into a
licence agreement with Cameron International Limited, which granted the Schlumberger group company a
non-exclusive licence to use the POS-GRIP and HG® metal-to-metal seal method of wellhead engineering
for the development of conventional and unconventional oil and gas surface wellheads.
Even more recently, in August 2021 Plexus has taken the opportunity to re-enter the exploration rental
wellhead market from Jack-up rigs market which it had previously been successful in before selling the division
(with the exception of Russia and the CIS) to TechnipFMC in February 2018.
Since it was established, Plexus has focused on being an innovative, IP-led company built around its
proprietary POS-GRIP technology. POS-GRIP was designed to address limitations associated with
conventional wellhead technology particularly in terms of metal sealing and has subsequently raised standards
for HP/HT wellhead applications. POS-GRIP enables Plexus to provide operators with superior solutions,
offering unique safety and operational advantages, while at the same time delivering significant time and cost
savings on the surface and, the Board in due course anticipates moving into the subsea sector. Thanks to
POS-GRIP, Plexus has successfully raised wellhead test standards to equal or exceed those of premium
couplings and there are numerous applications and products beyond Jack-up exploration drilling which the
Board believes could benefit from the POS-GRIP method of engineering now and in the future.
The Company has, over many years, invested, and indeed continues to invest in research & development and
IP development and areas and applications outside of Jack-up exploration wellheads, including in addition
to surface production and subsea wellhead equipment, proprietary connector technology. This suite of new
products and applications has grown significantly and includes: the Python Subsea Wellhead (a new standard
for subsea wellheads – where a JIP was supported by BG, Royal Dutch Shell, Wintershall, Maersk, Total,
Tullow Oil, Eni, Senergy, and Oil States Industries Inc); the development of the POS-SET Connector®
(‘POS-SET’) product for the growing de-commissioning and abandonment market; development of HP/HT
dual marine barrier risers to provide an efficient, safe and cost effective solution for use on Jack-up rigs; an
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Plexus Holdings plc Annual Report 2021
Corporate Governance continued
innovative HP/HT Tie-Back connector product and a Well Tree product. Plexus is also assessing opportunities
in geothermal drilling. Plexus can also offer outlet valves and Xmas trees, resulting in a complete package
offering to the end customer.
Prior to the sale of the POS-GRIP Jack-up rental wellhead business to TFMC, Plexus successfully expanded
its focus as part of its strategy to raise the awareness of its superior technology with contracts extending to
Asia, Australia, China, Egypt, Middle East, Russia, and West Africa from the UKCS, and in the process
became a supplier to a wide customer base, including blue-chip customers. An Asian business hub was
established to increase the supply of POS-GRIP wellhead equipment and services to the Australian, Brunei,
Indonesian, Malaysian, Thai, and Singaporean oil and gas exploration and production markets. Strategic
licence agreements were pursued, including in 2016 with Gusar, and Konar, two independent Russian oil and
gas equipment manufacturers, for the rental, manufacture, and servicing of Plexus’ Jack-up drilling exploration
wellhead equipment into the Russian Federation and the other CIS states’ oil and gas markets. The licencing
relationship with Gusar continues and is outside of the business activities that were sold to TFMC.
One of the key challenges faced by the Company continues to be the impact of a volatile oil price, which
combined with the impact of Covid-19 has resulted in a significant decline in capital spending and exploration
activity by the major E&P operators over the last couple of years The Board is hopeful that this trend is now
reversing as the impact of under investment by the industry, partly due to the downturn in economic activity
caused by Covid, and partly due to the desire to reduce dependence on hydrocarbons appears to be causing
supply problems and a significant spike in oil and gas prices.
Plexus’ long-term goal is to establish POS-GRIP technology as a superior industry standard for wellhead
and leak-free metal sealing designs, whilst continuing to develop new products, which can also offer multiple
benefits and advantages to the industry in terms of improved safety, functionality, and cost and time savings.
An example of such extensions for POS-GRIP technology is the Company’s connector technology, which is
ideal for high integrity, low fatigue applications. The Directors believe wellhead connectors, riser connectors,
subsea jumper connectors, pipeline connectors, tether tensioners and even vessel mooring connectors can all
benefit from the simplicity of POS-GRIP.
Production wellheads are required for the entire field life, and the size of the market for production wellheads
is many times that of Jack-up exploration wells. At the same time as the market shows signs of recovery there
is a major shift from coal and even oil to cleaner natural gas production. This should be a positive trend for
Plexus as it is widely recognised that gas leaks are very damaging to the atmosphere in terms of climate
change, particularly with regard to the impact of methane on the environment, and therefore the need for
superior and reliable long-term metal-to-metal leak-free sealing technology and integrity has never been
greater.
In terms of performance the Board monitors the Group by reference to certain financial and non-financial
key performance indicators. The financial indicators include revenue and margins, overhead expenses,
EBITDA, profit and loss, earnings per share and both fixed and working capital resources and requirements.
Non-financial indicators include Health and Safety statistics, employee welfare, geographical diversity of
revenues and customers, geopolitical considerations, effectiveness of various research and development
initiatives, for example, in relation to new patent activity and inventions and appropriate employee headcount
numbers and turnover rates. The key performance indicators of the Group are currently focussed on both
financial and non-financial key performance indicators such as cash resources, research and development
activities and commercialization objectives, including licencing initiatives. Over time, as financial key
performance indicators such as revenue streams become more established it may be that for example licence
income rather than sales revenue becomes more relevant.
Seek to understand and meet shareholder needs and expectations
2:
The Company remains committed to regular dialogue and communications with its shareholders to ensure
that its strategy, business model and performance are understood by the market. Inevitably the Covid
pandemic has had an adverse impact on such activities. Understanding what analysts and investors think
about Plexus, and helping these audiences understand our business, is part of moving our business forward
and we welcome dialogue with the market with the support of our broker Cenkos Securities and Investor
Relations advisors St Brides Partners. Such communications when and where appropriate include investor
Plexus Holdings plc Annual Report 2021
24
Corporate Governance continued
presentations, RNS updates, responding to specific phone calls and emails, ad hoc meetings as required and
results period meetings, and our regular reporting. The Company also maintains a dedicated email address
which investors can use to contact the Company which is displayed on the website together with the
Company’s address and phone number – http://www.plexusplc.com/contact-us
As the Company is too small to have a dedicated investor relations department, the Finance Director is
responsible for reviewing all communications received from members, and in conjunction as necessary with
the CEO and if appropriate the Board, before determining the most appropriate response.
Responses to shareholders are typically sent by email or letter in a timely manner.
Private shareholders
Our AGM is the main forum for dialogue with private shareholders. The Notice of Meeting is sent to
shareholders at least 21 days before the meeting. The chairs of the Board and all committees, together with
all other Directors, routinely attend the AGM and are available to answer questions raised by shareholders.
Time is set aside specifically to allow such questions from attending members to any board member. For each
vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results
of the AGM are subsequently published on the Company’s corporate website under the Stock Exchange
(RNS) Announcements tab – https://www.plexusplc.com/rns/. However, as per last year, because of ongoing
concerns and uncertainties about potential future restrictions that could be imposed by the Government as
a consequence of the COVID-19 pandemic, where it is not yet understood what winter conditions may bring,
and the prohibitively high costs associated in convening a virtual AGM where very specific rules along with
an amendment to the Company’s articles of association would be required, this year’s meeting will be a closed
meeting held at an undisclosed address in London where a quorum will be present in a COVID-19 secure
and compliant arrangement. Instead of shareholders attending the meeting to vote, they are being encouraged
to register their vote by completing and returning a Form of Proxy. Unlike a usual AGM where a vote on a
resolution is put to the meeting initially on a show of hands, the chairman of the meeting will demand a poll
of votes on each resolution to determine whether or not a particular resolution has been passed. As stated
above, the results of the AGM will be published on the London Stock Exchange and available on the
Company’s website.
Institutional shareholders
The Directors seek to build relationships with institutional shareholders, as well as long term private investors
who continue to remain supportive of the Company and its strategy. Shareholder relations are managed
primarily by the CEO and Finance Director, and supported by the Technical Director, as appropriate. The
CEO and Finance Director make presentations as required to institutional shareholders and analysts
following the release of the full-year and half-year results. Such procedures have inevitably been impacted in
recent times by the various restrictions imposed by COVID-19.
The Board as a whole is kept informed as necessary of the views and concerns of major shareholders, and is
aware that a number of institutions and sources of finance have actively begun to move away from investing
in oil and gas related companies. However, the Board believes that as the Company’s technology can claim to
be greener than conventional wellhead designs in terms of its leak proof sealing capabilities, that a case can
be made for investing in the technology not just on superior technology grounds, but also on green ones. Any
significant investment reports from analysts are also circulated to the Board. The Non-Executive Chairman
and Non-Executive Directors are available to meet with major shareholders if required to discuss issues of
importance to them.
3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
During the year Plexus entered into a licencing agreement with Cameron and post year-end re-entered the
exploration wellhead market in conjunction with Cameron. Despite Plexus’ strategy continuing to evolve
around such different ways of exploiting its proprietary POSGRIP IP, the key stakeholders (both internal
and external) and the way we engage with them has not changed (subject to Covid-19 constraints).
Stakeholders continue to consist of shareholders, employees, suppliers, customers, licensees and advisers.
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Plexus Holdings plc Annual Report 2021
Corporate Governance continued
Engaging with all our stakeholders as constructively as possible is important to Plexus, and we understand
that good relations and sound business practices and principles all contribute to helping make a business a
success. Feedback from shareholders is responded to where possible through interaction via letters, emails,
phone calls, meetings and, in prior years, the AGM.
Where necessary the Board is updated on stakeholder engagement feedback should any issues arise, to stay
abreast of stakeholder insights into what matters most to them and our business, and to enable the Board to
understand and consider such issues in relevant decision-making. Aside from our shareholders, suppliers and
customers, our employees are one of our most important stakeholder groups and the Board monitors relevant
employee issues through regular operating company operations reports.
Employees
Plexus is a non-discriminatory employer which aims to eliminate unfair discrimination, harassment,
victimisation and bullying. The Group is committed to ensuring that all individuals are treated fairly, with
respect and are valued irrespective of disability, race, gender, health, social class, sexual preference, marital
status, nationality, religion, employments status, age or membership or non-membership of a trade union.
Staff and staff development continues to be important to the Group and following a sustained period of
depressed operational activity there was concern the technical skills of those who fulfil specific technical roles
would diminish and would find it challenging to perform their role effectively and efficiently when activity
increases again. To help address such a possibility, in-house training and accredited competency programmes
ensure that necessary skill levels are maintained.
Additionally, competency across the business has continued to evolve and broaden; particularly within
workshop and office-based staff areas. The workshop competency system has been developed under the
OPITO standards with a view to being accredited by OPITO. The office-based competency system will not
be developed under the OPITO standard as it is a concise system that supports the requirements of
ISO9001:2015, for which Plexus has received Lloyd’s Register accreditation.
Importantly Health and Safety is an operational area for employee stakeholders where Plexus remains fully
committed to delivering the highest practical safety standards in everything we do. The Group continue to
maintain a positive safety culture which is aligned with our Company Safety Values and are pleased to report
our HSE culture remains strong across the business, and this is reflected by our LTCF and TRCF percentages
both being zero, with no major findings during our most recent LRQA certification surveillance audits set
against the ISO 45001:2018 standard.
Suppliers
The Plexus business model has been built around the conscious decision of not having its own manufacturing
facilities, and thereby avoids incurring fixed overheads associated with such activities. This means that
manufacturing is sub-contracted to carefully selected and assessed manufacturers and machine shops who
must operate to prescribed high standards and requirements for delivering Plexus’ products’ high-quality
threshold levels. Such relationships are of course important to Plexus and tend to be of a long-term nature
reflecting the professional manner in which business is conducted.
Customers
We continue to seek opportunities for continual improvement regarding our relationships with customers, and
our Business Management System complies with the ISO 45001 standard, demonstrating our commitment to
attain and sustain the highest standards possible and allow us to respond quickly to client demands.
Quality also remains a key focus in the delivery of our products and services demonstrated by our
accreditation of API Q1 certification in February 2020 along with ISO 45001 accreditation in May 2020.
Modern Slavery
In light of the ongoing activities and resultant human misery that have brought about the Modern Slavery
Act 2015, in 2018 a review of the requirements was carried out and a focus group was formed (HR, Executive
Plexus Holdings plc Annual Report 2021
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Corporate Governance continued
Assistant, Contracts & Supply Chain) to create a Business Code of Conduct, Supplier Code of Conduct,
Modern Slavery Statement and Whistleblowing procedure suitable for the business needs. Plexus takes such
matters seriously, and it is considered good practice that Plexus manages its supply chain in line with the
Modern Slavery Act to support the legislative requirement placed on the majority of our clients. In addition,
these business tools have proven to be relevant for tendering processes as companies’ awareness levels about
this pernicious crime increase.
4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
Audit, risk and internal control
Financial controls
The Company has an established framework of internal financial controls. These are reviewed by the Executive
Management, the Audit Committee and the Board as part of an ongoing assessment of significant risks by
category facing the Company.
The Group does not currently have an internal audit function due to the small size of the administrative
function and the level of Director review and authorisation of transactions.
The Board is responsible for reviewing and approving overall Company strategy, approving revenue and
capital budgets and plans, and for determining the financial structure of the Company including treasury,
tax and relevant dividend policy. Monthly results and variances from plans and forecasts are reported to the
Board. In addition, the Board has a formal schedule of matters reserved for its decision which includes the
setting of Company goals, objectives, budgets and other plans. All directors have access to independent
professional advice at the Company’s expense, if required, as well as to the advice and services of the company
secretary.
The Audit Committee assists the Board in discharging its duties regarding the interim and full year results,
financial statements, accounting policies, and operational and financial controls. Duties include:
(A) to consider and recommend to the Board the approval of the appointment of the external auditors of
the Company, the audit fee and other external remuneration of the auditors, and any questions of
resignation or dismissal;
(B)
to ensure the independence and objectivity of the external auditors;
(C) to discuss with the external auditors before each annual audit commences the nature and scope of the
audit, and other relevant matters;
(D) to review the half year and annual financial statements before submission to the Board, focusing
any changes in accounting policies and practices;
particularly on:
(1)
(2) major judgmental areas;
(3)
(4)
(5)
(6)
significant adjustments resulting from the audit;
the going concern assumption;
compliance with accounting standards; and
compliance with legal requirements.
(E)
to discuss problems and reservations arising from final audits, interim reviews or otherwise (if any), and
any matters the external auditors may wish to discuss (in the absence of the executive directors where
necessary);
(F)
to review management’s letter of representation;
(G)
to review the nature and extent of non-audit services provided by the external auditors (if any) and be
satisfied that the auditors’ independence and objectivity is maintained;
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(H)
to keep under review the effectiveness of the Company’s internal controls and risk management systems;
(I)
to undertake an annual assessment of internal controls and risk management;
(J)
to review the Company’s statement on internal control systems prior to endorsement by the Board;
(K)
to consider the major findings of any internal investigations and management’s response;
(L)
to review any internal audit programme and ensure that it is adequately resourced (currently not
applicable);
(M) to consider other topics, as defined by and referred to the Audit Committee by the Board; and
(N)
to review the Company’s arrangements for its employees to raise concerns, in confidence, about possible
wrongdoing in financial reporting or other matters. The Committee shall ensure that these arrangements
allow proportionate and independent investigation of such matters and appropriate follow up action.
Risk assessment & management controls
The Board recognises that maintaining sound controls and discipline is key to managing the downside risks
to our plan. The Board has ultimate responsibility for the Group’s internal controls and for reviewing their
effectiveness. However, any such system of internal control can provide only reasonable, but not absolute,
assurance against material misstatement or loss. The Board considers that the internal controls in place, as
summarised and explained below are appropriate for the size, complexity and risk profile of the Group. The
principal elements of the Group’s internal control system include:
l Management of the day-to-day activities of the Group by the Executive Directors;
l An organisational structure with defined levels of responsibility, which promotes responsible decision-
making and implementation while minimising risks;
l A comprehensive annual budgeting process producing an income statement, balance sheet and cash flow,
which are approved by the Board;
l Detailed monthly reporting of performance against budget;
l Control over key areas such as capital expenditure authorisation and banking facilities; and
l The Group continues to review its system of internal control to ensure compliance with best practice, while
also having regard to its size and the resources available. As part of such controls the Company maintains
a “Risk assessment & management document” which reviews both financial and non-financial controls
areas and risks including Business (including IT); Compliance; Finance; Cash; Debtors; Fixed Assets;
Other Debtors/Pre-payments; Creditors; Legal and Personnel. Such risks are assessed and reviewed, and
changes made where appropriate. The key elements of the non-financial controls are set out below.
Standards and policies
The Board is committed to maintaining appropriate standards for the Company’s business activities and
ensuring that these standards are set out in written policies. Key examples of such standards and policies
include the ‘Anti Modern Slavery Policy’ and ‘Employee Code of Conduct’. Operating procedures for control
of operations are clearly documented and set out in operation manuals where a key emphasis is on the
Company actively assessing and minimising health and safety risks in all areas of the business and educating
the workforce to provide as safe a working environment as possible. Managers are responsible for the
implementation of these procedures and compliance is monitored.
Approval process
Material contracts are required to be reviewed by a senior Director of the Company and where necessary
reviewed by external legal Counsel.
Code of Conduct
Our internal Code of Conduct includes guidance to employees on business integrity, anti-bribery, gifts,
intellectual property and design rights. Every year senior managers and above declare compliance to this code.
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Corporate Governance continued
Legal controls
Contracting with customers that include large international oil companies inevitably requires the entering into
at times complex contracts where the need to address such issues as limitation of liability need careful review
and negotiation. The Company’s commercial personnel have full access to external legal advice to ensure that
appropriate steps are taken to help mitigate the damage that can result from poorly negotiated contracts.
5: Maintain the board as a well-functioning, balanced team led by the chair.
The Board currently comprises the Non-Executive Chairman, J. Jeffrey Thrall; three Executive Directors
comprising Ben van Bilderbeek (CEO), Graham Stevens (FD); and Craig Hendrie (Technical Director); and
two Non-Executive Directors, Kunming Liu and Charles Jones; and a Company Secretary (non-director) is
in attendance at board meetings.
The Audit Committee comprises two Non-Executive Directors, J. Jeffrey Thrall and Charles Jones and is
scheduled to meet twice a year. It is the Audit Committee’s role to provide formal and transparent
arrangements for considering how to apply financial reporting and internal controls, whilst maintaining an
appropriate relationship with the independent auditors of the Group. In order to comply with best practice
that at least one member has relevant financial experience, the Chairman of the Board sits on the Audit
Committee. The Audit Committee review the Group’s policy on auditor rotation. The current auditors have
served for 14 years and there are no plans to retender.
The Remuneration Committee comprises two Non-Executive Directors, J. Jeffrey Thrall and Charles Jones
and meets when required. It is the Remuneration Committee’s role to set remuneration packages for individual
Directors. Where necessary the Remuneration Committee obtains advice and research material from external
remuneration specialists. There was no requirement for the Remuneration Committee to meet during the year.
The Board considers that the Non-Executive Directors bring an independent judgement to bear, although it
is recognised that factors such as length of service and shareholdings can have an impact. The Board is
satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company
on the other, to enable it to discharge its duties and responsibilities effectively. In view of the specialist nature
of the Company’s technology and IP, knowledge gained over time is considered an important part of the
Non-Executives understanding and therefore contribution to the business. The executive members of the
Board have considered the independence of their non-executive colleagues and have concluded they remain
independent in the context that they provide independent oversight of the Company removed from day-to-
day operations and constructively challenge the executive members of the Board.
All Directors are encouraged to apply their independent judgement and to challenge all matters, whether
strategic or operational.
During the last financial year seven Board meetings took place (including Board Committee meetings, but
excluding meetings of the Audit Committee, and, as disclosed above, the Remuneration Committee did not
meet during the last financial year), and key Board activities as listed below are included but are not exclusive:
l Discussed strategic priorities
l Discussed the Group’s financial strength and strategy, including capital investments, shareholder returns
and the dividend policy
l Reviewed the performance of the Company’s licensees
l Discussed actual and potential M&A activity
l Discussed the internal risk management and assessment report
l Reviewed feedback where relevant from shareholders post full and half year results
Details of the dates of meetings during the last financial year of the Board, Board Committee, and Audit
Committee, together with attendees are set out in the tables below.
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All members of the Board are expected to attend all scheduled main Board meetings whenever possible, but
for practical purposes, the completion of the interim or full year accounts, or certain corporate transactions
are delegated to a committee of the board to which all directors are entitled to attend by whatever practical
means possible. The directors receive timely notice of each meeting along with an agenda and supporting
papers which they review in advance of each meeting.
Directors’ conflicts of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is
aware of the other commitments and interests and if necessary, the relevant Board member will recuse
themselves from the matter at hand so as to avoid any conflicts for the individual or the Company.
Directors and Non-Executive Directors are expected to be available in person or virtually, and to have spent
sufficient time studying all papers relevant to the regular meetings. Additionally, they are required to similarly
attend meetings whenever required where non-routine course of business activity is going on, such as the
Board approval of the Licence Agreement with Cameron in November 2020, and the Jack-up Exploration
Wellhead Agreements in August 2021.
The executive members of the Board have considered the independence of their non-executive colleagues and
have concluded they remain independent in the context that they provide independent oversight of the Company
removed from day-to-day operations and constructively challenge the executive members of the Board.
Details of the Directors may be found here https://www.plexusplc.com/board-of-directors/
Audit Board
Board Board Board Committee Board Committee
2020: 30.09.2020 02.11.2020 09.11.2020 25.11.2020 25.11.2020 01.12.2020
Jeff Thrall
Ben van Bilderbeek
Graham Stevens
Craig Hendrie
Kunming Liu
Charles Jones
2021:
Jeff Thrall
Ben van Bilderbeek
Graham Stevens
Craig Hendrie
Kunming Liu
Charles Jones
Audit
Committee
24.03.2021
Board
Board Committee
24.03.2021 26.03.2021
As already disclosed above, the Remuneration Committee did not meet during the last financial year.
6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and
experience, including in the areas of finance, governance, commercial experience, public markets, oil and gas
industry, and international trade. All Directors receive regular and timely information on the Group’s
operational and financial performance. Relevant information is circulated to the Directors in advance of
Board and Committee meetings. The business reports regularly on its headline performance against its agreed
budget, and the Board reviews updates on performance and any significant variances are reviewed at each
Board meeting. Directors’ Service contracts are available for inspection at the Company’s registered office
and at the Annual General Meeting (“AGM”). Further details of the Directors’ experience and skills are set
out on page 19 of this report.
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The Directors are experienced in their own fields, and they act on their own initiative in ensuring they remain
up to date in their respective skills where relevant by being members of relevant professional organisations,
attending seminars and conferences, attending continuing professional development courses to maintain any
current accreditation and approaching the Company to arrange training where and if it is considered
appropriate. The Board does not at the current time undertake specific due diligence on or carry out a formal
review of an individual Director’s skills and training but is comfortable with such experience being appropriate
from regular engagement and dialogue with each Director. No such review is anticipated at the current time.
All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.
Appointment, removal and re-election of Directors
The Board makes decisions regarding the appointment and removal of Directors. As and when necessary
suitable candidates are identified and put forward for consideration and additionally external views are sought,
and, if relevant, background checks are undertaken in addition to any regulatory checks that are required.
The process is formal and transparent, and consideration is given to what skills the candidate brings to the
Board and how they will work and fit in with other Board members. The Company’s Articles of Association
require that one-third of the Directors must stand for re-election by shareholders annually in rotation and
that any new Directors appointed during the year must stand for re-election at the AGM immediately
following their appointment. Ben van Bilderbeek and Craig Hendrie will retire by rotation this year, and,
being eligible, offer themselves for re-election.
Independent advice
All Directors can take independent professional advice in the furtherance of their duties, if necessary, at the
Company’s expense. In addition, the Directors have direct access to the advice and services of the Company
Secretary, whose role is to consider compliance with primarily the Companies Act 2006 along with all other
relevant legislation, the Finance Director, and the Company’s nominated adviser.
The Company has not had to engage external advisers to the Board other than its usual professional advisers
during the normal course of business.
The Company out-sources the company secretarial duties and responsibilities to a firm of professional
company secretaries, (“the Out-Sourced Provider”), which engagement is overseen by the Finance Director.
In addition to the routine company secretarial compliance work, the Out-Sourced Provider fulfils a
wide-ranging support role to the FD on matters pertaining to the Companies Act, regulatory matters,
transactional support, and ad hoc assistance generally. Its services are also available to any other board
director who may wish to make an approach for independent advice which the Out-Sourced Provider strives
to deliver in an impartial manner.
7: Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
On an informal basis the Chairman Jeff Thrall and CEO Ben van Bilderbeek monitor the individual
contributions of each of the members of the team to ensure that:
l Their contribution is relevant and effective;
l That they are committed;
l Where relevant, they have maintained their independence; and
l The skills of the board members are appropriate for the size and complexity of the Group.
The responsibilities of the Chairman and CEO are summarised below: -
The Chairman’s primary responsibility is to lead the Board effectively and to oversee the adoption, delivery
and communication of the Company’s corporate governance model. The Chairman has sufficient separation
from the day-to-day business to be able to make independent decisions. The Chairman is also responsible for
making sure that the board agenda concentrates on the key issues, both operational and financial, including
reviews of the Company’s strategy and its overall implementation.
The CEO is responsible for the delivery of the business model within the timetable agreed by the Board. Keeps
the Chairman and Board up to date with operational performance, risks and other issues to ensure that the
business remains aligned with the agreed strategy.
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Because of the relative size of the Company, the composition of the Board and the level of experience of
each Board member, the Company has not adopted a formal board evaluation process although keeps the
topic under review and would conduct an assessment of the effectiveness of the whole Board’s performance
if it were considered beneficial.
The Board is mindful of the subject of succession planning, although has yet to adopt a formal process. At
the present time, any succession planning deemed necessary would be carried out on an ad hoc basis. The
Board keeps this subject under review. The Board is aware of the current shareholding structure and the
significance of the founder’s shareholding and is always mindful of the need to balance the interests of all
shareholders and stakeholders alike.
8: Promote a corporate culture that is based on ethical values and behaviours
The culture of the Group is to treat all of our customers, suppliers, shareholders and staff fairly and with
respect and to be responsive and professional in all that we do whilst at all times being aware of the critical
nature of the industry we operate in and the importance of monitoring and managing a range of risks that
include political, legal, environmental, IP infringement, competitive risk, operational, liquidity and financial
requirements, and credit.
The risk assessment of such areas is an ongoing process, and the Board has established a process for identifying,
evaluating and managing the more significant risk areas faced by the Group. One of the Board’s control
documents is a detailed “Risks assessment & management document” which categorises risks in terms of –
Business (including IT), Compliance, Finance, Cash, Debtors, Fixed assets, other Debtors/prepayments, Creditors,
Legal, and Personnel. These risks are assessed and updated on a regular basis and can be associated with a variety
of internal and external sources including regulatory requirements, disruption to information systems including
cyber-crime, control breakdowns and social, ethical, environmental and health and safety issues.
The Company ensures that ethical values and behaviours are recognised and respected by the adoption of
appropriate policies which all members of staff are required to read and have ready access.
9: Maintain governance structures and processes that are fit for purpose and support good
decision-making by the board
Board programme
The Board meets regularly during each year and in accordance with its scheduled meeting calendar as listed
below through a formal schedule of reserved matters for its decision.
Companies Act Requirements
1. Approval of interim and final financial statements.
2. Approval of the interim dividend and recommendation of the final dividend.
3. Approval of any significant changes in accounting policies or practices.
4. Appointment or removal of the company secretary.
5. Remuneration of the auditors and recommendations for the appointment or removal of auditors,
following recommendation of the Audit Committee.
6. Resolutions and corresponding documentation to be put forward to shareholders at a General Meeting.
Stock Exchange/Financial Services Authority
7. Approval of all circulars, listing particulars and announcements.
8. Approval of press releases concerning matters decided by the board.
Board membership and board committees
9.
Board appointments and removals, the overall remuneration policy and any special terms and conditions
attached to the appointment (subject to the recommendations of the Remuneration Committee).
10. Selection and terms of reference of chairman, chief executive and other executive directors.
11. Terms of reference and membership of board committees.
12. Where applicable, appointment of the senior independent director. None is currently appointed, and
the role would be defined appropriate to requirements and circumstances applicable at the time.
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Corporate Governance continued
13. Succession planning for the board and senior management.
14. Continuance in office of directors at the end of their office, where they are due to be re-elected by
shareholders in general meeting or at any other time, subject to the law and the director’s service contract.
15. Reviewing reports from committees on activities and progress.
Strategy and Management
16. Overall management of the group.
17. Approval of the group’s long-term objectives and commercial strategy.
18. Approval of the annual group budgets and any material changes to them.
19. Changes relating to the group’s capital structure, listing or its status as a plc.
20. Oversight of the group’s operations to ensure competent management, sound planning, adequate
systems of internal control, adequate accounting and other records are kept, and compliance with
statutory and regulatory obligations are achieved.
21. Review of performance against strategy, budgets, business plans and set objectives and implementation
of necessary corrective action.
22. Extending the group’s activities into new business or geographic areas or ceasing all or any material
part of the group’s business.
23. Changes to the group’s management and control structure.
24. Capital expenditure projects.
25. Material, either by reason of size or strategically such as the granting of licences in relation to the
Company’s IP, contracts of the company in the ordinary course of business (defined as the sale and
rental of wellhead equipment), above £750,000 for rental equipment, or above £350,000 p.a. for contracts
of one year or more.
26. Major investments including the acquisition or disposal of interests of more than 5 percent in the voting
shares of any company or the making of any takeover bid.
27. Risk management strategy and review.
28. Treasury policies including foreign currency exposure
Miscellaneous
29. Review of the company’s overall corporate governance arrangements and performance of the board,
its committees and the individual directors.
Investor relations management.
30. Determining ‘independence’ of the directors.
31.
32. Major changes in the rules of the company pension scheme.
33. Major changes in employee share schemes.
34. Formulation of policy regarding charitable donations.
35. Political donations.
36. Approval of the company’s principal professional advisers.
37. Litigation of any nature to be notified to the board and any settlements above £5,000.
38.
Internal control arrangements, annual review and statement in the annual report, subject to
recommendations of the Audit Committee as appropriate.
39. Directors’ & Officers’ liability insurance.
40. Approval of the group’s share dealing, code of conduct, health and safety, environmental and corporate
social responsibility policies.
41. Approval of third-party guarantees.
Prior to the start of each financial year, a schedule of Key Dates for that year’s Board and associated meetings
is compiled to align as far as reasonably practicable with the Company’s financial calendar, while also ensuring
an appropriate spread of meetings across the financial year.
The Key Dates schedule is updated throughout the year as necessary. This may be supplemented by additional
meetings as and when required, for example in relation to corporate activity. The Board and its Committees
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Corporate Governance continued
receive appropriate and timely information prior to each meeting; a formal agenda is produced for each
meeting, and Board and Committee papers are distributed several days before meetings take place. Any
Director may challenge Company proposals and decisions are taken democratically after discussion. Any
Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted
in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from
such meetings are agreed by the Board or if relevant by a Committee, and then followed up by the Company’s
management.
Roles of the Board, Chairman and Chief Executive Officer.
The Board is responsible for the long-term success of the Company. There is a formal schedule of reserved
Board matters, and it is responsible for overall Group strategy; approval of major investments (whether Capex
or Opex); approval of the annual and interim results; annual budgets; dividend policy; and Board structure.
It also monitors the exposure to key business risks. There is a clear division of responsibility at the head of
the Company. The Chairman is responsible for running the business of the Board and for reviewing
appropriate strategic focus and direction. The Chief Executive Officer is responsible for proposing the strategic
focus to the Board, implementing it once it has been approved and overseeing the management of the
Company through the Executive Team.
All Directors receive regular information on the Group’s operational and financial performance. Relevant
information is circulated to the Directors in advance of meetings. The business regularly reports on its headline
performance against its agreed budget, and the Board reviews updates on performance and any significant
variances are reviewed at each Board meeting. Senior executives below Board level attend Board meetings
where appropriate to present business updates.
Executive Team
The Executive Team consists of Ben van Bilderbeek (CEO), Graham Stevens (CFO) and Craig Hendrie
(Technical Director), with input from the subsidiary company Directors and teams, all of which are full-time
staff members and are responsible for the day-to-day management of the Group’s businesses and its overall
trading, operational and financial performance in fulfilment of that strategy, as well as plans and budgets
approved by the Board of Directors. They in conjunction with the Board manage and oversee key risks, and
where appropriate management development. Graham Stevens is responsible for overseeing shareholder
communications, and Craig Hendrie leads on R&D and engineering development activities. The Chief
Executive Officer reports to the plc Board on issues, progress and recommendations for change. The controls
applied by the Executive Team to financial and non-financial matters are set out earlier in this document.
Board Committees
The Board is supported by the Audit Committee and where necessary the Remuneration Committee. Each
committee has access to such resources, information and advice as it deems necessary, at the cost of the
Company, to enable each committee to discharge its duties. The duties of the Audit Committee have been
outlined in the detail on Principle 4 in this report. The overall duties of the Remuneration Committee are
determining the policy and all elements of the remuneration of the executive directors of the Company and
other senior executives (“the Executives”) of the Group and the duties of the Remuneration Committee are:
l to consider the basic salary paid to the Executives and any recommendations made by the Chairman of
the Company for changes to that basic salary
l to consider any bonuses to be paid to the Executives and, in respect of any element of remuneration of an
Executive which is performance related, to formulate suitable performance-related criteria and monitor
their operation, and to consider any recommendations of the Chairman of the Company regarding bonuses
or performance-related remuneration
l to advise on and determine all performance-related formulae relevant to the remuneration of the Directors
of the Company and to consider the eligibility of Directors for annual bonuses and benefits under long
term incentive schemes
l to administer all aspects of any executive share option scheme operated by or to be established by the
Company including but not limited to (subject always to the rules of that scheme and any applicable legal
and Stock Exchange requirements):
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Corporate Governance continued
(1)
(2)
(3)
(4)
(5)
the selection of those eligible Directors of the Company and its subsidiary companies to whom options
should be granted
the timing of any grant
the numbers of shares over which options are to be granted
the exercise price at which options are to be granted
the imposition of any objective condition which must be complied with before any option may be exercised
l to have regard in the performance of the duties set out in this clause to any published guidelines or
recommendations regarding the remuneration of directors of listed companies and formation and
operation of share option schemes (in particular the guidelines published by the Association of British
Insurers and National Association of Pension Funds) which the Remuneration Committee considers
relevant or appropriate
l to consider and make recommendations to the Directors of the Company concerning disclosure of details
of remuneration packages and structures in addition to those required by law
l to consider other benefits granted to the Executives and any recommendations of the Chairman of the
Company for changes in those benefits
l to consider the pension arrangements applicable to the Executives
l to consider and make recommendations in respect of the terms of the service contracts of the Executives
and any proposed changes to these contracts (including, without limitation, any compensation payments,
notice periods, or other entitlements under these contracts)
l to consider other matters relating to the remuneration of or terms of employment applicable to the
Executives and referred to the Remuneration Committee by the Board
The governance framework is subject to review on an ongoing basis. No changes to the governance framework
are currently planned.
10: Communicate how the company is governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Company communicates with shareholders through Regulatory News Service announcements, the
Annual Report and Accounts, full-year and half-year announcements, the Annual General Meeting (AGM)
(under normal non-pandemic circumstances) and when required one-to-one meetings with existing or
potential institutional new shareholders.
Most day to day shareholder interaction and communication is the responsibility of the CEO and the CFO.
A range of corporate information (including all Company announcements) is also available to shareholders,
investors and the public on the Company’s corporate website, www.plexusplc.com
The Board receives when relevant updates on the views of shareholders through briefings and reports from
the Company’s brokers, Cenkos Securities Plc.
The Company communicates with institutional investors where requested through briefings with management. In
addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.
Regular and open communication is encouraged between all layers of management to ensure that any issues
or concerns can be raised.
The Company announces the results of all votes on resolutions proposed at any general meeting of the
members of the Company by releasing an RNS to the London Stock Exchange immediately upon the
conclusion of the meeting. It has not had occasion to announce where a significant proportion of votes (e.g.
20% or more of independent votes) has been cast against any particular resolution, although intends to include
this information in the future, should such an occasion arise, including a summary of the actions it would
take to understand the reasons behind such a voting result. The Company maintains on its website an
increasing library of documents including all circulars to shareholders, RNS news releases and historic
documents which the Board considers adequate – https://www.plexusplc.com/aim-rule-26/
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Plexus Holdings plc Annual Report 2021
Audit Committee Report
Introduction
This report details how the Audit Committee (“the Committee”) has met its responsibilities under its terms
of reference. The Committee is a sub-committee of the Board and the ultimate responsibility for reviewing
and approving the Annual Report and Accounts and interim financial statements remains with the Board.
The Committee does not believe it is appropriate to have an internal audit function at this point in time as
the Group is relatively small and not sufficiently complex.
Members
The members of the Audit Committee are Jerome Jeffrey Thrall (Chairman) and Charles Jones. The Executive
Directors and the external auditors attend the meetings by invitation. The Board considers that the Committee
has an appropriate and experienced blend of commercial, financial and industry expertise to enable it to fulfil
its duties, and that the Committee Chairman has appropriate recent and relevant financial experience.
Committee Meetings
The Committee met twice during the year to 30 June 2021. One meeting related to the 2019-20 Annual Report
and Accounts, and the second meeting was to review and sign off the 2021 Interim Financial Statements. The
external auditors attended both meetings.
Role and Responsibilities
The Board has established an Audit Committee and set clear Terms of Reference so as to monitor the integrity
of the Group’s financial statements and the effectiveness of the Group’s internal financial controls.
The Terms of Reference are reviewed annually and amended where appropriate. During the year the Committee
worked with management, the external auditors, and other members of the senior management team in fulfilling
these responsibilities. The Committee considers financial reporting and internal controls. It also reviews the
scope and results of the external audit and the independence and objectivity of the auditors. It meets at least
twice a year and reviews the interim and annual financial statements before they are submitted for approval by
the Board upon its recommendation. The Committee considers annually whether the auditors remain
independent for the purposes of the audit and whether a separate internal audit function is required. As
referenced above, the Committee does not believe it is appropriate to have an internal audit function at this time
Financial reporting and related primary areas of judgement;
The external audit process;
The Committee report deals with the key duties and areas in which it plays an active role and has
responsibility. These duties and areas include the following:
i)
ii)
iii) Risk management and internal controls;
iv) Whistleblowing procedures
v) Consider and approve the appointment of the external auditors of the Company, the audit fee and other
fees for non-audit related services;
vi) Ensure the independence and objectivity of the external auditors; and
vii) Review the external auditor’s management representations letter and management’s response.
Annual Report and Accounts
General
The Committee has satisfied itself that the 2020-21 Annual Report and Accounts have been prepared in
accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, are
fair, balanced and provide the information necessary for shareholders to assess the Group’s performance, business
model and strategy. The Committee reviewed the key risk areas as identified in the Audit Plan document including:
revenue recognition and management override of controls. The Committee understands that the auditors have
followed their procedures for reviewing these risks and have undertaken detailed testing as appropriate.
In preparing the financial statements for the period, the main area requiring the exercise of management
judgement or a high degree of estimation was the valuation, and possible impairment, of intangibles. This
was discussed with the auditor. The Committee, having reviewed management’s assessment of impairment,
concluded that the relevant value in use was above the carrying value of the assets and hence no impairment
Plexus Holdings plc Annual Report 2021
36
Audit Committee Report continued
provision was required. Further information on the methodology and assumptions used in the valuation of
intangible assets and the assessment of impairment thereof is given in notes 1.g and 1.h to the consolidated
accounts on page 53, and in the Parent company accounts on page 81.
Going Concern
The Committee reviewed the going concern paper prepared by management including detailed monthly
financial forecasts, which included the twelve months from the date of signing the financial statements for
2020-21 and included related assumptions, risks and opportunities, sensitivities, areas for mitigation and
contingency plans. Based on this review, the Committee has a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future, being the period of twelve
months from the date of signing the financial statements for 2020-21. Accordingly, the Committee concluded
that it is appropriate to adopt the going concern basis in preparing the annual financial statements.
Internal Control Systems
The Committee ensures that it monitors internal control systems reporting by the auditors and that there are
no issues.
Risk Management
The Board has established an on-going process for identifying, evaluating and managing the more significant
risk areas faced by the Group. One of the Board’s control documents is a detailed “Risks assessment &
management document” which categorises risks in terms of – Business (including IT), Compliance, Finance,
Cash, Debtors, Fixed Assets, Other debtors/prepayments, Creditors, Legal, and Personnel. These risks are
assessed and updated when necessary and can be associated with a variety of internal and external sources
including regulatory requirements, disruption to information systems including cyber-crime, control
breakdowns and social, ethical, environmental and health and safety issues. Further details on the Principal
Risks and Risk Management may be found in the Strategic Report on page 9 of the financial statements.
Board Conduct and Effectiveness Review
As reported in the Corporate Governance section of the financial statements because of the relative size of
the Company, the composition of the Board and the level of experience of each Board member, the Company
has not adopted a formal whole board evaluation process although keeps the topic under review and would
conduct one if it were considered necessary.
The Board is mindful of the subject of succession planning, although has yet to adopt a formal process and,
the Company having been in transition since the disposal of the rental wellhead Jack-up business in 2018,
any succession planning deemed necessary would be carried out on an ad hoc basis. The Board keeps this
subject under review. The Board is aware of the current shareholding structure and the importance of the
founder’s shareholding and is always mindful of the need to balance the interests of all shareholders and
stakeholders alike.
Auditor Independence
The Committee satisfied itself on the auditors’ independence. Mr Stephen Bullock has been the senior
statutory auditor for five years. Non-audit services provided by the Group’s auditors have been considered
and has had no impact on the auditors’ independence.
Whistleblowing
The Committee had no whistleblowing incidents reported directly or indirectly during the year to 30 June 2021.
The Report of the Audit Committee was approved by a Committee of the Board of Directors on 19 November
2021 and signed on its behalf by:
J Jeffrey Thrall
Chairman of the Audit Committee
37
Plexus Holdings plc Annual Report 2021
Remuneration Committee Report
Introduction
Companies trading on AIM are not required to provide a formal remuneration report. However, in line with
current best practice this report provides information to enable a greater level of understanding as to how
Directors’ remuneration is determined.
The Remuneration Committee of the Board is responsible for considering Directors’ remuneration packages.
The Committee comprises two Non-Executive Directors J. Jeffrey Thrall and Charles Jones. There was no
requirement for the Remuneration Committee to meet during the last financial year.
Remuneration policy
The Group’s policy is to attract, retain and motivate high calibre executives capable of achieving the Group’s
objectives. Executive Directors receive salaries, annual bonuses (as and when appropriate), medical cover, and
pension scheme contributions.
The Committee determines the policy of the overall remuneration package for Executive Directors and other
senior executives. Basic salaries and benefits of all employees are normally reviewed every year, and the Group
and the Committee as part of this process may seek advice from external remuneration consultants as and
when appropriate. In reviewing salaries, consideration is given to personal performance, the Group’s overall
performance and external comparative information.
An annual performance or transaction related bonuses may be payable to Executive Directors and senior
staff, and when appropriate an exercise is undertaken, again in conjunction where appropriate with external
remuneration consultants to look at market comparisons, benchmarks, relative performance as well as
consideration of strategic progress in addition to simply financial ones. Comparator group analysis includes
oil and gas exploration companies with broadly similar market capitalisations and numbers of employees, as
well as oil and gas service companies where, although the market capitalisation range is wide, it is still relevant
as these are the sort of companies with which Plexus may compete for talent.
Service contracts
The Executive Directors have service agreements with the Company dated 25 November 2005 subject to
termination upon twelve months’ notice being given by either party.
Pensions
The Group offers a contributory group stakeholder pension scheme, into which the Group makes matching
contributions up to a pre-agreed level of base salary; the scheme is open to Executive Directors and permanent
employees. Directors may alternatively choose to have contributions paid into existing personal pension plans,
or to receive salary in lieu.
Non-executive Directors
The Non-Executive Chairman, J. Jeffrey Thrall, entered into a Letter of Appointment with the Company
dated 25 November 2005 for an initial term through to the first AGM and having been re-elected as a director
either party can terminate upon three months’ notice being given. The subsequently appointed Non-Executive
Directors, Charles Jones and Kunming Liu, entered into their Letters of Appointment with the Company
dated 18 September 2014, and 17 December 2015 respectively, and having been re-elected as a director at the
first respective AGM following their appointment, are subject to the same termination conditions as those
applicable to Mr Thrall.
Plexus Holdings plc Annual Report 2021
38
Remuneration Committee Report continued
Directors’ remuneration
Details of Directors’ remuneration for the year are set out below:
Executive Directors
Ben van Bilderbeek
Graham Stevens
Craig Hendrie
Non-executive Directors
J Jeffrey Thrall
Charles Jones
Kunming Liu
Total
Salary & Fees
£
Benefits
£
Pension
£
2021
Total
£
2020
Total
£
293,982
166,791
138,377
–
–
–
––––––––––
599,150
––––––––––
54,613
18,425
1,154
–
–
–
––––––––––
74,192
––––––––––
–
–
19,858
348,595
185,216
159,389
339,285
182,526
159,346
–
–
–
––––––––––
19,858
––––––––––
–
–
–
––––––––––
693,200
––––––––––
19,500
18,000
18,000
––––––––––
736,657
––––––––––
The highest paid director is the Group CEO with total remuneration for the year of £349k (2020: £339K). This
compares to the average of all company employees (salaries and benefits plus pension) of £78k (2020: £72k).
Directors’ interest in share options
The options and awards have been granted pursuant to the Executive 2005 Share Option Scheme and
Non-Executive 2005 Share Option Scheme to the following Directors:
Executive 2005 Share Option Scheme
Name
B. van Bilderbeek
B. van Bilderbeek
B. van Bilderbeek
B. van Bilderbeek
G. Stevens
G. Stevens
G. Stevens
G. Stevens
C. Hendrie
C. Hendrie
C. Hendrie
C. Hendrie
No of
options at
30/06/20 &
30/06/21
194,152
65,902
332,110
169,642
138,407
43,177
217,795
101,042
254,407
43,177
217,79
105,853
No of
Options
Vested at
30/06/21
194,152
65,902
332,110
169,642
138,407
43,177
217,795
101,042
254,407
43,177
217,79
105,853
Date of
Grant
09/12/05
20/06/07
17/12/09
25/03/11
09/12/05
20/06/07
17/12/09
25/03/11
09/12/05
20/06/07
17/12/09
25/03/11
Expiry
Date
08/12/25
19/07/27
13/12/29
24/03/31
08/12/25
19/07/27
13/12/29
24/03/31
08/12/25
19/07/27
13/12/29
24/03/31
Exercise
Price
0.59
0.385
0.41
0.60
0.59
0.385
0.41
0.60
0.59
0.385
0.41
0.60
No executive share options have been granted, lapsed, forfeited or exercised during the years to 30 June 2021
and 2020. No share options have been exercised since 2015.
39
Plexus Holdings plc Annual Report 2021
Remuneration Committee Report continued
Non-executive 2005 Share Option Scheme
No of
options at
30/06/20
No of
Lapsed
during options at
30/06/21
20/21
40,169
40,169 –
No of
Options
Date of Vested at
30/06/21
40,169
Grant
09/12/05
Expiry
Date
08/12/25
Exercise
Price
0.59
Name
J. Thrall
The non-executive share options granted on 08/06/10 lapsed during the year to 30 June 2020. No other
non-executive share options have been granted, forfeited or exercised during the years to 30 June 2021 and 2020.
No options are expected to lapse at the AGM.
On 9 July 2015 the Board of Plexus approved certain amendments to the rules of the Plexus Holdings plc
2005 Share Option Scheme (the “Plan”) such that the Company is permitted to extend the exercise period for
options granted under the Plan by a further ten years. On 9 July 2015 the directors approved an amendment
to the rules of the scheme such that the Company is permitted to extend the exercise period for options
granted under the scheme by a further ten years. Subsequently on 8 June 2017, 13 December 2019 and
25 March 2021 the Company entered into deeds of amendment with Ben van Bilderbeek, Graham Stevens,
Craig Hendrie, and eleven employees in respect of options granted to them on 20 June 2007 and 17 December
2009 and 25 March 2011 under the scheme, to extend the exercise period by ten years, subject to all other
terms of the scheme rules.
The lowest mid-market price of the Company’s shares in the year to 30 June 2021 was 8.50p on the
24th September 2020. The high price in the period to 30 June 2020 was 24.00p on 19th November 2020. The
mid-market price on 30 June 2021 was 13.25p.
The 6-year history of the share price on reporting date (30 June) is as follows, 2021: 13.25p, 2020:14.00p,
2019: 40.50p, 2018: 46.90p, 2017: 57.00p and 2016: 40.63p
Total staff remuneration costs for the year, as set out in note 5 was £2.81m (2020: £2.90m). This compares to
distributions to shareholders of nil (2020: £nil).
Plexus Holdings plc Annual Report 2021
40
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Directors’ Report, Strategic Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law
the directors have elected to prepare the group and parent company financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company
law the directors must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for
that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable accounting standards 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 Group and the parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets
of the Group and to prevent and detect fraud and other irregularities.
The directors are further responsible for ensuring that the Strategic Report and the Report of the Directors
and other information included in the Annual Report and Financial Statements is prepared in accordance
with applicable law in the United Kingdom.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Group’s website (www.plexusplc.com). The work carried out by the auditors does not involve
the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes
that may have occurred in the accounts since they were initially presented on the website. Legislation in the
UK governing the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
By order of the Board
G Stevens
Director
19 November 2021
41
Plexus Holdings plc Annual Report 2021
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc
Opinion
We have audited the financial statements of Plexus Holdings Plc (the “Parent Company”) and its subsidiaries
(the “Group”) for the year ended 30 June 2021, which comprise:
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the Group statement of comprehensive income for the year ended 30 June 2021;
the Group and Parent Company statements of financial position as at 30 June 2021;
the Group and Parent Company statements of changes in equity for the year then ended 30 June 2021;
the Group statement of cash flows for the year then ended 30 June 2021; and
the 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 in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006, and, as regards the parent company, as applied in accordance with
the Companies Act 2006.
In our opinion:
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the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 30 June 2021 and of the Group’s loss for the period then ended;
the group financial statements have been properly prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with International
Accounting Standards in conformity with the Companies Act 2006 and as applied by the Companies
Act 2006; 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 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, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors
assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of
accounting included:
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Reviewing management’s financial projections for the Group and Parent Company for a period of more
than 12 months from the date of approval of the financial statements.
Checking the numerical accuracy of management’s financial projections
Challenging management on the assumptions underlying those projections and sensitised them to reduce
anticipated net cash inflows from future trading activities.
Obtaining the latest financial results post the year end to review how the Group and Parent Company
is trending toward achieving the forecast.
Performing sensitivity analysis on key inputs of the forecast by calculating the impact of various
scenarios and considering the impact on the Group and Parent Company’s ability to continue as a going
concern in the event of not meeting the forecast.
Assessing the completeness and accuracy of the matters described in the going concern disclosure within
the significant accounting policies as set out in Note 1b.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s and Parent Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going
concern are described in the relevant sections of this report.
Plexus Holdings plc Annual Report 2021
42
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc continued
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material
if it could reasonably be expected to change the economic decisions of a user of the financial statements. We
used the concept of materiality to both focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements
as a whole to be £205,000 (2020: £375,000) based on approximately 4.6% (2020: 7%) of the Group’s loss before
taxation for the period. Materiality for the parent company financial statements was set at £40,000 (2020:
£50,000) based on a percentage of net assets.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for
the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted
for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having
regard to the internal control environment. We determined performance materiality for the Group financial
statements as a whole to be £143,500 (2020: £262,500). Performance materiality for the Parent Company
financial statements was set at £28,000 (2020: £35,000).
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related
party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £20,000 (2020: £20,000).
Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required
on qualitative grounds.
Overview of the scope of our audit
The Group and its subsidiaries are accounted for from one central operating location, the Group’s registered
office. There are two significant components in the group; the Parent Company and Plexus Ocean Systems
Limited. The Parent Company and Plexus Ocean Systems Limited were subject to full scope audit by
ourselves.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified. These matters included those which
had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
This is not a complete list of all risks identified by our audit.
43
Plexus Holdings plc Annual Report 2021
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc continued
Key audit matter
How the scope of our audit addressed the key
audit matter
Impairment of intangible assets, including goodwill
The Group carries intangible assets at a net book
value of £10.4 million (2020: £11.09 million). This
balance is primarily represented by intellectual
property, patent and other development expenditure.
prepares
Management
impairment
calculations to assess the carrying value of
intangible assets as set out in the accounting policy
in notes 1f and 1g to the financial statements.
annual
to make key
The performance of the impairment review requires
judgements and
management
identified the
assumptions. As a result, we
impairment of intangible assets, including goodwill,
as a significant risk, which was one of the most
significant assessed risks of material misstatement.
l We evaluated, in comparison to the requirements
set out in IAS 36, management’s assessment
(using discounted cash flow models) as to
whether goodwill or other intangible assets were
impaired.
l We challenged, reviewed and considered by
reference to external evidence, management’s
impairment and fair value models as appropriate
and their key estimates, including the discount
rate. We reviewed the appropriateness and
consistency of the process for making such
estimates.
l We obtained management’s discounted cash flow
models supporting the intangible asset valuation.
We challenged the key assumptions into the
model, including the forecast revenue and gross
margin, discount rates and growth rates.
l We compared cash flow forecasts used in the
impairment review to historical performance,
and challenged where
indicated
performance that deviated significantly from
historical performance,
in the absence of
significant changes in the business or market
environment.
forecasts
Revenue recognition
Revenue is recognised in accordance with the
accounting policy set out in the financial statements.
The accounting policy contains a number of
judgements, particularly in recognising when the
performance obligations are satisfied. This is
determined with reference to the underlying contract
with the customer.
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Discount rates and terminal growth rates were
benchmarked to externally derived data and our
knowledge of sector performance, to evaluate the
reasonableness of these assumptions.
Sensitivity
analysis was performed by
management on the key assumptions such as
growth, margin and discount rates to identify
those assumptions to which that the goodwill or
intangible asset valuation was highly sensitive.
We have applied further sensitivity to create a
worst case scenario and challenged management
on the likelihood of such a scenario occurring,
and on what remedial actions would be taken
l We assessed
that
the accounting policy
conformed with the requirements of IFRS15 and
then tested its application to a sample of
contracts.
l We performed cut off testing to ensure revenue is
being recorded in the correct period.
Plexus Holdings plc Annual Report 2021
44
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc continued
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no
such opinion.
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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
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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 Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception:
In light of the knowledge and understanding of the Group and Parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
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adequate accounting records have not been kept by the Parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns;
or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement on page 41, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
45
Plexus Holdings plc Annual Report 2021
Independent Auditor’s Report to the Shareholders of Plexus Holdings plc continued
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.
Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below however the primary responsibility for the prevention and detection of
fraud lies with management and those charged with governance of the Company.
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l We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group
and the procedures in place for ensuring compliance. The most significant identified was the Companies
Act 2006. Our work included direct enquiry of the directors who oversee all legal proceedings, reviewing
Board and relevant committee minutes and inspection of correspondence.
As part of our audit planning process we assessed the different areas of the financial statements, including
disclosures, for the risk of material misstatement. This included considering the risk of fraud where direct
enquiries were made of management and those charged with governance concerning both whether they
had any knowledge of actual or suspected fraud and their assessment of the susceptibility of fraud. We
considered the risk was greater in areas that involve significant management estimate or judgement. Based
on this assessment we designed audit procedures to focus on the key areas of estimate or judgement, this
included specific testing of journal transactions, both at the year end and throughout the year.
l We used data analytic techniques to identify any unusual transactions or unexpected relationships,
including considering the risk of undisclosed related party transactions.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements
of the financial statements may not be detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from
fraud because fraud may involve sophisticated and carefully organised schemes designed to conceal it, including
deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.
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.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
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.
Stephen Bullock (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
19 November 2021
Plexus Holdings plc Annual Report 2021
46
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Finance income
Finance costs
Share in (loss) / profit of associate
Other income
Loss before taxation
Income tax credit
Loss after taxation from continuing operations
Loss after taxation from discontinued operations
Loss for year
Other comprehensive income
Total comprehensive
income for the year attributable to the owners of the parent
Loss per share
Basic from continuing operations
Diluted from continuing operations
Basic from discontinued operations
Diluted from discontinued operations
Notes
2
4
6
7
14
8
9
10
2021
£’000
2,017
(1,062)
–––––––
955
(5,501)
–––––––
(4,546)
143
(103)
(77)
211
–––––––
(4,372)
262
–––––––
(4,110)
(392)
–––––––
(4,502)
–
–––––––
(4,502)
–––––––
(4.09p)
(4.09p)
(0.39p)
(0.39p)
2020
£’000
525
(225)
–––––––
300
(5,981)
–––––––
(5,681)
192
(111)
265
285
–––––––
(5,050)
992
–––––––
(4,058)
(2,549)
–––––––
(6,607)
–
–––––––
(6,607)
–––––––
(3.92p)
(3.92p)
(2.47p)
(2.47p)
47
Plexus Holdings plc Annual Report 2021
Consolidated Statement of Financial Position
at 30 June 2021
Assets
Goodwill
Intangible assets
Property, plant and equipment
Financial assets
Investment in associate
Deferred tax asset
Right of use asset
Total non-current assets
Inventories
Trade and other receivables
Current income tax asset
Cash and cash equivalents
Total current assets
Total Assets
Equity and Liabilities
Called up share capital
Shares held in treasury
Share based payments reserve
Retained earnings
Total equity attributable to equity holders of the parent
Liabilities
Lease liabilities
Total non-current liabilities
Trade and other payables
Lease liabilities
Bank Lombard facility
Total current liabilities
Total liabilities
Total Equity and Liabilities
Notes
11
12
15
16
14
8
26
17
18
20
21
22
26
19
26
24
2021
£’000
767
9,644
2,961
3,042
721
1,899
1,245
–––––––
20,279
–––––––
575
1,051
–
5,175
–––––––
6,801
–––––––
27,080
–––––––
1,054
(2,500)
674
23,764
–––––––
22,992
–––––––
1,085
–––––––
1,085
–––––––
643
316
2,044
–––––––
3,003
–––––––
4,088
–––––––
27,080
–––––––
2020
£’000
767
10,325
3,273
2,995
898
2,130
1,548
–––––––
21,936
–––––––
870
2,982
76
4,087
–––––––
8,015
–––––––
29,951
–––––––
1,054
(2,500)
674
28,266
–––––––
27,494
–––––––
1,401
–––––––
1,401
–––––––
778
278
–
–––––––
1,056
–––––––
2,457
–––––––
29,951
–––––––
These financial statements were approved and authorised for issue by the board of directors on 19 November
2021 and were signed on its behalf by:
G Stevens
Director
C Hendrie
Director
Company Number: 03322928
Plexus Holdings plc Annual Report 2021
48
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Balance as at 30 June 2019
Total comprehensive income
for the year
Balance as at 30 June 2020
Total comprehensive income
for the year
Balance as at 30 June 2021
Called Up
Share
Capital
£’000
Shares
Held in
Treasury
£’000
Share
Based
Payments
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
1,054
(2,500)
674
34,873
34,101
–
––––––––––
1,054
–
––––––––––
(2,500)
–
––––––––––
674
(6,607)
––––––––––
28,266
(6,607)
––––––––––
27,494
–
––––––––––
1,054
––––––––––
–
––––––––––
(2,500)
––––––––––
–
––––––––––
674
––––––––––
(4,502)
––––––––––
23,764
––––––––––
(4,502)
––––––––––
22,992
––––––––––
49
Plexus Holdings plc Annual Report 2021
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Notes
Cash flows from operating activities
Loss before taxation from continuing activities
Loss before taxation from discontinued activities
Loss before tax
Adjustments for:
Depreciation and amortisation charges
(Profit)/loss on disposal of property, plant and equipment
Share in loss/(profit) of associate
Property rental income
Impairment of associate
Write-down of other receivable
Lease liability re-assessment
Fair value adjustment on financial assets
Investment income
Interest expense
Changes in working capital:
Decrease/(increase) in inventories
(Increase) in trade and other receivables
Decrease in trade and other payables
Cash used in operating activities
Income taxes refunded
Net cash used from operating activities
Cash flows from investing activities
Funds invested in financial instruments
Property rental income
Purchase of intangible assets
Purchase of property, plant and equipment
Dividend income from associate
Deferred proceeds from sale of discontinued operation
Proceeds of sale of property, plant and equipment
Interest and investment income received
Net cash generated in investing activities
Cash flows from financing activities
Draw down of Lombard facility
Repayment of loans and banking facilities
Repayments of lease liabilities
Interest paid
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July 2020
Cash and cash equivalents at 30 June 2021
24
Plexus Holdings plc Annual Report 2021
50
2021
£’000
(4,372)
20
–––––––
(7,482)
1,701
(1)
77
(123)
–
–
25
19
(143)
84
295
(255)
(135)
–––––––
(2,808)
157
–––––––
(2,651)
–––––––
(66)
123
(235)
(170)
100
2,186
1
143
–––––––
2,082
–––––––
2,044
–
(342)
(45)
–––––––
1,657
–––––––
1,088
4,087
–––––––
5,175
–––––––
2020
£’000
(5,050)
(2,432)
–––––––
(3,819)
1,896
6
(265)
(285)
134
2,432
–
24
(192)
87
(172)
(191)
(1,328)
–––––––
(5,336)
545
–––––––
(4,791)
–––––––
(183)
285
(361)
(138)
140
4,240
6
192
–––––––
4,181
–––––––
–
(75)
(315)
(65)
–––––––
(455)
–––––––
(1,065)
5,152
–––––––
4,087
–––––––
Notes to the Consolidated Financial Statements
1.
Summary of significant accounting policies
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial information.
Basis of preparation
a.
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the International Accounting Standards
Board as adopted by the European Union and are in accordance with the Companies Act 2006.
There are a number of standards, amendments to standards, and interpretations which have been issued
by the IASB that are effective in future accounting. The Directors’ have assessed the impact of these
standards. The Group has decided not to adopt these standards early as no material impact is expected.
The following amendments are effective for the period beginning 1 January 2021:
l
l
l
l
l
l
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16)
COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
Annual Improvements to IFRS Standards 2018-2020
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
Reference to the Conceptual Framework (Amendments to IFRS 3)
In January 2020, the IASB issued amendments to IAS 1, which clarified the criteria used to determine
whether liabilities are classified as current or non-current. These amendments clarify that current or
non-current classification is based on whether an entity has a right at the end of the reporting period to
defer settlement of the liability for at least twelve months after the reporting period. The amendments also
clarify that ‘settlement’ includes the transfer of cash, goods, services, or equity instruments unless the
obligation to transfer equity instruments arises from a conversion feature classified as an equity instrument
separately from the liability component of a compound financial instrument. The amendments are effective
for annual reporting periods beginning on or after 1 January 2022.
The Group is currently assessing the impact of these new accounting standards and amendments. The
Group does not believe that the amendments to IAS 1 will have a significant impact of the classification
of its liabilities, as the conversion feature in its convertible debt instruments is classified as an equity
instrument and therefore, does not affect the classification of its convertible debt as a non-current liability.
The Group financial statements are presented in sterling and all values are rounded to the nearest thousand
pounds except where otherwise indicated.
The financial information has been prepared under the historical cost convention except where fair value
adjustments are required.
Going concern
b.
The Group’s activities and an outline of the developments taking place in relation to its products, services
and marketplace are considered in the Strategic Review on pages 9 to 16 along with an explanation of
revenue, trading results and cash flows.
Note 25 to the Financial Statements sets out the Company’s financial risks and the management of
capital risks. At the year end, the Group had cash and cash equivalents of £5.18m, £2.04m drawn down
on a bank Lombard facility and financial assets with a value of £3.04m.
Accordingly, after careful enquiry and review of available financial information, including projections
and cash flows for the period to 30 June 2023, the Directors believe that the Company has adequate
resources to continue to operate for the foreseeable future and that it is therefore appropriate to continue
to adopt the going concern basis of accounting in the preparation of the consolidated and company
financial statements.
Whilst COVID-19 has had a significant impact upon many businesses, with Plexus the negative impact
has been the delay in the award of work, which the Group has to a degree managed to partially offset
with cost savings. The pandemic has not halted any revenue streams, as evidenced by the growth in
revenue in the year.
51
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
Basis of consolidation
c.
The Group’s financial statements consolidate the financial statements of Plexus Holdings plc and the entities
it controls (its subsidiaries) and are drawn up to 30 June each year. Control comprises the power to govern
the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved
through direct and indirect ownership of voting rights; currently exercisable or convertible potential voting
rights. Subsidiaries are consolidated from the date of their acquisition, being the date on which the group
obtains control, and continue to be consolidated until the date that such control ceases. The financial
statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent
accounting policies. All intercompany balances and transactions, including unrealised profits arising from
intra group transactions, have been eliminated in full. Unrealised losses are eliminated unless the transaction
provides evidence of an impairment of the asset transferred.
Within twelve months of the date of acquisition of a subsidiary undertaking a re-assessment is made of
the fair value of the assets and liabilities acquired in order to assess any provisional values used in
initial accounting.
The financial statements of the Company and its subsidiaries are prepared in sterling (the functional
currency), which is the currency that best reflects the economic substance of the underlying events and
circumstances relevant to the Group. Transactions and balances in foreign currencies are converted into
sterling in accordance with the principles set forth by IAS 21 (“The Effects of Changes in Foreign Exchange
Rates”). Accordingly, transactions and balances have been converted as follows:
l Monetary assets and liabilities – at the rate of exchange applicable at the reporting date; and
l
Income and expense items – at exchange rates applicable as of the date of recognition of
those items. Exchange gains and losses are recognised in the consolidated statement of
comprehensive income.
Revenue
d.
Sale of equipment
The Group sells a range of equipment derived from its proprietary technology, spares and ancillary
equipment. Revenue from the sale of equipment is recognised when performance obligations are met. This
is considered to be on acceptance of the equipment by the customer, or where contractual delivery date is
specified in the terms and conditions of sale. Invoicing and subsequent payment follow the transfer
of ownership.
Rental income
The Group rents out equipment to customers. Revenue from rental contacts, all of which are short term,
is recognised in the statement of comprehensive income on a straight-line basis as the performance
obligations are satisfied over time. Rental income is invoiced on a monthly basis.
Service income
The Group provides Field Service Technicians to its customers, on daily rate basis. Revenue from service
contracts are recognised on a performance basis as work is undertaken. Customers are invoiced following
receipt of a signed field service ticket.
Royalty income
The Group has licensing agreements which are subject to royalty payments. Royalty income is recognised
under the terms and conditions of the underlying licensing agreement, and revenue is recognised when
performance obligations are satisfied.
Rebillable income
The Group passes on third party costs to customers at cost plus mark-up where applicable. The level of
mark-up is specified in the underlying contract with the customer. Revenue is invoiced and recognised,
along with the associated expenditure in the period in which it relates.
Plexus Holdings plc Annual Report 2021
52
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
Cost of sales
e.
Cost of sales includes salary and related costs for service personnel, depreciation, refurbishment costs
on rental assets and other costs which are directly attributable to revenue generating projects.
Income taxes and deferred taxation
f.
The income tax credit for the period comprises current and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
The current income tax credit is calculated on the basis of the tax laws enacted or substantively enacted
at the reporting date in the countries where the company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively
enacted by the reporting date and are expected to apply when the related deferred income tax asset is
realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
As set out in note 22 the Group operates a share option scheme. Where the market price of the shares
at the year-end exceeds the option price there is a potential tax deduction. This is treated as a deferred
tax asset. The portion of the expected future tax deduction which is less than or equal to the associated
cumulative IFRS2 charge is recognised in the income statement. The balance of the credit is recognised
directly in equity.
Goodwill
g.
Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value
of the separable assets acquired) arising on business combinations in respect of acquisitions is capitalised.
Goodwill is not amortised; it is measured at cost less any accumulated impairment losses. Goodwill is
reviewed for impairment at least annually.
Goodwill is monitored by management at the operating segment level. All goodwill has been allocated
to the single operating segment, which is considered to be a group of similar cash generating units
(CGU’s) for impairment purposes.
Intangible assets and amortisation
h.
Patents are recorded initially at cost and amortised on a straight-line basis over 20 years which represents
the life of the patent. The Group operates a policy of continual patent enhancement in order that
technology enhancements and modifications are incorporated within the registered patent, thereby
protecting the value of technology advances for a full 20-year period.
Intellectual Property rights are initially recorded at cost and amortised over 20 years on a straight-line
basis. The technology defined by the Intellectual Property is believed to be able to generate income
streams for the Group for many years; key Intellectual Property is protected by patents; the lowest
common denominator in terms of economic life of the intangible assets is the life of the original patents
and therefore the life of the Intellectual Property has been matched to the remaining life of the patents
protecting it.
Development expenditure is capitalised in respect of development of patentable technology at cost
including an allocation of own time when such expenditure is incurred on separately identifiable
53
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
technology and its future recoverability can reasonably be regarded as assured. Any expenditure carried
forward is amortised on a straight-line basis over its useful economic life, which the directors consider
to be 20 years.
Computer software is amortised over 2 to 5 years on a straight-line basis.
In all cases the amortisation period represents the expected useful life of the asset.
Amortisation is charged to the Administrative Expenses line of the Statement of Comprehensive Income.
Expenditure on research and development, which does not meet the capitalisation criteria, is written
off to the Statement of Comprehensive Income in the period in which it is incurred.
The carrying value of intangible assets is reviewed on an on-going basis by the directors, and where
appropriate, provision is made for any indication of impairment in value. Where impairment arises, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if
any). Where it is not possible to estimate the recoverable amount of an individual asset, an estimate is
made of the recoverable amount of the cash-generating unit to which the asset belongs.
The 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 discount rate that
reflects the current market assessments of the time value of money and the risks specific to the asset. If
the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount.
Any impairment loss would be recognised immediately in the Statement of Comprehensive Income.
Property, plant and equipment
i.
Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the cost
of acquisition or construction, including the direct cost of financing the acquisition or construction
until the asset comes into use. Depreciation is provided to write off the cost or valuation of property,
plant and equipment less the estimated residual value by equal instalments over their estimated useful
economic lives as follows:
Buildings Over the remaining life of the lease on the land on which the building
is constructed
Tenant improvements Over the remaining life of the lease of the relevant building
Equipment 7% – 50% per annum
Motor vehicles 20% per annum
The expected useful lives and residual values of property, plant and equipment are reviewed on an annual
basis and, if necessary, changes in useful life or residual value are accounted for prospectively.
The carrying value of property, plant and equipment is reviewed for impairment whenever events or
changes in circumstances indicate the carrying value may not be recoverable.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the item) is included in the Statement of Comprehensive Income in the period the
item is derecognised.
Cash and cash equivalents
j.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable
on demand form an integral part of the Group’s cash management and are included as a component of
cash and cash equivalents for the purpose of the statement of cash flows.
Foreign currencies
k.
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange
ruling at the statement of financial position date and the gains or losses on translation are included in the
Statement of Comprehensive Income. The functional currency of the Group is pounds sterling.
Plexus Holdings plc Annual Report 2021
54
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
Leases
l.
Operating lease rentals are charged to the Statement of Comprehensive Income on a straight-line basis
over the period of the lease.
The Group has adopted IFRS 16, which supersedes IAS 17, sets out principles for the recognition,
measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer
(‘lessee’) and the supplier (‘lessor’). Lessee accounting changes substantially under this new standard
while there is little change for the lessor. IFRS 16 eliminates the classification of leases as either operating
leases or financing leases and, instead, introduces a single lessee accounting model. A lessee will be
required to recognise assets and liabilities for all leases with a term of more than 12 months (unless the
underlying asset is of low value) and is required to present depreciation of leased assets separately from
interest on lease liabilities in the consolidated statement of comprehensive income.
The Group has taken the exemptions where applicable for low value and short-term leases. A lessor will
continue to classify its leases as operating leases or financing leases, and to account for those two types
of leases separately. On inception an asset and liability both valued of £1.95m was recognised.
In applying IFRS 16 for the first time the Group has used the following practical expedients permitted
by the standard:
l
l
l
Accounting for operating leases with a remaining lease term of less than 12 months as at 1 January
2019 as short-term leases
Excluding initial direct costs for the measurement of the right-of-use asset at the date of initial
application; and
Using hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial
application. Instead, for contracts entered into before the transition date the Group relied on its assessment
made applying IAS 17 and Interpretation 4 Determining whether an arrangement contains a lease.
m.
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first in first out
basis and includes all direct costs incurred and attributable production overheads. Net realisable value
is based on estimated selling price allowing for all further costs to completion and disposal.
Inventory
Pensions
n.
The Group offers a contributory Group stakeholder pension scheme, into which the Group will make
matching contributions up to a pre-agreed level of base salary; the scheme is open to executive directors
and permanent employees. Directors may choose to have contributions paid into personal pension plans.
Payments to the defined contribution retirement benefit plans are recognised as an expense when the
employees have rendered service entitling them to contributions.
Dividends
o.
Dividends are recognised when they become legally payable. In the case of interim dividends to equity
shareholders, this is when they are paid. In the case of final dividends, this is when approved by the
shareholders at the AGM. Dividends unpaid at the statement of financial position date are only
recognised as a liability at that date to the extent that they are appropriately authorised and are no longer
at the discretion of the Company. Unpaid dividends that do not meet these criteria are disclosed in the
notes to the financial statements.
Classification of financial instruments issued by the Group
p.
In accordance with IAS 32, financial instruments issued by the Group are treated as equity (i.e. forming
part of shareholders’ funds) only to the extent that they meet the following two conditions:
(a)
they include no contractual obligations upon the Company (or Group as the case may be) to deliver
cash or other financial assets or to exchange financial assets or financial liabilities with another party
under conditions that are potentially unfavourable to the Company (or Group); and
55
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
(b) where the instrument will or may be settled in the Company’s own equity instruments, it is either
a non-derivative that includes no obligation to deliver a variable number of the Company’s own
equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount
of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability.
Where the instrument so classified takes the legal form of the Company’s own shares, the amounts
presented in these financial statements for called up share capital and share premium account exclude
amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part of finance charges. Finance
payments associated with financial instruments that are classified as part of shareholders’ funds (see
dividends policy), are dealt with as appropriations in the reconciliation of movements in shareholders’ funds.
Share based payments
q.
The Group issues share options to directors and employees, which are measured at fair value at the date
of grant. The fair value of the equity settled options determined at the grant date is expensed on a
straight-line basis over the vesting period based on an estimate of the number of options that will
actually vest. The Group has adopted a Stochastic model to calculate the fair value of options, which
enables the Total Shareholder Return (TSR) performance condition attached to the awards to be
factored into the fair value calculation.
r. Management of capital
The Group’s capital is comprised of share capital, shares held in treasury and retained earnings. (notes 20
and 21).
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern so
that it can continue to provide returns to shareholders.
The Group sets the amount of capital in proportion to its assessment of the risks that it faces. The Group
manages the capital structure and adjusts it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure the Group may
adjust the value of dividends paid or issue new equity.
Significant judgements made by management
s.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The principal areas in which significant judgements have been made by management are as follows:
(a)
In assessing the intangibles assets for impairment the directors have prepared projections of future
revenues expected to be derived from exploiting the Group’s intangible assets in future periods as part
of their consideration of impairment. The core technology has proven commercial value, despite the
recent trading losses made. The projections for future application are subject to a significant degree
of judgement due to the Group working to establish new markets for its technology after moving away
from the Jack-up rental exploration wellhead business which was disposed of in 2018.
(b) The directors have considered the recognition of a deferred tax asset in relation to future utilisation
of trading losses. That recognition is predicated on a judgement in relation to the probable extent that
sufficient taxable profit will be available against which the unused tax losses can be utilised. In arriving
at that judgement the directors have adopted modelling based on approved budgets for the next 12
months and applied estimates and assumptions consistent with those set out in note 12 in relation to
expectation of future developments, sales models and growth rates.
Plexus Holdings plc Annual Report 2021
56
Notes to the Consolidated Financial Statements continued
1.
Summary of significant accounting policies (continued)
t.
Key assumptions and sources of estimation
Judgements
The life of the Group’s Intellectual Property is estimated with reference to the lifespan of the patents
which help protect the knowledge and the Group’s ability to generate income from it. Changes to these
estimates can result in significant variations in the carrying value and amounts charged to the
consolidated statement of comprehensive income in specific periods.
When measuring goodwill and intangible assets for impairment a range of assumptions are required
and these are detailed in the Goodwill and Intangible Asset notes 1g and 1h.
Estimates
Provisions requiring management estimates and judgements: A provision has been made against slow
moving inventory based upon historical experience of the viability of the older parts as technological
improvements are made. Changes to these estimates can result in significant variations in the carrying
value and amounts charged to the consolidated statement of comprehensive income in specific periods.
2.
Revenue
By geographical area
UK
Europe
Rest of World
The revenue information above is based on the location of the customer.
By revenue stream
Rental
Service
Sold Equipment
Royalty Fees
Rebillables
Support services and Engineering
2021
£’000
1,992
–
25
–––––
2,017
–––––
2021
£’000
401
235
835
386
19
141
–––––
2,017
–––––
2020
£’000
131
489
23
–––––
525
–––––
2020
£’000
–
9
26
476
14
–
–––––
525
–––––
Substantially all of the revenue in the current and previous periods derives from the sale, rental and the
provision of services relating to the Group’s patent protected equipment.
57
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
3.
Segment Reporting
The Group derives revenue from the sale of its POS-GRIP technology and associated products, the rental
of equipment utilising the POS-GRIP technology and service income principally derived in assisting with
the commissioning and on-going service requirements of our equipment. These income streams are all
derived from the utilisation of the technology which the Group believes is its only segment.
Per IFRS 8, the operating segment is based on internal reports about components of the group, which are
regularly reviewed and used by the board of directors being the Chief Operating Decision
Maker (“CODM”).
All of the Group’s non-current assets are held in the UK.
The following customers each account for more than 10% of the Group’s continuing revenue:
Customer 1
Customer 2
4. Group operating loss
2021
£’000
1,485
386
2020
£’000
489
–
Loss on ordinary continuing activities before tax taxation is stated after charging/(crediting).
2021
£’000
2020
£’000
Depreciation of tangible assets
Amortisation of intangible assets:
– Intellectual property rights
– Research and development
– Computer software
– IFRS 16 lease amortisation
Operating lease charges:
– Land and buildings
– Other
Foreign currency exchange loss
Gain on disposal of property, plant and equipment
Directors’ emoluments
Inventories recognised as expense
Inventory write down provision
Auditors’ remuneration:
Fees payable to the Company’s auditors for:
The audit of the Company’s annual accounts
The audit of the Company’s subsidiary pursuant to legislation
Audit related assurance services
Total audit fees
482
237
676
3
303
17
47
7
1
693
319
569
10
30
3
–––––
43
–––––
680
237
664
11
304
7
46
6
6
737
12
134
10
30
3
–––––
43
–––––
Plexus Holdings plc Annual Report 2021
58
Notes to the Consolidated Financial Statements continued
5.
Staff numbers and costs
The average number of persons, including executive directors, during the year was:
Management
Technical
Administrative
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Pension contributions to defined contribution plans
2021
Number
2020
Number
6
25
5
–––––
36
–––––
2021
£’000
2,466
231
111
–––––
2,808
–––––
6
26
5
–––––
37
–––––
2020
£’000
2,555
235
111
–––––
2,901
–––––
Key management are considered to be the Board of Directors and details of Directors’ remuneration are
given in the remuneration report on page 38 and this forms part of the financial statements.
Other income includes Job Retention Scheme income of £87k (2020: £33k).
6.
Finance Income
Bank interest receivable
Investment income
Other interest receivable
7.
Finance Costs
On bank loans and overdraft
Investment costs
Fair value adjustment on financial assets
Interest on right of use assets
2021
£’000
24
109
10
–––––
143
–––––
2021
£’000
8
37
19
39
–––––
103
–––––
2020
£’000
46
123
23
–––––
192
–––––
2020
£’000
4
37
24
46
–––––
111
–––––
59
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
8.
Income tax credit
(i) The taxation charge for the year comprises:
UK Corporation tax:
Adjustment in respect of prior years
Foreign tax
Current tax on income for the year
Adjustment in respect of prior years
Total current tax credit
Deferred tax:
Origination and reversal of timing differences
Adjustment in respect of prior years
Total deferred tax
Total tax charge/(credit)
The effective rate of tax is 19% (2020: 19%)
Tax credit on discontinued activities
Tax credit on continuing activities
Total tax charge/(credit)
(ii) Factors affecting the tax charge on continuing activities for the year
Loss on ordinary activities before tax
Tax on (loss)/profit at standard rate of UK
corporation tax of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes
Effect of change in tax rate
Tax adjustments on share-based payments
Adjustments in respect of prior year
Foreign tax rates
Deferred tax not recognised
Total tax credit on continuing activities
2021
£’000
(83)
–––––
(83)
–––––
1
–
–––––
1
–––––
(82)
–––––
(23)
(255)
–––––
232
–––––
150
–––––
412
(262)
–––––
150
–––––
2021
£’000
(4,372)
(831)
186
(816)
–
(92)
–
1,291
–––––
(262)
–––––
2020
£’000
(76)
–––––
(76)
–––––
–
72
–––––
72
–––––
(4)
–––––
(648)
(223)
–––––
(871)
–––––
(875)
–––––
117
(992)
–––––
(875)
–––––
2020
£’000
(5,050)
(960)
163
(153)
4
(46)
–
–
–––––
(992)
–––––
Plexus Holdings plc Annual Report 2021
60
Notes to the Consolidated Financial Statements continued
8.
Income tax credit (continued)
(iii) Movement in deferred tax asset balance
Deferred tax asset at beginning of year
Debit/(credit) to Statement of Comprehensive Income
Deferred asset at end of year
(iv) Deferred tax asset balance
The deferred tax asset balance is made up of the following items:
Difference between depreciation and capital allowances
Tax provisions
Tax losses
Deferred tax asset at end of year
2021
£’000
(2,130)
231
–––––
(1,899)
–––––
2021
£’000
1,131
(1)
(3,029)
–––––
(1,899)
–––––
2020
£’000
(1,259)
(871)
–––––
(2,130)
–––––
2020
£’000
902
(2)
(3,030)
–––––
(2,130)
–––––
As outlined in the accounting policy (note 1f) the deferred tax asset is reviewed at the end of each
reporting period. Following a review of the Group’s financial models and taxable profitability the Group
has a further £1,290k not recognised. The group has recognised a deferred tax asset based upon its
mid-term forecast profitability. Where recoverability is dependent upon profits arising beyond this
period, the group has determined that the threshold for recognition is not met and so restricted the
deferred tax asset recognised. An amount of deferred tax of £1,290k has not been recognised but remains
available for future loss utilisation.
9. Discontinued Operations
On 1st February 2018 the Group sold its “Jack-up Business” to TFMC for an initial gross consideration
of £15m, with an additional sum of up to £27.5m payable dependent on the future performance of the
Jack-up Business during a three year earn-out period.
The recognised profit on discontinued operations in the current year represents the deferred consideration
received which exceeded the debtor receivable.
The recognised loss on discontinued operations in the prior year represents the impairment of deferred
consideration receivable presented in prepayments and other amounts.
Revenue
Expenses
Gain / (loss) before tax of discontinued operations
Income tax charge
Loss after tax of discontinued operations
Loss after taxation from discontinued operations
2021
£’000
–
20
20
(412)
(392)
–––––
(392)
–––––
2020
£’000
–
(2,432)
(2,432)
(117)
(2,549)
–––––
(2,549)
–––––
The Statement of cash flows includes the following amounts related to discontinued operations:
Operating activities
Investing activities
Financing activities
Net cash generated/(used) from discontinued activities
2021
£’000
–
–
–
–––––
–
–––––
2020
£’000
–
–
–
–––––
–
–––––
61
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
10. Loss per share
Loss attributable to shareholders – continuing operations
Loss attributable to shareholders – discontinued operations
Loss attributable to shareholders
Weighted average number of shares in issue
Dilution effects of share schemes
Diluted weighted average number of shares in issue
Loss per share
Basic Loss per share for continuing operations
Diluted Loss per share for continuing operations
Basic Loss per share for discontinued operations
Diluted loss per share for discontinued operations
2021
£’000
2020
£’000
(4,110)
(392)
––––––––––
(4,502)
––––––––––
(4,058)
(2,549)
––––––––––
(6,607)
––––––––––
Number
Number
100,435,744
–
––––––––––
100,435,744
––––––––––
(4.09p)
(4.09p)
––––––––––
(0.39p)
(0.39p)
––––––––––
103,406,041
–
––––––––––
103,406,041
––––––––––
(3.92p)
(3.92p)
––––––––––
(2.47p)
(2.47p)
––––––––––
Basic loss per share is calculated on the results attributable to ordinary shares divided by the weighted
average number of shares in issue during the year.
Diluted earnings per share calculations include additional shares to reflect the dilutive effect of share
option schemes. As a loss was made on continuing operations for the current year the option schemes
are considered to be anti-dilutive.
11. Goodwill
Cost
As at 30 June 2019, 2020 and 2021
Impairment
As at 1 July 2019, 2020 and 2021
Net Book Value
As at 30 June 2020 and 2021
£’000
767
––––––
–
––––––
767
––––––
The recoverable amount of goodwill has been determined on a value in use basis.
The key assumptions on which the valuation is based are that:
l
l
l
Industry acceptance will over time result in growth of the business above long-term industry growth
rates. Management consider this to be appropriate for a new technology still gaining industry
acceptance,
Prices will rise with inflation,
Staff wage inflation will be higher than general inflation but will not rise in line with sales.
These assumptions were determined from the directors’ knowledge and experience.
Plexus Holdings plc Annual Report 2021
62
Notes to the Consolidated Financial Statements continued
11. Goodwill (continued)
The cash flows are based upon a 20-year period which is the period covered by the relevant patents, and,
in accordance with historical trends and current expectations. In making these calculations Management
have not included an assessment of the terminal value. The company’s Weighted Average Cost of Capital
for discounting purposes has been measured at 10.87%. A discounted cashflow model has been prepared
for both an organic sales model and a licensing sales model. The cashflows are based upon approved
budgets for the following 12 months, beyond this they are based upon management’s expectations of
future developments. As the Group are starting from a base point of trading the growth rates are high
in the initial years (varying from 50% to 400% depending on the model employed), then in later years
where the technology becomes established the expected rate of growth declines (varying from 5% to 10
depending on the model employed).
Management regularly assesses the sensitivity of the key assumptions and the probability that any of
them would change to the degree that the carrying value would exceed the recoverable amount. It would
require significant adjustments to key assumptions before the goodwill would be impaired Note 1g
provides information on the Goodwill.
12.
Intangible Assets
Cost
As at 30 June 2019
Additions
Disposals
As at 30 June 2020
Additions
Disposals
As at 30 June 2021
Amortisation
As at 30 June 2019
Charge for the year
On disposals
As at 30 June 2020
Charge for the year
On disposals
As at 30 June 2021
Net Book Value
As at 30 June 2021
As at 30 June 2020
Intellectual
Property
£’000
Patent and
Other
Development
£’000
4,600
–
–
––––––––––
4,600
–
–
––––––––––
4,600
––––––––––
3,076
237
–
––––––––––
3,313
237
–
––––––––––
3,550
––––––––––
1,050
––––––––––
1,287
––––––––––
13,096
359
–
––––––––––
13,455
235
–
––––––––––
13,690
––––––––––
3,758
664
–
––––––––––
4,422
676
–
––––––––––
5,098
––––––––––
8,592
––––––––––
9,033
––––––––––
Computer
Software
£’000
332
2
(73)
––––––––––
261
–
–
––––––––––
261
––––––––––
318
11
(73)
––––––––––
256
3
–
––––––––––
259
––––––––––
2
––––––––––
5
––––––––––
Total
£’000
18,028
361
(73)
––––––––––
18,316
235
–
––––––––––
18,551
––––––––––
7,152
912
(73)
––––––––––
7,991
916
–
––––––––––
8,907
––––––––––
9,644
––––––––––
10,325
––––––––––
63
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
12.
Intangible Assets (continued)
When assessing the valuation of the Group’s assets the key assumptions on which the valuation is based
are that:
l
l
l
l
Industry acceptance will result in continued growth of the business above long-term industry growth
rates Management considers this to be appropriate for a new technology gaining industry acceptance,
Prices will rise with inflation,
Costs, in particular direct costs and staff costs are based on past experiences, and management’s
knowledge of the industry,
Staff wage inflation will be higher than general inflation but will not rise in line with sales.
These assumptions were determined from the directors’ knowledge and experience.
The value in use calculation is based on cash flow forecasts derived from the most recent financial model
information available. Although the Group’s technology is proven and has proven commercial value the
exploitation of opportunities beyond the rental wellhead exploration equipment services market are at
a relatively early stage and the commercialisation process is expected to be a long term one. The cash
flow forecasts therefore extend to 2040 to ensure the full benefit of all current projects is realised. The
rationale for using a timescale up to 2040 with growth projections which increase in the first five years
and decline thereafter, is that as time progresses, Plexus expects to gain an increasing foothold in the
surface, subsea and other equipment markets, including the recent re-entry into the Jack-up exploration
rental wellhead sector. As the Group is starting from a base point of trading the growth rates are
expected to be high in the initial years (varying from 50% to 400% depending on the model employed)
then in later years where the technology becomes established the expected rate of growth declines
(varying from 5% to 10 depending on the model employed).
The key assumptions used in these calculations include discount rate, revenue projections, growth rates,
expected gross margins and the lifespan of the Group’s technology. Management estimates the discount
rates using pre-tax rates that reflect current market assessments of the time value of money and risks
specific to the Group and the markets in which it operates. Revenue projections, growth rates, margins
and technology lifespans are all estimated based on the latest business models and the most recent
discussions with customers, suppliers and other business partners.
Management regularly assesses the sensitivity of the key assumptions and the probability that any of
them would change to the degree that the carrying value would exceed the recoverable amount. It would
require significant adjustments to key assumptions before the goodwill and other intangibles would
be impaired.
Patent and other development costs are internally generated Note 1h provides additional information
on intangible assets.
Plexus Holdings plc Annual Report 2021
64
Notes to the Consolidated Financial Statements continued
13.
Investments
Included within the consolidated group accounts are the following subsidiaries and associated undertakings:
Country of Registration Nature of Business
Percentage of Ordinary
Shares held
Subsidiary/Associated
undertaking
Plexus Ocean Systems
Limited
Scotland
Plexus Limited
Plexus Applied
Technologies Limited
Scotland
Scotland
Plexus Holdings
USA Inc.
Plexus Ocean Systems
US. LLC
Plexus Deepwater
Technologies Limited
USA
USA
USA
Plexus Response
Services Limited
Turks and
Caicos Islands
Plexus Subsea
International Limited
Turks and
Caicos Islands
Plexus Ocean Systems
(Malaysia) Sdn Bhd
Malaysia
Plexus Ocean Systems
(Brunei) Sdn Bhd
Brunei
Plexus Offshore Systems Singapore
(Singapore) Pte Ltd
Supply of wellheads
and associated
equipment for
oil and gas drilling
Dormant
Dormant
Investment Holding
Investment Holding
Dormant
Dormant
Commercial exploitation
of subsea applications
Supply of wellheads and
associated equipment for
oil and gas drilling
Supply of wellheads and
associated equipment for
oil and gas drilling
Supply of wellheads and
associated equipment for
oil and gas drilling
Afrotel Corporation Ltd Turks and
Dormant
Caicos Islands
Scotland
Kincardine
Manufacturing Services
Limited
Plexus Pressure Control
Limited
Scotland
The Group’s investments are unlisted.
Manufacture and machining
of fabricated metal products
Design, fabrication and
manufacture of valve
related products
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
65
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
14.
Investment in associate
Investment in associate at 30 June 2019
Share of profit for the period
Dividends received
Impairment of investment
Investment in associate at 30 June 2020
Share of loss for the period
Dividends received
Investment in associate at 30 June 2021
£’000
907
265
(140)
(134)
––––––––––
898
––––––––––
(77)
(100)
––––––––––
721
––––––––––
On 14 December 2018 Plexus Ocean Systems Limited acquired a 49% interest in Kincardine
Manufacturing Services Limited ('KMS') for a consideration of £735k plus associated legal fees. KMS
are a precision engineering company which serves the oil and gas industry. This is viewed as a long-term
strategic investment by Plexus. KMS are based at Sky House, Spurryhillock Industrial Estate, Stonehaven,
Aberdeenshire AB39 2NH.
Following the investment Graham Stevens PLC Finance Director was appointed to the board of KMS.
The company remains under the control and influence of the 51% majority shareholders.
On 30 June 2020, an impairment review was undertaken. The investment was revalued using a profit after
tax earnings model. This resulted in an impairment charge of £134k. There was no impairment for the
period to 30 June 2021.
The summary financial information of KMS, extracted on a 100% basis from the accounts for the
6 months to 30 June 2021 are as follows:
Assets
Liabilities
Revenue
(Loss)/profit before tax
2021
£’000
2,888
1,998
3,313
(194)
2020
£’000
3,001
1,714
2,554
195
KMS have a December 31 year-end date. Therefore, the profit before tax figure is based on management
accounts for the 12-month period to 30 June 2021.
Plexus Holdings plc Annual Report 2021
66
Notes to the Consolidated Financial Statements continued
15. Property, plant and equipment
Tenant
Buildings Improvements
£’000
£’000
Assets under
Equipment Construction
£’000
£’000
Motor
Vehicles
£’000
Total
£’000
Cost
As at 30 June 2019
Additions
Disposals
As at 30 June 2020
Additions
Transfers
Disposals
As at 30 June 2021
Depreciation
As at 30 June 2019
Charge for the year
On disposals
As at 30 June 2020
Charge for the year
On disposals
As at 30 June 2021
Net book value
As at 30 June 2021
As at 30 June 2020
3,699
41
–
––––––––––
3,740
–
–
–
––––––––––
3,740
––––––––––
1,338
152
–
––––––––––
1,490
153
–
––––––––––
1,643
––––––––––
2,097
––––––––––
2,250
––––––––––
716
–
(2)
––––––––––
714
–
–
–
––––––––––
714
––––––––––
466
61
(2)
––––––––––
525
41
–
––––––––––
566
––––––––––
148
––––––––––
189
––––––––––
5,432
144
(183)
––––––––––
5,393
42
128
(2)
––––––––––
5,561
––––––––––
4,252
464
(147)
––––––––––
4,569
284
(2)
––––––––––
4,851
––––––––––
710
––––––––––
824
––––––––––
–
–
–
––––––––––
–
128
(128)
–
––––––––––
–
––––––––––
–
–
–
––––––––––
–
–
–
––––––––––
-
––––––––––
-
––––––––––
-
––––––––––
17
–
–
––––––––––
17
–
–
–
––––––––––
17
––––––––––
4
3
–
––––––––––
7
4
–
––––––––––
11
––––––––––
6
––––––––––
10
––––––––––
9,864
185
(185)
––––––––––
9,864
170
-
(2)
––––––––––
10,032
––––––––––
6,060
680
(149)
––––––––––
6,591
482
(2)
––––––––––
7,071
––––––––––
2,961
––––––––––
3,273
––––––––––
The value in use of property, plant and equipment is not materially different from the carrying value.
16. Financial Asset
Financial instruments held at fair value
2021
£’000
3,042
––––––––––
3,042
––––––––––
2020
£’000
2,995
––––––––––
2,995
––––––––––
The financial asset relates to cash invested in an investment portfolio, made up of high-yield bonds held
at fair value in the statement of financial position. The portfolio can be divested to cash at any time.
Included in the statement of comprehensive income is a write-down in the carrying value of the financial
asset of £19k (2020: £24k). The fair value of the investment is evaluated by reviewing the portfolio on
a quarterly basis, including the reporting date of 30 June 2021.
67
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
17.
Inventories
Raw materials and consumables
Finished goods and goods for resale
18. Trade and other receivables
Trade receivables
Prepayment and other amounts
2021
£’000
91
484
––––––––––
575
––––––––––
2021
£’000
772
279
––––––––––
1,051
––––––––––
2020
£’000
309
561
––––––––––
870
––––––––––
2020
£’000
503
2,479
––––––––––
2,982
––––––––––
Trade and other receivables are classified as loans and receivables and are held at amortised cost. The
carrying value approximates fair value.
In the prior year prepayments and other amounts included the deferred consideration from the sale of
the discontinued operation (note 9). Following the final payment of £2,186k in the current year this
debtor reduced to nil.
19. Trade and other payables
Trade payables
Social security and other taxes
Other payables and accruals
20. Share Capital
Authorised:
Equity: 110,000,000 (2020: 110,000,000) Ordinary shares of 1p each
Allotted, called up and fully paid:
Equity: 105,386,239 (2020: 105,386,239) Ordinary shares of 1p each
2021
£’000
136
81
426
––––––––––
643
––––––––––
2020
£’000
255
68
455
––––––––––
778
––––––––––
2021
£’000
2020
£’000
1,100
––––––––––
1,054
––––––––––
1,100
––––––––––
1,054
––––––––––
Plexus Holdings plc Annual Report 2021
68
Notes to the Consolidated Financial Statements continued
21. Shares held in treasury
Buyback of shares
2021
£’000
2,500
––––––––––
2020
£’000
2,500
––––––––––
On 1 February 2019 Plexus Holdings PLC completed the acquisition of 4,950,495 Ordinary Shares
beneficially held by LLC Gusar. Following the above transaction, the Company's issued share capital
comprises 105,386,239 Ordinary Shares, of which 4,950,495 Ordinary Shares are held in treasury. The
Company now has a total of 100,435,744 Ordinary Shares in issue with voting rights. This figure,
100,435,744, should be used by shareholders as the denominator when determining whether they are
required to notify their interest in, or a change to their interest in the Company under the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules.
22. Share based payments
Share options have been granted to subscribe for ordinary shares, which are exercisable between 2021
and 2031 at prices ranging from £0.385 to £1.18. At 30 June 2021 there were 3,577,899
options outstanding.
The Company has an unapproved share option scheme for the directors and employees of the Group.
Options are exercisable at the quoted mid-market price of the Company’s shares on the date of grant.
The options may vest in three equal portions, at the end of each of three assessment periods, provided
that the option holder is still employed by the Group at vesting date and that the Total Shareholder Return
(TSR) performance conditions are satisfied. Options that do not meet the TSR criteria at the first available
vesting date may vest at the end of the complete assessment period, provided that the compounded TSR
performance is met over the complete assessment period. Vested but unexercised options ordinarily expire
on the tenth anniversary of the date of grant. The options are equity settled.
On 9 July 2015 the directors approved an amendment to the rules of the scheme such that the Company
is permitted to extend the exercise period for options granted under the scheme by a further ten years.
Subsequently on 8 June 2017, 13 December 2019 and 25 March 2021 the Company entered into deeds of
amendment with Ben van Bilderbeek, Graham Stevens, Craig Hendrie, and eleven employees in respect
of options granted to them on 20 June 2007 and 17 December 2009 and 25 March 2011 under the scheme,
to extend the exercise period by ten years, subject to all other terms of the scheme rules.
Details of the share options outstanding during the year are as follows:
Outstanding at the beginning of the period
Lapsed during the year
Outstanding at the end of the period
Exercisable at the end of the period
2021
2020
Weighted
Average
Exercise
Price
0.52
–
0.52
0.52
Weighted
Average
Exercise
Price
0.53
0.60
0.52
0.52
No of
shares
3,677,899
(100,000)
3,577,899
3,577,899
No of
shares
3,577,899
–
3,577,899
3,577,899
The Group has recognised an expense in the current year of £nil (2020: £nil) towards equity settled
share-based payments.
The weighted average contractual life of the share options outstanding at the end of the period is 7 years
3 months.
69
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
23. Reconciliation of net cash flow to movement in net cash/debt
Movement in cash and cash equivalents
Repayment of bank loans
Drawdown of Lombard facility
(Decrease)/increase in net cash in year
Net cash at start of year
Net cash at end of year
24. Analysis of net cash/(debt)
2021:
Cash in hand and at bank
Bank Lombard facility
Lease Liability
Total
2021
£’000
1,088
–
(2,044)
––––––––––
(956)
4,087
––––––––––
3,131
––––––––––
Cashflow
£’000
1,088
(2,044)
278
––––––––––
(678)
––––––––
2020
£’000
(1,065)
75
–
––––––––––
(990)
5,077
––––––––––
4,087
––––––––––
At end
of year
£’000
5,175
(2,044)
(1,401)
––––––––––
1,730
––––––––
At beginning
of year
£’000
4,087
–
(1,679)
––––––––––
2,408
––––––––
A maturity analysis of the Bank Lombard Facility and Lease Liability are included in notes 25 and
26 respectively.
2020:
Cash in hand and at bank
Bank loans
Lease Liability
Total
At beginning
of year
£’000
5,152
(75)
(1,948)
––––––––––
3,129
––––––––
Cashflow
£’000
(1,065)
75
269
––––––––––
(721)
––––––––
At end
of year
£’000
4,087
–
(1,679)
––––––––––
2,408
––––––––
Plexus Holdings plc Annual Report 2021
70
Notes to the Consolidated Financial Statements continued
25. Financial instruments and risk management
Treasury management
The Group’s activities give rise to a number of different financial risks: market risk (including foreign
currency exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s management
regularly monitors the risks and potential exposures to which the Group is exposed and seeks to take
action, where appropriate, to minimise any potential adverse impact on the Group’s performance.
Risk management is carried out by Management in line with the Group’s Treasury policies. The Group’s
Treasury policies cover specific areas, such as foreign exchange risk, interest rate risk and investment of
excess cash. The Group’s policy does not permit entering into speculative trading of financial instruments
and this policy has been applied throughout the year.
(a) Market risks
(i)
Foreign currency exchange risk
The Group is exposed to foreign exchange risk arising from various currencies. In order to protect
the Group’s statement of financial position from movements in exchange rates, the Group converts
foreign currency balances into sterling on receipt so far as they will not be used for future payments
in the foreign currency.
The Group carefully monitors the economic and political situation in the countries in which it
operates to ensure appropriate action is taken to minimise any foreign currency exposure.
The Group’s main foreign exchange risk relates to movements in the sterling/US dollar and
sterling/euro exchange rates. Movements in these rates impact the translation of US dollar and euro
denominated net assets. Outstanding debts are in GBP and USD, minimal cash is held in foreign
currency. Therefore, the Group has minimal foreign exchange risk for the reporting period.
(ii)
Interest rate risk
The Group has historically financed its operations through a mixture of retained profits and bank
borrowings. The Group borrows in sterling at floating rates of interest.
The Group is also exposed to interest rate risk on cash held on deposit. The Group’s policy is to
maximise the return on cash deposits whilst ensuring that cash is deposited with a financial
institution with a credit rating of ‘AA’ or better.
The consolidated income statement would be affected by gain/loss £49k (2020: £30k) by a reasonably
possible 1 percentage point change down/up in LIBOR interest rates on a full year basis.
(b) Credit risk
The Group’s credit risk primarily relates to its trade receivables. Responsibility for managing credit risks
lies with the Company’s management.
The Group applies the IFRS 9 simplified approach to measure expected credit losses for all trade
receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets
have been grouped based on shared credit risk characteristics and the number of days past due. The
expected loss rates are based on payment profiles of sales and the corresponding historical credit losses
experienced within this period. The amount of expected credit losses is updated at each reporting date to
reflect changes in credit risk since initial recognition of the respective financial instrument.
The investment portfolio consists of funds invested in high-yield bonds with reputable financial
institutions. The Company do not consider the investment portfolio presents a credit risk.
A customer evaluation is typically obtained from an appropriate credit rating agency. Where required,
appropriate trade finance instruments such as letters of credit, bonds, guarantees and credit insurance
will be used to manage credit risk.
71
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
25. Financial instruments and risk management (continued)
The Group’s major customers are typically large companies which have strong credit ratings assigned
by international credit rating agencies. Where a customer does not have sufficiently strong credit ratings,
alternative forms of security such as the trade finance instruments referred to above may be obtained.
The Group’s customer base is concentrated on a few major companies, but management believe that
the calibre of these companies means that no material credit risk provision is required.
Management review trade receivables across the Group based on receivable days’ calculations to assess
performance. There is significant management focus on receivables that are overdue. All receivables are
with large corporations with good credit history with which the entity has not experienced any
recoverability issues in the past. Individual trade receivables and contract assets are written off when
management deem them not to be collectible. No bad debt provision has been provided for within
the accounts.
Amounts deposited with banks and other financial institutions also give rise to credit risk. This risk is
managed by limiting the aggregate amount of exposure to any such institution by reference to their rating
and by regular review of these ratings. The possibility of material loss in this way is considered unlikely.
The currency composition of trade receivables at the year-end was:
Sterling
U.S Dollar
The ageing of trade receivables at the year-end was:
Not past due
Past due 0-30 days
Past due 30+ days
Past due 120+ days
(c) Liquidity risk
2021
£’000
555
217
–––––––
772
–––––––
2021
£’000
772
–
–
–
–––––––
772
–––––––
2020
£’000
503
–
–––––––
503
–––––––
2020
£’000
476
–
–
27
–––––––
503
–––––––
The Group has historically financed its operations through equity finance and bank borrowings. The
Group has continued with its policy of ensuring that there are sufficient funds available to meet the
expected funding requirements of the Group’s operations and investment opportunities. The Group
monitors its liquidity position through cash flow forecasting. Based on the current outlook the Group
has sufficient funding in place to meet its future obligations.
Plexus Holdings plc Annual Report 2021
72
Notes to the Consolidated Financial Statements continued
25. Financial instruments and risk management (continued)
30 June 2021
Cash and liquid resources
30 June 2020
Cash and liquid resources
– Sterling
– US Dollar
– Malaysian
– Sterling
– US Dollar
– Malaysian
Floating Non-interest
bearing
£’000
rates
£’000
Book and
fair value
£’000
4,738
–
–
––––––––––
4,738
––––––––––
3,971
–
–
––––––––––
3,971
––––––––––
431
4
2
––––––––––
437
––––––––––
94
6
16
––––––––––
116
––––––––––
5,169
4
2
––––––––––
5,175
––––––––––
4,065
6
16
––––––––––
4,087
––––––––––
At 30 June 2021 the Group had £5,175k of cash. The average rate of interest earned in the year is on a
floating rate basis and ranged between 0% and 1.25% on sterling deposits.
Cash is categorised as loans and receivables.
The Group has classified its financial instruments into the three levels prescribed under the accounting
standards. The definition of the levels is as follows.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded
derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of
the reporting period. The quoted market price used for financial assets held by the group is the current
bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3. This is the case for unlisted equity securities.
Non-current assets (note 16) meet the level 1 criteria and have been recorded in the statement of financial
position at fair value. As at 30 June 2021 the fair value of the financial assets held by the Group are
£3,042k (2020: £2,995k).
.
73
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
25. Financial instruments and risk management (continued)
The interest rate and currency profiles of the Group’s financial liabilities at 30 June 2021 are as follows:
30 June 2021
Bank Lombard facility – Sterling
30 June 2020
Bank Lombard facility – Sterling
30 June 2021
Bank Lombard facility – Sterling
Total
30 June 2020
Bank Lombard facility – Sterling
Total
Floating Non-interest
bearing
£’000
rates
£’000
Book and
fair value
£’000
2,044
––––––––––
–
––––––––––
2,044
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
Due
within
1 Year
£’000
Due
between
2–5 Years
£’000
Due
after
5 Years
£’000
Total
£’000
2,044
2,044
––––––––––
–
–
––––––––––
–
–
––––––––––
2,044
2,044
––––––––––
–
–
––––––––––
–
–
––––––––––
–
–
––––––––––
–
–
––––––––––
Bank borrowings are other financial liabilities which are measured at amortised cost. The carrying value
approximates fair value.
26. Leased assets and liabilities
Leased Assets
The Group’s leased assets relates to a building. Key movements relating to the lease balance is
presented below:
Creation of asset on inception 1st July 2019
Amortisation charge
Balance at 30 June 2020
Amortisation charge
As at 30 June 2021
£’000
1,852
(304)
–––––––
1,548
(303)
–––––––
1,245
–––––––
Plexus Holdings plc Annual Report 2021
74
Notes to the Consolidated Financial Statements continued
26. Leased assets and liabilities (continued)
Leased Liabilities
The maturity of the lease liability is as follows
Less than one year
One to five years
Total lease liability
2021
£’000
316
1,085
–––––––
1,401
–––––––
2020
£’000
278
1,401
–––––––
1,679
–––––––
The total interest expense on lease liabilities and the total cash outflow in the year to 30 June 2021 was
£39k and £342k respectively (2020: £46k and £315k).
The borrowing rate applied to the lease liability is 2.5%.
Other leases
The Group leases storage facilities, IT equipment and other workshop machinery with terms between
1 month and 2 years. The Group considers these assets to be of low value or short-term in nature.
Therefore, no right of use assets and lease liabilities are recognised on these leases.
Expenses recognised relating to short-term leases and leases of low value for the year to June 2021 was
£53k and £11k respectively (2020: £62k and £11k).
The Group had a capital commitment of £nil as at 30 June 2021 (2020: £nil).
27. Contingent liabilities
The Group had no contingent liabilities as at 30 June 2021 (2020: £nil).
28. Related party transactions
Control
No one party owns a controlling interest in the Company.
Ultimate parent company
There is no ultimate parent company.
Transactions
During the year the Group had the following transactions with related parties:
Purchase of goods and services from Other Related Parties
Payables to Other Related Parties
Repayables from Other Related Parties
Purchases from associate undertaking
2020
£’000
342
–
–
65
–––––––
2020
£’000
315
–
1
7
–––––––
Other related parties were @SIPP (Pension Trustees) Limited, OFM Holdings Limited and Plexus
Properties International Limited. The transactions related to accommodation, rent and related charges.
@SIPP (Pension Trustees) Limited are the trustees of Ben van Bilderbeek’s pension fund. OFM
Holdings Limited is a trust of which Ben van Bilderbeek’s family are beneficiaries. Plexus Properties
International Limited is a company under the control of the van Bilderbeek family.
All of these transactions were between either Plexus Ocean Systems Limited or Plexus Ocean Systems
International Limited and the relevant related party.
75
Plexus Holdings plc Annual Report 2021
Notes to the Consolidated Financial Statements continued
29. General information
These financial statements are for Plexus Holdings plc and subsidiary undertakings. The Company is
registered, and domiciled, in England and Wales and incorporated under the Companies Act 2006. The
nature of the company’s operations and its principal activities are set out in the strategic report on page
9 and the directors’ report on page 20.
Plexus Holdings plc Annual Report 2021
76
Parent Company Statement of Financial Position
at 30 June 2021
Assets
Intangible assets
Investments
Total Non-current assets
Trade and other receivables
Current income tax asset
Cash at bank and in hand
Total current assets
Total Assets
Equity and Liabilities
Called up share capital
Shares held in treasury
Share based payments reserve
Retained earnings
Total equity attributable to equity holders of the company
Liabilities
Deferred tax liabilities
Total non-current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total Equity and Liabilities
Notes
4
5
7
10
9
6
8
2021
£’000
9,380
8,294
–––––––
17,674
–––––––
20,720
–
55
–––––––
20,775
–––––––
38,449
–––––––
1,054
(2,500)
326
38,910
–––––––
37,790
–––––––
489
–––––––
489
–––––––
170
–––––––
170
–––––––
659
–––––––
38,449
–––––––
2020
£’000
9,999
8,294
–––––––
18,293
–––––––
19,625
76
1,013
–––––––
20,714
–––––––
39,007
–––––––
1,054
(2,500)
326
39,704
–––––––
38,584
–––––––
224
–––––––
224
–––––––
199
–––––––
199
–––––––
423
–––––––
39,007
–––––––
As permitted by section 408 of the Companies Act 2006, the parent company’s Statement of Comprehensive
Income has not been included in these financial statements. The parent company’s loss after tax for the year
was £794k (2020: loss of £335k).
These financial statements were approved and authorised for issue by the board of directors on 19 November
2021 and were signed on its behalf by:
G Stevens
Director
C Hendrie
Director
Company Number: 03322928
77
Plexus Holdings plc Annual Report 2021
(335)
–––––––
38,584
–––––––
(794)
–––––––
37,790
–––––––
Parent Company Statement of Changes in Equity
for the year ended 30 June 2021
Balance as at 30 June 2019
Total comprehensive income
for the period
Called
Up
Share
Capital
£’000
Shares
Held in
Treasury
£’000
Share
Based
Payments
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
1,054
(2,500)
326
40,039
38,919
–
–
–
(335)
–––––––
–––––––
–––––––
–––––––
Balance as at 30 June 2020
1,054
(2,500)
326
39,704
–––––––
–––––––
–––––––
–––––––
Total comprehensive income
for the period
–
–
–
(794)
–––––––
–––––––
–––––––
–––––––
Balance as at 30 June 2021
1,054
(2,500)
326
38,910
–––––––
–––––––
–––––––
–––––––
Plexus Holdings plc Annual Report 2021
78
Parent Company Statement of Cash Flows
at 30 June 2021
Notes
Cash flows from operating activities
Loss before taxation
Adjustments for:
Amortisation
Investment income
Changes in working capital:
(Increase) / decrease in trade and other receivables
Decrease in trade and other payables
Cash (used) / generated from operations activities
Income taxes refunded
Net cash (used) / generated from operations
Cash flows from investing activities
Purchase of intangible assets
Interest received
Net cash generated from investing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at 1 July 2020
Cash and cash equivalents at 30 June 2021
10
2021
£’000
(611)
854
(423)
(1,095)
(29)
–––––––
(1,304)
159
–––––––
(1,145)
–––––––
(235)
422
–––––––
187
–––––––
(958)
1,013
–––––––
55
–––––––
2020
£’000
(438)
842
(512)
784
(92)
–––––––
584
270
–––––––
854
–––––––
(359)
512
–––––––
153
–––––––
1,007
6
–––––––
1,013
––––––
79
Plexus Holdings plc Annual Report 2021
Notes to the Parent Company Financial Statements
1.
Summary of significant accounting policies
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial information.
a. Basis of preparation
The company financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the International Accounting Standards
Board as adopted by the European Union and are in accordance with the Companies Act 2006.
There are a number of standards, amendments to standards, and interpretations which have been issued
by the IASB that are effective in future accounting periods. The Directors’ have assessed the impact of
these standards. The Company has decided not to adopt these standards early as no material impact is
expected. The following amendments are effective for the period beginning 1 January 2021:
l
l
l
l
l
l
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16)
COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
Annual Improvements to IFRS Standards 2018-2020
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
Reference to the Conceptual Framework (Amendments to IFRS 3)
In January 2020, the IASB issued amendments to IAS 1, which clarified the criteria used to determine
whether liabilities are classified as current or non-current. These amendments clarify that current or
non-current classification is based on whether an entity has a right at the end of the reporting period to
defer settlement of the liability for at least twelve months after the reporting period. The amendments
also clarify that ‘settlement’ includes the transfer of cash, goods, services, or equity instruments unless
the obligation to transfer equity instruments arises from a conversion feature classified as an equity
instrument separately from the liability component of a compound financial instrument. The
amendments are effective for annual reporting periods beginning on or after 1 January 2022.
The Company is currently assessing the impact of these new accounting standards and amendments.
The Company does not believe that the amendments to IAS 1 will have a significant impact of the
classification of its liabilities, as the conversion feature in its convertible debt instruments is classified as
an equity instrument and therefore, does not affect the classification of its convertible debt as a
non-current liability.
The Company financial statements are presented in sterling and all values are rounded to the nearest
thousand pounds except where otherwise indicated.
The financial information has been prepared under the historical cost convention except where fair value
adjustments are required.
Income taxes and deferred taxation
b.
The income tax expense for the period comprises current and deferred tax. Tax is recognised in the
income statement, except to the extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the reporting date in the countries where the company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements.
Plexus Holdings plc Annual Report 2021
80
Notes to the Parent Company Financial Statements continued
1.
Summary of significant accounting policies (continued)
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively
enacted by the reporting date and are expected to apply when the related deferred income tax asset is
realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
As set out in note 22 of the Group accounts, the Company operates a share option scheme. Where the
market price of the shares at the year-end exceeds the option price there is a potential tax deduction.
This is treated as a deferred tax asset. The portion of the expected future tax deduction which is less
than or equal to the associated cumulative IFRS2 charge is recognised in the income statement. The
balance of the credit is recognised directly in equity.
Intangible assets and amortisation
c.
Patents are recorded initially at cost and amortised on a straight-line basis over 20 years which represents
the life of the patent. The Group operates a policy of continual patent enhancement in order that
technology enhancements and modifications are incorporated within the registered patent, thereby
protecting the value of technology advances for a full 20-year period.
Intellectual Property rights are initially recorded at cost and amortised over 20 years on a straight-line
basis. The technology defined by the Intellectual Property is believed to be able to generate income
streams for the Group for many years; key Intellectual Property is protected by patents; the lowest
common denominator in terms of economic life of the intangible assets is the life of the original patents
and therefore the life of the Intellectual Property has been matched to the remaining life of the patents
protecting it.
Development expenditure is capitalised in respect of development of patentable technology at cost
including an allocation of own time when such expenditure is incurred on separately identifiable
technology and its future recoverability can reasonably be regarded as assured. Any expenditure carried
forward is amortised on a straight-line basis over its useful economic life, which the directors consider
to be 20 years.
Amortisation is charged to the Administrative Expenses line of the Statement of Comprehensive Income.
Expenditure on research and development, which does not meet the capitalisation criteria, is written
off to the Statement of Comprehensive Income in the period in which it is incurred.
The carrying value of intangible assets is reviewed on an on-going basis by the directors and, where
appropriate, provision is made for any impairment in value. It would require a substantial movement
(over 100%) in the assumptions employed in valuations before there would be any impairment to
intangible assets.
Potential impairment of intangible assets has been reviewed and is outlined in note 1h in the Group
accounts, with no impairment required.
Investments
d.
The investment in subsidiary and associate undertakings is stated at cost less provision for impairment.
Cost is the amount of cash paid or the fair value of the consideration given to acquire the investment.
Income from such investments is recognised only to the extent that the Company receives distributions
from accumulated profits of the investee company arising after the date of acquisition.
Potential impairment of investments and the intangible assets each subsidiary undertaking holds has
been reviewed and is outlined in note 1h in the Group accounts, with no impairment required.
Cash and cash equivalents
e.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable
on demand form an integral part of the Company’s cash management and are included as a component
of cash and cash equivalents for the purpose of the statement of cash flows.
81
Plexus Holdings plc Annual Report 2021
Notes to the Parent Company Financial Statements continued
1.
Summary of significant accounting policies (continued)
f.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the
rate of exchange ruling at the statement of financial position date and the gains or losses on translation
are included in the Statement of Comprehensive Income.
Pensions
g.
The Group offers a contributory Group stakeholder pension scheme, into which the Group will make
matching contributions up to a pre-agreed level of base salary; the scheme is open to executive directors
and permanent employees. Directors may choose to have contributions paid into personal pension plans.
h. Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity
shareholders, this is when they are paid. In the case of final dividends, this is when approved by the
shareholders at the AGM. Dividends unpaid at the statement of financial position date are only
recognised as a liability at that date to the extent that they are appropriately authorised and are no longer
at the discretion of the Company. Unpaid dividends that do not meet these criteria are disclosed in the
notes to the financial statements.
Classification of financial instruments issued by the Group
i.
In accordance with IAS 32, financial instruments issued by the Group are treated as equity (i.e. forming
part of shareholders’ funds) only to the extent that they meet the following two conditions:
(a)
they include no contractual obligations upon the Company (or Group as the case may be) to deliver
cash or other financial assets or to exchange financial assets or financial liabilities with another
party under conditions that are potentially unfavourable to the Company (or Group); and
(b) where the instrument will or may be settled in the Company’s own equity instruments, it is either
a non-derivative that includes no obligation to deliver a variable number of the Company’s own
equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount
of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability.
Where the instrument so classified takes the legal form of the Company’s own shares, the amounts
presented in these financial statements for called up share capital and share premium account exclude
amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part of finance charges. Finance
payments associated with financial instruments that are classified as part of shareholders’ funds (see
dividends policy), are dealt with as appropriations in the reconciliation of movements in shareholders’ funds.
Share based payments
j.
The Company issues share options to directors and employees, which are measured at fair value at the
date of grant. The fair value of the equity settled options determined at the grant date is expensed on a
straight-line basis over the vesting period based on an estimate of the number of options that will
actually vest. The Group has adopted a Stochastic model to calculate the fair value of options, which
enables the Total Shareholder Return (TSR) performance condition attached to the awards to be
factored into the fair value calculation.
Key assumptions and sources of estimation
k.
The estimated life of the Company’s Intellectual Property is estimated with reference to the lifespan of
the patents which protect the knowledge and their forecast income generation.
When measuring Intellectual Property for impairment a range of assumptions are required and these
are detailed in the Intangible Assets note above.
The recoverability of loan between parent company and subsidiary is a key estimate. Recoverability is
based on future financial performance.
Plexus Holdings plc Annual Report 2021
82
Notes to the Parent Company Financial Statements continued
2.
Profit for the year
As permitted by section 408 of the Companies Act 2006, the parent company’s Statement of
Comprehensive Income has not been included in these financial statements. The parent company’s loss
after tax for the year was £794k (2020: loss of £335k). The company had revenue of £386k for the
financial year (2020: £476k).
3.
Staff numbers and costs
Management
Technical
Administrative
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
2020
Number
3
–
–
–––––––
3
–––––––
2020
£’000
185
24
–––––––
209
–––––––
2019
Number
3
–
–
–––––––
3
–––––––
2020
£’000
183
24
–––––––
207
–––––––
All payroll costs are of a continuing nature.
Key management are considered to be the Board of Directors and details of Directors’ remuneration
are given in the remuneration report on page 38 and this forms part of the financial statements.
83
Plexus Holdings plc Annual Report 2021
Notes to the Parent Company Financial Statements continued
4.
Intangible fixed assets
As at 30 June 2019
Additions
As at 30 June 2020
Additions
As at 30 June 2021
Amortisation
As at 30 June 2019
Charge for the year
As at 30 June 2020
Charge for the year
As at 30 June 2021
Net Book Value
As at 30 June 2021
As at 30 June 2020
Intellectual
Property
£’000
Patent and
Other
Development
£’000
2,761
–
–––––
2,761
–
–––––
2,761
–––––
1,619
178
–––––
1,797
178
–––––
1,975
–––––
786
–––––
964
–––––
12,867
359
–––––
13,226
235
–––––
13,461
–––––
3,527
664
–––––
4,191
676
–––––
4,867
–––––
8,594
–––––
9,035
–––––
Total
£’000
15,628
359
–––––
15,987
235
–––––
16,222
–––––
5,146
842
–––––
5,988
854
–––––
6,842
–––––
9,380
–––––
9,999
–––––
Plexus Holdings plc Annual Report 2021
84
Notes to the Parent Company Financial Statements continued
5.
Investments
Subsidiary undertakings:
As at 30 June 2019, 2020 and 2021
The Company’s undertakings are:
Subsidiary undertaking
Plexus Ocean Systems
Limited
Plexus Limited
Plexus Applied
Technologies Limited
Address and
Country of Registration
Johnstone House,
52-54 Rose Street,
Aberdeen, AB10 1HA
Scotland
Johnstone House,
52-54 Rose Street,
Aberdeen, AB10 1HA
Scotland
Highdown House,
Yeoman Way,
Worthing,
West Sussex, BN99 3HH
England
£’000
8,294
–––––
Percentage of
Ordinary
Shares held
100%
Nature of Business
Supply of wellheads and
associated equipment for
oil and gas drilling
Dormant
100%
Dormant
100%
100%
100%
100%
100%
Plexus Holdings USA
Inc.
4295 San Felipe #1200,
Houston, TX 77027, USA
Investment Holding
Plexus Ocean Systems
US. LLC
4295 San Felipe #1200,
Houston, TX 77027, USA
Investment Holding
Plexus Deepwater
Technologies Limited
4295 San Felipe #1200,
Houston, TX 77027, USA
Dormant
Plexus Response
Services Limited
Plexus Subsea
International Limited
Plexus Ocean Systems
(Malaysia) Sdn Bhd
1, Caribbean Place,
P.O Box 97,
Leeward Highway,
Providenciales,
Turks and Caicos Islands
1, Caribbean Place,
P.O Box 97, Leeward
Highway, Providenciales,
Turks and Caicos Islands
Commercial exploitation
of subsea applications
Commercial exploitation
of subsea applications
100%
Level 16, Tower C,
Megan Avenue II,
12, Jalan Yap Kwan Seng, oil and gas drilling
50450, Kuala Lumpur,
Malaysia
Supply of wellheads and
associated equipment for
100%
85
Plexus Holdings plc Annual Report 2021
Notes to the Parent Company Financial Statements continued
5.
Investments (continued)
Subsidiary undertaking
Plexus Ocean Systems
(Brunei) Sdn Bhd
Address and
Country of Registration
Ground Floor Unit 30,
Block D Simpang 21,
Kg Menglait Gadong,
BE4119, Bandar,
Seri Begawan,
Brunei Darussalam
Percentage of
Ordinary
Shares held
100%
Nature of Business
Supply of wellheads and
associated equipment for
oil and gas drilling
Plexus Offshore Systems 137 Telok Ayer Street,
(Singapore) Pte Ltd
08-01, Singapore,
Singapore
Supply of wellheads and
associated equipment for
oil and gas drilling
100%
Afrotel Corporation Ltd 1, Caribbean Place,
Investment Holding
100%
Design, fabrication and
manufacture of valve
related products
100%
Plexus Pressure
Control Limited
P.O Box 97, Leeward
Highway, Providenciales,
Turks and Caicos Islands
Johnstone House,
52-54 Rose Street,
Aberdeen, AB10 1HA
Scotland
6. Deferred tax
i)
Movement in deferred tax liability balance
Deferred tax liability at beginning of year
Debit to Statement of Comprehensive Income
Deferred liability at end of year
ii) Deferred tax liability balance
The deferred tax liability balance is made up of the following
Difference between depreciation and capital allowances
Share based payments
Tax losses
Deferred tax liability at end of year
Plexus Holdings plc Annual Report 2021
86
2021
£’000
224
265
–––––––
489
–––––––
2020
£’000
251
(27)
–––––––
224
–––––––
2021
£’000
2020
£’000
1,601
–
(1,112)
–––––––
489
–––––––
1,336
–
(1,112)
–––––––
224
–––––––
Notes to the Parent Company Financial Statements continued
7.
Trade and other receivables
Trade receivables
Receivables due from group companies
Prepayments and other amounts
2021
£’000
217
20,469
34
–––––––
20,720
–––––––
2020
£’000
479
19,099
47
–––––––
19,625
–––––––
Trade and other receivables are classified as loans and receivables and are held at amortised cost. The
carrying value approximates fair value.
Prepayments relate to prepaid amounts for services to be consumed over the next 12 months.
The recoverability of all receivables has been assessed with no impairment required.
8.
Trade and other payables
Trade payables
Non-trade payables and accrued expenses
2021
£’000
78
92
–––––––
170
–––––––
2020
£’000
84
115
–––––––
199
–––––––
Trade and other payables are held at amortised cost. The carrying value approximates fair value. All
trade and other payable are due within one year.
9.
Share Capital
Authorised:
Equity: 110,000,000 (2020: 110,000,000) Ordinary shares of 1p each
Allotted, called up and fully paid:
Equity: 105,386,239 (2020: 105,386,239) Ordinary shares of 1p each
10. Reconciliation of net cash flow to movement in net cash
Movement in net cash in year
Net cash at start of year
Net cash at end of year
2021
£’000
1,100
–––––––
1,054
–––––––
2021
£’000
(958)
1,013
–––––––
55
–––––––
2020
£’000
1,100
–––––––
1,054
–––––––
2020
£’000
1,007
6
–––––––
1,013
–––––––
87
Plexus Holdings plc Annual Report 2021
Notes to the Parent Company Financial Statements continued
11. Financial instruments and risk management
The Company’s activities give rise to a number of different financial risks: market risk (including foreign
currency exchange risk and interest rate risk), credit risk and liquidity risk. The Company’s management
regularly monitors the risks and potential exposures to which the Company is exposed and seeks to take
action, where appropriate, to minimise any potential adverse impact on the Company’s performance.
Risk management is carried out by Management in line with the Company’s Treasury policies. The
Company’s Treasury policies cover specific areas, such as foreign exchange risk, interest rate risk and
investment of excess cash. The Company’s policy does not permit entering into speculative trading of
financial instruments and this policy has been applied throughout the year.
(a) Market risks
(i) Foreign currency exchange risk
The Company is exposed to foreign exchange risk arising from various currencies. In order to protect
the Company’s statement of financial position from movements in exchange rates, the Company converts
foreign currency balances into sterling on receipt so far as they will not be used for future payments in
the foreign currency.
The Company carefully monitors the economic and political situation in the countries in which it
operates to ensure appropriate action is taken to minimise any foreign currency exposure.
(ii)
Interest rate risk
The Company is also exposed to interest rate risk on cash held on deposit. The Company’s policy is to
maximise the return on cash deposits whilst ensuring that cash is deposited with a financial institution
with a credit rating of ‘AA’ or better.
(b) Credit risk
The Company’s credit risk primarily relates to its inter-company loans and inter-company receivables.
Management have reviewed the recoverability of intercompany loan balances at the reporting date, this
has resulted in a write-off of £nil (2020: £97k) charged in the year from the assessment of credit losses
on Group balances.
Amounts deposited with banks and other financial institutions also give rise to credit risk. This risk is
managed by limiting the aggregate amount of exposure to any such institution by reference to their
rating and by regular review of these ratings. The possibility of material loss in this way is considered
unlikely.
(c) Liquidity risk
The Company has historically financed its operations through equity finance and the flow of
inter¬company loan repayments. The Company has continued with its policy of ensuring that there are
sufficient funds available to meet the expected funding requirements of the Company’s operations and
investment opportunities. The Company monitors its liquidity position through cash flow forecasting.
Based on the current outlook the Company has sufficient funding in place to meet its future obligations.
The bank facility provided to the Group includes a fixed and floating charge over the assets of the
Company.
12. Financial commitments
The Company had no capital commitments as at 30 June 2021 (2020: £nil).
13. Contingent liabilities
The Company had no contingent liabilities as at 30 June 2021 (2020: £nil).
Plexus Holdings plc Annual Report 2021
88
Notes to the Parent Company Financial Statements continued
14. Related party transactions
Control
No one party owns a controlling interest in the Company.
Ultimate parent company
There is no ultimate parent company.
Transactions
During the year, the Company had the following transactions with related parties:
Plexus Ocean Systems Limited, a wholly owned subsidiary made net repayments of £517k less net
purchases of £1,887k during the year increasing the balance owed from £19,099k to £20,469k.
Ben Van Bilderbeek, Graham Stevens and Craig Hendrie are considered to be the Key Management
Personnel of the parent entity. Details of their remuneration is included in the remuneration report.
89
Plexus Holdings plc Annual Report 2021
Corporate Information
Directors
Registered Office
Company Number
Company Secretary
Nominated Adviser and Broker
Auditor
Solicitors to the Company
Registrars
Jerome Jeffrey Thrall† (Non-Executive Chairman)
Bernard Herman van Bilderbeek (Chief Executive)
Graham Paul Stevens (Finance Director)
Craig Francis Bryce Hendrie (Technical Director)
Charles Edward Jones† (Non-Executive Director)
Kunming Liu (Non-Executive Director)
† Member of Audit and Remuneration committees
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
03322928
Prism Cosec Limited
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
Cenkos Securities plc
66 Hanover Street
Edinburgh
EH2 1EL
6-8 Tokenhouse Yard
London
EC2R 7AS
Crowe U.K. LLP
55 Ludgate Hill
London
EC4Y 8EH
Fox Williams LLP
10 Finsbury Square
London
EC2A 1AF
Ledingham Chalmers LLP
52-54 Rose Street
Aberdeen
AB10 1HA
SLC Registrars
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
Plexus Holdings plc Annual Report 2021
90
Perivan 262319
mechanism.
markets.
P L E X U S
P O S - G R I P T E C H N O L O G Y
P O S - G R IP ®
P R O P R I E TA R Y M E T H O D O F
F R I C T I O N G R I P E N G I N E E R I N G
POS-GRIP friction-grip technology is based
on a very simple concept. A compressive
force is applied on the outside of a wellhead
or pipe, to flex it inwards. As the bore of
the vessel moves inwards, it makes contact
with an inner pipe (or hanger) on the inside.
Sufficient contact force is generated to fix
the inner member (hanger) in place through
friction between the two components.
In wellheads, POS-GRIP can replace the
conventional load shoulder or slips to
provide an improved hanger support
Utilising our patented POS-GRIP technology,
we are continually developing new wellhead
equipment to meet our customers’
requirements, delivering solutions for
the surface, subsea and decommissioning
P O S - G R IP ®
P O S - G R I P ®
P ROPRIETARY METHOD O F
P ROPRIETARY METHOD O F
F RICTION GRIP EN GIN EERING
F RICTION GRIP EN GIN EERING
POS-SET Connector recently deployed
for a well decommissioning project
Plexus HG® technology, is a simple scientific
POS-GRIP friction-grip technology is based
method of design for metal interface seals, used to
on a very simple concept. A compressive
permanently contain METHANE GAS in wellheads,
force is applied on the outside of a wellhead
throughout the life of a producing well.
or pipe, to flex it inwards. As the bore of
the vessel moves inwards, it makes contact
The seal system comprises of multiple integral
with an inner pipe (or hanger) on the inside.
radiused bump rings, which interact directly with
Sufficient contact force is generated to fix
the wellhead bore, to halve the number of leak paths
the inner member (hanger) in place through
past the annulus, using a series of redundant gallery
friction between the two components.
seals. A preload above yield is carefully delivered
and recorded by the externally controlled horizontal
In wellheads, POS-GRIP can replace the
deflection of the housing wall against solid hanger
conventional load shoulder or slips to
bodies, thereby equally distributing perimeter
provide an improved hanger support
stress, in compliance with the principles of Hertzian
mechanism.
Stress Theory (HST).
POS-GRIP is ideal for high integrity, low
fatigue connector applications. Wellhead
connectors, riser connectors, subsea jumper
connectors, pipeline connectors, and even
vessel mooring connectors can benefit from
the simplicity of POS-GRIP.
Production wellheads and surface subsea
have all benefitted from POS-GRIP. Casing and
tubing hangers can be gripped, but POS-GRIP
can also be used to support wearbushings,
BOP test tools and seal sleeves.
P O S - G R I P A P P L I C AT I O N S
Connectors
Wellheads
A potential low cost application of
POS-GRIP in an “HG” Tubing Head
Metal-to-metal sealing
Wellheads and connectors can both benefit
from the direct contact created when the
POS-GRIP metal to metal HG® seal is activated,
delivering an unrivalled gas-proof seal.
Utilising our patented POS-GRIP technology,
The system stays permanently rigid, guarantees
we are continually developing new wellhead
life-cycle integrity and is maintenance-free, using
equipment to meet our customers’
re-usable components. By matching materials at the
requirements, delivering solutions for
seal interface, bi-metallic corrosion is prevented and
the surface, subsea and decommissioning
multiple metal seals are used to anticipate the pace
markets.
of chemical degradation, throughout field-life.
POS-GRIP in OPEN Position
A potential low cost application of
POS-GRIP in CLOSED Position
POS-GRIP in an “HG” Tubing Head
P L E X U S
P L E X U S
P O S - G R I P T E C H N O L O G Y
P O S - G R I P T E C H N O L O G Y
Plexus has always maintained that
PREVENTION is a better way of addressing
fugitive emissions as well as being a more
effective way of achieving Net Zero at the
wellhead, compared to simply pursuing a
monitoring and cure approach.
Such logic has been clear to see for
hundreds of years:
Benjamin Franklin famously
advised fire-threatened Philadelphians
in 1736 that:
“ An ounce of
prevention is worth
a pound of cure.”
POS-GRIP “HG” production wellhead is assembled ready for testing ahead of
drilling and producing a new North Sea well
P L E X U S
P O S - G R I P T E C H N O L O G Y
POS-SET Connector recently deployed
POS-GRIP
POS-GRIP
for a well decommissioning project
Production Wellhead System
Production Wellhead System
POS-GRIP “HG” production wellhead is assembled ready for testing ahead of
drilling and producing a new North Sea well
P L E X U S
P O S - G R I P T E C H N O L O G Y
P OS-G RIP AP PL ICAT IO NS
P OS-G R IP APP LIC AT ION S
Wellheads
Production wellheads and surface subsea
Wellheads
have all benefitted from POS-GRIP. Casing and
Production wellheads, both surface and subsea
tubing hangers can be gripped, but POS-GRIP
have all benefitted from POS-GRIP. Casing
can also be used to support wearbushings,
and tubing hangers can be gripped, but
BOP test tools and seal sleeves.
POS-GRIP can also be used to support
wearbushings, BOP test tools and seal
Connectors
sleeves.
POS-GRIP is ideal for high integrity, low
fatigue connector applications. Wellhead
Connectors
connectors, riser connectors, subsea jumper
POS-GRIP is ideal for high integrity, low
connectors, pipeline connectors, and even
fatigue connector applications. Wellhead
vessel mooring connectors can benefit from
connectors, riser connectors, subsea jumper
the simplicity of POS-GRIP.
connectors, pipeline connectors, and even
vessel mooring connectors can benefit from
Metal-to-metal sealing
the simplicity of POS-GRIP.
Wellheads and connectors can both benefit
from the direct contact created when the
Metal-to-metal sealing
POS-GRIP metal to metal HG® seal is activated,
Wellheads and connectors can both benefit
delivering an unrivalled gas-proof seal.
from the direct contact created when the
POS-GRIP metal to metal HG® seal is
activated.
P
L
E
X
U
S
H
O
L
D
I
N
G
S
P
L
C
|
A
N
N
U
A
L
R
E
P
O
R
T
|
2
0
2
0
/
2
1
safer performance | leak-proof | reduced costs
A N N U A L R E P O R T
2 0 2 1
Plexus in July 2021 was recognized by the London
Stock Exchange as contributing to the global green
economy by deriving more than 50% of revenues
from environmental solutions. Plexus has been
protecting the environment for over 30 years,
initially with its ‘through the BOP’ (Blow Out
Preventer) wellhead designs, and subsequently with
its POS-GRIP® proprietary metal-to-metal
leak-proof wellhead sealing system.
W W W . P L E X U S P L C . C O M