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PowerHouse Energy Group Plc

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FY2021 Annual Report · PowerHouse Energy Group Plc
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POWERHOUSE ENERGY GROUP PLC 

COMPANY NUMBER: 03934451 

Annual Report and Financial Statements 
For The Year Ended 31 December 2021 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
COMPANY INFORMATION 

Directors 

Keith Riley  
Paul Drennan-Durose  
Paul Emmitt 
Myles Kitcher 
Gill Weeks  
Hugh McAlister  
James Greenstreet  

Interim Non-Executive Chairman 
Chief Executive Officer  
Chief Technical Officer  
Non-Executive Director 
Non-Executive Director 
Non-Executive Director  
Non-Executive Director 

Company secretary 

Delgany Corporate Services Limited 

Company number 

03934451 

Registered office 

Website 

Bankers 

Nominated Adviser 

Registrar 

Auditor 

15 Victoria Mews 
Mill Field Road 
Cottingley Business Park 
Bingley, UK 
BD16 1PY 

www.powerhouseenergy.co.uk 

HSBC 
79 Piccadilly 
London W1J 8EU  

WH Ireland 
24 Martin Lane 
London EC4R 0DR 

Neville Registrars Limited 
Neville House, Steelpark Road 
Halesowen B62 8HD   

Jeffreys Henry LLP 
Finsgate 5-7 
Cranwood Street 
London EC1V 9EE 

Forward-looking statements 

This report includes forward-looking statements. Whilst these forward-looking statements are made in good faith, they are 
based  upon  the  information  available  to  Powerhouse  Energy  Group  PLC  at  the  date  of  this  report  and  upon  current 
expectations, projections, market conditions and assumptions about future events. These forward-looking statements are 
subject to risks,  uncertainties and assumptions about the Company and should be treated with an appropriate degree of 
caution. 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONTENTS 

INTERIM CHAIRMAN’S STATEMENT ......................................................................................... 4 

CHIEF EXECUTIVE OFFICER’S REPORT .................................................................................. 5 

STRATEGIC REPORT ................................................................................................................. 8 

DIRECTORS’ REPORT .............................................................................................................. 21 

CORPORATE GOVERNANCE REPORT ................................................................................... 27 

REMUNERATION COMMITTEE REPORT ................................................................................. 34 

REPORT OF THE AUDIT COMMITTEE ..................................................................................... 36 

REPORT OF THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) COMMITTEE .... 38 

STATEMENT OF DIRECTORS’ RESPONSIBILITIES ............................................................... 40 

INDEPENDENT AUDITOR’S REPORT ...................................................................................... 41 

STATEMENT OF COMPREHENSIVE INCOME ......................................................................... 47 

STATEMENT OF FINANCIAL POSITION .................................................................................. 48 

STATEMENT OF CASHFLOWS ................................................................................................ 49 

STATEMENT OF CHANGES IN EQUITY ................................................................................... 50 

NOTES TO THE ACCOUNTS .................................................................................................... 51 

3 

 
 
 
 
 
 
Chairman’s Statement 

INTERIM CHAIRMAN’S STATEMENT 

At time of writing this statement, I have been in the Chair at Powerhouse Energy Group for a very short time, but having been 
involved  with  the  first  application  of  its  plastics-to-hydrogen  DMG  technology  since  October  2020,  and  a  non-executive 
director since September 2021, I feel more than qualified to present this statement in support of our results for the year ending 
31 December 2021. 

Despite the difficulties caused by the Covid pandemic that impacted a good part of the year and some major changes in 
Board members, including the Chairmanship, the focus of the Powerhouse executive team was almost exclusively in support 
of Peel NRE on the development at their Protos Plastics Park in Cheshire, UK. The pathway of development of complex capital 
projects, is rarely smooth, and Protos Plastics-to-Hydrogen has been no exception. A change of project management and a 
realignment of the contracting strategy meant that earlier target dates were not achieved,  

Late  2021  saw a major  reorganisation  of  the  Peel  project  team, which  substantially increased  its  level  of  experience  and 
professionalism.  The  fact  is  that  it  took  the  project  team  most  of  the  year  to  complete  the  restructuring  and  prepare  for 
engaging with the construction contractor market. Powerhouse provided its full support to the team, as well as strengthening 
its own engineering capability by the acquisition of 48% of the share capital of Engsolve Ltd. 

There is much more work involved in specifying the technical requirements, tendering and contract negotiation, and putting 
into place the myriad of items required for a project to proceed than most people realise. Powerhouse was, and is, a key 
contributor to Peel NRE’s Protos development, but is only one of a number of organisations involved. To carry out these tasks 
and  deliver  them  comprehensively  takes  time  and  effort,  and  whilst  there  is  disappointment  in  missed  targets,  doing  this 
properly also lays down a solid foundation for the future. Once done, it can be reproduced and used again. The Powerhouse 
engineering team has done its very best in supporting the Protos project, which has now obtained robust, contractable offers 
for the construction of the project from some very substantial contractors. It has been difficult reporting to shareholders on 
this phase of the development, particularly due to the sensitive commercial nature of the process being led by Peel NRE and 
its project team. 

The need to concentrate on Protos meant that development of Powerhouse’s business in other areas took a back seat. Even 
so, the Company continued to work with its development partners and entered into a collaboration agreement with Hydrogen 
Utopia International Plc (“HUI”). An application for approval of an environmental impact assessment of a project in Konin, 
Poland was submitted to the Polish authorities by HUI, response to which is still pending. 

With the arrival of Paul Drennan-Durose as Chief Executive Officer, the Company is now looking to expand its capabilities 
and  activities.  We  welcome  Paul  to  the  Company  at  a  time  when  a  transformation  of  the  world’s  behaviour  towards  the 
environment  is  being  openly  demanded  by  the  people,  placed  at  the  heart  of  the  public  agenda  and  economic  players 
throughout the world. Powerhouse has developed a technology that can make a significant contribution to achieving net zero. 
This contribution will only be achieved, however, if we build and develop the competence and capability of the Company to 
create a high-performance, purpose-led culture. Paul outlines in his statement to this Annual Report the measures he is taking 
to achieve that.  

I look forward to the next stage of the evolution of the Company that will see Powerhouse technology implemented and the 
business of the Company being able to grow. 

We would also like to take this opportunity to thank all our staff for their continued efforts and hard work as well as all our 
investors and stakeholders for their continued support.  

Keith Riley 
Interim Non-Executive Chairman 
28 June 2022

4 

 
 
 
 
 
 
 
 
 
 
 
 
 
Chief Executive Officer’s Report 

CHIEF EXECUTIVE OFFICER’S REPORT 

This is my first report as Chief Executive Officer of Powerhouse Energy Group, having been appointed in February 2022.  

In the period since my appointment as Chief Executive Officer, much has already been started, completed and achieved. As 
set out in the Strategic Report which follows this statement, this work will provide a foundation for the establishment of a clear 
set of imperatives and direction for the Company.  

Discovery, Engagement and Direction  

My initial approach was to embark upon an intense discovery phase to fully evaluate our business. Time has been invested 
with a wide and deep cross section of stakeholders, starting with existing and potential partners and players in our markets. 
Engagement with key collaboration partners during the first weeks of appointment was a high priority. Meetings with Peel 
NRE’s leadership commenced on day two and have resulted in a refresh of previous plans aimed at supporting Peel NRE 
delivering what could be the first commercial project utilising Powerhouse’s technology. Naturally, the Company is supporting 
Peel NRE, and doing what it can to mitigate any risk of delay Peel NRE has on this first project.  

During this initial period, a comprehensive 360-degree understanding has been developed by the team, and key imperatives 
and collaboration positions have been re-established and prioritised. Many of these imperatives have already been completed 
or initiated and included within a plan for relevant periods in the near, mid, and longer terms. These are set out in the Strategic 
Report. 

In parallel, we have also taken time to form a new strategy team, made up by the nucleus of the leadership team, and a set 
of trusted advisors, including the cementing of relationships with our Nominated Adviser, brokers, lawyers and accountants. 
This  new  strategic  team  will  be  tasked  to  ensure  that  the  Company  continues  to  deliver  its  stated  objectives  whilst  also 
delivering better communications and engagement with the Company’s shareholders and the market.  

Evolving Strategy 

In 2022, the new leadership team and the Board has started to build a robust, flexible business model and three-year strategy, 
designed to meet the challenges of each phase of the Company’s evolution. The Company will elaborate on this further later 
this year as the strategy is developed. 

The Company must build trust from its key stakeholders. Relationships with our customers and partners remain core to the 
Company’s growth strategy. Our plan is to launch in developed markets close to our operational base, developing and testing 
repetitively and  with  rigor,  cultivating  close  and  strong  relationships  with  our  customers  and  partners.  As  the  dynamic  of 
change  is  so  fast  flowing  in  economies,  Powerhouse  has  embarked  on  a  process  to  reassess  its  purpose,  its  values,  its 
structure, its processes, and its markets. 

Powerhouse understands that it must create value for all its stakeholders, and it intends to deliver this through a refreshed 
strategy.  Reducing  energy  dependency,  providing  more  effective  solutions  for  increasing  levels  of  non-recyclable  waste, 
creating more sources of newer non-fossil fuel energy are all unmistakably of ever-increasing relevance. Powerhouse intends 
to play a role in this transition. 

The Strategic Report outlines the challenges met, and the progress made by the team last year. Although early days for the 
new team, this is a good opportunity to share some early assessments: 

• 

Technology and Innovation – a renewed focus on improving the technology readiness level and ensuring it is 
process capable.  

•  Commercial Development – support development of the first of a kind commercial project, commit fully to early 
users  and  reduce  dependencies  by  building  quality  of  choice  in  developer/channel  partner  pipeline  and  project 
pipeline. 

•  Business  Model  Evolution  –  ensure  the  target  business  model  of  being  a  prominent  leader  of  technology 

innovation and an attractive licensing partner is enabled. 

5 

 
 
 
 
 
 
Chief Executive Officer’s Report 

•  Go-to-market engagement 

o  Creation of a combined Marketing Centre & Global Technology and Innovation Centre – to support the 
development of technology readiness levels, expand the range of products the Company can offer, and 
lessen  the  risk  of  impact  to  growth  from  delays  the  Company  has  experienced  at  its  first  of  a  kind 
commercial site in the UK. 

o  Marketing  Pillars  -  investing  in  developing  a  marketing  pathway  which  will  underpin  and  support  the 

commercialisation and scale up of the Company. 

• 

Invest in Talent – enrich, invest and engage partners and talent at all levels of the enterprise. 

Board  

The Board of Powerhouse has been through a period of significant change. We are delighted to have welcomed some high 
calibre individuals to the board including Gill Weeks OBE, Hugh McAlister and Paul Emmitt as well as Keith Riley and myself. 
A brief biography on each is outlined below, and biographies of all Directors are contained within the Directors Report within 
this document. 

Gill Weeks joined the Powerhouse in Board in January 2022 as a Non-Executive Director and is a leader of compliance and 
regulatory teams in global environmental business, advising on environmental law changes. Over the course of her career 
Gill  has  developed  expertise  in  public  policy,  environmental  law,  stakeholder  management,  governance  and  risk, 
environmental science and regulatory compliance and enforcement.  

Hugh McAlister was appointed to the Powerhouse Board in February 2022 as a Non-Executive Director and has over 40 
years’ stockbroking experience in the City of London. Hugh has been the executive chairman of Novum Securities Limited 
since 2018, having been its Chief Executive Officer for the previous nine years. Prior to this, Hugh was a founding partner 
and  head  of  trading  a  Kaupthing  Singer  &  Friedlander  Capital  Markets  and  Head  of  Pan  European  Equities  at  Dresdner 
Kleinwort Benson. 

Paul Emmitt joined Powerhouse in July 2021 and was appointed to the Board as an Executive Director in March 2022. He 
will  continue as  CTO,  leading  the  management,  planning,  development, and  operation  of  the  DMG  technology.  Paul  is  a 
Chartered Engineer, has an MBA in Engineering Management, and has over twenty years of multi-sector engineering and 
operational management experience. He is also the Managing Director of Engsolve Limited, the engineering consultancy in 
which Powerhouse has a 48% stake. 

I  recently  joined  the  Board  of  Powerhouse  as  Chief  Executive  Officer.  I  have  just  spent  over  three  years  as  the  investor 
appointed Chief Executive Officer of Heliex Power Limited, a private equity backed cleantech energy business. Whilst there, 
I  led  the  transformation  of  the  start-up  new  technology  company,  leading  the  roll-out  of  its  technical  development,  and 
commercial market recovery. 

Keith Riley joined the Board as a Non-Executive Director in 2021 and stepped in as Interim Non-Executive Chair on 27 June 
2022.  Mr  Riley  is  also  the  proprietor  and  Chief  Executive  Officer  of  Vismundi  Limited,  a  consultancy  company  providing 
services to the resources and waste management industry. Prior to that, between 1993 and 2012 he worked for what is now 
known as Veolia Environmental Services plc in a number of senior roles.  

It is the intention of the Board for the interim Chair and myself, to evaluate and re-assess the composition, scale and relevance 
of the Board ensuring its alignment with the strategy being created and deployed in this phase of the Company’s evolution.  

The outcome of these evaluations will include options for the Board to consider and implement where appropriate.  

It is intended that a permanent Chair will be recruited in quarter three of 2022.  

Once this process is complete, the Board’s focus will be on continuity, stability, cost, and effectiveness.  

Financial Results 

The Company increased revenues in the year ended 31 December 2021 to £701k (2020: £100k) primarily due to further 
engineering support works provided to the Protos SPV. Once the project enters construction, it is currently intended that 
Powerhouse enters an agreement with the Protos SPV for provision of owner’s engineer services. 

  6 

 
 
 
 
Chief Executive Officer’s Report 

The total loss for the year is £1.87m (2020: £15.83m). This substantial reduction is due to a reduction in the impairment of 
goodwill to £nil (2020: £14.2m). The carrying value of goodwill, which arose on the acquisition of the Waste2Tricity Limited, 
is independently assessed on an annual basis, with no impairment deemed to have arisen in 2021. 

The loss per share for the year is 0.05p (2020: 0.57p) with the change reflecting the reduction in the total loss detailed above. 

Cash at year end amounted to £9.64m (2020: £3.46m). The Company raised an additional £10m pre-expenses from the 
market during the year. The Company also provided a loan facility to the Protos SPV of £3.8m of which £1.15m had been 
advanced by the year end. 

Market Outlook   

There is no question that most stakeholders now expect companies to embrace reducing waste effectively, and to play an 
active role in decarbonising the economy. This shift in expectations represents significant opportunities for Powerhouse. The 
transition to net zero continues to evolve, with different economies moving at different speeds. The pace of change, and the 
level of available capital to support decarbonisation, is vastly different in developing and developed countries. Being quoted 
on the London Stock Exchange means Powerhouse can benefit from a widely available pool of public capital, in a market 
where investors have a proven track record of supporting companies involved in the energy transition. 

Russia’s  invasion  of  Ukraine,  and  the  on-going  appalling  war,  has  seen  the  launch  of  an  economic  conflict  too.  Western 
countries’ dependence on Russian energy is in the spotlight, and it is anticipated that companies and governments will also 
be  looking  more  broadly  at  their  energy  dependencies  and  energy  security  strategies,  as  well  as  on  their  fossil  fuel 
consumption.  

This would suggest that a focus by Powerhouse on countries within closer proximity to its UK base, would be an appropriate 
scalable  market  in  terms  of  available  capital,  motivation,  and  attractiveness  for  dealing  with  unrecyclable  waste  and 
decarbonisation in those regions, and would avoid the company overreaching in its commercialisation phases. However, we 
are committed to serving all markets should the right opportunity present itself. 

Engaging and Communicating with Shareholders 

We  must  share  that  it  is  not  lost  on  the  new  leadership  team  that  the  engagement  the  Company  has  with  its  investor 
community  is  not  where  it  needs  to  be.  As  explained  in  the  Chairman’s  Statement,  much  of  the  reason  has  been  the 
commercially delicate stage the Protos project has been in. The project will shortly be through that stage and working with 
the Chairman, one of my aims is to maintain more regular communications with shareholders without overburdening them. 
The new implemented structure will foster strong, balanced coordination of the Company’s image and messaging to investors, 
and to other key stakeholders. This is intended to help drive valuation, sales, and overall image. Our investor community will 
be updated on this in short order.  

Thank you 
I would also like to take this opportunity to thank all the Powerhouse staff and our associates at Engsolve for their continued 
efforts and hard work, and our investors and stakeholders for their continued support. The Board believe that Powerhouse is 
well placed and that we are implementing a strategy that is not only appropriate but will enable the Company to take full 
advantage of the significant opportunities that are available to deliver long term value. 

Paul Drennan-Durose 
Chief Executive Officer 
28 June 2022 

  7 

 
 
 
 
 
 
 
Strategic Report 

STRATEGIC REPORT 

This  Strategic  Report  addresses  the  Directors’  management  of  the  Company  and  contains  certain  forward-looking 
statements. These statements are made by the Directors in good faith based on the information available to them up to the 
time of the report preparation and approval and such statements should be treated with caution as they address uncertainties. 

Business Descriptor 

Powerhouse develops, designs, co-designs, integrates, delivers and licenses technology and its know-how, its DMG solution. 
This has an advanced thermal conversion technology at its centre, which converts calorific waste streams into synthetic gas 
(syn-gas), a valuable product that can be used as an intermediary for producing new high-value products such as hydrogen, 
or as a fuel in its own right for power generation.  

Powerhouse’s central capability is its know-how in the integration of the processes and technology, the application of the 
pyrolysis and gasification processes involved, and the research and development of the complex variables, which make it 
operationally and financially viable. This includes development and testing of equipment, but also testing of assorted feedstock 
materials and mixes, and in the process, calibration, and programming of control systems, which maximise yield and process 
productivity. 

The process can convert a wide range of end-of-life and other feedstocks, including the Company’s initial focus of end-of-life, 
non-recyclable waste plastic, to produce a range of ‘end of waste’ products, including: 

• Hydrogen 
• Electrical power  
• Thermal Energy 

• Natural gas replacement 
• Chemical feedstocks 
• Biochar

Business Strategy  

To  position  Powerhouse’s  technology  as  a  converter  of  waste  to  wellness,  and  to  support  its  growth  and  scale-up,  the 
Company has centred its main focus on several key strategic imperatives:  

1.  Technology and Innovation 

A  successful  year  of  tests,  trials  and  development  using  the  Company’s  test  unit  at  its  Thornton  site  in  the  northwest  of 
England, was completed in 2021.  

Several developments are worthy of highlighting in this report:  

The team has made noteworthy progress in enhancing the Hydrogen output of the system, and there has been a tangible 
increase in evidence-based confidence from the systematic testing of feedstocks in 2021 and in 2022, in the generation of 
optimum levels of Hydrogen.  

More understanding and control of the technology has been achieved which has allowed in certain cases, optimized carbon 
retention in the residue (biochar). This is a form of carbon sequestration.  

The 2021 period is being followed by a doubling down on the Company’s efforts in 2022 and 2023.  

In 2022, the new leadership team and the Board intend to have a robust three-year strategy for technology development and 
a solid detailed level plan every year. This is designed to meet the challenges of each phase of the Company’s evolution, truly 
generate continuous improvement, and maintain relevance to its target markets.  

Technology and System Readiness and Capability  

The thrust of focus in 2022 is on the Company setting about applying more rigour and scrutiny to delivering the technology 
and  system  readiness  level  of  the  core  technologies  it  is  developing  and  adopting  and  ensuring  that  the  technology  the 
Company  is  forming  and  integrating  is  process  capable.  This  is  a  critical  foundation,  necessary  for  minimising  risk  and 
optimising potential when the Company rolls-out a full-scale commercial operation.  

In quarter two of 2022, the Company initiated the formation of effective engineering leadership structures for this next phase 
in its evolution. This structuring includes, but is not restricted to, Powerhouse’s CTO Paul Emmitt being appointed to the 

  8 

 
 
 
 
 
 
Strategic Report 

Board to generate more positional authority and to position technology and innovation at main Board level, given its criticality. 
The Company has also embarked on a process of partnering meaningfully with technologists, engineers, universities, and 
industrial partners for this next phase.  

The technological developments will be underpinned and supported by the creation of a Global Technology & Innovation 
Centre.  This  will  have  pyrolysis  and  gasification  technology  at  its  core,  and  the  £1.3m  turnkey  supply,  installation  and 
commissioning contract announced and awarded in June 2022 is intended to see the centre operational by Q2 2023. Funded 
by the Company from current reserves, the Company is at the same time underway with a search for a site for this in the UK. 
Doing  so  simultaneously  with  launching  the award  for  the  long  lead time  equipment  build  is designed  to  reduce  the  total 
operational completion timeframe.  

The  location  profile  brief  has  been  defined and  includes  the environment  it  will  be  situated  in,  its  proximity  to  supply  and 
manufacturing networks as well as being located within reach of relevant technology and research networks, and of course 
being easily accessible for customers in near to-door as well as near to shore markets.   

The centre will house up-scaled R&D facilities for testing capabilities in a live environment. This will be the pre-commercial 
plant core and will provide an environment to support the improvement of the technology readiness level and demonstrate 
the process capability. At the same time, of course, it will generate visibility and proof of scalability for the Company, and its 
stakeholders. 

Quarter two 2022 has already seen a new relevant relationship forged with the Department of Mechanical, Aerospace and 
Civil Engineering at Manchester University, which is collaborating with Powerhouse and one of the Company’s key vendors. 
This first venture together is to develop further the understanding of the thermal transfer and fluid dynamic flows associated 
with the reactions within the Thermal Combustion Chamber in the gasification process. This project will have several phases 
extending throughout 2022. 

Business Acquisition – Engsolve  

In Q3 2021, the Company acquired a 48% stake in Engsolve Limited, a privately owned engineering solutions company with 
significant experience in undertaking engineering design and support, cost estimating and control, project management and 
safety risk assessments across a range of industries including energy from waste, renewables, and green energy. The shares 
were acquired for a consideration of £99,990. 

Engsolve has worked closely with the Company for more than four years and the acquisition is intended to maintain Engsolve’s 
continued support of the Company’s projects and developments and will ensure that their expertise remains available going 
forward. This follows the appointment of Paul Emmitt, Engsolve’s Managing Director, to the position of Chief Technical Officer 
of the Company. 

Engsolve is a profit generating business and, as an associate of the Company, its post-acquisition results are reflected in 
these accounts. 

Technology Endorsement 

The  international  consultancy  DNV  completed  the  assessment  and  updated  report  on  the  enhanced  technology  design 
against their standards and provided a positive technology endorsement in the third quarter of 2021. In addition to this, as 
part of the Protos  development work, an independent red flag review was undertaken by GHD Engineering for Peel NRE 
which raised no technical red flags.  

The  Company  continues  to actively ensure  that  the  process  is  enhanced  to  be  compliant  with  established and  emerging 
legislation.  

Intellectual Property Management  

The  Company  has  initiated  the  development  and  formation  of  IP  and  has  filed  patents  pending  in  2021  the  operational 
conditions within the Powerhouse Thermal Conversion Chamber at their centre. The leadership team have assessed this as 
being  low  in  value  for  the  short  term  until  patents  are  market  assessed  and  granted.  However,  it  has  identified  that  the 
Company can also supplement this with the highly valuable technical, market and commercial knowhow it has, and continues 
to create. This can be incorporated in new future IP development and generation where possible.  

  9 

 
 
 
Strategic Report 

The most important IP remains the chemical engineering model of the process to create the clean gas – and Powerhouse 
maintain strict protocols to ensure this information is protected, including limited access and isolated control over the design 
documents, calculations, and process development models for the process.  

Through last year and into 2022, the technical development team of Powerhouse has continued to assess and develop the 
DMG control system. This work was further enhanced during the basic engineering phase where third party control vendors 
and the Thermal Combustion Chamber (TCC) supplier engaged in the progression of the system. 

Further works on the development of patent protection had been undertaken in the period, with patents now filed in Europe, 
Australia, Japan, Brazil, Canada, USA, Indonesia, South Korea, GCC, Hong Kong and the United Kingdom.  

Future Product Developments 

In addition to developing the core technologies, the Directors recognise that the evolving hydrogen and associated energy 
transition market offers opportunities to develop other advanced complimentary technologies and applications in future. The 
decision to invest in a Global Technology and Innovation Centre, will permit the technical team to optimise the technology 
development, and provide the platform to advance complimentary processes and technologies in supporting this, and future 
value. This will ultimately enhance the Powerhouse offering.  

2.   Commercial Development 

UK - Planned first of a kind 

In 2020’s strategic report, the business model and arrangements of the Company’s potential first of a kind commercial project 
and pipeline for the UK were the dominant feature and the subsequent focus of shareholders and stakeholders.  

Peel NRE is part of the Peel Group, one of the leading infrastructure, transport, and real estate investors in the UK, with 
collective investments owned and under management of more than c£5 billion. 

The business model agreed by Powerhouse Energy with Peel NRE is unchanged, in so much as that it will derive revenues in 
the  UK  principally  from  annual  licence  fees  payable  by  the  plant  owner  in  respect  of  each  process  application  of  the 
Powerhouse technology. Under the UK Exclusivity Option Agreement Peel NRE, on payment of £500,000 to Powerhouse, 
can also acquire the exclusive rights to develop Powerhouse’s technology in the UK.  

In addition, Powerhouse can generate revenues in the project development stage from the engineering services and technical 
assurance  services  for  specific  client  feedstock  analysis  and  laboratory  services,  from  engineering  during  project 
development, and then from operational support services when plants are in operation.  

The first commercial scale application of Powerhouse technology is under development at the Protos Energy Park, Ellesmere 
Port, Cheshire, UK by Peel NRE, who owns that site. Peel NRE completing the construction of this first commercial scale plant 
remains a key milestone and priority for the Company. In 2021 these experienced delays to financial close which continued 
into  2022.  This  was  related  to  a  combination  of  factors  experienced  by  Peel  NRE  and  the  Protos  SPV  which  included 
contractor and vendor engagement, an amended procurement strategy and planning delays associated with the development 
of the engineering design. 

A  competitive  tender  process,  including  pre-qualification  of  potential  tenderers,  was  commenced  by  Peel  NRE  midway 
through February 2022 and Peel NRE indicates that this is expected to complete in September 2022.  

UK - Pipeline Development  

Peel NRE’s plan is that it will replicate the development model at the Protos site, incorporating its ‘Plastic Parks’ vision where 
there is scope, coupled with the community-based provision of hydrogen at various sites across the UK. Each park/site is 
intended to have Powerhouse technology to divert non-recyclable plastic from landfill and produce hydrogen and clean power.  

Recently, Powerhouse introduced the concept of having two process streams at future pipeline sites, doubling capacity and 
capability - which improved the return on investment, sweated the land asset, and provided future system redundancy for the 
plant operators and owners. Peel NRE has introduced this into its rollout considerations, with the size of sites and local waste 
volumes influencing the mix of sites between single and twin processes. It is not planned to have twin processes until the 
single process configurations are established and delivering repeatable performance and reliability. 

Under the CA Business Planning, Peel NRE is maintaining a long-term plan of more than seventy sites. These sites will be a 
mixture of Peel NRE developed sites together with a pipeline of third-party sites enacted by Peel NRE on tolling commercial 

  10 

 
 
 
 
Strategic Report 

terms or by capital sales on waste processing sites around the UK. Each application of DMG will carry the Powerhouse licence 
fee. 

The development counterparties vary and current interest in the pipeline arises from waste management companies, councils, 
companies in the plastics and consumer goods production sectors and developers. 

In 2021 Peel NRE announced that it had submitted planning applications for the second of its eleven primary target sites for 
a waste to hydrogen plant in the UK. The second site is in Scotland, at Rothesay Dock on the north side of the Clyde River, 
opposite  Glasgow  Airport.  Peel  NRE  announced  in  June  2022  that  West  Dunbartonshire  council’s  planning  board  has 
approved planning consent for that site.  

International Development  

Development activities by the Company in territories outside of the UK have focused on developing project, regional and 
territory-by-territory partnership agreements to roll out Powerhouse’s technology.  

The  Company  has  previously  stated  that  the  pipeline  from  these  activities  was  embodied  in  collaboration  or  project 
agreements, country agreements and memoranda of understanding. And that the project or collaboration agreements allow 
developers  access  to  initial  limited  information  to  undertake  project  screening.  The  work  in  these  phases  has  included 
supporting the review of feedstock alternatives, offtake, and environmental constraints.   

This process had not developed consistent traction. The recruitment of a UK based Business Development Manager was 
completed  in  late  2021.  The  appointment  of  a  new  CEO  in  February  2022  has  generated  a  new  sense  of  direction  and 
purpose for this resource. Pipeline opportunities are being qualified, with in-person visits to perspective clients in close to 
door/shore markets such as UK and Ireland, and in far from shore markets such as Australia completed in Quarter two 2022. 
These are aimed at understanding client needs, perspective project status, and assessing the probability and prospects from 
the existing pipeline. 

A modification of the go-to-market approach will be implemented in quarter three. 

Why? The transition to net zero is already uneven with different parts of the world economy moving at different tempos. The 
pace  of  change  will  be  vastly  different  between  developing  and  developed  countries.  But  all  markets  will  require 
unprecedented investment in decarbonisation technology. In response to the energy shock caused by the war in Ukraine, 
many European countries are looking more urgently for new sources of energy and more broadly at their dependencies on 
other nations. This is a market where the offtakes from the technology Powerhouse is developing are of increasing relevance.  

The Company will of course develop relationships with existing partners in other territories and cultivate these for more mid 
to longer term pipeline conversion. It will naturally continue to centre its initial focus on the UK’s first of a kind commercial site, 
which will generate validation and consensus with Peel NRE, supporting the conversion of their pipeline with the next site 
being  the  Rothesay  Dock  site  in  West  Dunbartonshire,  Scotland.  This  first  commercial  site  will  also  provide  supportive 
validation and consensus as Powerhouse builds pipeline elsewhere.  

The  progress  of  our  go-to-market  approach  includes  a  reliance  on  growing  an  effective,  relevant  network  of  license 
distributors, developers, contractors, and other partners across target geographies.  

The  intent  is  that  each  of  these  markets  will  ultimately  have  its  own,  growing  pipeline  of  opportunities,  developed,  and 
managed by a professional team and with a growing, local network of partners to support development, construction, and 
operations & maintenance. 

3.  Business Model Evolution  

Through its arrangement with Peel in the UK, PHE extracts its share of value primarily from delivered projects through licence 
fees per system delivered and operational.  

This follows an early establishment of roles with Peel acting as Developer and PHE as technology provider. This was also a 
reflection of the relative strengths of the two businesses at the time the arrangements were made, when PHE had limited 
funding and accordingly a limited ability to resource and deliver multiple projects through development. 

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In last year’s report, it was explained that just as it has under the arrangements with its UK development partner, Powerhouse 
intends to license the use of its technology to project owner companies which will operate plants using technology it provides 
and integrates. The Company held this out as its business model. 

The Company’s new CEO’s focus has been on how best to maximise shareholder value. A range of evaluations conducted 
included one of the business models.  

This demonstrated that the type of model that had been adopted by the Company has relevance and value, but conversely, 
that it can create a prominent level of dependency on developer partners, or even sole dependency where exclusivity rights 
to,  for  example,  a territory,  have  been  granted.  It  can  generate  a loss  of  traction  where  delays  develop  and  can  confine 
Powerhouse to a smaller-part player, with a low influence level over the pace of progression of the project, its financing or 
achieving key value points within the gated process. 

These assessments have also shown clearly that Powerhouse’s technology value to a project is represented in the value of 
the outputs the technology can produce (i.e., hydrogen, syngas, power, heat) or, to a lesser extent, the costs that can be 
avoided (e.g., waste disposal to landfill or incineration). Fresh financial modelling revealed the level of, for example, potential 
development revenues, project management incomes, as well as build and technical support revenues the Company could 
generate if it adopted a more flexible business model, including considering being, for example, co-developer, developer, or 
project lead.  

In doing so, these assessments have established that the target business model of being a prominent leader of technology 
innovation and an attractive licensing partner, is likely to be more effectively realised and achieved by a more flexible model 
in the initial stages of commercialisation and scale-up by the company. Naturally, this would include Powerhouse creating an 
investor grade, qualified and well-integrated group of partners, who could deliver a deep and wide range of roles and activities 
essential to the integration of Powerhouse’s technologies into its plants of the future. 

The Board is currently exploring this evolution of its current business model for its effectiveness and how best to structure 
this, to serve as part of a market entry strategy, validating and demonstrating with clients and markets the value and credibility 
of the plants and the technology, generating consensus and subsequently further pipeline opportunities. 

It is envisaged that that this could see a switch to development and operational fees dominating revenue streams, and as 
scale-up evolves that Powerhouse subsequently migrates more to generating revenues from its technology, integration, and 
engineering know-how, as client’s take-over operations or fund the project pipeline.  

4.  Go-to-market engagement  

Marketing Centre  

Within the Commercial development imperative referred to earlier in this report, the Company has outlined how it will enrich 
its  global  network  of  partners  and  clients,  and  the  Company  has  also  outlined  how  it  is  considering  adapting  its  current 
business  model.  The  Company  is  clear  that  there  is  a  strong  market,  and  that  scale-up  will  be  supported  by  a  range  of 
imperatives, which includes proof of operation and scalability.  

As reported above, in Q2 of 2022, the Company deployed its own capital to invest up to £1.3 million in the supply, installation, 
and commissioning of equipment, which has a pre-commercial scale thermal gasification technology at its centre. This will 
form the nucleus of a Global Innovation and Technology Centre.  

This is designed to achieve several outcomes. Firstly, as mentioned earlier, it will support a doubling down on the development 
of the readiness of the technologies the Company is leading the development of, and to deliver and demonstrate process 
capability.  

It is also intended to mitigate any risk of impact to growth. Specifically, from interruptions the Company may experience with 
in-operation development on a commercial scale facility at its first of a kind site, until a repetitive consistent performance and 
reliability is established and assured consistently. At the same time, it will lessen any impact on growth from risks of delays 
the Company has experienced on reaching Financial Close at its first of a kind commercial site in the UK. The Company has 
the quality of using the centre as a market reference site when operational.  

Importantly, however, it as well as supporting the development and further proving Powerhouse’s proposition and offering, it 
will also be a marketing centre, serving as a focal point to grow the pipeline with prospective partners and clients, providing 
proof that a larger scale technology operation can perform, and is scalable.  

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Marketing Pillars 

Finally,  we  are  commencing  investing  in  developing  a  marketing  pathway  which  will  underpin  and  support  the 
commercialisation and scale up of the Company. This will include investment in appropriate professional marketing resources 
and collateral.  

5.  Invest in Talent  

As well as enriching its network of partners, the Company also intends to enrich and invest in its talent. 2021 saw growth in 
our technical team, and the addition of a  business  development manager. In 2022, we are restructuring and investing in 
replacing two engineering personnel with more seasoned engineering talent. This will underpin the Technology and Innovation 
imperative.  

The Company will also be recruiting a Financial Controller by the end of 2022; will see migration from outsourced functions, 
providing the Company with greater control over financial functions including accounting records and timely production of 
financial  and  management  information,  to  enable  more  accurate  decision  making,  governance  and  reporting  to  investor 
markets.  

Board Strengthening 
There has been a high level of attrition at Board level historically and up to present day. The Board’s strategy has been to 
keep the composition of the Board and related corporate governance issues under constant review. The aim is to ensure that 
the Directors have the right mix of skills, experience, and qualifications to carry out their duties in a way which ensures the 
Company’s future success. The appointment of a new Non-executive Chairman in Q3, to replace Russell Ward, will continue 
with the work he had started on supporting the CEO in the aim of ensuring that the relevance, composition, and scale of the 
Board is appropriate for the forthcoming stage of its evolution. 

Financial Strategy  

At 31 December 2021, the Company had £9.6m of available cash with commitments forward, outside of normal operational 
spend, only in respect of the Protos short term loan facility. The Company considers the impacts of forward plans by producing 
regular forecasts, considering forward running costs of the business. 

Under the Protos short term loan facility of £3.8m, the Company had lent £1.15m as at 31 December 2021, excluding accrued 
loan interest. During 2022, the amount drawn down under the facility has increased to £1.89m. 

In 2022, the Company has committed £1.3m for the supply, installation, and commissioning of equipment in respect of its 
planned Global Technology and Innovation Centre. 

The Company will consider alternative financing routes for project initiatives and will explore appropriate ways to invest funds 
in the development of projects internationally. The Company is prepared to function as developer or as co-developer in key 
markets,  where  appropriate,  to  accelerate  progress.  Whilst  the  use  of  future  fund  raises  where  appropriate  will  also  be 
considered, there are no firm plans to do so at this time.  

2022 Key Performance Indicators 

The Board of Powerhouse remains focused on the first application for DMG. The principal Key Performance Indicator for 2022 
is  to  support  Peel  NRE,  and  its  SPV  team  to  complete  the  procurement  and  construction  phase,  generate  investment 
committee sign off at Peel NRE and reach financial close, leading to proving the process in operation.  

The  Company  intends  to  build  the  Global  Technology  and  Innovation  Centre  in  early  2023,  and  the  technical  team  will 
complete the key imperatives within the Technology and Innovation detailed plan for the year.  

The Company puts safety to the fore in our activities and for 2022 our target will be to operate without harm and to ensure 
that our operating systems and process are developed with safety of all as the prime concern. Continued incident free activity 
is a key performance indicator for 2022. 

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CORPORATE SOCIAL RESPONSIBILITY 

Our Commitment 

The Company cares profoundly about the environment and is committed to addressing two of the world’s current challenges 
in  the  eradication  of  unrecyclable  plastic  waste and  the  production  of  hydrogen  energy  to  replace  diesel  in  heavy  goods 
vehicle use improving air quality around our communities. 

The Company is committed to operating with an inclusive, transparent, and respectful culture and places particular emphasis 
on  operating  to  the  highest  ethical  and  environmental  standards  and  our  applications  target  the  best  achievable  energy 
efficiency. 

The Directors  take  personal  ownership  of  the  policies  and maintenance  of  the  necessary exacting  standards  of  business 
conduct throughout the organisation and for delivering these Corporate Social Responsibilities. 

Health and Safety  

Powerhouse cares profoundly about the health and safety of our employees, customers and the communities who could be 
affected by our activities and aims to protect them from any foreseeable hazard or danger arising from our activities or our 
products. To this end in 2020 and 2021 the Company completed a series of safety related studies and reviews, including 
hazard and operability studies, quantified risk assessments and layer of protection analysis using external experts to review 
the product risk and the application on sites such as Protos. In all instances the findings of the safety risk assessments have 
demonstrated that the risk arising from the DMG technology is well within acceptable tolerable risk levels. In 2022 and 2023 
the Company will revisit these assessments to identify any changes that have been introduced which may represent new or 
variants of risk.  

The Directors recognise that the key to successful health and safety management requires an effective policy, organisation, 
and  arrangements  which  reflect  the  commitment  of  senior  management.  The  Chief  Executive  Officer  will  implement  the 
Company’s health and safety policy and ensure that the Company Health and Safety (HSE) management system and safety 
standards are all maintained, monitored, and improved where necessary. 

The Company’s research and development activities and activities at Protos were delivered HSE incident free in 2021.   

Environment Policies 

The Company’s Environmental Policy recognises the importance of our technology from a global challenge perspective. The 
Company will regularly evaluate the environmental impact of its activities, products, and services, taking all actions necessary 
to continually improve the Company’s and its products’ environmental performance.  

Product Emissions in Operation  

The Company is committed to providing a solution for utilising problem waste streams with its current UK focus being to use 
non-recyclable  plastics  within  its  technology  to  produce  hydrogen  as  a  clean  fuel  for  buses  and  trucks  which  minimise 
emissions and to comply with all relevant environmental legislation, regulations, and other environmental requirements. The 
Company passionately believes that its process is a far better alternative to incineration and / or landfill. 

The application of the Company’s technology in waste to hydrogen plants produces residues in two forms, a char like solid 
residue and waters with hydrocarbon content. During the last period progress has been made on the characterisation and 
utilisation of the residue (Biochar) and we are confident that we can develop it into a saleable product for a given feedstock 
mix. This work will continue through 2022. Similarly, once the Protos plant is in operation, the technical development team is 
looking to implement further cleaning processes to treat and use the emitted water to return into the process. 

Under the Powerhouse Environmental Policy, Powerhouse has committed to improving the product emission performance, 
and Directors are confident that the technology performance in this area will be improved, and we will report annually on this 
matter. 

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Stakeholder Engagement 

Recruitment and employee management are undertaken in line with the Company Employment Policy which has committed 
to a working environment with equal opportunities for all, without discrimination and regardless of sex, sexual orientation, 
age, race, ethnicity, nationality, religion, or disability.  

Furthermore, the Company has committed to continuous development schemes and will support employees to attain the best 
for themselves and the Company through personal assessment, training, and mentoring.  

Powerhouse recruited a Chief Executive Officer in February 2022. During 2021, the Company recruited a Chief Technical 
Officer and a Business Development Executive.  

The Board is mindful of the duties of Directors under S.172 of the Companies Act 2006. The Directors believe strongly in the 
importance  of  solid  and  exemplary  corporate  governance  to  help  achieve  our  corporate  goals.  The  Board  takes  its 
accountability to each of Powerhouse’s stakeholder groups very seriously.  

The  Directors  have  committed  to  promoting  a  company  culture  that  treats  everyone  fairly  and  with  respect  and  this 
commitment extends to all principal stakeholders including shareholders, employees, consultants, suppliers, customers, and 
the communities where it is active.  

All Directors are encouraged to act in a way they consider, in good faith, to be most likely to promote the success of the 
Company for the benefit of its shareholders. In doing so, they each have regard to a range of matters when making decisions 
for the long-term success of the Company.  

PRINCIPAL RISKS AND UNCERTAINTIES  

The  Company  is  subject  to  various  operational  risks  and  the  following  issues  are  particularly  relevant  to  the  Company’s 
business activities:  

Business Risk 

Technology Risk  

The Company continues to manage technology risks within the detailed Technology Management Program. The risks are 
identified  from  our  test  and  design  activities,  tests  on  potential  waste  materials  and  the  residues  arising.  The  strategy  of 
selecting proven components with extensive operating hours in similar service in other plants significantly reduces the risk 
profile for its DMG system. The Directors’ objective is to reduce technology risk wherever practical, however the risk of the 
first application will remain with the project SPV until the Protos plant is commissioned. 

Throughout  2021  and  the  current  year,  engineering  design  contractors  and  independent  experts  including  DNV  have 
reviewed the design. The feedback from these reviews has allowed the removal of some of the risk issues completely and the 
refinement of other matters. The design has been validated by commissioning experiences that Powerhouse and our specialist 
suppliers have experienced, and further challenged by the independent reviews that have been undertaken by the FEED 
contractor, specialist consultants such as DNV and GHD addressing the chemical engineering, gas, and hydrogen activities.  

A key aspect in risk reduction is process development. The inception of the Global Technical and Innovation Centre (“GTIC”) 
will focus on improving the technology readiness level of the technologies Powerhouse is developing and adopting and allow 
the development and integration of technologies to further enhance its offering whilst reducing overall risk. 

The GTIC will allow the technical team to focus on specific aspects arising from risk assessments and an active technical risk 
register. It will also commence development of in-house technologies to reduce any risks posed by third party systems within 
the process. 

In conjunction with the development of the GTIC, we will continue to build on the initial work with Manchester University by 
taking the initial computational fluid dynamic output and begin a program of works with the University to optimize the internals 
of the TCC. The aim of this works will be to gain a better understanding of the intricacies of gas flow but also allow us to build 
additional IP relating directly to the TCC design. 

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Strategic Report 

The Protos final contractor selection to be made in 2022 by Peel NRE’s SPV for the Protos site, will allow the final detailed 
design to be completed and the control system logarithm functionality to be defined. This design detail, and the commissioning 
and testing program will allow the closure, or mitigation, of detail design related risks noted as outstanding against the risk 
management program that was assessed by DNV during the second stage of their Technology Validation process. 

Research and Development Activity Risk  

Throughout 2021 and into 2022, research and development has continued using the demonstration unit at Powerhouse's 
Thornton, Cheshire site. The test time has been utilised to further refine the feedstock/output model along with allowing the 
testing of numerous potential feedstock sources. All testing, maintenance and modifications to the unit are undertaken after  
formal  design  and  functional  safety  reviews  with  all  activities  being  subject  to  risk  assessments  in  accordance  with  the 
Company Health & Safety Management processes.  

Powerhouse operates its research and development laboratory equipment and testing programme in accordance with the 
Company Health and Safety Management system. 

The Research and Demonstrator rig has been optimised further during the year and has resulted in a design package that 
has allowed the placement of the order for a larger feedstock testing unit to be sited at the new Global Testing and Innovation 
Centre, as  reported  above.  The  design,  fabrication,  construction,  and  commissioning  of  the new equipment  will  follow all 
required external and internal Health, Safety and Environmental guidelines. 

Competition Risk  

In quarter two 2022, the Company commenced an in-depth re-assessment of competitive technologies to maintain a current 
and forward-looking vision of the landscape it operates within.  

Powerhouse remains well-placed to address current and future waste market potential. As an innovator at the leading edge 
of integrating associated technologies and advanced gasification technologies, Powerhouse can pursue and deliver on UK 
and international opportunities in line with the Company’s focused strategy.  

Market Adoption Risk  

In the UK, Peel NRE, as our main collaboration partner, has been leading the commercial engagement for waste plastic and 
hydrogen, and contract negotiations with waste suppliers available to the first of a kind plant they are developing plant.  

The Company acknowledges that once this facility at the Protos Park is operating successfully, commercial scale-up can be 
achieved.  

The Company also has a collaboration with Hydrogen Utopia International Plc (HUI). It is pursuing a project at Konin in Poland. 
To date, the project is reported to be on programme, but is at risk of delay and other negative impacts due to the situation 
regarding Ukraine. 

Reliance on client parties  

The Company depends on key developers and counterparties for its business pipeline. The failure of a key business partner, 
supplier, subcontractor, financer, or other provider could materially affect the operational and financial effectiveness of the 
Company. Ensuring ongoing professional collaborative relationships with our early-stage clients is mission critical.  

Central to achieving our strategy is winning and successfully delivering projects and supplying our technology services, and 
the product ecosystem. 

Winning  new,  and  retaining  and  converting,  existing  client  pipeline  continues  to  be  critical  for  the  future  success  of  the 
business. 

To mitigate some of this risk, the Company has also signalled and recently launched several imperatives to begin to limit 
dependency on any one or similar number of projects and development partners. The Company aims to build and create a 
quality of pipeline choice, whilst having a professional supportive collaborative position with key partners.  

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Intellectual Property and Know-How Risk 

The  Company  undertakes  reasonable  endeavours  to  protect  its  know-how  and  has  filed  patents  in  2021  to  generate  IP. 
However,  any  patents  and  other  IP  may  not  prevent  competitors  from  independently  developing  or  selling  products  and 
services like or duplicative of those filed.  

If the Company can generate and protect IP, the value of the brand and other intangible assets may be increased, and our 
business  positively  affected.  In  addition  to  the  IP  patents,  the  Company  possesses  a  wide-ranging  level  and  breadth  of 
proprietary know-how that drives our capabilities and excellence. 

The Directors are aware of the risks of IP leakage and, through our IP attorneys, are maintaining and monitoring compliance 
of any potentially conflicting technologies as well as maintaining protection around the freedom to operate worldwide. The 
Company follows a dual route of IP protection via a suite of patents and maintaining control of disclosure over the design 
documents, calculations, and chemical engineering models for the process through systems management.  

All contracts robustly define the IP and Employees are trained to limit data made available to third parties  

Finally, the GTIC and material partner collaborations are designed to form a platform which will support building further know-
how and IP potential for the Company.  

Employee Risk 

Attracting and retaining the best, skilled people at all levels of the business is critical. This is particularly the case in ensuring 
the Company has access to a diverse range of views and relevant experience, and in attracting specific expertise at both 
board, managerial and operational levels where the market may be highly competitive.  

As the Company evolves, this risk will take more prominent focus with the Board. Employees should not become a hurdle to 
progress for the Company.  

The  Board  is  also  aware  that  the  value  of  the  Company  is  inherently  embedded  in  its  employees  and  the  remuneration 
committee  has  made  commitments  to  make  Powerhouse  an  attractive  workplace,  both  in  terms  of  suitably  attractive 
packages but also commitment to development through training and compliance and other Employees benefits. 

As part of the Covid-19 measures all employees were supported to ensure that their home working facilities were compliant 
and, as the Directors are also aware of the pressures on employees, that well-being support and instruments were introduced. 

Supply Chain Risk  

As  a  hangover  from  the  pandemic,  global  shortages  in  raw  material  shortages,  supplier  capacity  constraints,  supplier 
production disruptions, supplier quality and sourcing issues or price increases are widespread and touching a wide range of 
industries.  

It is not beyond the realms of possibility that this could increase aspects of the technology, or development and operating 
costs, and adversely impact the competitive positions of the Company’s products or service. The reliance on its development 
partners,  and  their  reliance  on  contractors,  third-party  suppliers  and  manufacturers,  and  raw  material  markets  exposes 
enterprises like Powerhouse to volatility in the prices and availability of such items. A disruption in deliveries, including as a 
result  of  catastrophic  events  or  war,  could  have  an  adverse  effect  on  our  ability  to  meet  our  development  partner’s 
commitments to customers or increase operating costs.  

It is however also anticipated that the prices of offtakes such as gas, power, heat, and hydrogen produced by Powerhouse 
will see increases in the same environment.  

Financial Risk 

Capital management 

In January 2021, the Company raised £10 million before expenses by way of a fund raise. This was primarily intended to 
support the delivery of the Protos project, evidenced by the provision of the £3.8m loan facility to the Protos SPV. 

Due to changes in the Protos contracting strategy, the facility was not fully utilised during 2021 and has been made available 
until August 2022 in keeping with updated cashflows for the project development phase. Powerhouse had a cash balance of 
£9.6 million at 31 December 2021. 

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Whilst this is a healthy position, until the Company can secure forward revenues in excess of its running costs, this amount 
will deplete over time. The Company produces regular cashflows to assess plans forward and the use of its cash resources 
based on business strategy. The Company assesses investment opportunities, either in its technology development or in 
project engagement, on their individual merits but also in terms of how funds can be used to generate future revenues in line 
with Business Strategy.  

To enhance financial control procedures and to strengthen the oversight and monitoring and control of financial performance 
and cash, the Company will bring activities which are outsourced currently, in-house and will recruit a Financial Controller 
who will report to the CFO. The Company will also invest in an upgraded finance software system appropriate for this current 
and immediate stage in its evolution.  

The Company manages its capital according to budgets with the aim of ensuring it can continue as a going concern. Capital 
sources include debt and equity instruments. 

Board members review cash balances available for ongoing spend on a weekly basis against budget and income forecasts 
in assessing needs forward and timing for any future equity raises. 

Other financial risks are considered as follows: 

Foreign Currency Risk 

The execution of the first project does not expose the Company to any foreign currency risk and the Company does not hold 
any  cash  in  foreign  currencies.  Foreign  currency  value  fluctuations  are  therefore  insignificant.  In  future,  as  international 
contracts  are  signed,  the  Board  will  examine  the  currency  risk  exposure  of  each  project  and  protect  any  revenues  and 
expenses against currency volatility. 

Interest Rate Risk 

The Company does not have any corporate or project related debt outstanding, so the Board considers that there is currently 
no material risk of any exposure to interest rate variations. 

Credit risk 

The Company has provided a loan facility and billed for engineering services to the Protos SPV during the year and into 2022. 
Amounts due will be dealt with as part of the funding arrangements for the project during 2022. The Company has exposure 
on these amounts should the project fail to reach a financial close, although security is in place in the event of a default in 
repayment. 

Other Financial Risk 

The Company considers price risk and liquidity risk to be negligible in relation to their performance and financial position at 
this early stage of its development, except as referenced elsewhere in this report.  

Before entering any contract, partnership, or collaboration arrangements for service providers to Powerhouse, the Board 
ensures that steps are taken to confirm the ability to deliver of any contractor or partner to avoid business disruption.  

External Risks 

The Company is subject to various risks originating from external events including political, economic, legal, business, and 
financial  conditions.  The  assessment  of  these  risks,  their  evaluation  and  mitigation  are  essential  parts  of  the  Company’s 
planning and internal control system. 

Projects that utilise the Company’s technology are subject to price risk in respect of project build and operational costs and 
market risks in respect of commodity pricing relating to project outputs. As the Company’s ability to generate revenues is 
dependent upon projects materialising, the Company is indirectly exposed to these risks. The Company is actively involved 
with its customers in assisting management of these risks.  

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Strategic Report 

The following risk factors, which are not exhaustive, are particularly relevant to our current business activities:  

COVID-19  

Since 2020, the engineering development work avoided significant interruption.  

In 2022, as the different regions of the UK moved more into the phases of ‘living with Covid-19’, more normalised operations 
were established within society, and in our business environment. Despite this, the flow through impact of Covid-19 on global 
supply chain is still prevailing. The Company and its collaboration partner in the UK, Peel NRE, and the SPV team on the 
Protos project, monitor the supply chain related effects of the pandemic on the project (including cost volatility), and on the 
business. They deploy appropriate risk mitigation strategies where possible.  

The  Company  continues  to  closely  monitor  the  coronavirus  situation,  are  following  health  authority  and  government 
guidelines. The Company is prepared to take further action to deal with any situational changes. 

Implications of the war in Ukraine   

The Company does not consider there to be a direct impact on its assets and liabilities as a result of the war in Ukraine. The 
Company  notes  that  the  situation  is  impacting  commodity  pricing,  exchange  rates  and  the  supply  chain,  as  well  as  the 
possibility of an economic downturn. The Company will continue to monitor events and potential impacts on the business and 
relating projects, mitigating where appropriate and possible.   

Regulatory and Compliance Risk  

The international markets available to Powerhouse expose the Company to risk across a spectrum of different political and 
regulatory regimes with different risk profiles.  

The steps being taken to adopt a more strategic and tactical development of territories and markets by the Company of late 
reduces this risk and allows the Company to focus on aligning with relevant markets where there is existing or potential market 
fit and attractiveness, which includes the political, regulatory and compliance elements.  

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Statement of Directors’ Duties to Stakeholders under s.172 Companies Act 2006 

Promoting the success of the Company 

The Directors are aware of their duty under section 172 of the Companies Act 2006 to act in the way which they consider, in 
good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in 
doing so, to have regards (amongst other matters) to: 

• 
• 
• 
• 
• 
• 

The likely consequences of any decision in the long term;  
The interests of the Company’s employees; 
The need to foster the Company’s business relationships with suppliers, customers and others;  
The impact of the Company’s operations on the community and the environment; 
The desirability of the Company maintaining a reputation for high standards of business conduct; and 
The need to act fairly between members of the Company. 

The Board recognises that the long-term success of the Company requires positive interaction with its stakeholders. Positive 
engagement with stakeholders will enable our stakeholders to better understand the activities, needs and challenges of the 
business and enable the Board to better understand and address relevant stakeholder views which will assist the Board in its 
decision making and to discharge its duties under Section 172 of the Companies Act 2006. 

Key stakeholders are discussed in more detail in the Corporate Social Responsibility section of this report. 

Paul Drennan-Durose 
Chief Executive Officer 
28 June 2022 

  20 

 
 
 
 
 
 
 
 
Directors’ Report 

DIRECTORS’ REPORT  

The Directors present their report together with the audited financial statements for the year ended 31 December 2021 for 
Powerhouse  Energy  Group  Plc  (“Powerhouse”  or  the  “Company”).  The  financial  statements  have  been  prepared  in 
accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board 
(IASB),  as  adopted  for  use  in  the  United  Kingdom  (UK)  and  with  those  parts  of  the  Companies  Act  2006  applicable  to 
companies reporting under IFRS (except as otherwise stated. 

Principal Activities 

Powerhouse is a company incorporated in England and Wales with company number 03934451. The Company is a public 
limited company which trades on the AIM market of the London Stock Exchange. The address of the registered office is 15 
Victoria Mews, Mill Field Road, Cottingley Business Park, Bingley BD16 1PY. 

The Company has a Distributed Modular Generation (“DMG”) product platform for the regeneration of plastic to power and 
hydrogen. The Company engineers, sells, licenses and supports operations of the DMG process for applications in UK and 
throughout the world. 

Business Strategy 

The Company Business strategy is described in the Strategic Report. 

Business Review 

The review of the year and the Directors’ strategy are set out in the Strategic Report and the Chairman & CEO’s Reports. 

Key Performance Indicators 

For the year ended 31 December 2021, the Directors consider that performance is measured against the commercialisation 
and business development milestone activities reported in the Strategic Report. 

Future Developments 

Expected future developments and the Company’s corporate development strategies are reported in the Chairman & CEO’s 
Report and the Strategic Report. 

Management of Capital  

Matters related to the management of capital are set out in the Strategic Report. 

Subsidiaries, associates and other investments 

The Company’s only UK subsidiaries are non-trading and not material. There are also long-term restrictions on the operations 
of the Company’s subsidiaries in the US and Switzerland. With these restrictions in place, the Company is also unable to exert 
control over the subsidiaries. As such the Company has claimed exemptions applicable to it under Companies Act section 
405 (2) and 405 (3b) and IFRS 10 to not present any Consolidated financial statements for the year ended 31 December 
2021. 

The Company has one associate, Engsolve Limited, in which a 48.39% interest was acquired on 12 August 2021 for a cash 
consideration of £99,990. Engsolve Limited is incorporated and operates in the UK. The accounts include the Company’s 
share of Engsolve’s profits made after the acquisition. The rationale for the acquisition is detailed in the Strategic Report. 

During 2021, the Company’s investment in Waste2Tricity International (Thailand) Limited was transferred into a new Thailand 
based  entity,  Altec  Energy  Limited  (‘Altec”).  The  Company  has  not  taken  part  in  fund  raises  investment  made  by  Altec 
subsequent to its formation such that the Company’s interest has reduced to 33.8% as at 31 December 2021 and to 30.4% 
since year end. Due to the passive nature of the Company’s involvement, the interest is held in other investments. 

21 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report 

Results and Dividends for the Year 

The Company financial statements for the year ended 31 December 2021 are set out in this annual report. The Company 
loss for the year after taxation amounted to £1,870,496 (2020: loss of £15,837,741). The net assets of the Company are 
£55,085,971 (2020: £46,857,836) with the movement in the year set out in the Statement of Changes in Equity.  

The  Company  has  not  paid  a  dividend  during  the  year  ended  31  December  2021  (2020:  £nil)  and  the  Directors  do  not 
recommend the payment of a dividend at 31 December 2021 (2020: £nil). 

Research and Development  

Research  and  development  related  costs  incurred  during  the  year,  relating  to  the  DMG  product,  amounted  to  £585,195 
(2020: £407,071). This excludes amounts expended on client projects that are expected to be recovered. 

Financial Risk 

Financial risk management and exposure are set out in the Strategic Report. 

Events after the Reporting Period 

There have been no significant events since the balance sheet date other than those discussed in the Strategic Report and 
note 29 to the Company financial statements. 

Directors  

The Directors who held office during the period and up to the date of the Annual Report are as follows: 

Current Board Members:  

Paul Drennan-Durose (appointed 14 February 2022) 
Paul Emmitt (appointed 2 March 2022) 
James Greenstreet (resigning on 30 June 2022) 
Myles Kitcher 
Hugh McAlister (appointed 4 February 2022) 
Keith Riley (appointed 27 September 2021) 
Gillian Weeks (appointed 18 January 2022) 

Board Members who served and left during period:  

Mark Berry (resigned 29 July 2021) 
Dr William Cameron Davies (resigned 31 March 2021) 
Kirsten Gogan (resigned 12 October 2021) 
David Ryan (resigned 30 June 2021) 
Allan Vlah (resigned 31 December 2021) 
Russell Ward (appointed 4 February 2022, resigned 10 June 2022) 
Tim Yeo (resigned 20 August 2021)  

Company Secretary 

Delgany Corporate Services Limited  

A brief biography of the current Directors can be found below:  

22 

 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report 

Executive Directors: 

Paul Drennan-Durose, Chief Executive Officer 

Paul Drennan-Durose recently joined (14 Feb 2022) the Board of Powerhouse, having spent over three years as the investor 
appointed Chief Executive Officer of Heliex Power Limited, a private equity backed cleantech energy business. Whilst there, 
he  led  the  transformation  of  the  start-up  new  technology  company,  leading  the  roll-out  of  its  technical  development, and 
commercial market recovery. 

Paul  has  many  years  of  Board  level  experience  in  complex,  new  technology,  distribution,  engineering  services,  and 
manufacturing companies. He has PLC, SME, PE, and VC business experience internationally, and has extensive experience 
in a range of sectors, including cleantech energy, oil & gas, waste to energy, marine, automotive and process manufacturing 
industries. 

Paul Emmitt, Chief Technical Officer 

Paul Emmitt was appointed as Chief Technical Officer in June 2021 and joined the Board as an Executive Director on 2 March 
2022. Mr Emmitt is a Chartered Materials Engineer and Chartered Environmental Engineer with over twenty years engineering 
and operational management experience both in the UK and overseas.  

Paul holds an MBA in Engineering Management. His experience encompasses work in the oil, gas, energy-from-waste and 
chemical industries as well as periods with major international companies at levels from Engineer to Director. In all sectors he 
has been a designer as well as a project and HSE manager. 

Non-Executive Directors: 

Keith Riley, Interim Non-Executive Chair 

Keith Riley joined the Board as a Non-Executive Director in 2021 and stepped in as Interim Non-Executive Chair on 27 June 
2022.  Mr  Riley  is  also  the  proprietor  and  Chief  Executive  Officer  of  Vismundi  Limited,  a  consultancy  company  providing 
services  to  the  resources  and  waste  management  industry.  Prior  to  that,  between  2005  and  2012  he  worked  for  Veolia 
Environmental  Services  plc  as  Group  Managing  Director  for  Technology  and  as  Managing  Director  for  Group  Technical 
Services.  

Over the course of his career Mr Riley has worked with several specialist waste and resource management companies and 
was a Non-Executive Director of Waste2tricity Limited. He continues to be a Partner of BH Energy Gap LLP on behalf of 
Vismundi, which develops projects in the renewables sector and raises the finance to implement them. 

James Greenstreet, Non-Executive Director 

James Greenstreet has over 20 years of corporate and structured finance experience. Having started his career at Arthur 
Andersen, he joined BAE Systems in 1994 to work in the corporate finance team. 

After leaving BAE, Mr Greenstreet held corporate finance positions at IBM and XL Capital, once more focusing on asset and 
lease finance. James has been a non-executive director of Powerhouse since 2011 and is a founder of aircraft lessor, Falko 
Regional Aircraft. He also sits on the board of regional airline, CityJet DAC and Electric Aviation Group Ltd an early-stage 
company developing hydrogen electric commercial aircraft. 

Myles Kitcher, Non-Executive Director 

Myles Kitcher is Managing Director of Powerhouse’s development partner for Protos, Peel NRE and the leading force behind 
Protos, – Peel NRE's flagship destination for energy, innovation and industry where the first application of Powerhouse DMG 
technology is to be built. Myles is a Chartered Surveyor with extensive experience in both the public and private sectors 
managing the development process for several large waste infrastructure projects. 

Prior to joining the Peel Group, Mr Kitcher worked for Lancashire County Council where he held senior positions within the 
planning and waste management functions of the authority.  

23 

 
 
 
 
 
 
 
 
 
 
 
Directors’ Report 

Gill Weeks, Non-Executive Director 

Gill Weeks OBE joined the Board as a Non-Executive Director in January 2022. With a scientific and legal background and 
widely considered to be an industry expert within the field of waste, environment and resource management, Ms Weeks has 
chaired key government, trade body and Environment Agency committees and has served on the Environment Agency Board. 

As a leader of compliance and regulatory teams in global environmental business, advising on environmental law changes, 
over  the  course  of  her  career  Ms  Weeks  has  developed  expertise  in  public  policy,  environmental  law,  stakeholder 
management, governance and risk, environmental science and regulatory compliance and enforcement. Ms Weeks was a 
board member at the Environment Agency for seven years until 2021 where she was chair of the Environment and Business 
Committee. She is currently the chair of Trustees at the Welcome Charity.  

Hugh McAlister Non-Executive Director 

Hugh McAlister joined the Board in February 2022. Mr McAlister has over 40 years’ stockbroking experience in the city and 
has been the executive chairman of Novum Securities Limited since 2018, having been its Chief Executive Officer for the 
previous nine years.  

Prior to this, Mr McAlister was a founding partner and head of trading a Kaupthing Singer & Friedlander Capital Markets and 
Head of Pan European Equities at Dresdner Kleinwort Benson.   

Directors’ Service Contracts 

Details  of  the  Directors’  service  contracts  and  their  respective  notice  terms  are  detailed  in  the  Remuneration  Committee 
report. 

Directors’ Interests 

The interests of the Directors who held office at 13 June 2022, being the latest practicable 
date before the publication of the Annual Report and at 31 December 2021, in the ordinary 
shares of the Company, were as follows: 

James Greenstreet 

Myles Kitcher 

Keith Riley 

Paul Drennan-Durose 

Paul Emmitt 

Gill Weeks 

Hugh McAlister 

Number of ordinary shares 

13 June 2022 

31 December 2021 

1,840,000 

1,840,000 

- 

- 

12,128,986 

12,128,986 

- 

- 

- 

- 

N/A 

N/A 

N/A 

N/A 

24 

 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report 

Significant Shareholders 

As at 13 June 2022, being the latest practicable date before the publication of the Annual Report, the Company is aware of 
the following significant interests in its ordinary, voting share capital: 

Holder 

Amount 

Percentage 

White Family* consisting of: - 

* Josh White 

* Ben White 

* Serena White-Reyes 

* Howard White 

Jarvis Investment Management Limited A/C Jarvis 

Vidacos Nominees Limited A/C CLRLUX 

Hargreaves Lansdown (Nominees) Limited A/C 15942 

Hargreaves Lansdown (Nominees) Limited A/C HLNOM 

Hargreaves Lansdown (Nominees) Limited A/C VRA 

Interactive Investor Services Nominees A/C SMKTISAS 

Interactive Investor Services Nominees A/C SMKTNOMS 

Barclays Direct Investing Nominees Limited A/C CLIENT1 

Corporate Governance 

994,461,055 

377,746,610  

224,065,330  

214,584,086  

178,065,029  

665,345,487  

539,957,293  

290,900,668 

199,380,589 

183,664,418 

180,291,605 

157,235,756 

122,579,893 

25.13% 

9.55% 

5.66% 

5.42% 

4.50% 

16.81% 

13.64% 

7.35% 

5.04% 

4.64% 

4.56% 

3.97% 

3.10% 

The Company complies with the AIM Rules for Companies, including AIM Rule 26, concerning the disclosure of information. 
It also complies with the provisions of the Quoted Companies Alliance Corporate Governance Code (“QCA Code”). More 
details are provided in the Corporate Governance Report in this document. 

Payment to Suppliers 

The Company does not have a standard or code which deals specifically with the payment of suppliers. Total creditor days 
for the Company for the year ended 31 December 2021 were 24 days (2020: 22 days). 

Risk Management and Principal Risks 

The principal risks to the Company, including financial risks and exposures and descriptions of how they are managed is 
explained in detail in the Strategic Report and in Note 26 to the financial statements. 

Going Concern Basis 

The  financial  statements  have  been  prepared  on  a  going  concern  basis  and  is  explained  in  Note  1.3  to  the  financial 
statements. 

Political Donations 

The Company has not made any political donations in the year ended 31 December 2021 (2020: nil). 

Auditors 

Jeffreys Henry LLP were re-appointed as auditors at the Company’s 2021 AGM. A resolution is to be proposed at the 2022 
AGM for the re-appointment of Jeffreys Henry LLP as auditors to the Company, at a rate of remuneration to be determined 
by the Audit Committee. 

25 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors’ Report 

Each of the persons being a Director at the date of approval of this report confirms that: 

• 

• 

So far as the Director is aware there is no relevant audit information of which the Company’s auditor is unaware; 
and 
The Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any 
relevant audit information and to establish that the Company’s auditor is aware of that information.  

This confirmation is given, and should be interpreted, in accordance with the provisions of s.418 of the Companies Act 2006.  

Approved by the Board of Directors and signed on behalf of the Board on 28 June 2022.  

Paul Drennan-Durose 
Director 

26 

 
 
 
 
Corporate Governance Report 

CORPORATE GOVERNANCE REPORT  

Introduction 

The Directors attach great importance to maintaining high standards of corporate governance to help achieve the Company’s 
goals. To that end they have adopted the principles set out in the Quoted Companies Alliance Corporate Governance Code 
for Small and Mid-Size Quoted Companies (the ‘QCA Code’) 2018. The QCA Code, which is constructed around 10 broad 
principles, sets out a standard of minimum best practice for small and mid-size quoted companies, including AIM companies. 
Companies are required to disclose how the implementation of the QCA Code has been applied or, to the extent not done 
so, to explain any areas of departure from its requirements. 

We  have  considered  how  we  apply  each  principle  to  the  extent  that  the  Board  judges  these  to  be  appropriate  for  our 
circumstances, and below we provide an explanation of the approach taken in relation to each. Our compliance with the QCA 
Code  is  based  on  the  Company’s  current  practices  and  the  improvements  in  its  governance  made  since  the  last  Annual 
General Meeting. 

The QCA Code makes clear it is the prime responsibility of the Chairman to ensure the Company applies the QCA Code for 
the  benefit  of  all  the  Company’s  stakeholders.  The  Chairman  and  the  Board  accept  their  responsibility  for  setting  the 
Company’s corporate culture, its values and for the behaviour of all its employees. 

This report sets out our approach to the QCA Code and governance. Our compliance with the 10 principles is also available 
to view on the Company’s website: www.powerhouseenergy.co.uk 

We have identified three principal areas where we are not in full compliance: 

The first relates to the position of the Company’s Chair. Since the recent resignation of the Chair, other Directors assumed 
the Chair’s responsibilities until Keith Riley, existing Non-Executive Director, was elected by the Board as Interim Chair. The 
Company is in the process of  searching for a permanent Chair with a view to making a relevant appointment as soon as 
practicable. See Principle 5 for further details. 

Secondly, due to changes on the board during 2021, there were no formal meetings of the Remuneration Committee in the 
year  under  review.  See  Principle  5  for  further  details.  New  members  have  been  appointed  and  there  has  been  a 
recommencement of the meetings of the Remuneration Committee in 2022. 

The third is that Powerhouse allows non-executive Directors to participate in the Company’s share options schemes. See 
Principle 5 for further details. 

The QCA Code allows cross reference to disclosures made on the website rather than repeating them all in this Report. The 
principal disclosures such as the Remuneration Committee and Directors’ Report will continue to be included in the Annual 
Report. However, for a full assessment of the Company, shareholders are encouraged to review the Company’s website for 
regulatory disclosures and for up-to-date information on activities. 

QCA Principles 

Principle 1 - Establish a strategy and business model which promote long-term value for shareholders 

Powerhouse has a clear business model and growth strategy. Our objective is to be a leading sustainable technology provider 
and to enable the rapid deployment of modular distributed hydrogen production, distributed electricity generation and the 
provision  of  heat.  This  will  be  done  using  non-recyclable  and  end-of-life  waste  material,  including  plastic.  Powerhouse’s 
proprietary process technology is one of the world's first proven, distributed, modular, hydrogen from waste (HfW) processes. 

Details of the Company’s strategy and business model are set out in the Strategic Report. This describes progress to date, 
our commercial partnerships, our DMG development programme and our plans. Key challenges facing the Company and 
how they will be addressed are set out in the Strategic Report in the section headed Principal Risks and Uncertainties. 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

Principle 2 - Seek to understand and meet shareholder needs and expectations 

Powerhouse is committed to open communication with all its shareholders. The Company believes it is important to explain 
business development and financial results to its shareholders and to ensure that suitable arrangements allow the issues and 
concerns of shareholders to be heard and understood. 

The Chair is normally primarily responsible for shareholder liaison. However, with the recent changes to the Board, the Chief 
Executive Officer has assumed this role on a temporary basis in conjunction with the Interim Chair appointed on 27 June 2022 
until the appointment of a new permanent Chair is made. Since joining Powerhouse in February 2022, the Chief Executive 
Officer and the former Chair made it a priority to meet the Company’s largest shareholders and held discussions with the 
Company’s broker to understand shareholders needs and expectations. The Chief Executive Officer, together with the new 
Chair when appointed and the Interim Chair in the meantime, intends to make presentations to shareholder events from time 
to  time  where  investors  can  discuss  the  Company’s  progress  and  performance.  Trading  updates  and  press  releases  are 
issued as appropriate. 

Hard copies of the Annual Report and Accounts are issued to all shareholders who have requested them and these, together 
with the interim results are also published on the Company’s website at www.powerhouseenergy.co.uk. The Company makes 
full use of its website to provide information to shareholders, other stakeholders, potential customers, and other interested 
parties. 

Shareholders  are  given  the  opportunity  to  raise  questions  at  the  Annual  General  Meeting  (“AGM”)  and  the  Directors  are 
normally available both before and after the meeting for further discussion with shareholders. As a matter of policy, the level 
of proxy votes (for, against and votes withheld) lodged on each resolution is declared at the meeting. In the event there were 
a  significant  number  of  votes  against  a  resolution,  the  Directors  would  seek  to  communicate  with  the  shareholder(s) 
concerned to discuss their issues.  

The Board receives regular share register analysis reports to monitor the Company’s shareholder base and help identify the 
types of investors on the register. 

Principle 3 - Take into account wider stakeholder and social responsibilities and their implications for long- term 
success 

The Company regards its shareholders, employees, customers, contractors, consultants and advisors, business partners and 
suppliers  as  forming  part  of  the  wider  stakeholder  group.  The  Company  recognises  the  contribution  of  each  of  these 
stakeholder groups and seeks to build meaningful and mutually beneficial relationships with them all. 

As  the  needs  and  growth  of  the  business  evolves,  management  identifies  key  relationships  and  aims  to  ensure  they  are 
managed appropriately. 

The Company’s internal stakeholders are its employees and its consultants. The Company is fully committed to promoting a 
working environment of equal opportunities for all without discrimination or harassment and regardless of part-time working, 
gender,  sexual  orientation,  age,  race,  ethnicity,  nationality,  religion,  or  disability.  The  Company  will  report  against  this 
commitment in future annual reports. 

The Company proactively seeks feedback to enable the management to make improvements and changes to products and 
processes.  All  stakeholders  have  access  to  contact  information  for  communication  with  the  Company.  Feedback  is 
respectfully acknowledged by the Company and appropriately dealt with. 

The Board believes that investment in the wider stakeholder network assists the achievement of its long-term goals and helps 
create an environment of trust which will promote the long-term success of the Company. 

There are further details of the Company’s approach to corporate social responsibility in the Strategic Report of this Annual 
Report and Financial Statements. 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

Principle  4  -  Embed  effective  risk  management,  considering  both  opportunities  and  threats,  throughout  the 
organisation 

Risk assessment and evaluation is an essential part of the Company’s planning and an important aspect of the Company’s 
internal control system. 

The Board had established a comprehensive risk register relating to significant aspects of the Company’s business. Given the 
level of Board changes in the period 2021 to current, the Board will complete a comprehensive revalidation and reassessment 
of the risks and mitigations within the register in quarter three and continue to review regularly thereafter.  

Standards and policies 
The Board is committed to maintaining appropriate standards for all the Group’s business activities and ensuring that these 
standards are set out in written policies. Key examples of such standards and policies include: 

Policy for Authorities and Approvals  
Share Dealing Code 
Social Media Policy 
Terms of Reference for the Board Committees 
Business Ethics Policy 
Environmental Policy 
Health and Safety Policy 
Employment Policy 

Approval process 
All significant contracts are required to be reviewed and signed by a Director of the Company. 

For further details of the Company’s approach to risk and its management, please refer to the Principal Risks and Uncertainties 
section of the Strategic Report in this Annual Report and Financial Statements. 

Principle 5 – Maintain the board as a well-functioning, balanced team led by the chair 

The  Board  comprises  two  executive  and  five  non-executive  Directors  and  it  oversees  and  implements  the  Company’s 
corporate governance programme. 

James Greenstreet is stepping down from his role as Non-Executive Director on 30 June 2022, having served on the Board 
since  2011.  James  acted  as  interim  Non-Executive  Chair  following  the  resignation  of  previous  chair,  Tim  Yeo,  until  the 
appointment of Russell Ward on 1 March 2022. Russell Ward recently resigned and left the Company on 10 June 2022. The 
Company is actively searching to appoint a new Chair and, in the meantime, has appointed existing non-executive Director, 
Keith Riley, as Interim Chair.  

The  executive  Directors  are  Paul  Drennan-Durose  and  Paul  Emmitt.  The  non-executive  Directors  are  Keith  Riley,  James 
Greenstreet, Myles Kitcher, Gill Weeks and Hugh McAlister. 

The Chair is responsible for the Company’s approach to corporate governance and the application of the principles of the 
QCA Code. Myles Kitcher, James Greenstreet, and Gill Weeks are the Company’s independent Directors and, as such, are 
independent  of  management  and  any  business  or  other  relationships  which  would  interfere  with  the  exercise  of  their 
independent judgement. 

James Greenstreet does not meet the strict criteria for independence set out in the QCA Code, due to his length of service, 
ownership of ordinary shares and/or his participation in the Company’s share option arrangements, as part of his remuneration 
arrangements. Mr Greenstreet has been a non-executive Director since 2011, having served as non-executive Chair from 20 
August 2021 until 1 March 2002. However, there has been no concurrent tenure with management which could otherwise 
hinder his ability to be independent.  

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

The Board considers that the ownership of shares and participation in the Company’s share option scheme by certain non-
executive Directors encourages the alignment of their interests with those of the Company’s shareholders and not material 
enough to compromise their independence, character and judgement. Therefore, the Company considers Mr Greenstreet to 
be independent for the purposes of the QCA Code. 

Each Board member commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend 
board  meetings,  join  ad  hoc  board  calls  and  are  available  for  consultation  when  needed.  The  contractual  arrangements 
between  the  Directors  and  the  Company  specify  the  minimum  time  commitments  which  are  considered  sufficient  for  the 
proper discharge of their duties. When exceptional circumstances arise all Board members understand the need to commit 
additional time. 

Board packs include information on business developments, progress and risks faced as well as financial performance and 
are circulated ahead of board meetings. Key issues are highlighted and explained, providing board members with sufficient 
information to enable full discussion in the board meeting. From time to time, members of the Company’s senior management 
present to the Board to update them on issues and developments. 

The Board is supported by its Audit Committee, its Remuneration Committee and its Environmental, Social and Governance 
(ESG) Committee. 

Board and committee meetings 
Attendances of Directors at Board and committee meetings convened in 2021, and which they were eligible to attend, are 
set out below:  

Director 

Number of meetings in year 

Tim Yeo* 

Dr Cameron Davies* 

David Ryan* 

James Greenstreet 

Myles Kitcher 

Allan Vlah* 

Kirsty Gogan* 

Mark Berry* 

Keith Riley* 

*Notes: 

Board Meetings 
Attended 

Remuneration 
Committee 
Attended 

Audit Committee 
Attended 

ESG Committee 
Attended 

7 

5/5 

3/3 

4/4 

7/7 

7/7 

5/7 

4/5 

4/4 

2/2 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

1 

N/A 

N/A 

N/A 

0/1 

1/1 

1/1 

N/A 

N/A 

N/A 

2 

2/2 

N/A 

2/2 

N/A 

N/A 

0/2 

2/2 

2/2 

N/A 

Tim Yeo resigned from the Board on 20 August 2021. 
Allan Vlah resigned from the Board on 31 December 2021. 
Kirsty Gogan resigned from the Board on 12 October 2021. 
Mark Berry resigned from the Board on 29 July 2021. 
Dr Cameron Davies resigned from the Board on 31 March 2021. 
David Ryan resigned from the Board on 30 June 2021. 
Keith Riley joined the Board on 27 September 2021. 

2021 was a year of many Board changes. Two of the non-executive directors of the Remuneration Committee resigned from 
the  Board  during  the  year  and  the  remaining  non-executive  Director  managed  matters  in  conjunction  with  other  Board 
members. 

There was only one formal meeting of the Audit Committee in 2021 in which the audit of the financial statements for the year 
ended 31 December 2020 was discussed. The same financial statements were discussed by the full Board with the auditors 
before being approved by the Directors of the Company in June 2021.  

30 

 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

Appointment and tenure 
The Board makes decisions regarding the appointment and removal of Directors. There is a formal, rigorous and transparent 
procedure for appointments, some of which have been delegated to the Remuneration Committee which, when needed, also 
acts  as  Nomination  Committee,  to  make  recommendations  to  the  Board  about  the  appointment  of  Directors  and  senior 
executives. Appointments are made on merit, taking account of the balance of skills, experience and knowledge required. 

As part of its commitment to improve accountability to shareholders, the Board has decided that, in future, any director who 
is over the age of 70 or has been on the board for eight years at the date of the Annual General Meeting will submit themselves 
for re-election annually, in addition to those Directors retiring by rotation in accordance with our Articles of Association. 

Principle  6  –  Ensure  that  between  them  the  Directors  have  the  necessary  up-to-date  experience,  skills  and 
capabilities. 

The Board comprises two executive Directors and five non-executive Directors, three of whom are independent. Details of 
the Directors are set out in the Directors’ Report of this Annual Report and Financial Statements. 

The  Chair  believes  that  the  Board  should  always  have  a  suitable  mix  of  skills  and  competencies  covering  all  essential 
disciplines bringing a balanced perspective that is beneficial both operationally and strategically. 

The nature of the Company’s business requires the Directors to keep their skillset up to date. Periodic advice on regulatory 
matters  is  given  by  the  Company’s  professional  advisers.  Directors  joining  the  Board  and  new  employees are  offered  full 
familiarisation briefings with the Company’s technology, the development programme and the current status of technology 
risk. During the period of Covid-19 restrictions in parts of 2021, the opportunity for Directors to visit the R&D facilities was 
limited but since restrictions have been lifted, familiarisation visits to the Company’s facilities have been resumed. In addition, 
the Company periodically holds board meetings at the site of the facilities. 

The Board is supported by senior management and by its key partners and professional advisers. The advice provided to the 
Board is often commercially sensitive. It is used by the Board to inform their decisions but typically will not be disclosed. 

The Company Secretary supports the Board and reports directly to the Chair on governance matters. 

The Board is supported and advised by a Chief Financial Officer, a chartered accountant with extensive experience, who 
works closely with the Board and is managing financial procedures and controls. 

Principle  7  -  Evaluate  board  performance  based  on  clear  and  relevant  objectives,  seeking  continuous 
improvement 

Board performance effectiveness process 
The assessment of the Board’s performance has to date been largely focused on its contribution to the achievement of the 
Company’s financial and strategic goals. As the Company moves towards full commercial operation the Board intends to 
consider how to make the evaluation of its own performance more formal and rigorous. 

Each Board member is subject to a review by the Remuneration Committee based on their professional contribution as well 
as their contribution to the performance of the Company. 

The terms and conditions of the arrangements, including remuneration are set by the Remuneration Committee. 

Board appointments  
The  Remuneration  Committee,  which  acts  as  Nomination  Committee  as  needed,  meets  when  necessary  to  consider  the 
appointment of new Directors. Board members all have appropriate notice periods so that if a board member indicates his or 
her intention to step down, there is sufficient time to appoint a replacement, whether internal or external. 

Board appointments are made after consultation with advisers in all cases. The Nomad undertakes due diligence on all new 
potential board candidates. 

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

Each Director is required to offer themselves for re-election at least once every three years as per the Company’s articles of 
association. In addition, any Director who is over the age of 70 or has been on the board for eight years at the date of the 
Annual General Meeting will submit themselves for re-election annually, in addition to those Directors retiring by rotation in 
accordance with our Articles of Association. 

Succession planning 
Succession planning was undertaken by the Chairman in consultation with the Board in 2021. However, with recent Board 
changes,  succession  planning  is  to  be  a  responsibility  of  the  Remuneration  Committee  which  acts  as  a  Nominations 
Committee as needed. 

Principle 8 – Promote a corporate culture that is based on ethical values and behaviours 

Consistent with Principle 3 above, the Company operates an inclusive, transparent and respectful culture. 

The Board places particular emphasis on operating to the highest ethical and environmental standards. HS&E is a specific 
agenda item at every board meeting. In December 2020, the Board established a new Environmental Social and Governance 
(ESG)  Committee  with  the  aim  of  placing  sustainability  at  the  heart  of  all  decision-making  and  business  activities.  The 
Company’s objectives include observing the highest level of health and safety standards, developing our Employees to their 
highest potential and being a good corporate citizen in all the countries where we operate. A health and safety management 
system has been developed for operation in 2021 with policies for healthy and safety, environment and quality in place. 

Management engages with independent environmental and safety engineering specialists to review the Company’s product 
and  demonstrate  that  it  will  have  minimal  environmental  and  safety  impact  on  the  communities  in  which  the  Company 
operates.  

The  Company’s  employment  policies  follow  best  practice,  based  on  equal  opportunities  for  all  employees,  irrespective  of 
ethnic origin, religion, political opinion, gender, marital status, disability, age or sexual orientation. 

The Company strives to create a diverse and inclusive working environment where every employee feels welcome and can 
do their best work. Powerhouse believes in the benefits of diversity and the importance of bringing a wide range of skills, 
experience  and  perspectives  into  our  business.  The  Directors  continually  work  with  senior  management  to  promote  the 
Company’s values and to monitor attitudes and behaviours to ensure that they are consistent with its culture. 

Principle  9  –  Maintain  governance  structures  and  processes  that  are  fit  for  purpose  and  support  good 
decision- making by the board. 

The Board has undergone significant change in the last year and is now working to ensure that its processes and culture are 
appropriate for the Company’s current size and complexity. It continues to review its practices as the Company evolves and 
grows as part of its commitment to improve accountability to stakeholders. 

The  Chief  Executive  Officer  has  overall  responsibility  for  managing  the  day-to-day  operations  of  the  Company  and  has 
assumed  responsibility  for  investor  relations,  PR  and  business  development.  The  Board  as  a  whole  is  responsible  for 
implementing the Company’s strategy. Management systems and procedures implemented in 2020 were followed in 2021 in 
parallel with project execution and licencing readiness activities. 

The Company has established an Audit Committee, a Remuneration Committee and an Environmental Social and Governance 
Committee with formally delegated duties and responsibilities. 

Audit Committee 
The duties of the Audit Committee include reviewing, in draft, form the Company’s annual and half-yearly report and accounts 
and providing advice to the Board. Members of the Audit Committee are also responsible for reviewing and supervising the 
financial  reporting  process  and  internal  control  systems  of  Powerhouse.  The  Audit  Committee  is  comprised  of  two  non-
executive Directors. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Governance Report 

Remuneration Committee 
The Remuneration Committee is responsible for determining the policy for Directors’ remuneration and setting remuneration 
for  the  Company’s  chair,  executive  Directors  and  senior  management  including  share  option  schemes  and  any  bonus 
arrangements. The Remuneration Committee also acts as a Nomination Committee as needed. No director plays any role in 
determining his or her own remuneration. 

2021 was a year of many Board changes. Two of the non-executive Directors of the Remuneration Committee resigned from 
the  Board  during  the  year  and  the  remaining  non-executive  Director  managed  matters  in  conjunction  with  other  Board 
members.  In  2022,  two  new  non-executive  Directors  have  been  appointed  to  the  Remuneration  Committee  and  normal 
Committee activities have resumed. 

Environmental Social and Governance (ESG) Committee 
The ESG Committee was established in December 2020 with the aim of integrating sustainability best practice into all decision 
making and business activities as part of the Company’s commitment to ensuring sustainable and ethical best practice in all 
its  work.  Powerhouse  is  pioneering  clean  fuel  technology  and  the  ESG  Committee  supports  the  Board  in  developing  the 
technology that could help accelerate the UK’s clean energy transition. The Committee ensures that Powerhouse promotes 
achievement of the UN Sustainable Development Goals throughout its business. 

Furthermore, the ESG Committee monitors the Company’s recruitment policies and its progress towards employing a fully 
diverse work force and engagements with stakeholders. 

The appropriateness of the Company’s governance structures will be reviewed annually in light of further developments of 
accepted best practice and the development of the Company. 

Principle 10  –  Communicate  how  the company is  governed  and is  performing  by  maintaining  a  dialogue 
with shareholders and other relevant stakeholders 

The Company maintains a regular dialogue with stakeholders including shareholders to enable interested parties to make 
informed  decisions  about  the  Company  and  its  performance.  Regular  communication  enables  the  Board  to  receive 
shareholders’ views by various means as set out in Principle 2 above. 

The Company regularly releases appropriate price sensitive information regarding its activities and progress to the market. In 
2022, the Company intends to foster strong, balanced co-ordination of messaging to investors and to other key stakeholders. 

The Board discloses the result of general meetings by way of announcement and discloses the proxy voting numbers to those 
attending the meetings. In order to improve transparency, the Board has committed to announcing proxy voting results in 
future and disclosing them on the Company’s website. In the event that a significant portion of voters have voted against a 
resolution, an explanation of what actions it intends to take to understand the reasons behind the vote will be included. 

Keith Riley 
On behalf of the Board 
28 June 2022 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration Committee Report 

REMUNERATION COMMITTEE REPORT  

I am pleased to present the Committee’s report for the year ended 31 December 2021. The following pages provide an insight 
into how the Committee discharged its responsibilities during the year and the key topics that it considered in doing so. The 
composition and terms of reference for the Remuneration Committee were updated in the final quarter of 2020 to reflect the 
Company’s renewed commitment to corporate governance and enhanced practices. Following several changes to the Board 
during  2021,  the  Remuneration  Committee  membership  was  refreshed  in  2022  and  terms  of  reference  reviewed  and 
approved by the Board. 

Due to the timing of the various changes to the Board in 2021 and the Remuneration Committee’s membership, there were 
no  formal  meetings  of  the  Remuneration  Committee  in  2021.  However,  the  remaining  member  of  the  Committee  took 
responsibility for its affairs, supported by the wider Board of Directors.  

Composition 
The membership of the Remuneration Committee was renewed in 2020 and in part of 2021 comprised Kirsty Gogan and Tim 
Yeo and was chaired by Myles Kitcher. Further to the Board changes in 2022 mentioned above, the Remuneration Committee 
is now chaired by Gill Weeks with Myles Kitcher and Hugh McAlister being the other members and normal activities have 
resumed. 

The Remuneration Committee is responsible for determining the policy for Directors’ remuneration and setting remuneration 
for  the  Company’s  chair,  executive  Directors  and  senior  management  including  share  option  schemes  and  any  bonus 
arrangements. The Remuneration Committee also acts as a Nomination Committee as needed. 

Remuneration Policy 
The Remuneration Committee is aware that the remuneration package should be sufficiently competitive to attract, retain and 
motivate individuals capable of achieving the Group’s objectives and thereby enhancing shareholder value without paying 
more than is necessary, having regard to views of shareholders and other stakeholders. In determining remuneration policy, the 
Remuneration  Committee  considers  all  other  factors  which  it  deems  necessary  including  relevant  legal  and  regulatory 
requirements. No director or senior manager is involved in any decisions as to their own remuneration outcome.  

Service Contracts 
Paul  Drennan-Durose  and  Paul  Emmitt  have  service  contracts  which  can  be  terminated  by  providing  six  months’  written 
notice.  James  John  Pryn  Greenstreet,  Gill  Weeks,  Hugh  McAlister  and  Keith  Riley  have  service  contracts  which  can  be 
terminated by providing three months’ written notice. Myles Kitcher has a service contract which can be terminated without 
provision of notice.  

Prior to his resignation, David Ryan had a service contract which could be terminated by providing six months’ written notice. 
Mr Ryan resigned on 30 June 2021. 

Prior to their resignations, Russell Ward, Tim Yeo, William Cameron Davies Allan Vlah, Kirsty Gogan and Mark Berry held 
service contracts which could be terminated by providing three months’ written notice.  

Tim Yeo’s remuneration includes amounts paid to Rivermill Partners Limited, a company wholly owned by Tim Yeo and Mrs 
Diane Yeo, for executive corporate management services provided during the year. These services are contracted for to 
September 2022. 

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remuneration Committee Report 

Basic Salary and Benefits  
The remuneration of the Directors of the Company paid for the year or since date of appointment, if later, to 31 December 
2021 is set out below: 

2021 
£ 
Salary/Fee 

2021 
£ 
Pension 

2021 
£ 
Share based 
payments 

2021 
£ 
Other 

2021 
£ 
Total 

2020 
£ 
Total 

Tim Yeo  

David Ryan 

William Cameron Davies 

Nigel Brent Fitzpatrick 

James Greenstreet 

Allan Vlah 

Kirsten Gogan 

Keith Riley 

Mark Berry 

Total 

92,444 

97,996 

7,500 

- 

30,000 

15,000 

23,468 

8,167 

- 

274,575 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

22,500 

- 

- 

17,500 

40,000 

35,500 

127,944 

- 

- 

- 

- 

- 

- 

- 

- 

97,996 

7,500 

- 

30,000 

37,500 

23,468 

8,167 

17,500 

35,500 

350,075 

27,004 

196,856 

54,421 

26,868 

31,061 

13,306 

7,500 

- 

1,129 

358,145 

Notes: 
David Ryan resigned from the Board on 30 June 2021. 
Mr Yeo resigned from the Board on 20 August 2021. 
Allan Vlah resigned from the Board on 31 December 2021. 
Mr Davies resigned from the Board on 31 March 2021. 
Kirsty Gogan resigned from the Board on 12 October 2021. 
Mark Berry resigned from the Board on 29 July 2021. 
Keith Riley joined the Board on 27 September 2021. 

Share options held by the Directors are detailed in note 27 in the Notes to the Accounts. Total remuneration includes share-
based payments arising from the issue of options amounting to £40,000 (2020: £8,399) and details are set out in note 27 in 
the Notes to the Accounts. There have been no awards of shares to Directors under long term incentive plans. 

Bonus Schemes 
There  was  no  bonus  scheme  in  place  for  2021  and  therefore  no  bonuses  are  payable  in  respect  of  the  year  ended  31 
December 2021 (2020: nil).  

Share Options 
In April 2021, non-executive Directors were granted options under the Company’s Non-Employee Share Option Plan in lieu 
of part or all of the fees to which they were entitled. 

Tim Yeo was the highest paid Director in the year. There were no shares received or receivable by him in respect of qualifying 
services under long term incentive schemes. 

For details of the total number of options outstanding at 31 December 2021 please refer to Note 27 to the Accounts. 

Remuneration Committee Meetings and Attendance 
Please  see  the  table  in  the  Corporate  Governance  Report  in  this  document  for  attendance  by  the  members  of  the 
Remuneration Committee. 

On behalf of the Directors of Powerhouse Energy Group plc  

Gill Weeks 
Chair of Remuneration Committee 
28 June 2022 

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit Committee Report 

REPORT OF THE AUDIT COMMITTEE 

I am pleased to present the Committee’s report for the year ended 31 December 2021. The following pages provide an insight 
into how the Committee discharged its responsibilities during the year and the key topics that it considered in doing so. The 
composition and terms of reference for the Audit Committee were updated in the final quarter of 2021 to reflect the Company’s 
renewed commitment to corporate governance and enhanced practices. 

Composition 
The Audit Committee is comprised of two non-executive Directors, currently Myles Kitcher and Keith Riley, with Myles Kitcher 
acting as Chair. The Chair is considered by the Board to have recent and relevant financial experience and the other members 
have competence relevant to the Company’s sector of operation.  

Other members of the Board, the Chief Financial Officer and other members of senior management may also be invited to 
attend the meetings as guests. 

Role and Responsibilities 
The Audit Committee determines and examines any matters relating to the financial affairs of the Group including the terms 
of engagement of the Group’s auditors and, in consultation with the auditors, the scope of the audit. In 2021 and onwards, 
the Audit Committee intends to meet at least twice in each financial year. 

The Audit Committee is responsible for monitoring the integrity of the Company’s financial statements, reviewing significant 
financial  reporting  issues,  reviewing  the  effectiveness  of  the  Group’s  internal  control  and  risk  management  systems.  In 
addition, it considers the financial performance, position and prospects of the Group and the Company and ensures they are 
properly monitored and reported on. It oversees the relationship with the Auditor (including advising on their appointment, 
agreeing the scope of the audit and reviewing the audit findings).  

The Board and the Audit Committee do not consider it appropriate for the current size of the Group to establish an internal 
audit function. However, this will be kept under review. 

Principal activities during the year 
The Committee held one meeting during the year under review and considered the following:  

•  An overview of the planned work by the external auditors on the 2020 audit including the scope and regulatory 

requirements of the audit and the fees; and 
The Committee’s Terms of Reference.  

• 

A further review of the audit and the financial statements for the year ended 31 December 2020 was undertaken by the full 
Board. 

The Committee’s planned activities during 2022 include: 

• 

• 
• 

• 
• 

Review and approve the FY21 and FY22 external Auditor’s plan, including the proposed materiality threshold, the 
scope of the audit, the significant audit risks and fees;  
Review the Company’s procedures, systems and controls for the prevention of bribery or fraud;  
Review  the  adequacy  and  security  of  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; 
Review the Committee’s internal audit role, in the absence of an external provider of an internal audit service;  
Risk – review and challenge the Risk Register and consider the risk appetite of the business.  

36 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Audit Committee Report 

External Auditor 
Jeffreys Henry has been the external Auditor of the Group since 2018. The continued appointment of Jeffreys Henry is to be 
reviewed by the Committee each year, taking into account the relevant legislation, guidance and best practice appropriate 
for a Company of Powerhouse’s size, nature and stage of development.  

The Committee will consider a number of areas when reviewing the external Auditor appointment, namely its performance in 
discharging  the  audit,  the  scope  of  the  audit  and  terms  of  engagement,  its  independence  and  objectivity,  and  its 
reappointment and remuneration.  

The breakdown of fees between audit and non-audit services paid to Jeffreys Henry during the financial year is set out in Note 
4 to the Financial Statements. The non-audit fees relate to taxation advisory and compliance services. 

Attendance at Audit Committee Meetings 
Please  see  the table  in  the  Corporate  Governance  Report  in  this  document  for  attendance by  the  members  of  the  Audit 
Committee. 

Myles Kitcher 
Chair of the Audit Committee 
28 June 2022 

37 

 
 
 
 
 
 
 
 
 
ESG Committee Report 

REPORT  OF  THE  ENVIRONMENTAL,  SOCIAL  AND  GOVERNANCE  (ESG) 
COMMITTEE 

I am pleased to present the Committee’s report for the year ended 31 December 2021. The Committee was established in 
December 2020 with the aim of integrating sustainability best practice into all decision making and business activities as part 
of the Company’s commitment to ensuring sustainable and ethical best practice in all decision-making and business activities. 

Composition 
In 2021 the ESG Committee was comprised of three non-executive Directors, Kirsty Gogan, Allan Vlah and Mark Berry, with 
Kirsty Gogan acting as Chair. Two executive Directors, Tim Yeo and David Ryan, were also part of the Committee. The Chair 
was considered by the Board to have recent and relevant experience with more than 15 years’ experience as a senior advisor 
to Government on climate and energy policy.  

Further to multiple changes to the Board during 2021, the membership of this Committee was refreshed in April 2022. The 
Committee comprises Keith Riley and Gill Weeks, with Keith acting as Chair. 

Role and Responsibilities 
The overall mission of the ESG Committee is to support the Board in ensuring that Powerhouse attaches the highest priority 
to environmental, social and governance issues and managing the associated ESG risks. 

As a sustainable hydrogen company, Powerhouse is pioneering clean fuel technology and the ESG Committee supports the 
Board in developing the technology that could help accelerate the UK’s clean energy transition along with helping to clean 
up unrecyclable plastic and improving air quality. The Committee ensures that Powerhouse promotes achievement of the UN 
Sustainable Development Goals throughout its business. 

The ESG Committee will monitor Powerhouse's performance in relation to its stated aims of providing a solution to the global 
problem of plastic waste and producing a sustainable low carbon alternative to fossil fuels whose adoption will accelerate the 
world's progress to net zero emissions. Where appropriate it will make recommendations to the Board to ensure these aims 
are achieved. 

Powerhouse  technology  aims  to  be  used  at  a  local  level  providing  a  closed  loop  solution  within  the  community  for  non-
recyclable plastic waste, cleaning up our oceans and helping to accelerate the clean energy transition to reach the target of 
net zero emissions by 2030. Importantly the ESG Committee will scrutinise particularly closely the greenhouse gas emissions 
caused by Powerhouse's own activities as well as those of its suppliers and customers with the aim of achieving continuous 
improvement in performance. 

As a business which is helping accelerate the clean energy transition, the welfare of the environment and the impact of climate 
change  are  key  issues  for  the  business.  Powerhouse  technology  aims  to  work  at  a  local  level,  therefore  engaging  with 
communities will be a vital part of this Committee’s work.   

The ESG Committee will monitor Powerhouse's recruitment policies and its progress towards employing a fully diverse work 
force at all levels, including consultants. 

The ESG Committee will keep all aspects of Powerhouse's governance under continuous review and make recommendations 
to the Board for improvements where necessary. 
during the year. 

Principal activities during the year 
The Committee held two meetings in the first half of 2021, and considered the following:  

Engaging with research consultancies  

• 
•  Options for plastic waste sites 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ESG Committee Report 

•  An  overview  of  the  potential  activities  under  consideration  including  scrutinising  greenhouse  gas  emissions, 
engaging with agencies who could undertake an ongoing assessment of the environmental impact of Powerhouse’s 
processes and the Company’s approach to recruitment bearing in mind the aims of the ESG Committee. 

Attendance at ESG Committee Meetings 
Please  see  the  table  in  the  Corporate  Governance  Report  in  this  document  for  attendance  by  the  members  of  the  ESG 
Committee. 

Keith Riley  
Chair of the ESG Committee 
28 June 2022 

39 

 
 
 
 
 
 
Statement of Directors’ Responsibilities 

STATEMENT OF DIRECTORS’ RESPONSIBILITIES 

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law 
and regulations. 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
elected  to  prepare  the  financial  statements  in  accordance  with  International  Financial  Reporting  Standards  (IFRSs)  as 
adopted for use in the United Kingdom. Under company law the Directors must not approve the accounts unless they are 
satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for 
that period. In preparing these financial statements, International Accounting Standard 1 requires that Directors: 

• 
• 

• 

• 

properly select and apply accounting policies; 
present  information,  including  accounting  policies,  in  a  manner  that  provides  relevant,  reliable,  comparable  and 
understandable information; 
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the company 
will continue in business; 
provide additional disclosures when compliance with the specific requirements in IFRS Standards is insufficient to 
enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial 
position and financial performance. 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to 
ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the 
assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the 
company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements 
may differ from legislation in other jurisdictions. 

Responsibility Statement  
We confirm that to the best of our knowledge that: 

• 

• 

• 

the financial statements, prepared in accordance with International Financial Reporting Standards, give a true and 
fair view of the assets, liabilities, financial position and profit or loss of the Company; 
the strategic report includes a fair review of the development and performance of the business and the position of 
the Company together with a description of the principal risks and uncertainties that it faces; and 
the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide 
the information necessary for shareholders to assess the Company’s performance, business model and strategy.  

Paul Drennan-Durose 
Director 
On behalf of the Board 
28 June 2022

40 

 
 
 
 
 
 
 
 
 
Independent Auditor’s Report  

INDEPENDENT AUDITOR’S REPORT 
TO THE MEMBERS OF POWERHOUSE ENERGY GROUP PLC 

Opinion 

We have audited the financial statements of Powerhouse Energy Group Plc (the ‘Company’) for the year ended 31 December 
2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of cash 
flows, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting 
policies. The financial reporting framework that has been applied in the preparation of the financial statements is applicable 
law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom as applied in accordance 
with the provisions of the Companies Act 2006. 

In our opinion, the financial statements:  

• 

• 

• 

give a true and fair view of the state of the Company’s affairs as at 31 December 2021 and of its loss for the year 
then ended; 

have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and, 

the financial statement has 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 company in accordance with the ethical requirements that are 
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, 
and  we  have  fulfilled  our  other  ethical  responsibilities  in  accordance  with  these  requirements.  We  believe  that  the  audit 
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

Conclusions relating to going concern 

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 entity’s ability to 
continue to adopt the going concern basis of accounting included, as part of our risk assessment, review of the nature of the 
business of the company, its business model and related risks including where relevant the impact of the COVID-19 pandemic 
and Brexit, the requirements of the applicable financial reporting framework and the system of internal control. We evaluated 
the directors’ assessment of the Company’s ability to continue as a going concern, including challenging the underlying data 
and key assumptions used to make the assessment, and evaluated the directors’ plans for future actions in relation to their 
going concern assessment. 

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 Company’s ability to continue as a going concern for a period of 
at least twelve months from 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. 

Our approach to the audit 

Key audit matters 
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial 
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due 
to fraud) we identified, including 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 risk identified by our audit. 

41 

 
 
 
 
 
Independent Auditor’s Report  

Carrying value of intangible assets 

Our audit procedures: 

A  key  balance  on  the  statement  of  financial  position  is 
intangible fixed assets of £43,554,498 (2020: £43,519,582) 
at 31 December 2021 as detailed in Note 10. 

In  the  prior  year  the  Company  acquired  and  hived  up 
Waste2Tricity Limited. This transaction was a share for share 
exchange and qualified for merger relief as described further 
in Note 1.1. The treatment of the merger reserve resulted in 
a large goodwill and intangible asset increase as is described 
in Note 10. 

Like the previous year, the Company obtained a third-party 
opinion  of  the  Goodwill  value  that  was  accounted  for  as  a 
result of the hive up of the Waste2Tricity Limited acquisition. 
The  report  of  the  third-party  valuer  concluded  that  no 
impairment  of  the  Goodwill  value  was  necessary  this  year 
(2020:  included  an  initial  impairment  of  £14,192,699) 
leaving a residual value for Goodwill at 31 December 2021 
of £42,960,000 (2020: £42,960,000). Note, in the prior year, 
the  Goodwill  impairment  had  been  accounted  for  in  the 
statement of comprehensive income. The Group’s policy in 
1.18(iii)  is  that  impairment  losses  on  Goodwill  are  not 
reversed. 

On initial acquisition of Waste2Tricity Limited, the Company 
identified  £500,000  exclusivity  rights  as  intangible  assets. 
This balance is being held at fair value and assessed each 
year for impairment as described in Note 1.10. In the same 
review  as  Goodwill,  the  third-party  valuer  concluded  that 
there  was  no  impairment  of  the  exclusivity  rights  (2020: 
£Nil). 

Correct calculation of share-based payments 

The share-based payment charge recognised in profit or loss 
for the year is £34,829 (2020: 40,634). 

The  Company  used  the  same  third-party  valuer  as  in  the 
prior year. We reviewed the scope of his work and attended 
meetings  with  the  valuer  and  the  client  to  discuss  our 
findings in our review of the model prepared for us. We went 
through the assumptions and corroborated the information 
to our understanding of the business and information that 
was provided by the management of the Company. 

We discussed the model and its assumptions internally to 
determine  whether  the  valuation  model  and  assumptions 
used were still appropriate. 

Overall,  we  were  satisfied  that  the  Company  remained 
independent  of  the  valuation  process.  The  valuers’  model 
was based on a discounted cash flow and their assumptions 
are  reflected  in  Note  10.  The  model  remained  broadly 
similar to the prior year. We discussed with members of the 
Board  the  implication  of  delays  since  our  previous  audit 
report and concluded that the valuation assumptions were 
appropriate given the information shared with us.  

We corroborated the discount  rates to check if they were 
applicable.  We also checked the income streams and the 
number of expected projects based on a probability matrix 
which  we  challenged  and  the  outcome  of  which  is  very 
much dependent on the roll out of UK sites over the next 5 
years post-delivery of the Protos project. 

Following  discussions  with  us,  the  key  sensitivities  in  the 
assumptions made in the model were strengthened in Note 
10. The key areas being: the number and roll out of systems 
and sites; the discount rate used; and, the effect of inflation. 

Valuations based on this methodology were both compliant 
with IFRS and the International Private Equity and Venture 
Capital  Valuation  (IPEV)  guidelines.  The  assumptions  and 
workings  in  the  goodwill  model  are  UK  specific  and  not 
dependent  on  any  other  potential  source  of  activity  or 
income outside the UK.  

The valuation report acknowledged that the development of 
revenues  from  international  (non-UK)  sources  were  not 
sufficiently  developed  to  be  included  within  his  valuation 
model  at  the  year-end  but  may  have  an  impact  following 
delivery  of  the  first  project  at  Protos.  The  start  date  and 
delivery  of  the  first  project  is  based  on  the  system  being 
delivered by the Company’s agreement with Peel NRE and 
subsequent roll out of additional sites. However, should the 
agreement with Peel NRE be unfulfilled for any reason, the 
Company  may  still  be  able  to  continue  the  delivery  of 
systems with a new partner. A new model would need to be 
prepared and these assumptions and conclusions may be 
different from those disclosed in Note 10.  
Our audit procedures: 

We  have  understood  and  assessed  the  methodology 
utilised  to  estimate  the  Company’s  share-based  payment 
charge calculations and checked that the calculation of the 
provision was mathematically accurate. 

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independent Auditor’s Report  

All share-based payments are equity-settled and are made 
up  of  share  issues,  share  option  issues  and  share  warrant 
issues.  

These  share-based  payments  have  been  reviewed  for  the 
purpose of calculating an appropriate share-based payment 
charge. The fair value of services was used to value share-
based  payments  where  the  fair  value  of  services  may  be 
directly calculated. Where the fair value of services may not 
be directly calculated, the Black-Scholes model was used. 

The vesting period of share options and warrants are fixed. 
Exemption from preparing consolidated financial 
statements 

Our audit procedures: 

The Company has claimed exemptions applicable to it under 
Companies Act section 405 (2) and 405 (3b) and IFRS 10 to 
not  present  any  Consolidated  financial  statements  for  the 
year ended 31 December 2021. This is on the basis that the 
Company’s  only  UK  subsidiary  is  non-trading  and  not 
material  and  there  being  long-term  restrictions  on  the 
operations  of  the  Company’s  subsidiaries  in  the  US  and 
Switzerland. 

We  have  reviewed  and  discussed  with  the  Directors 
applicable 
legislation  and  accounting  standard  and 
assessed  that  based  on  the  Directors’  explanation,  the 
Company  satisfies  the  conditions  under  Companies  Act 
section 405 (2) and 405 (3b) and IFRS 10 to not present 
any Consolidated financial statements for the year. 

Our application of materiality 

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. 
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and 
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of 
misstatements, both individually and in aggregate on the financial statements as a whole. 

Based  on  our  professional  judgement,  we  determined  a  materiality  of  £430,000  (2020:  £470,000)  for  the  review  of  the 
goodwill and its impairment. In respect of other balances, we considered that a level of £100,000 (2020: £80,000) was more 
appropriate for our review. A benchmark of 1% of the net book value of Goodwill (2020: 1% of gross assets of the company) 
was used to calculate the materiality when reviewing goodwill and its impairment. A benchmark of 5% of net losses (excluding 
goodwill impairment) was used for other areas (2020: 5% of net losses (excluding Goodwill impairment)). We believe that net 
losses are a primary measure used by the shareholders in assessing the performance of the company and are a generally 
accepted auditing benchmark. 

We agreed with management that we would report to them misstatements identified during our audit above £5,000 (2020: 
£4,000) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. 

An overview of the scope of our audit 

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial 
statements. In particular, we looked at where the Directors made subjective judgments, for example in respect of significant 
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all 
of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was 
evidence of bias by the Directors that represented a risk of material misstatement due to fraud. 

How we tailored the audit scope 

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial 
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the 
industry in which they operate. 

We performed an audit of the financial information of Powerhouse Energy Group Plc. Our engagement team performed all 
audit procedures. 

43 

 
 
 
 
 
  
 
 
 
 
 
 
 
 
Independent Auditor’s Report  

Other information 

The other information comprises the information included in the annual report other than the financial statements and our 
auditor’s  report  thereon.  The  directors  are  responsible  for  the  other  information  contained  within  the  annual  report.  Our 
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated 
in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information 
and,  in  doing  so,  consider  whether  the  other  information  is  materially  inconsistent  with  the  financial  statements,  or  our 
knowledge  obtained  during  the  audit  or  otherwise  appears  to  be  materially  misstated.  If  we  identify  such  material 
inconsistencies  or  apparent  material  misstatements,  we  are  required  to  determine  whether  this  gives  rise  to  a  material 
misstatement in the financial statements or a material misstatement in the financial statements themselves. If, based on the 
work we have performed, we conclude that there is a material misstatement of this other information, we are required to 
report that fact.  

We have nothing to report in this regard. 

Opinions on other matters prescribed by the Companies Act 2006 

In our opinion, based on the work undertaken in the course of the audit: 

• 

• 

the information given in the strategic report and the Directors’ report for the financial year for which the financial 
statements are prepared is consistent with the financial statements; and 

the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. 

Matters on which we are required to report by exception 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we 
have not identified material misstatements in the strategic report or the Directors’ report. 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to 
report to you if, in our opinion: 

• 

• 

• 

adequate accounting records have not been kept by the company, or returns adequate for our audit have not been 
received from branches not visited by us; or 

the company financial statements are not in agreement with the accounting records and returns; or 

certain disclosures of Directors’ remuneration specified by law are not made; or 

•  we have not received all the information and explanations we require for our audit. 

Responsibilities of Directors 

As explained more fully in the Directors’ responsibilities statement set out on page 40, 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 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 company or to cease operations, or have no realistic alternative but to do so. 

Auditor’s responsibilities for the audit of the financial statements 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material 
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance 
is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a 
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually 
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 
these financial statements. 

44 

 
 
 
 
Independent Auditor’s Report  

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.  

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and 
non-compliance with laws and regulations, was as follows: 

• 

the senior statutory auditor ensured the engagement team collectively had the appropriate competence, capabilities 
and skills to identify or recognise non-compliance with applicable laws and regulations; 

•  We focused on specific laws and regulations which we considered may have a direct material effect on the financial 

statements or the operations of the company;  

•  we assessed the extent of compliance with the laws and regulations identified above through making enquiries of 

• 

management and inspecting legal correspondence; and 
identified laws and regulations were communicated within the audit team regularly and the team remained alert to 
instances of non-compliance throughout the audit. 

We  assessed  the  susceptibility  of  the  Company’s  financial  statements  to  material  misstatement,  including  obtaining  an 
understanding of how fraud might occur, by: 

•  making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of 

actual, suspected and alleged fraud; 
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. 

• 

To address the risk of fraud through management bias and override of controls, we: 

• 
• 
• 

• 

performed analytical procedures to identify any unusual or unexpected relationships; 
tested journal entries to identify unusual transactions; 
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 1.2 
of the Company financial statements were indicative of potential bias; and, 
investigated the rationale behind significant or unusual transactions. 

In  response  to  the  risk  of  irregularities  and  non-compliance  with  laws  and  regulations,  we  designed  procedures  which 
included, but were not limited to: 

• 
• 
• 
• 

agreeing financial statement disclosures to underlying supporting documentation; 
reading the minutes of meetings of those charged with governance; 
enquiring of management as to actual and potential litigation and claims; and, 
reviewing correspondence from local authorities and the company’s legal advisor. 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from 
financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the 
audit  procedures  required  to  identify  non-compliance  with  laws  and  regulations  to  enquiry  of  the  directors  and  other 
management and the inspection of regulatory and legal correspondence, if any. 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve 
deliberate concealment or collusion. 

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. 

Other matters which we are required to address 

We  were  reappointed  as  auditors  by  the  company  at  the  Annual  General  Meeting  on  29  July  2021  to  audit  the  financial 
statements for the period ending 31 December 2021. Our total uninterrupted period of engagement is 5 years, covering the 
periods ending 31 December 2017 to 31 December 2021. 

The  non-audit  services  prohibited  by  the  FRC’s  Ethical  Standard  were  not  provided  to  the  Company  and  we  remain 
independent of the company in conducting our audit.  

In addition to the audit, the firm provides tax compliance services to Powerhouse Energy Group Plc. 

45 

 
 
 
 
 
 
 
 
 
 
 
 
Independent Auditor’s Report  

Our audit opinion is consistent with the additional report to the audit committee. 

Use of this report 

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are 
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not 
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit 
work, for this report, or for the opinions we have formed. 

Sachin Ramaiya (Senior Statutory Auditor) 
For and on behalf of Jeffreys Henry LLP 

Chartered Accountants 
Statutory Auditor 

Finsgate 
5-7 Cranwood Street 
London EC1V 9EE 
28 June 2022 

46 

 
 
 
 
 
 
 
 
 
 
Statement of Comprehensive Income 

STATEMENT OF COMPREHENSIVE INCOME  
For The Year Ended 31 December 2021 

Revenue 

Cost of sales 

Gross Profit 

Administrative expenses 
Acquisition costs 
Share of associate 
Goodwill impairment 

Operating loss 

Net finance income/(cost)  

Loss before taxation 

Income tax credit 

Total comprehensive loss 

Loss per share (pence) 

Diluted loss per share (pence) 

Note 

31 December 
2021 
£ 

31 December 
2020 
£ 

2 

4 

5 
6 

7 

8 

9 

9 

701,435 

(599,914) 

101,521 

(2,147,476) 
(11,735) 
50,062 
- 

100,000 

(99,868) 

132 

(1,477,415) 
(303,224) 
- 
(14,192,699) 

(2,007,628) 

(15,973,206) 

10,987 

(3,032) 

(1,996,641) 

(15,976,238) 

126,145 

138,497 

(1,870,496) 

(15,837,741) 

(0.05) 

(0.05) 

(0.57) 

(0.57) 

All activities are in respect of continuing operations and there are no other items of comprehensive income. 

The notes numbered 1 to 30 are an integral part of the financial information. 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Financial Position 

STATEMENT OF FINANCIAL POSITION  
As At 31 December 2021 

ASSETS 
Non-current assets 
Intangible fixed assets 
Tangible fixed assets 
Investments in subsidiary undertakings 
Investments in associated undertakings 

Total non-current assets 

Current Assets 
Loans receivable 
Contract costs 
Trade and other receivables 
Corporation tax recoverable 
Cash and cash equivalents 

Total current assets 

Total assets 

LIABILITIES 
Current liabilities 
Creditors: amounts falling due within one year 

Total current liabilities 

Total assets less current liabilities 

Creditors: amounts falling due after more than one year 

Net assets 

EQUITY 
Share capital 
Share premium 
Merger relief reserve 

Accumulated deficit 

Total surplus 

Note 

2021 
£ 

2020 
£ 

10 
11 
12 
12 

13 
14 
15 
16 
17 

18 

19 

22 
23 
23 

24 

43,554,498 
33,092 
1 
140,540 

43,519,582 
53,020 
2 
49 

43,728,131 

43,572,653 

1,165,286 
- 
963,648 
155,227 
9,637,460 

- 
14,550 
200,310 
138,497 
3,464,475 

11,921,621 

3,817,832 

55,649,752 

47,390,485 

(563,781) 

(563,781) 

(509,194) 

(509,194) 

55,085,971 

46,881,291 

- 

(23,455) 

55,085,971 

46,857,836 

22,900,856 
61,291,710 
36,117,711 

21,689,288 
52,594,934 
36,117,711 

(65,224,306) 

(63,544,097) 

55,085,971 

46,857,836 

The financial statements of Powerhouse Energy Group Plc, Company number 03934451, were approved by the Board of Directors and 
authorised for issue on 28 June 2022 and signed on its behalf by: 

Paul Drennan-Durose 
Director 

The notes numbered 1 to 30 are an integral part of the financial information. 

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Cashflows 

STATEMENT OF CASHFLOWS  
For The Year Ended 31 December 2021 

Cash flows from operating activities 
Operating Loss 
Adjustments for: 
Share based payments 
Amortisation 
Depreciation 
Goodwill impairment 
Share of associate result 
Provision against investments 
Changes in working capital: 
Decrease/(Increase) in contract costs 
Decrease/(Increase) in trade and other receivables 
Increase/(Decrease) in trade and other payables 
Tax credits received 

Note   

2021 
£ 

2020 
£ 

(2,007,628) 

(15,973,206) 

34,829 
5,049 
28,824 
- 
(50,062) 
49 

14,550 
(763,338) 
55,015 
118,927 

40,634 
2,170 
2,311 
14,192,699 
- 
- 

99,868 
(143,504) 
(171,998) 
195,708 

Net cash used in operations 

(2,563,785) 

(1,755,318) 

Cash flows from investing activities 
Purchase and hive up of subsidiary 
Purchase of interest in associate 
Loans advanced 
Purchase of intangible fixed assets 
Purchase of tangible fixed assets 

12 
13 
10 
11 

- 
(99,990) 
(1,150,000) 
(39,965) 
(8,896) 

1,934 
- 
- 
(45,238) 
(5,852) 

Net cash flows from investing activities 

(1,298,851) 

(49,156) 

Cash flows from financing activities 
Proceeds from issue of shares 
Payments of principal under leases 
Net finance costs 

21.3   
7 

10,063,802 
(23,882) 
(4,299) 

5,170,314 
(1,913) 
(3,032) 

Net cash flows from financing activities 

10,035,621 

5,165,369 

Net increase/(decrease) in cash and cash equivalents 

Cash and cash equivalents at beginning of year 

6,172,985 

3,464,475 

3,360,895 

103,580 

Cash and cash equivalents at end of year 

9,637,460 

3,464,475 

The notes numbered 1 to 30 are an integral part of the financial information. 

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statement of Changes in Equity 

STATEMENT OF CHANGES IN EQUITY  
For The Year Ended 31 December 2021 

Balance at 1 January 2020 
Transactions with equity parties: 
 -   Share issues in lieu of services 
-  Share issues on exercise warrants 
 -   Share issues to acquire W2T 
 -   Share issues in year 
Share based payments 
Share issue costs 
Reserve transfer- goodwill impairment 
Total comprehensive loss 
Balance at 31 December 2020 

Transactions with equity parties: 
-  Share issues on exercise warrants 
 -   Share issues to exercise options 
 -   Share issues in year 
Share based payments 
Share issue costs 
Total comprehensive loss 

Ordinary share 
capital 
£ 

Deferred 
shares 
£ 

Share 
premium 
£ 

Merger 
relief 
reserve 
£ 

Accumulated 
deficit 
£ 

Total 
£ 

9,808,942 

3,113,785 

48,778,651 

- 

(61,714,360) 

(12,982) 

261,141 
318,219 
7,187,201 
1,000,000 
- 
- 
- 
- 

- 
- 
- 
- 
- 
- 
- 
- 

9,757 
38,963 
- 
4,000,000 
- 
(232,437) 
- 
- 

- 
- 
50,310,410 
- 
- 
- 
(14,192,699) 
- 

- 
- 
- 
- 
(184,695) 
- 
14,192,699 
(15,837,741) 

270,898 
357,182 
57,497,611 
5,000,000 
(184,695) 
(232,437) 
- 
(15,837,741) 

18,575,503 

3,113,785 

52,594,934 

36,117,711 

(63,544,097) 

46,857,836 

24,477 
278,000 
909,091 
- 
- 
- 

- 
- 
- 
- 
- 
- 

174,603 
253,982 
9,090,909 
- 
(822,718) 
- 

- 
- 
- 
- 
- 
- 

- 
- 
- 
190,287 
- 
(1,870,496) 

199,080 
531,982 
10,000,000 
190,287 
(822,718) 
(1,870,496) 

Balance at 31 December 2021 

19,787,071 

3,113,785 

61,291,710 

36,117,711 

(65,224,306) 

55,085,971 

The following describes the nature and purpose of each reserve within equity: 

Deferred shares: 

Represents the combined total of all deferred shares (0.5p, 4p and 4.5p) 

Share premium: 

Amount subscribed for share capital in excess of nominal value 

Merger relief reserve:  Amount subscribed for share capital in excess of nominal value where merger relief applies (Note 1.1) 

Accumulated deficit:  Accumulated deficit represents the cumulative losses of the company and all other net gains and losses and 

transactions with shareholders not recognised elsewhere 

The notes 1 to 30 are an integral part of the financial information. 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

NOTES TO THE ACCOUNTS   
For The Year Ended 31 December 2021 

1.  ACCOUNTING POLICIES 

Powerhouse Energy Group Plc is a company incorporated in England and Wales. The Company is a public limited company 
quoted on the AIM market of the London Stock Exchange. The address of the registered office is 15 Victoria Mews, Mill Field 
Road, Cottingley Business Park, Bingley BD16 1PY. The principal activity of the Company is to continue the development of its 
technology and to support its customers in order to achieve its full commercial roll-out. The following accounting policies have 
been applied consistently in dealing with items which are considered material in relation to the financial information. 

1.1.  Basis of preparation 

This financial information is for the year ended 31 December 2021 and has been prepared in accordance with International 
Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (IASB), as adopted for 
use in the United Kingdom (UK) and with those parts of the Companies Act 2006 applicable to companies reporting under 
IFRS (except as otherwise stated). These accounting policies and methods of computation are consistent with the prior 
year,  unless  otherwise  stated.  There  were  no  retrospective  adjustments  required  either  on  1  January  2020  or  in  the 
corresponding amounts for the period ended 31 December 2020 due to the transition to UK-adopted IFRS. 

The  Company’s  only  UK  subsidiaries  are  non-trading  and  not  material.  There  are  also  long-term  restrictions  on  the 
operations of the Company’s subsidiaries in the US and Switzerland. With these restrictions in place, the Company is also 
unable  to  exert  control  over  the  subsidiaries.  As  such  the  Company  has  claimed  exemptions  applicable  to  it  under 
Companies Act section 405 (2) and 405 (3b) and IFRS 10 to not present any Consolidated financial statements for the 
year ended 31 December 2021. Investments in subsidiaries that are not consolidated are carried at cost less any provision 
for impairment. 

The acquisition of Waste2Tricity Limited during 2020 was transacted by way of a share for share exchange and qualifies 
for merger relief, meaning that no share premium is recorded on the issue of the consideration shares. The excess of the 
fair value of consideration shares over their nominal value has been recorded in a merger relief reserve. 

Associates are entities which the Company has significant influence but not control or joint control as defined under IAS 
28.  This  is  generally  the  case  where  the  Company  holds  between  20%  and  50%  of  the  voting  rights.  Investments  in 
associates are accounted for using the equity method of accounting. 

Under the equity method of accounting, investments are initially recognised at cost and adjusted thereafter to recognise 
the Company’s share of the post-acquisition profits or losses of the investee in the Income statement. Dividends received 
or receivable from associates and joint ventures are recognised as a reduction in the carrying value of the investment. 

When the Company’s share of losses in an equity-accounted investment exceeds or equals its interest in the equity, the 
Company does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other 
entity. Unrealised gains on transactions between the Company and its associates and joint ventures are eliminated to the 
extent of the Company’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides 
evidence of an impairment in the asset transferred. 

Accounting  policies  of  the  equity  accounted  investees  are  changed  where  necessary  to  ensure  consistency  with  the 
policies  adopted  by  the  Company.  The  carrying  value  of  equity  accounted  investments  is  tested  for  impairment  in 
accordance with the policy described in Note 1.18 (ii). 

The Company has one associate, Engsolve Limited, the interest in which was acquired during the year. 

Other investments, which are not publicly traded, are initially measured at cost and subsequently measured at cost less 
accumulated losses.  

1.2.  Judgements and estimates 

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and 
assumptions that affect the application of policies and reported amounts in the financial statements. 

Areas involving a higher degree of judgements or complexity, or areas where assumptions or estimates are significant to 
the financial statements such as the exercise to assess the fair value of goodwill, share based payments (share options 
and warrants) and going concern are disclosed within the relevant notes. 

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

1.3.  Going concern 

The financial statements have been prepared on a going concern basis. The Company has a total comprehensive loss of 
£1.87m  (2020:  £1.65m  after  excluding  £14.19m  of  goodwill  impairment)  and  net  operating  cash  outflows  of  £2.56m 
(2020: 1.76m). However, the Directors believe the going concern basis to be appropriate for the following reasons. 

As at the balance sheet date, the Company has available cash of £9.64m (2020: £3.46m) which is considered by the 
Directors to be sufficient to enable the Company to continue in operational existence for the foreseeable future by meeting 
its liabilities as they fall due for payment. 

The Directors’ views are based upon working capital projections which take into account the intended uses of the funds 
in hand over the next 12 months. 

In  the  event  that  the  Protos  project  did  not  proceed  then  the  Company  would  need  to  consider  alternative  ways  to 
commercialise the DMG technology, including the potential introduction of third-party developers. However, the Directors 
do not see that this would impact the going concern basis on which these accounts are drawn up. 

The Directors have assessed the effects on the business arising from Covid-19 and from Brexit in respect of potential 
tariff charges and do not consider these to impact the going concern basis on which these accounts are drawn up.   

1.4.  Foreign currency translation 

The financial information is presented in sterling which is the Company’s functional currency. 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates 
of the transactions. Monetary assets and liabilities denominated in foreign currencies are revalued to the exchange rate 
at date of settlement or at reporting dates (as appropriate). Exchange gains and losses resulting from such revaluations 
are recognised in the Statement of Comprehensive Income. 

Foreign  exchange  gains  and  losses  are  presented  in  the  Statement  of  Comprehensive  Income  within  administrative 
expenses. 

1.5.  Revenue 

(i)  Engineering services 

The  Company  provides  engineering  services  for  the  application  of  the  DMG  Technology,  the  intellectual  property 
which the Company owns. Revenue from providing services is recognised in the accounting period in which services 
are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the 
reporting period as a proportion of the total services to be provided to the extent to which the customer receives the 
benefits. This is determined based on the actual labour hours spent relative to the total expected labour hours. 

Where contracts include multiple performance obligations as specified by the work scope, the transaction price will 
be allocated to each performance obligation based on estimated expected cost-plus margin.  

Estimates of revenues, costs or extent of progress toward completion of services are revised if circumstances change. 
Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in 
which the circumstances that give rise to the revision become known by management. 

In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services 
rendered by the Company exceed the payment, a contract asset is recognised. If the payments exceed the services 
rendered, a contract liability is recognised. 

If a contract includes an hourly fee, revenue is recognised in the amount to which the Company has a right to invoice. 

(ii)  Exclusivity fees 

Where the Company grants a developer exclusive rights to utilise its technology in a particular territory for an 
exclusivity fee, the fee is recognised in the income statement over the agreed exclusivity period. 

1.6.  Leases  

For any new contracts entered into, the Company considers whether a contract is, or contains, a lease. A lease is defined 
as  ‘a  contract,  or  part  of  a  contract,  that  conveys  the  right  to  use  an  asset  for  a  period  of  time  in  exchange  for 
consideration’. To apply this definition the Company assesses whether the contract meets three key evaluations which 
are whether: 

(i)  the contract contains an identified asset which is either explicitly defined in the contract or implicitly specified by being 

identified at the time the asset is made available to the Company; 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

(ii)  the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the 

period of use, considering its rights within the defined scope of the contract; 

(iii) the Company has the right to direct the use of the identified asset throughout the period of use. 

Where the above evaluations are met, at lease commencement date, the Company recognizes a right of use asset and a 
lease liability on the balance sheet. The right of use asset is measured at cost, which is made up of the measurement of 
the initial lease liability, any direct initial costs incurred by the Company, an estimate of any costs to dismantle and remove 
the asset at the end of the lease, and any lease payments made in advance of the lease commencement date. 

The Company depreciates right of use assets on a straight-line basis from the lease commencement date to the earlier 
of the end of the useful life of the right of use asset or the end of the lease term. The Company assesses the right of use 
asset for impairment when such indicators exist. 

At the commencement date the Company measured the lease liability at the present value of the lease payments unpaid 
at  that  date,  discounted  using  the  interest  rate  implicit  in  the  lease  if  that  rate  is  readily  available  or  the  Company’s 
incremental borrowing rate. For the assessment of the lease entered into in 2020 the Company applied a rate of 7.5%. 

Subsequent to initial measurement the liability will be reduced for payments and increased for interest. It is remeasured 
to reflect any reassessment or modification or is there are any changes to the repayment schedule. 

1.7.  Finance income and expenses 

(i)  Income 

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset 
except for financial assets that subsequently become credit impaired. For credit impaired financial assets, the effective 
interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance). 

(ii)  Expense 

The effective  interest method  is  a method  of  calculating  the amortised  cost  of a  financial liability  and  of  allocating 
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future 
cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net 
carrying amount on initial recognition. 

1.8.  Income tax expense 

The tax expense for the period comprises current and deferred tax.  

UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been 
enacted or substantively enacted by the balance sheet date. 

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance 
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax 
in the future have occurred at the balance sheet date.  Temporary differences are differences between the Company’s 
taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax 
assessments in periods different from those in which they are recognised in the financial statements. 

A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all 
available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the 
future reversal of the underlying temporary differences can be deducted. 

Deferred  tax  is  measured  at  the  average  tax  rates  that  are  expected  to  apply  in  the  periods  in  which  the  temporary 
differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the 
balance sheet date.  Deferred tax is measured on a non-discounted basis. 

1.9.  Property, plant and equipment 

Property, plant and equipment is 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 on property, plant and equipment is provided to allocate the cost less the residual value by equal instalments 
over their estimated useful economic lives of 3 years, once the asset is complete. 

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. 

53 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

1.10.  Intangible assets 

Goodwill represents the future economic benefits arising from a business combination that are not individually identified 
and  separately  recognised.  Goodwill  is  carried  at  cost  less  accumulated  impairment  losses.  Refer  to  note  1.18  for 
impairment testing procedures. Goodwill impairment losses are not reversible as explained in note 1.18 (ii). 

Exclusivity rights acquired in a business combination that qualify for separate recognition are recognised as intangible 
assets at their fair value and subsequently assessed for impairment loss. 

Costs associated with patent applications are capitalised in the year of spend and amortised over their estimated useful 
lives of 20 years on a straight-line basis commencing from the date of patent application. Any cost associated with the 
upkeep of a patent is amortised over the remaining useful life of that patent. 

An internally generated intangible asset arising from development is only recognised where all of the following have 
been demonstrated: (i) the technical feasibility of completing the asset; (ii) the intention to complete the asset and the 
ability to use or sell it; (iii) the availability of resources to complete the asset; and (iv) the ability to reliably measure the 
cost attributable to the asset during its development.  

Research and development 
In all other instances research and development expenditure is recognised as an expense as incurred. Development 
costs previously recognised as an expense are not recognised as an asset in a subsequent period. 

1.11.  Other non-current assets 

Other non-current assets represent investments in subsidiaries. The investments are carried at cost less accumulated 
impairment. Cost was determined using the fair value of shares issued to acquire the investment. 

Financial assets 
The Company classifies financial assets as loans and receivables within current assets, except for maturities greater 
than 12 months after the balance sheet date. These are classified as noncurrent assets. Assets are initially recognised 
at fair value plus transaction costs. Loans and receivables are subsequently carried at amortised cost using the effective 
interest rate method. 

1.12.  Contract costs 

The  Company  recognises  costs  incurred  in  fulfilling  contracts  with  customers  that  are  directly  associated  with  the 
contract as an asset if those costs are expected to be recoverable. Contract costs are amortised on a basis consistent 
with the transfer of goods and services to which the asset relates. 

1.13.  Trade and other receivables 

Trade receivables are initially recognised at fair value. Subsequently they are carried at amortised cost less any provision 
for impairment. 

1.14.  Cash and cash equivalents 

Cash and cash equivalents comprise cash balances and call deposits and are recognised and subsequently carried at 
fair value. For the purpose of presentation in the statement of cashflows, cash and cash equivalents include cash on 
hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities 
of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant 
risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the 
balance sheet. 

1.15.  Trade and other payables 

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business 
from suppliers. Trade and other payables are recognised initially at fair value and subsequently measured at amortised 
cost using the effective interest method. 

1.16.  Financial assets and liabilities 

i)  Financial assets 

Loans receivable, where forward receivables comprise solely of payments of principal and interest, are measured 
at amortised cost. Interest income from these financial assets is included in finance income using the effective 
interest rate method. 

ii)  Financial liabilities 

Loans payable are financial obligations arising from funding received and used to support the operational costs of 
the Company. These are initially recognised at fair value. Loans are subsequently carried at amortised cost using 
the effective interest method. 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

1.17.  Adoption of new and revised standards 

i)  New and amended standards adopted by the Company 

New and amended standards for the current period and effective from 1 January 2021 have been applied by the 
Company, including: 

Covid-19 Related Rent Concessions (Amendment to IFRS 16) 
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7) 

There are no transition adjustments relating to the adoption of these standards. 

ii)  Standards issued but not yet effective 

Certain  new  accounting  standards  and  interpretations  have  been  published  that  are  not  mandatory  for  31 
December 2021 reporting periods and have not been adopted early by the Company. These standards are not 
expected to have a material impact on the entity in the current or future reporting periods and on foreseeable 
future transactions. 

1.18.  Impairment 

(i)  Goodwill 

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested 
annually  for  impairment,  or  more  frequently  if  events  or  changes  in  circumstances  indicate that  they  might  be 
impaired. 

(ii)  Other assets  

At  each  balance  sheet  date,  the  carrying  amounts  of  assets  are  reviewed  to  determine  whether  there  is  any 
indication that those assets have suffered an impairment loss. An impairment loss is recognised whenever the 
carrying  amount  of  an  asset  or  its  cash  generating  unit  exceeds  its  recoverable  amount.  Impairment  losses 
recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill 
allocated to cash generating units and then to reduce the carrying amount of the other assets in the unit on a pro-
rata basis. A cash generating unit is the group of assets identified on acquisition that generate cash inflows that 
are largely independent of the cash inflows from other assets or groups of assets.  The recoverable amount of 
assets or cash generating units is the greater of their fair value less costs to sell and value in use. In assessing 
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate 
that reflects current market assessments of the time value of money and the risks specific to the asset.  For an 
asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash 
generating unit to which the asset belongs. 

(iii) Reversals of impairments 

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed 
if there has been a change in the estimates used to determine the recoverable amount. 

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying 
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been 
recognised. 

1.19.  Share based payments 

Share based payments are made to employees and third parties and all are equity settled. 

(i) Third party provision of services 

a) 

Via issue of shares 
Contractors receive remuneration in the form of share-based payments, whereby services are provided and 
settled by the issue of shares. The cost of equity settled transactions is determined at the fair value of the 
services provided, based upon invoiced amounts or formal agreements in place with suppliers. 

b)  Via issues of share warrants 

The Company also issues share warrants to third parties in relation to services provided by suppliers. The 
cost  of  equity  settled  transactions  is  determined  at  the  fair  value  of  the  services  provided,  based  upon 
invoiced amounts or formal agreements in place with suppliers. Where no fair value of services can be directly 
obtained, the fair value at the grant date is determined using the Black and Scholes valuation model. At each 
reporting date the Company revises its estimates of the number of options that are likely to be exercised with 
any adjustment recognised in the income statement. 

(ii) Directors and employees 

c) 

Via issues of share options 
The  Company  has  issued  share  options  to  Directors  and  employees  through  approved  and  unapproved 
option  plans. The fair value of options issued is determined at the date of grant and is recognised as an 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

expense in the Income Statement. The fair value at the grant date is determined using the Black and Scholes 
valuation model. At each reporting date the Company revises its estimates of the number of options that are 
likely to be exercised with any adjustment recognised in the income statement.  

Where share-based payments give rise to the issue of new share capital, the proceeds received by the Company are 
credited to share capital and share premium when the share entitlements are exercised. 

1.20.  Employee benefits 

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are 
expected to be settled wholly within 12 months after the end of the period in which the employees render the related 
service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the 
amounts expected to be paid when the liabilities are settled. The liabilities are included within creditors in the balance 
sheet. 

For  defined  contribution  pension  plans,  the  company  pays  contributions  to  publicly  or  private  administered  pension 
insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once 
the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. 
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments 
is available. 

The Company does not contribute to any defined benefit pension plans. 

1.21.  Segmental reporting 

An operating segment is a component of the Company: 

• 

that engages in business activities from which it may earn revenues and incur expenses (including revenues and 
expenses relating to transactions with other components of the Company); 

•  whose operating results are reviewed regularly by the Company’s chief decision maker to make decisions about 

resources to be allocated to the segment and assess its performance; and 
for which discrete financial information is available. 

• 

The Company considers it has one business segment, being a UK based development company intending to license its 
technology to projects in the UK and internationally. 

2.  Revenue 

Engineering and related services 
Exclusivity fees 
Other 

2021 
£ 

628,859 
71,829 
747 

701,435 

2020 
£ 

100,000 
- 
- 

100,000 

During the year, the Company billed for engineering work carried out on projects. All revenue generated has arisen in the UK.  

3.  Employee costs 

Directors’ fees 
Wages and salaries 
Social security costs 
Pensions 

The number of average monthly employees (including Directors) are as follows: 

Management 
Operations 
Total  

2021 
£ 

274,575 

178,710 

48,835 

3,960 

2020 
£ 

332,746 

11,473 

35,659 

17,000 

506,080 

396,878 

2021 

7 
3 
10 

2020 

6 
- 
6 

The total number of employees as at 31 December 2021 (including Directors) was 9 (2020: 11) comprising 5 in management 
and 4 in operations (2020: 8 in management, 3 in operations). All Directors are classed as management. 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

4.  Administrative expenses 

Included in administrative expenses are: 

Lease charges 
Research and development costs 
Amortisation 
Depreciation 
Depreciation – right of use asset 
Share based payments  
Foreign exchange (gains)/losses 
Auditor’s remuneration for audit services: 

Fees payable to the Company’s auditor for the audit of the Company’s annual 
financial statements 
Fees payable to the Company’s auditor and their associates for other services: 

Non-audit fees paid to auditors  
           Taxation advisory and compliance services 
           Other services 

There are no other fees paid to the Company’s auditor other than those disclosed above. 

5.  Share of associate 

Share of profits 

2021 
£ 

- 
585,195 
5,049 
4,199 
24,625 
34,829 
(429) 

25,000 
1,000 

10,000 
- 

2021 
£ 

50,062 

50,062 

2020 
£ 

14,250 
407,071 
2,170 
259 
2,052 
40,634 
- 

20,000 
1,000 

13,850 
5,000 

2020 
£ 

- 

- 

The Company acquired a 48.39% stake in Engsolve on 12 August 2021 as explained in note 12. The above result represents 
the Company’s share of the associate’s profits arising since acquisition. The Company’s share of the associate’s tax is included 
in the tax charge (see note 8). 

6.  Goodwill impairment 

Goodwill impairment 

2021 
£ 

- 

- 

2020 
£ 

14,192,699 

14,192,699 

In 2020, Goodwill of £57,152,699 was recognised on the acquisition and hive up of Waste2tricity Limited. An independent fair 
value assessment is commissioned by the Directors on the carrying value at each balance sheet date as explained in note 10. 
Impairments are made based upon the results of those assessments. 

7.  Net finance income/(cost) 

Loan interest receivable 
Other interest receivable 
Bank and other interest payable 

8. 

Income tax and deferred tax 

2021 
£ 

15,286 
47 
(4,346) 

10,987 

2020 
£ 

- 
83 
(3,115) 

(3,032) 

As the Company incurred a loss, no current tax is payable (2020: £nil). In addition, as there is no certainty about future profits 
from which accumulated tax losses could be utilised, accordingly no deferred tax asset has been recognised. The Company 
submitted a claim for research and development tax credits during the year amounting to £135,657 (2020: £138,497) which  

57 

 
 
 
 
 
   
 
 
 
 
 
   
   
   
   
   
   
   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

has been recognised in the accounts. Accumulated tax losses amount to an estimated £17.0 million (2020: £12.9 million) and 
reflect tax losses submitted in tax returns and arising during the period less any relief taken for research and development 
credits. The tax credit rate is lower (2020: lower) than the standard rate of tax. Differences are explained below.  

Current tax 

Loss before taxation 

Tax credit at standard UK corporation tax rate of 19% (2019: 19%) 
Effects of: 
Goodwill impairment not deductible for tax purposes 
Expenses not deductible for tax purposes 
Allowable deduction on exercise of share options 
Research and development tax credits claimed 
Deferred tax asset not recognised 

Income tax credit 

9. 

Loss per share 

Total comprehensive loss (£) 

Weighted average number of shares  

Loss per share in pence 
Diluted loss per share in pence 

2021 
£ 
1,996,641 

2020 
£ 
15,976,238 

379,362 

3,035,485 

- 
(9,837) 
445,750 
135,657 
(824,787) 

(2,696,613) 
(63,003) 
- 
138,497 
(275,869) 

126,145 

138,497 

2021 

2020 

(1,870,496) 

(15,837,741) 

3,918,497,299 

2,782,088,358 

(0.05) 
(0.05) 

          (0.57) 
       (0.57) 

For the year ended 31 December 2021, 1,062,692 of the options in issue and 9,090,910 of the warrants in issue were excluded 
from the diluted loss per share calculation due to being anti-dilutive. 

For the year ended 31 December 2020, 6,000,000 of the options in issue and 376,839,329 of the warrants in issue were excluded 
from the diluted loss per share calculation due to being anti-dilutive. 

There have been no shares issued since the year end. 

10. 

Intangible fixed assets 

Cost 
At 1 January 2020 
Additions – hive up of W2T 
Additions 
At 31 December 2020 

Accumulated amortisation & impairment 
At 1 January 2020 
Amortisation charge for the year 
Impairment charge for the year 
At 31 December 2020 

Carrying amount 
At 31 December 2020 

Cost 
At 1 January 2021 
Additions  

At 31 December 2021 
Accumulated amortisation & impairment 

At 1 January 2021 

Amortisation charge for the year 

At 31 December 2021 

Carrying amount 
At 31 December 2021 

Goodwill 

Exclusivity rights 

Patent costs 

£ 

- 
57,152,699 
- 
57,152,699 

- 
- 
14,192,699 
14,192,699 

£ 

- 
500,000 
- 
500,000 

- 
- 
- 
- 

£ 

16,514 
- 
45,238 
61,752 

- 
2,170 
- 
2,170 

Total 

£ 

16,514 
57,652,699 
45,238 
57,714,451 

- 
2,170 
14,192,699 
14,194,869 

42,960,000 

500,000 

59,582 

43,519,582 

57,152,699 
- 

57,152,699 

14,192,699 

- 

14,192,699 

500,000 
- 

500,000 

- 

- 

- 

61,752 
39,965 

101,717 

2,170 

5,049 

7,219 

57,714,451 
39,965 

57,754,416 

14,194,869 

5,049 

14,199,918 

42,960,000 

500,000 

94,498 

43,554,498 

58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

Goodwill acquired in 2020 arose on the acquisition and hive up of Waste2Tricity Limited. It was considered attributable to the 
Company’s DMG technology, which is intended to be licensed on a project-by-project basis to generate income to the Company 
over the lifetime of each project.  

The recoverable amount of goodwill at the balance sheet date was assessed via independent third-party valuation. For 2021, 
the Valuer assessed goodwill above its carrying value resulting in no impairment (2020: £14.2m). The valuer took note of the 
ICAEW Corporate Finance Faculty Best Practice Guideline April 2008 and applied a discounted cashflow approach, supported 
by the International Private Equity and Venture Capital Guidelines of December 2018. 

The key assumptions made by the valuer were: 

the expected roll out of the technology over 5 years following the delivery of the Protos project based on probability adjusted 
scenarios; 

that the roll out will not be significantly impacted by competing technologies; 

that the Company and roll out developer have the capability to scale up where necessary to deliver the assumed roll out pipeline; 

the expected operating life of projects from which the Company will earn licence revenues;  

the expected licence fees arising per project based upon agreements with Peel NRE; 

the expected cost of services to support annual licence fee income estimated by the Company based upon current draft project 
agreements; 

applying a discount rate to cashflow of 10% assessed by review of market survey reports of discount rates for projects within 
similar and competing sectors which was considered to provide a reasonable estimate of a weighted average cost of capital for 
a company benefiting from the assumed roll out. 

Changes to the above assumptions would impact the valuation assessment. 

The Directors believe that key sensitivities in the valuation are as follows: 

(i) 

The probability adjusted roll out scenario assumed by the valuer. The valuer attributes probabilities to different roll 
out scenarios based upon a review of information provided by the Company and Peel NRE. This takes account of 
expected timelines and the average number of systems expected to be deployed at each site. The rollout assumptions 
made by the valuer averages out at 17.85 systems (2020: 16 systems). Based upon the valuer’s assumptions, an 
incremental system would increase or decrease the valuation by c £2.3m. 

(ii) 

The discount rate applied to the cashflows. An increase in the discount rate of 1% would impact the Valuer’s valuation 
assessment by £4.4m (2020: £4.1m). 

(iii) 

Inflation – an increase in the inflation assumption above that assumed in the valuer’s model would result in adjustment 
to the licence fees and result in an increase the valuer’s valuation. 

The Directors have not accounted for the possibility of any onerous obligations arising within the service contracts from which 
licence fees will be earnt as there is no reason to expect that these will arise at this stage in the business life cycle. 

Exclusivity  rights  arose  on  the  acquisition  and  hive  up  of  Waste2Tricity  Limited.  They  are  subject  to  an  Option  Agreement 
between the Company and Peel NRE. No impairment is considered to have arisen. 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

11.  Tangible fixed assets 

Right of use asset 
Land and buildings  
£ 

Property, plant and 
equipment 
£ 

Fixtures and  
fittings 
£ 

Cost 
At 1 January 2020 
Additions 
At 31 December 2020 

Accumulated depreciation 
At 1 January 2020 
Charge for the year 
At 31 December 2020 

Carrying amount 
At 31 December 2020 

Cost 
At 1 January 2021 
Additions  

At 31 December 2021 

Accumulated depreciation 

At 1 January 2021 

Charge for the year 

At 31 December 2021 

Carrying amount 
At 31 December 2021 

- 
49,250 
49,250 

- 
2,052 
2,052 

47,198 

49,250 
- 

49,250 

2,052 

24,625 

26,677 

6,868 
5,852 
12,720 

6,639 
259 
6,898 

5,822 

12,720 
7,693 

20,413 

6,898 

3,807 

10,705 

22,573 

9,708 

- 
- 
- 

- 
- 
- 

- 

- 
1,203 

1,203 

- 

392 

392 

811 

Total 

£ 

6,868 
55,102 
61,970 

6,639 
2,311 
8,950 

53,020 

61,970 
8,896 

70,866 

8,950 

28,824 

37,774 

33,092 

12. 

Investments 

2021 
£ 

2021 
£ 
Subsidiaries  Associates 

2021 
£ 
Other 

2020 
£ 
Subsidiaries 

2020 
£ 
Associates 

2020 
£ 
Other 

Cost or carrying value at 1 January 
Additions 
Goodwill recognised 
Distributions 
Share of associate’s net result 
Transfers 
Disposals 

48,947,156 
- 
- 
- 
- 
- 
(1) 

49 
99,990 
- 
- 
40,550 
(49) 
- 

Cost or carrying value 31 December 

48,947,155 

140,540 

Provision at 1 January 
Additions 
Disposals 
Accumulated impairment 

Carrying value 

(i)  Subsidiaries 

(48,947,154) 
- 
- 
(48,947,154) 

- 
- 
- 
- 

1 

140,540 

- 
- 
- 
- 
- 
49 
- 

49 

- 
(49) 
- 
(49) 

- 

48,947,155 
57,497,611 
(57,152,699) 
(344,911) 
- 
- 
- 

48,947,156 

(48,947,154) 
- 
- 
(48,947,154) 

2 

- 
49 
- 
- 
- 
- 
- 

49 

- 
- 
- 
- 

49 

- 
- 
- 
- 
- 
- 
- 

- 

- 
- 
- 
- 

- 

Investments relate to costs of investments in subsidiary undertakings, namely in Powerhouse Energy, Inc, Pyromex AG and 
Powerhouse Energy UK Limited. Powerhouse Energy, Inc is incorporated in California in the United States of America and 
the  Company  holds  100  per  cent  of  the  common  stock  and  voting  rights  of  the  subsidiary. Pyromex  AG  is  based  in  Zug, 
Switzerland and the Company holds 100 per cent of the shares and voting rights of the subsidiary. Powerhouse Energy UK 
Limited is a wholly owned UK based dormant company. 

The registered address of Powerhouse Energy Inc is 145 N Sierra Madre Blvd Pasadena, CA 91107, USA. 
The registered address of Pyromex AG is Chollerstrasse 3, CH-6300, Zug, Switzerland. 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

The registered address of Powerhouse Energy UK Limited is 15 Victoria Mews, Mill Field Road, Cottingley Business Park, 
Bingley BD16 1PY. 

Waste2Tricity Limited, which was acquired in 2020, was incorporated in the UK and on 1 January 2021 the Company owned 
100 per cent of its common stock and voting rights. It was dissolved on 1 June 2021. 

(ii)  Acquisition of interest in Engsolve Limited 

On  12  August  2021,  the  Company  acquired  48.39%  of  the  share  capital  of  Engsolve  Limited  for  cash  consideration  of 
£99,990. Engsolve Limited is incorporated and operates in the UK. Summary financial information of Engsolve Limited at 
acquisition and balance sheet dates is provided below: 

12 Aug 2021  
£ 

31 Dec 2021 
£ 

Summarised balance sheet 
Fixed assets 
Cash and cash equivalents 
Other current assets 
Current liabilities 
Net assets 
Company share 
Share of net assets 

Summarised income statement – post acquisition 
Revenue 
Profit from continuing operations 
Profit from discontinued operations 
Other comprehensive income 
Total comprehensive income 

Company share of pre-tax profit 
Company share of tax 
Dividends received 

6,965 
221,037 
117,268 
(142,939) 
202,331 
48.39% 
97,902 

7,848 
317,423 
99,845 
(138,981) 
286,135 
48.39% 
138,452 

402,122 
83,804 
- 
- 
83,804 

50,062 
(9,512) 
- 

The Company incurred advisory costs associated with the acquisition which have been expensed in the year. 

(iii) Other investments 

During 2021, the Company’s investment in Waste2Tricity International (Thailand) Limited was transferred into a new Thailand 
based  entity,  Altec  Energy  Limited  (“Altec”).  The  Company  has  not  taken  part  in  fund  raises  investment  made  by  Altec 
subsequent to its formation such that the Company’s interest has reduced to 33.8% as at 31 December 2021 and to 30.4% 
since year end. Due to the passive nature of the Company’s involvement, the interest is held in other investments. 

13.  Loans receivable 

Loans advanced 
Accrued interest 

2021 
£ 

1,150,000 
15,286 

1,165,286 

2020 
£ 

- 
- 

- 

On 12 May 2021, the Company agreed to provide a loan facility for up to £3.8m to Protos Plastics to Hydrogen No 1 Limited, the 
Peel NRE special purpose vehicle and owner of the development of the Protos plant. The loan is provided to support the plant 
construction and secure long lead time items and project design services. The loan facility was made available for an initial 6-
month  period,  accruing  interest  daily  at  the  Bank  of  England  base  rate  plus  2%.  The  availability  period  for  the  facility  has 
subsequently been extended to 31 August 2022. 

14.  Contract costs 

Contract costs 

2021 
£ 
- 

- 

2020 
£ 
14,550 

14,550 

Contract costs assets relate to costs arising on engineering contracts where the company has not yet completed performance 
obligations which are typically met by the submission of reports, the transfer of data or on longer contracts via the completion of 
milestones in accordance with the relevant contract.  

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

15.  Trade and other receivables 

Trade receivables 
Other receivables 
Prepayments and accrued income 

16.  Corporation tax 

Corporation tax recoverable 

17.  Cash and cash equivalents 

Cash balances 

18.  Trade and other payables: amounts falling due within one year 

Trade payables 
Lease liability 
Other creditors and accruals 
Other taxes 
Pensions payable 

19.  Trade and other payables: amounts falling due after one year 

Lease liability 

20.  Financial assets and financial liabilities 

Financial assets 

Financial assets at amortised cost: 

 - Trade receivables 
 - Other financial assets at amortised cost 
 - Cash and cash equivalents 

62 

2021 
£ 

447,967 
177,513 
338,168 

963,648 

2020 
£ 

- 
158,126 
42,184 

200,310 

2021 
£ 

2020 
£ 

155,227 

138,497 

155,227 

138,497 

2021 
£ 

2020 
£ 

9,637,460 

3,464,475 

9,637,460 

3,464,475 

2021 
£ 

144,105 
23,455 
238,955 
156,642 
624 

563,781 

2021 
£ 

- 

- 

2020 
£ 

121,152 
23,881 
334,609 
29,552 
- 

509,194 

2020 
£ 

23,455 

23,455 

2021 
£ 

447,967 
1,165,286 
9,637,460 

11,250,713 

2020 
£ 

- 
- 
3,464,475 

3,464,475 

 
 
 
 
 
   
 
 
 
 
 
   
   
   
 
 
 
 
 
   
 
 
 
 
 
   
 
   
 
 
 
 
 
 
 
 
   
 
 
 
 
 
   
 
   
 
 
 
 
 
 
 
 
   
 
 
 
 
 
   
   
   
   
   
 
 
 
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

Financial liabilities 

Liabilities at amortised cost 

 - Trade payables 
 - Other creditors 
 - Payroll taxes 
 - Pensions payable 
 - Lease liabilities 

2021 
£ 

144,105 
238,955 
156,642 
624 
23,455 

2020 
£ 

121,152 
334,609 
29,552 
- 
47,336 

563,781 

532,649 

21.  Leases 

The Company has leased offices at the location of its research facility with the lease reflected in the accounts as a right of use 
asset  and  a  lease  liability.  Payments  are  fixed  and  at  the  balance  sheet  date  the  lease  has  a  further  11  months  left  to  run. 
Information about leases for which the Company is a lessee is presented below: 

21.1 Amounts recognised in the balance sheet 

Right of use assets relate to leased properties that do not meet the definition of investment property and are presented 
within tangible fixed assets per Note 11. 

2021 
£ 

47,198 
- 
(24,625) 

22,573 

2021 
£ 

24,310 
- 
24,310 
(855) 

23,455 

2021 
£ 

24,625 
2,638 
- 

27,263 

2021 
£ 

2,638 
23,882 
- 

26,520 

2020 
£ 

- 
49,250 
(2,052) 

47,198 

2020 
£ 

26,520 
24,310 
50,830 
(3,494) 

47,336 

2020 
£ 

2,052 
296 
14,250 

16,598 

2020 
£ 

296 
1,913 
14,250 

16,459 

Right of use assets 
Balance at 1 January 
Additions to right of use assets 
Depreciation charge for the year 

Balance at 31 December 

Future minimum rentals payable are as follows:  
Amounts payable: 
Within one year 
Later than one year and not later than five years 
Total gross payments 
Impact of finance expenses 

Carrying value of liability 

21.2 Amounts recognised in income statement 

Depreciation charge 
Interest on lease liabilities 
Expenses relating to short term leases 

21.3 Amounts recognised in statement of cashflows 

Interest on lease liabilities 
Repayment of lease principal 
Expenses relating to short term leases 

Total cash outflow for leases 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

22.  Share capital 

(i) Number of shares 

0.5 p Ordinary  
shares 

0.5 p Deferred 
shares 

4.5 p Deferred 
shares  

4.0 p Deferred 
shares  

Shares at 1 January 2020 

1,961,788,425 

388,496,747 

17,373,523 

9,737,353 

Issue of shares 

1,753,312,268 

- 

- 

- 

Shares at 31 December 2020 

3,715,100,693 

388,496,747 

17,373,523 

9,737,353 

Issue of shares  

242,313,442 

- 

- 

- 

Shares at 31 December 2021 

3,957,414,135 

388,496,747 

17,373,523 

9,737,353 

(ii) Value in £ 

At 1 January 2020 

Issue of shares 

At 31 December 2020 

0.5 p Ordinary 
shares 

0.5 p Deferred 
shares 

4.5 p Deferred 
shares  

4.0 p Deferred 
shares  

Share Capital  

£ 

£ 

£ 

£ 

£ 

9,808,942 

1,942,483 

781,808 

389,494 

12,922,727 

8,766,561 

- 

- 

- 

8,766,561 

18,575,503 

1,942,483 

781,808 

389,494 

21,689,288 

Issue of shares  

1,211,568 

- 

- 

- 

1,211,568 

At 31 December 2021 

19,787,071 

1,942,483 

781,808 

389,494 

22,900,856 

All ordinary shares of the Company rank pari-passu in all respects. 

The deferred shares do not carry any voting rights or any entitlement to attend general meetings of the Company. They carry only 
a right to participate in any return of capital once an amount of £100 has been paid in respect of each ordinary share. 

On 29 January 2020, the Company issued 52,228,139 ordinary shares of 0.5p each in the Company (“Ordinary Shares”) to various 
service providers for the settlement of fees. Of these new Ordinary Shares, 47,732,518 were issued at 0.5p and 4,495,621 were 
issued at 0.717p in accordance with terms agreed. 

On  29  January  2020,  the  Company  issued  5,500,000  ordinary  shares  of 0.5p each  in  the  Company  further  to  the exercise  of 
warrants for proceeds amounting to £27,500. 

On 28 February 2020, the Company issued 25,440,350 ordinary shares of 0.5p each in the Company further to the exercise of 
warrants for proceeds amounting to £127,202. 

On 19 March 2020, the Company issued 3,750,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £18,750. 

On 7 April 2020, the Company issued 7,800,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £39,000. 

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

On 16 April 2020, the Company issued 2,500,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £12,500. 

On 22 April 2020, the Company issued 5,500,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £27,500. 

On 27 May 2020, the Company issued 4,100,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £20,500. 

On 9 June 2020, the Company issued 2,003,502 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £10,017. 

On 23 June 2020, the Company issued 1,750,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £8,750. 

On 10 July 2020, the Company issued 5,300,000 ordinary shares of 0.5p each in the Company further to the exercise of warrants 
for proceeds amounting to £26,500. 

On 26 June 2020, the Directors of the Company issued a circular to shareholders detailing the proposed acquisition of the whole 
of the share capital of Waste2Tricity Limited on a share for share basis. The acquisition was approved by shareholders at a General 
Meeting held on 14 July 2020 and the Company issued 1,437,440,277 ordinary shares of 0.5p on 15 July 2020 to complete the 
transaction. 

On 15 September 2020, the Company issued 200,000,000 ordinary shares of 0.5p each in the Company at a price of 2.5p each, 
totalling £5,000,000 before issue costs.  

On 21 January 2021, the Company issued 181,818,182 ordinary shares of 0.5p each (“Ordinary shares”) in the Company at a 
price of 5.5p each amounting to £10,000,000 before issue costs. The Company also granted 9,090,910 warrants to subscribe for 
Ordinary Shares at the issue price of 5.5p to its broker. 

On  26  January  2021,  the  Company  issued  4,895,260  ordinary  shares  of 0.5p each  in  the  Company  further  to  the exercise  of 
warrants for proceeds amounting to £122,382. 

On  9  February  2021,  the  Company  issued  6,000,000  ordinary  shares  of  0.5p  each  in  the  Company  further  to  the  exercise  of 
options for proceeds amounting to £36,000. 

On 24 February 2021, the Company issued 1,600,000 ordinary shares of 0.5p each in the Company further to the exercise of 
options for proceeds amounting to £12,000. 

On 4 March 2021, the Company issued 6,000,000 ordinary shares of 0.5p each in the Company further to the exercise of options 
for proceeds amounting to £45,000. 

On 17 March 2021, the Company issued 500,000 ordinary shares of 0.5p each in the Company further to the exercise of options 
for proceeds amounting to £3,000. 

On 19 April 2021, the Company issued 6,000,000 ordinary shares of 0.5p each in the Company further to the exercise of options 
for proceeds amounting to £36,000. 

On 22 July 2021, the Company issued 8,000,000 ordinary shares of 0.5p each in the Company further to the exercise of options 
for proceeds amounting to £48,000. 

On 19  August 2021, the Company issued 13,500,000 ordinary shares of 0.5p each in the Company further to the exercise of 
options for proceeds amounting to £81,000. 

On 7 October 2021, the Company issued 7,000,000 ordinary shares of 0.5p each in the Company further to the exercise of options 
for proceeds amounting to £42,000. 

On 9 December 2021, the Company issued 7,000,000 ordinary shares of 0.5p each in the Company further to the exercise of 
options for proceeds amounting to £42,000. 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

23.  Other reserves  

As at 1 January 2020 
Issue of shares 
Share issue costs 
Reserve transfer – goodwill impairment 

At 31 December 2020 

Issue of shares 
Share issue costs 

At 31 December 2021 

24.  Accumulated deficit  

As at 1 January 
Loss for the year 
Share based payments 
Reserve transfer – goodwill impairment 

At 31 December 

Merger relief  
reserve 
£ 

Share premium 
account  
£ 

- 
50,310,410 
- 
(14,192,699) 

48,778,651 
4,048,720 
(232,437) 
- 

36,117,711 

52,592,934 

- 
- 

9,519,495 
(822,719) 

36,117,711 

61,291,710 

2021 
£ 

(63,544,097) 
(1,870,496) 
190,287 
- 

2020 
£ 

(61,714,360) 
(15,837,741) 
(184,695) 
14,192,699 

(65,224,306) 

(63,544,097) 

25.  Share based payments 

The expense recognized for share-based payments during the year is shown in the following table: 

Share based payment charge recognised in Income Statement 

Expense arising from equity-settled share-based payment transactions: 

 - Share options for Directors and employees 
 - Shares issued for third party services 

Total share-based payment charge in Income Statement 

Share based payment charge recognised in Share Premium Account 

Warrants for third party services 
Total share-based payment charge in Share Premium Account 

Total share-based payment charges recognised 

Other share-based payment movement 

Exercise of share options by Directors and employees 
Exercise of warrants for third party services 
Shares issued for third party services 

Total share-based payment 

2021 
£ 

34,829 
- 
34,829 

419,138 
419,138 

453,967 

(186,982) 
(76,698) 
- 
190,287 

2020 
£ 

8,399 
32,235 
40,634 

84,532 
84,532 

125,166 

- 
(38,963) 
(270,898) 
(184,695) 

There were no liabilities recognised in relation to share based payment transactions. 

25.1 Share options for Directors and employees 

The Company has put in place various options schemes for Directors and employees as follows: 

On 8 December 2014, the Company granted 11,000,000 options over ordinary shares to the Board. The options may be 
exercised between the grant date and the tenth anniversary of the grant date and will lapse if not exercised during that period. 

On  7  March  2016,  the  Company  granted  15,000,000  options  over  ordinary  shares  to  the  Board.  The  options  may  be 
exercised between the grant date and the fifth anniversary of the grant date and will lapse if not exercised during that period.  

On 6 March 2018, the Company granted 32,100,000 options over ordinary shares to employees, including a Board member, 
under the Powerhouse Energy Group PLC 2018 EMI Option Scheme. The options vest to the employees over a period of 24 
months and are exercisable between the relevant vesting dates and the tenth anniversary of the grant date and will lapse if 
not exercised during that period. These options had all been exercised or forfeited by 31 December 2019.  

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

On 6 March 2018, the Company granted 60,000,000 options over ordinary shares to Board members under the Powerhouse 
Energy  Group  PLC  2018  non-employee  Share  Option  Plan. The  options  vest  to the  Board members  over  a  period  of  24 
months and are exercisable between the relevant vesting dates and the tenth anniversary of the grant date and will lapse if 
not exercised during that period. 

On 23 April 2021, the Company granted 1,773,239 share options in ordinary shares of 0.5p each in the Company to two 
Directors of the Company in lieu of part or all of their fees to which they are entitled. The options have an exercise price of 
6.3p each and lapse 3 years from the date of grant. 

The movement of share options in the year are as follows: 

Outstanding at 1 January  
Granted during the year 
Forfeited during the year 
Exercised during the year 
Outstanding at 31 December  

2021 

Number 

75,000,000 
1,773,239 
(5,110,547) 
(55,600,000) 
16,062,692 

Exercisable at 31 December 

16,062,692 

2021 

WAEP (pence) 

0.77 
6.3 
2.55 
0.62 
1.33 

1.33 

2020 

Number 

75,000,000 
- 
- 
- 
75,000,000 

75,000,000 

2020 

WAEP (pence) 

0.77 
- 
- 
- 
0.77 

0.77 

The weighted average remaining contractual life for the share options outstanding as at 31 December 2021 was 5.3 years 
(2020: 6.1 years) 

1,773,239 share options were granted during the year (2020: Nil).  

The range of exercise prices for options outstanding at the year-end was 0.6p to 6.3p (2020: 0.6p to 2.5p). 

The number of options outstanding at 31 December 2021 and the movements in the year are as follows: 

Date of  
grant 

Granted 

Share price on 
grant 

Exercised  

Forfeited 

At 31 Dec 
2021 

Exercise 
price 

Exercise period 

8 Dec  
2014 

7 Mar  
2016 

6 Mar  
2018 

22 Apr 
2021 

6,000,000 

1.875p 

- 

(3,000,000) 

3,000,000 

2.5p 

9,000,000 

0.55p 

(7,600,000) 

(1,400,000) 

- 

0.75p 

60,000,000 

0.57p 

(48,000,000) 

- 

12,000,000 

0.6p 

1,773,239 

5.58p 

- 

(710,547) 

1,062,692 

6.3p 

9 Dec 2014 until 8 
Dec 2024 

8 Mar 2016 until 
7 Mar 2021 

7 Mar 2018 until  
6 Mar 2028 

23 Apr 2021 until 
22 Apr 2024 

Total 

76,773,239 

(55,600,000) 

(5,110,547) 

16,062,692 

Of the 1,062,692  options granted on 22  April 2021  which were outstanding on 31  December 2021, 481,337  have been 
forfeited since the year end. 

The  estimated  fair  value  of  the  options  issued  was  calculated  by  applying  the  Black-Scholes  option  pricing  model.  The 
assumptions used in the calculation were as follows: 

Options in issue 31 December 2021 
Exercise price 
Expected volatility 
Contractual life 
Risk free rate 
Estimated fair value of each option 

8 December 2014 

6 March 2018 

22 April 2021 

3,000,000 
2.5p 
127.56% 
10 years 
2% 
1.79p 

12,000,000 
0.6p 
70.00%** 
10 years 
1.49% 
0.32p* 

1,062,692 
6.3p 
214.8%** 
3 years 
0.15% 
3.87p* 

* the calculation applies a 25% discount for small companies 
** expected volatility based on historic volatility at the point of grant. 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

25.2 Warrants for third party services 

The Company has issued warrants in respect of services provided by consultants as part of their service arrangements. It 
has also issued warrants to participating shareholders in respect of certain fund raises. No share-based payment charge is 
recognised for warrants issued to participating shareholders as they are outside of the scope of IFRS 2.  

Details of warrants which have been issued during the year are as follows: 

On  15  September  2020,  the  Company  granted  5,395,260  warrants  to  the  Company’s  broker  as  part  of  its  service 
arrangement in relation to the fund raise arising on that date. The options may be exercised between the grant date and the 
third anniversary of the grant date and will lapse of not exercised during that period. At the date of grant the share price was 
3.3p and the warrants have an exercise price of 2.5p per share. 

On 21 January 2021, the Company granted 9,090,910 warrants to the Company’s broker as part of its service arrangement 
in  relation  to  the  fund  raise  arising  on  that  date.  The  options  may  be  exercised  between  the  grant  date  and  the  third 
anniversary of the grant date and will lapse of not exercised during that period. At the date of grant the share price was 8.6p 
and the warrants have an exercise price of 5.5p per share. 

Warrants in respect of services provided: 

The movement of warrants issued for share-based payments in the year are as follows: 

Outstanding at 1 January  
Granted during the year 
Forfeited during the year 
Exercised during the year 
Outstanding at 31 December  

2021 
Number 
5,395,260 
9,090,910 
- 
(4,895,260) 
9,590,910 

2021 
WAEP (pence) 
2.5 
5.5 
- 
2.5 
5.3 

2020 
Number 
17,740,350 
5,395,260 
- 
(17,740,350) 
5,395,260 

2020 
WAEP (pence) 
0.5 
2.5 
- 
0.5 
2.5 

Exercisable at 31 December 

9,590,910 

5.3 

5,395,260 

2.5 

The weighted average remaining contractual life for the share warrants outstanding as at 31 December 2021 was 2.1 years 
(2020: 2.7 years) 

The weighted average fair value of share warrants granted in the year was 4.6p (2020: 1.57p). 

The range of exercise prices for warrants outstanding at the year-end was 2.5p to 5.5p (2020: 2.5p). 

The number of warrants, which have been included for share-based payment purposes, outstanding at 31 December 2021 
and the movements in the year are as follows: 

Date of grant 

Granted 

Share price  
on grant 

Exercised  

Forfeited 

At 31 Dec  
2021 

Exercise  
price 

Exercise  
period 

15 Sep 2020 

5,395,260 

3.3p 

(4,895,260) 

21 Jan 2021 

9,090,910 

8.6p 

- 

Total 

14,486,170 

(4,895,260) 

- 

- 

- 

500,000 

2.5p 

9,090,910 

5.5p 

9,590,910 

16 Sep 2020 until 
15 Sep 2023 

22 Jan 2021 until 
21 Jan 2024  

The  Company  is  required  to  assess  the  fair  value  of  instruments  issued  in  respect  of  services  received,  with  such  value 
charged to the Income Statement. The estimated fair value of the warrants issued during the year was calculated by applying 
the Black-Scholes option pricing model. The assumptions used in the calculation were as follows: 

Warrants issued for services 

15 Sep 2020 

21 Jan 2021 

In issue 31 December 2021 
Exercise price 
Expected volatility* 
Contractual life 
Risk free rate 
Estimated fair value of each option 

500,000 
2.5p 
92.10% 
3 years 
0.07% 
1.57p 

9,090,910 
5.5p 
161.6% 
3 years 
(0.07%) 
4.6p 

* expected volatility based on historic volatility at the point of grant. 

68 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

Warrants issued to participating shareholders 

Warrants issued to participating shareholders are outside the scope of IFRS 2 and no share-based payment charges have 
been recognised on them. On initial recognition the warrants’ cost was deducted from equity as it represents the cost of 
shares issued to investors. As the agreements had a fixed-for-fixed requirement, they are also recognised as equity at the 
same time. As such, there is £nil net impact on equity and has not been included in the statement of changes in equity. 

The  number  of  warrants  issued  to  participating  shareholders,  which  have  not  been  included  for  share-based  payment 
purposes, outstanding at 31 December 2021 and the movements in the year are as follows: 

Date of grant 

Granted 

Share price 
on grant 

Exercised   Forfeited 

At 31 Dec 2021 

Exercise 
price 

Exercise period 

15 Sep 2020 

371,510,069 

3.3p 

Total 

371,510,069 

- 

- 

- 

- 

371,510,069 

2.75p 

16 Sep 2020 until 15 
Sep 2022 

371,510,069 

The estimated fair value of the warrants issued was calculated by applying the Black-Scholes option pricing model. The 
assumptions used in the calculation were as follows: 

Warrants issued to participating shareholders 

In issue 31 December 2021 
Exercise price 
Expected volatility* 
Contractual life 
Risk free rate 
Estimated fair value of each option 

15 Sep 2020 

371,510,069 
2.75p 
106.20% 
2 years 
0.04% 
1.46p 

* expected volatility based on historic volatility at the point of grant. 

All warrants  

The number of all warrants outstanding at 31 December 2021 and the movements in the year are as follows: 

Date of 
grant 

Granted 

Share price 
on grant 

Exercised  

Forfeited 

At 31 Dec 2021 

Exercise 
price 

Exercise period 

15 Sep 2020 

5,395,260 

3.3p 

(4,895,260) 

15 Sep 2020 

371,510,069 

3.3p 

21 Jan 2021 

9,090,910 

8.6p 

- 

- 

Total 

385,996,239 

(4,895,260) 

- 

- 

- 

- 

500,000 

2.5p 

371,510,069 

2.75p 

9,090,910 

5.5p 

16 Sep 2020 until 
15 Sep 2023 

16 Sep 2020 until 15 
Sep 2022 

22 Jan 2021 until 
21 Jan 2024 

381,100,979 

25.3 Share issue third party services 

In 2020, the Company issued shares to settle services to some of its service providers. The fair value of the share-based 
payments charge was based on invoiced amounts or amounts agreed to be paid under a formal agreement of the Company. 

26.  Material risks 

The Company is subject to various risks relating to political, economic, legal, social, industry, business and financial conditions. 
Risk assessment and evaluation is an essential part of the Company’s planning and an important aspect of the Company’s internal 
control system. The Company’s approach to these risks is detailed in the Strategic Report. 

69 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

27.  Directors’ remuneration and share interests 

The Directors who held office at 31 December 2021 had the following interests, including any interests of a connected party in 
the ordinary shares of the Company: 

Keith Riley 

James John Pryn Greenstreet 

Number of ordinary shares  
of 0.5p each 

Percentage of  
voting rights 

12,128,986 

1,840,000 

<0.5 

<0.1 

The  remuneration  of  the  Directors  of  the  Company  paid  or  payable  for  the  year  or  since  date  of  appointment,  if  later,  to  31 
December 2021 is: 

Tim Yeo  
David Ryan 
William Cameron Davies 
Nigel Brent Fitzpatrick 
James John Pryn Greenstreet 
Allan Vlah 
Kirsten Gogan 
Keith Riley 
Mark Berry 

Total 

2021 
£ 
Salary/Fee 

2021 
£ 
Pension 

2021 
£ 
Share based 
payments 

92,444 
97,996 
7,500 
- 
30,000 
15,000 
23,468 
8,167 
- 

274,575 

- 
- 
- 
- 
- 
- 
- 
- 
- 

- 

- 
- 
- 
- 
- 
22,500 
- 
- 
17,500 

40,000 

2021 
£ 
Other 

35,500 
- 
- 
- 
- 
- 
- 
- 
- 

35,500 

2021 
£ 
Total 

127,944 
97,996 
7,500 
- 
30,000 
37,500 
23,468 
8,167 
17,500 

350,075 

2020 
£ 
 Total 

27,004 
196,856 
54,421 
26,868 
31,061 
13,306 
7,500 
- 
1,129 

358,145 

Total remuneration includes share-based payments arising from the issue of options amounting to £40,000 (2020: £8,399). There 
have been no awards of shares to Directors under long term incentive plans during the year. 

The Directors’ social security costs for the year amounted to £29,965 (2020: £34,282) resulting in a total remuneration expense 
of £380,040 (2020: £392,427). 

Prior to their resignations from the Board, Tim Yeo, William Cameron Davies, James John Pryn Greenstreet, Allan Vlah, Kirsten 
Gogan and Mark Berry had service contracts that could be terminated by the provision of three months’ notice. David Ryan had 
a service contract that could be terminated by the provision of six months’ notice. 

James John Pryn Greenstreet and Keith Riley have service contracts which can be terminated by providing three months’ written 
notice. 

Rivermill Partners Limited, a company wholly owned by Tim Yeo and his associates, provided executive corporate management 
services during the year the value of which is included in the above remuneration. These services are contracted for on an annual 
basis as required. 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Accounts for the Year Ended 31 December 2021 

Share options held by the Directors who served during the year are as follows: 

Options granted 8 Dec 2014 
Nigel Brent Fitzpatrick 
James John Pryn Greenstreet 

Options at  
1/1/21 

Forfeited 

Exercised 

Options at 
31/12/21 

Exercise 
price 

Earliest and latest 
date of exercise 

3,000,000 
3,000,000 

(3,000,000) 
- 

- 
- 

- 
3,000,000 

2.5p 
2.5p 

9/12/14 – 8/12/24 
9/12/14 – 8/12/24 

Options at  
1/1/21 

Forfeited 

Exercised 

Options at 
31/12/21 

Exercise 
price 

Earliest and latest 
date of exercise 

Options granted 7 March 2016 
Nigel Brent Fitzpatrick 
James John Pryn Greenstreet 

5,000,000 
4,000,000 

- 
(1,400,000) 

(5,000,000) 
(2,600,000) 

- 
- 

0.75p 
0.75p 

8/3/16 – 7/3/21 
8/3/16 – 7/3/21 

Options granted 6 March 2018 
William Cameron Davies 
Nigel Brent Fitzpatrick 
James John Pryn Greenstreet 
David Ryan 

Options at  
1/1/21 

15,000,000 
12,000,000 
12,000,000 
21,000,000 

Forfeited 

Exercised 

Options at 
31/12/21 

Exercise 
price 

Earliest and latest 
date of exercise 

- 
- 
- 
- 

(15,000,000) 
(12,000,000) 
- 
(21,000,000) 

- 
- 
12,000,000 
- 

0.6p 
0.6p 
0.6p 
0.6p 

1/10/18 – 6/3/28 
7/3/18 – 6/3/28 
7/3/18 – 6/3/28 
7/3/18 – 6/3/28 

Options granted 22 April 2021 
Mark Berry 
Allan Vlah 

Options 
granted 
22/4/21 

Forfeited or 
not vested 

998,098 
775,141 

(516,761) 
(193,786) 

Exercised 

Options at 
31/12/21 

Exercise 
price 

Earliest and latest 
date of exercise 

- 
- 

481,377 
581,355 

6.3p 
6.3p 

23/4/21 – 22/4/24 
23/4/21 – 22/4/24 

Highest Paid Director 
Tim Yeo was the highest paid Director in the year. There were no shares received or receivable by him in respect of qualifying 
services under long term incentive schemes.  

28.  Related parties 

Rivermill Partners Limited, a corporate management services company, wholly owned by Tim Yeo and his associates, was a 
related party for the period during which Tim Yeo was a Director of the Company. During that period, Rivermill provided executive 
corporate  management  services  amounting  to  £48,000  and  the  Company  agreed  a  future  termination  settlement  of  £5,500 
(2020: £7,800). 

Engsolve Limited, an engineering solutions company, was a related party until 30 June 2021 due to a Director’s family member 
being part of its key management personnel, and from 12 August 2021 when the Company acquired 48.39% of its share capital. 
Engsolve provided engineering services to the Company during the year amounting to £621,968 (2020: £249,555). Amounts 
outstanding at year end for services provided and included in these accounts amounted to £41,058 (2020: £43,841). 

29.  Events after the reporting period 

On 28 February 2022, the Company announced that it had agreed to extend the availability period for the £3.8m Loan Facility it 
had  made  available  to  Protos  Plastics  to  Hydrogen  No  1  Limited,  the  Peel  NRE  special  purpose  vehicle  and  owner  of  the 
development of the Protos plant, the first proposed commercial application of the Company’s DMG technology. The loan facility, 
provided to support the Protos plant development and construction and initially made available during 2021 for a 6-month period, 
had been previously extended until 28 February 2022. Loans made under the facility amount to £1.89m (£1.15m at 31 December 
2021) and accrue interest daily set at the Bank of England base rate plus 2%. 

On 24 May 2022, the Company announced its plan to create a UK based Global Technology and Innovation Centre (GTIC) which 
is expected to open in 2023. The Company has contracted £1.3m for the supply, installation and commissioning of equipment 
for the facility amounting to £1.3m. 

30.  Ultimate controlling party 

There is no controlling party of the Company. 

71