Annual Report and Accounts
For the year ended 31 December 2021
Symphony Environmental is a world-leading
developer of technology to make ordinary plastic
biodegradable, and a range of other technologies to
protect plastic and rubber against microbes, insects,
fire, and many other threats.
Our technology is sold, usually in the form of
masterbatches, in nearly 100 countries around the
world to protect the environment, food supply and
human health and safety.
Contents
Overview
2021 Highlights ������������������������������������������������������������������������1
Business Highlights �����������������������������������������������������������������1
Symphony at a Glance �������������������������������������������������������������2
Symphony’s Distribution Network ������������������������������������������4
Product Focus ��������������������������������������������������������������������������6
Strategic Report
Chair’s Statement �������������������������������������������������������������������12
Chief Executive’s Review �������������������������������������������������������15
2021 Roundup ������������������������������������������������������������������������19
Corporate Social Responsibility ��������������������������������������������20
Strategic Report ���������������������������������������������������������������������21
Section 172 Report �����������������������������������������������������������������22
Principal Risks and Uncertainties �����������������������������������������23
Governance
Board of Directors ������������������������������������������������������������������24
Chairman’s Corporate Governance Statement ���������������������26
Directors’ Report ��������������������������������������������������������������������33
Directors’ Responsibilities Statement ����������������������������������36
Audit Committee Report ��������������������������������������������������������37
Remuneration Committee Report ������������������������������������������38
Independent Auditor’s Report ������������������������������������������������40
Financial Statements
Consolidated statement of financial position ����������������������46
Consolidated statement of comprehensive income ������������47
Consolidated statement of changes in equity ����������������������48
Consolidated cash flow statement ���������������������������������������49
Notes to the Annual Report and Accounts ���������������������������50
Company statement of financial position �����������������������������73
Company statement of changes in equity ����������������������������74
Notes to the Company statement of financial position �������75
Company Information ������������������������������������������������������������79
Symphony Environmental Technologies plc Annual Report and Accounts 2021
79
Company Information
Company registration number
Nominated adviser and joint broker
03676824
Registered office
6 Elstree Gate
Elstree Way
Borehamwood
Hertfordshire
WD6 1JD
Directors
Michael Laurier
Chief Executive Officer
Ian Bristow FCCA
Chief Financial Officer
Michael Stephen, LL.M
Commercial Director & Deputy Chairman
Nicolas Clavel
Non-Executive Director & Interim Chairman
Shaun Robinson
Non-Executive Director
Robert (Bob) Wigley
Non-Executive Director
Alexander Brennan
Executive Director
Secretary
Ian Bristow
Perivan 263261
Zeus Capital Limited
10 Old Burlington Street
London
W1S 3AG
Joint broker
Hybridan LLP
1 Poultry
London
EC2R 8EJ
Bankers
HSBC Bank Plc
103 Station Road
Edgware
Middlesex
HA8 7JJ
Solicitors
Eversheds Sutherland (International) LLP
1 Wood Street
London
EC2V 7WS
Auditor
Mazars LLP
Chartered Accountants and
Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Symphony Environmental Technologies plc Annual Report and Accounts 2021
1
Overview
2021 Highlights:
Group
Revenue
Gross Profit
Loss
before tax
R&D Spend
Basic loss
per share
Cash used
in operations
£9.16m
£3.59m
£1.53m
£0.66m
0.81p
£0.60m
2020:
£9.77m
2020:
£4.11m
2020:
£0.44m
2020:
£0.60m
2020:
0.19p
2020:
£1.44m
Revenue Mix
d2w Masterbatch
d2p Masterbatch
Finished Products
Other
2021
£7.19 million
£0.45 million
£1.40 million
£0.12 million
2020
£7.27 million
£0.47 million
£1.80 million
£0.23 million
Business Highlights:
Technologies
Corporate
•
•
•
US FDA further approval for antibacterial plastic technology
with greater loading and wider film use in bread packaging
Health Canada approval obtained for antibacterial bread
packaging films
•
•
Meditech nitrile glove manufacturing, marketing and
distribution agreements
Major Expansion with Joint Venture into India with
Indorama Corporation – completed in February 2022
Investment continues in the sales team, and new Head of
Innovation appointed to accelerate the commercialisation
of the Group’s growing portfolio of new and highly
innovative products
• Antimicrobial ten-minute Coronavirus kill rate achieved
•
•
Substantial progress in many product areas including
an increase in customer trials and product tests
currently underway
Significant potential sales identified in many of the current
pipeline projects
•
Several patent applications filed to protect our IP as many
new products reach commercialisation
• Small Caps Award: ESG Company of the Year
2
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Symphony at a Glance
Global specialists in technologies that make plastic and rubber products smarter, safer and
more sustainable.
High margin
Investing in
technology
A global market
Strong pipeline
High gross margin and
capital light
Global network of
distributors and
manufacturing bases
7% of revenue invested
into research and
development over the
past 6 years
Approvals in place for
key technologies
Emerging markets
have driven growth to
date. 22 countries have
adopted regulations
mandating the use of
d2w type technologies
Engaging with public
and private sector
targets internationally,
we have multiple
customer trials
underway
Established with
ESG Credentials
Listed on the London
Stock Exchange since
2001.
Awarded the LSE’s
Green Economy Mark
for sustainability in
2019
Strong partners in
key regions
Our Solutions:
Biodegradable Technology
Perfect for single use plastics and packaging
Lightweight plastic materials are used in many industries – not least the food industry where they are essential for protecting
food from contamination and damage and reducing waste. However, 30% of plastic escapes into the environment annually with
8-10 million tonnes of plastic finding its way into in the oceans of the world, with dire consequences for people, wildlife, and water
quality.
With over 20 years of solid scientific research and development behind it, our d2w masterbatch has been proven
to biodegrade on land and in the marine environment, and is now sold around the world.
A mature technology which represents the majority of our current revenues. It is cost-effective and
perfect for single use plastics and packaging, which account for around 40% of all plastic items
produced annually, and among the top ten items littered. It is also much kinder to the environment. So,
there is plenty of room for revenue growth.
The lifecycle of plastic products enhanced with d2w biodegradable technology
1
2
3
4
R
R
Just 1% of d2w added to polymer
during manufacture
Can be used for all the same
purposes as regular plastic
Can be recycled with regular
plastic during product life
If littered, products will
biodegrade and be recycled
back into nature by bacteria
and fungi on land or sea
Without leaving toxic residues or microplastics behind.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
3
Designed to Protect
d2p is the brand name for a suite of masterbatches offering extra protection
to plastic and rubber products from bacteria, insects, fungi, algae, odour,
fouling and fire.
The d2p range of products are relatively new compared to d2w. Over the last few years, we have conducted, along with our
global partners, a significant number of tests and trials, resulting in several technologies maturing and ready to commercialise
including anti-insect, bread, gloves and flame retardants, obtaining regulatory approval where necessary. The Product Focus
section of this report highlights a few of these key technologies and their applications.
We also continue to progress our newer technologies which we expect to commercialise over the short term. Additionally,
there is a pipeline of products in development, which we hope to bring to fruition in the next few years.
Problem:
Protecting food
Hygiene and Virus transmission
Solution
• FDA approved antibacterial bread packaging
•
Ethylene and moisture absorbers for packaging
• Antimicrobial water pipes and tanks
• Antimicrobial gloves
Flammable plastics
• Flame retardant plastic masterbatches
Electric cable, deterioration and damage
• Rodent repellents
Insect borne disease transmission and damage
• Anti-insect masterbatch
Masterbatches offering cost-effective
protection against bacterial and fungal
contamination on plastic products and
other surfaces.
Insecticidal masterbatch used to control
pests – applications include agriculture,
horticulture, forestry, and home.
Masterbatches to repel rodents from
causing dangerous damage to plastic
products such as cable insulation,
food, and non-food packaging.
Produced from a natural ore, d2p OS will
remove oxygen from inside packaging
to increase the shelf life of perishable
goods.
Flame retardants decrease the
ignitability of materials and inhibit
the combustion process limiting the
amount of heat released.
To protect surfaces against the
corrosion and oxidation of ferrous and
non-ferrous metals.
Highly active adsorbent for the removal
of ethylene gas and moisture in plastic
packaging, to reduce spoilage of
perishable fruit and vegetables.
Inorganic masterbatches and
additives designed to inhibit odours in
plastic products.
www.d2p.net
Overview 4
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Symphony’s Distribution Network
Symphony is an international company reaching every corner of the globe.
We have a growing number of distributors, giving us a presence in nearly 100 countries worldwide.
Below are just some of the products and places where
d2w biodegradable and d2p protective technologies
are adding value.
P l a y p it b alls
USA
R
B r
a
e
d b a gs
Latin America/Turkey/
Dominican Republic
R
D r i n k i n
g straws
Colombia
R
C a r
r i e r b ags
Brazil
Symphony Environmental Technologies plc Annual Report and Accounts 2021
5
Israel
Pakistan
China
R
D rip tape
s
e
k in g water pip
D r i n
M ulch fi lm
R
W a t
r p
e
o u ches
Ghana
R
s e sacks
u
f
R e
R
Foo d s t
o r a g e bags
Middle East*
Thailand
*SASO and ESMA certified
NB-0002
Overview
6
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Product Focus
Making a Difference with d2p AI (Anti-insect)
Many farmers and gardeners depend on irrigation pipes to manage the feeding and watering
of their crops
These pipes offer huge benefits in terms of watering efficiency,
conservation of water and feed, and greater crop-yields.
However, these lifelines are under constant attack from insects
which puncture the pipes and cause the loss of valuable water
and lower crop-yield.
Insecticidal sprays are widely used, but they are a temporary
measure and are costly in terms of insecticide and labour.
They can also be dangerous.
d2p AI is a specialised anti-insect masterbatch, added to the
plastic pipes during manufacture. It is proven effective to
protect drip lines, and tape and flexible irrigation pipes, and will
effectively repel most insects for the lifetime of the pipe.
Preventing this damage not only saves water but also time
and money spent on repairs and replacements. It also enables
the wall thickness of drip tapes and lines to be reduced, thus
saving money at manufacture.
Field studies have shown that drip tape and lines treated with
d2p anti-insect technology outperformed the ordinary 8mm
and 10mm drip tape.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
7
Antimicrobial technology in bread packaging
Keeping your bread safe!
According to WRAP, bread is one of the UK’s most wasted foods.
Our d2p AM technology for packaging films, has been developed
to inhibit the growth of bacteria on the surface of the film, and it
has been tested according to ISO 22196.
Bread packaging has been a particular success, with d2p AM
receiving FDA approval in the USA in July 2021, followed by
approval from Health Canada. Better yet, FDA approval now
applies to all types of polyolefin and polyester film for wrapping
bread instead of just linear low density polyethylene (LLDPE).
The FDA wider approval allows for up to three times increased
loading of d2p technology, giving greater flexibility, efficacy and
ultimately value to our customers. This innovative treatment with
d2p has been developed through our customer-led trials, with trial
data showing significant benefits.
d2p AM is also effective in all indirect plastic, rubber, and silicone
food contact applications such as food processing equipment,
conveyor belts, utensils and food storage containers.
80% of bakery products are thrown away
Overview
8
Symphony Environmental Technologies plc Annual Report and Accounts 2021
d2w Biodegradable Plastic
You would have to walk around with your eyes closed not
to notice the amount of plastic litter in the environment,
everything from pallet wrap to plastic shopping bags and
packaging and more recently, disposable face masks now
adorning the landscape and seascape everywhere.
Plastic pollution has become one of the most pressing
environmental issues of the 21st Century. As demand for
plastic overwhelms our ability to collect it. According to recent
studies only 9% of plastic litter is ever recycled, which leaves
tonnes of plastic litter either going to landfill or escaping into
the open environment.
Single-use plastic items and packaging account for around
40% of all plastic items produced annually, and are usually
among the top ten plastic items littered. This is most evident in
the developing countries, where lack of infrastructure to collect
and dispose of plastic waste leaves many tonnes of plastic
annually, finding its way into the oceans of the world.
Collecting plastic litter from land is hard enough, but collecting
it from the marine environment is impossible, particularly as it
breaks down into smaller and smaller pieces called microplastics.
Which is why the world needs d2w biodegradable plastic
technology.
d2w is a masterbatch that can be added to conventional
polymer during the manufacturing process. It is a drop-in
technology, added at only 1%, which means little or no extra
on-cost. It meets all relevant standards including ASTM
D6954, UAE 5009:2009, Saudi 2879 and AFNOR Accord
T61-808. It is safe for food contact according to US and EU
food contact regulations.
Our d2w biodegradable masterbatch technology has more
than 20 years of research and development behind it. The last
few years have seen scientific studies carried out by Queen
Mary University London and the Oxomar project – a 5-year
study sponsored by the French Government, proving what
we already know. This is that plastic products made with d2w
biodegradable technology, can be recycled if collected, but if
they escape collection and end up in the open environment
as litter they will degrade and biodegrade on land or sea
much more quickly than ordinary plastic, without leaving toxic
residues or microplastics behind.
It is a practical solution and perfect for all the single-use
packaging and products you can think of and perhaps some
that you can’t.
Mulch film on farm
Symphony Environmental Technologies plc Annual Report and Accounts 2021
9
Mulch films
Did you know that d2w controlled-life plastic is used in the
farming industry for mulch films?
Mulch film is plastic sheeting used to cover the soil – it has
many benefits - it can modify soil temperatures, limit weed
growth, prevent moisture loss, and improve crop-yield. The
challenge for farmers is what to do with the mulch films
after use. Before d2w, farmers had to pay to have acres of
contaminated plastic removed from their farms, but not
any more.
Films made with d2w can be programmed to remain intact
as a cover for the growing crop for the period required by
the farmer, and will then degrade and biodegrade in the soil,
without leaving harmful residues behind.
This offers an environmentally sustainable alternative to
conventional polyethylene (PE) mulch films because they
can be tilled into the soil after the harvest and will biodegrade
to nothing more than CO2, water and humus. This saves the
farmer time and money and saves the environment from
plastic waste.
R
Overview 10
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Antimicrobial pipes and tanks
d2p AM is suitable for pipes made from PE, PP and PVC and
has been tested to ISO 22196 and ASTM G21.
Cleaning pipework affected by biofilm can be expensive and
difficult. The expected life of a plastic water pipe is around
50 years. Prevention is the safest and cheapest option.
Preventing biofilm build-up using d2p antimicrobial
masterbatch is safe and cost-effective as the additive is
included at manufacture. It is also the most practical solution
to a widespread problem, as the protection lasts for the
lifetime of the product.
Helping to deliver safer drinking water
Plastic pipes are the backbone of water distribution systems.
Unfortunately, these vital systems are always under attack
from microbes which manage to enter distribution pipes and
trigger biofilm build-up on the inside surfaces.
A biofilm is a layer of microorganisms contained in a matrix (or
slime layer), which forms on surfaces in contact with water. Their
presence in drinking water pipe networks can be responsible for
a wide range of water quality and operational problems. They
can also cause potentially deadly disease and blockages which
threaten human and animal health and security of supply.
Water is used throughout the food chain from farm to table
which means that water quality can have a significant impact
on the quality of food products. Maintaining pipework to
ensure water quality is therefore essential in preventing food
spoilage and disease.
d2p AM is an antimicrobial masterbatch developed to prevent
the build-up of biofilm in plastic drinking water pipes and water
storage tanks. Our d2p AM masterbatch is registered with the
US EPA for the control of fungi and bacteria causing stain,
odour and/or degradation of physical properties in polymers.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
11
Protecting against fire
In most cases plastics propagate fire because they quickly
decompose to volatile combustible materials when exposed
to heat.
In many fields such as electrical, transport, buildings etc. the
use of polymers is therefore restricted by their flammability,
whatever benefits the material may bring.
The use of synthetic polymers has greatly increased the fire risk,
and serious consequences for people and property. Symphony
has therefore carried out extensive R&D in this field.
Our fire-retardant masterbatches are now commercially
available, and if used at manufacture of the plastic product,
will significantly decrease the ignitability of the product and
inhibit the combustion process, thereby limiting the amount of
heat released.
The role of fire-retardants is to increase the time for people
to escape, and to increase the time available to tackle the fire,
by slowing down the polymer combustion, reducing smoke
emissions, and reducing the dripping of molten polymer.
As the use of flame retardants is driven by legislation,
Symphony has paid close attention to the approval processes
in product development.
We have achieved M1 classification according to French
standard NFP92 -503 and American Standard NFP 701 and
have achieved excellent results according to BS476-12.
Overview 12
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chair’s Statement
2021 was a year of contrasting results. These financial results do not reflect the
transformational effort and success that was achieved in many of our high value development
projects that are mainly customer led. We had expected these material changes to positively
impact 2021 but repeated and unpredictable lockdowns created logistical and resource
difficulties, which delayed the commencement of some large and valuable projects.
However, with the vaccination programmes being rolled out
around the world, we now anticipate many of these projects
will advance to commercialisation much faster, which will start
to have a transformational effect on the business.
The progress in customer driven development projects, many
of which are significant both from a revenue perspective, but
crucially also underpin long term relationships, provide the
Group with real optimism that substantial revenue growth in
the short and longer term will be achieved.
Group revenues for the year ended 31 December 2021 were
£9.16 million (2020: £9.77 million). Further, revenues of
£0.50 million missed the year end cut-off due to shipping
congestion and delayed sailings. Of the recognised revenues
for 2021, both d2w and d2p were on a par with the previous
year, with total year-on-year revenue reduction mainly in
respect of PPE items such as gloves with the compliance,
sampling and regulatory process taking much longer than
anticipated. Together with congestion and delays, shipping
charges were also high during the period, and this higher cost
so far continues in 2022.
“ The progress in customer
driven development projects,
many of which are significant
both from a revenue
perspective, but crucially
also underpin long term
relationships, provide the
Group with real optimism that
substantial revenue growth in
the short and longer term will
be achieved. ”
The business could maintain sales at approximately £9 million
on a significantly reduced cost base (estimated at £2 million
lower); however, the Board’s confidence in the outlook for the
Group’s products, means we continue to invest in the Group’s
infrastructure, staff and R&D so that the business is able to
fully maximise the growth potential for the customers and
markets already secured.
Investment into d2w, our biodegradable technology, continued
during the year with further independent certification to
prove biodegradability and no persistent microplastics on
land and oceans, together with specific advocacy teams that
are focussing on several important markets such as Latin
America where the legislation process is moving towards
changes in laws that we believe will encourage the use of d2w
type technologies. It is pleasing to see in this region a positive
commercial result from this medium-term investment strategy
that has helped increase volumes by 25% with an indication
of further strengthening going forward. In the Middle East,
volumes were consistent with 2020 which was a good result
as local plastic production volumes were reported to have
decreased by more than 50% due to Covid-19 restrictions.
We are also starting to see business return to pre-Covid-19
levels, and very soon the start of a biodegradable enforcement
programme by the Saudi national standards organisation
(which is more easily capable of being enforced following the
cessation of Covid-19 restrictions which have been in place
during the last 2 or so years). This we believe will also have a
positive effect in surrounding countries and further afield.
Sales for d2w have now commenced in India following
completion in February 2022 of the agreement in November
2021 to form a joint venture with Indorama Corporation
together with a local manufacturing agreement. This opens
an exciting and large opportunity as the Indian government
are taking immediate steps to control plastics through
new regulations that are expected to encourage the use of
compostable and biodegradable products like d2w. We look
forward to providing further updates on this regulation and
commercial progress during 2022.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
13
Investment into the many d2p “Designed to Protect”
technologies and products has continued throughout the
year and whilst various programmes have progressed, the
enhancement of the US FDA approval is undoubtedly a
significant milestone upon which we will build our sales.
Health Canada adds to this important food approval process
for use in bread packaging, thus opening two very large
potential markets plus other territories which follow FDA
regulations. Although the commercial and sales development
process has been slower than anticipated, it continues to
progress satisfactorily. Long-term sales based upon current
negotiations could potentially be a multiple of the Group’s
current revenue. Further announcements are expected to be
made in the near term and throughout 2022.
In addition to plastic packaging applications, we continued
to advance the development and regulatory process of a d2p
antimicrobial/antiviral nitrile glove with Meditech. This process
is expected to complete during 2022 following which we will
start marketing and selling to known customers in the UK,
EU and USA where we have already ongoing negotiations
dependent on the completion of regularity approvals.
I would like to thank the Board, our staff, and distributors
for all their hard work in advancing the business through
globally challenging times into a period where many of our
developments become commercial and cash-generative.
The Board continue to be optimistic that the future
performance of the Group, particularly financially will improve
materially during 2022 and beyond.
N Clavel
Interim Chairman
29 March 2022
Overview 14
Symphony Environmental Technologies plc Annual Report and Accounts 2021
“ The Group continues its
investment programmes
across several areas each
aimed to stimulate new sales
and markets in the short and
medium term including gaining
key regulatory and product
approvals.”
Symphony Environmental Technologies plc Annual Report and Accounts 2021
15
Chief Executive’s Review
The Group continues its investment programmes across
several areas each aimed to stimulate new sales and markets
in the short and medium term including gaining key regulatory
and product approvals. Whilst these regulatory approvals will
create access to material sales in both the UK, EU and US, they
also provide a barrier to entry for potential new entrants.
d2p USA FDA & Canadian approved bread-
packaging technology
This FDA approval represents the successful completion of an
investment and development programme that started nearly
8 years ago and places the Group in a unique sales position in
a new and valuable market, primarily for the USA and Canada
and applicable in other markets such as Latin America. This,
we anticipate could represent a multiple of our current sales
based on continuing negotiations and a full roll-out throughout
these markets and customer product lines.
The FDA’s approval for Symphony’s d2p antimicrobial food
contact technology now applies to all types of polyolefin and
polyester film for wrapping bread, instead of just linear low
density polythene. Low density polythene and polypropylene
are common packaging materials used in bread, which are both
now included. Symphony’s d2p technology is intended to inhibit
the growth of bacteria on the surface of the packaging film
and is vital to a very hygiene-conscious industry. This creates
valuable commercial and financial benefits for our customers.
Customer trials have progressed well in several markets, and we
look forward to providing further positive updates during 2022.
Nitrile disposable gloves made with d2p
technology
In August 2021, Symphony entered into four agreements with
Meditech to expand sales in East Asia and globally. Alongside
Meditech, Symphony has commenced upgrading current
EU CE certification and US FDA registration. Based upon
advice received, we believe these upgrades will be approved
by Q3 2022. It should be noted however that the corporate
agreement with Meditech expired due to the time required to
complete this regulatory work.
Nitrile gloves made with d2p have completed pre-production
trials and have also been successfully tested against ISO
Standards for anti-viral and anti-bacterial performance with kill
rates of at least 99.99%. A recent laboratory test result showed
a coronavirus kill rate of 99.99% within ten minutes.
Further to the work being carried out with Meditech,
negotiations are taking place in the USA (for use in medical
facilities such as hospitals and clinics) and Europe (for large
retail distributors in Spain and Italy) for d2p gloves and other
finished products. These discussions are not yet enshrined
in binding agreements, but anticipated volumes would be
material to Symphony.
India
In November 2021, Symphony agreed to form a joint venture
(“JV”) company in India with Indorama India Private Limited
(“Indorama”), a wholly owned subsidiary of Indorama
Corporation Pte. Ltd., (“Indorama Corporation”). The JV was
completed in February 2022, with shares in the JV company,
called Symphony Environmental India Pvt Ltd (“Symphony
India”), held as to 46.5% by Symphony, 46.5% by Indorama
and 7% by Mr. Arjun Aggarwal, an Indian citizen, who has been
appointed Managing Director of Symphony India.
Sales have already started, with production mainly in India,
under licence from Symphony, being both cost-effective and
environmentally friendly.
d2w
We are seeing a positive impact from the advisory and
advocacy work being carried out for our d2w technology in
Latin America as well as increasing enforcement of favourable
legislation by the relevant authorities in Saudi Arabia. In Latin
America, sales volume grew by 25% during the year with stable
volumes in the Middle East and East Asia in markets where
general demand was affected by Covid-19.
d2p pipeline
In addition to bread-packaging and gloves, the Group has a
developing pipeline of d2p technologies that include flame
retardants, ethylene adsorbers and many formulation variations
of antimicrobial products and masterbatches. Repeat orders
have been received during 2021 for insecticidal and odour
adsorption applications which will be marketed strongly in 2022
together with the Group’s antimicrobial technologies.
Strategic Report 16
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chief Executive’s Review
Continued
Trading results
Group revenue was £9.16 million (2020: £9.77 million) and is
analysed in the table below. Further, revenues of £0.50 million
missed the year end cut-off due to shipping congestion, lack of
containers, and delayed sailings. Gross profit margins decreased
slightly to 39.2% (2020: 42.1%) principally due to increased raw
material prices. In addition, there was a stock impairment of
£0.13 million in relation to gloves purchased during the year
before pricing reduced significantly. As a result, gross profit
decreased to £3.59 million from £4.11 million in 2020.
d2w Masterbatch
d2p Masterbatch
Finished Products
Other
2021
2020
£7.19 million
£7.27 million
£0.45 million
£0.47 million
£1.40 million
£1.80 million
£0.12 million
£0.23 million
Administrative expenses increased to £4.57 million
(2020: £4.14 million) with £0.12 million increase in advisory
costs associated with advisory, legislative, and regulatory
situations in the UK, EU and Latin America. These short-term
discretionary costs will continue into 2022, with some costs
expected to fall away during the second half of the year. Staff
costs increased £0.20 million during 2021 following expansion
of the sales and technical departments, including a new head
of innovation. Distribution costs were £0.15 million higher than
anticipated due to ongoing global shipping issues.
The Group expensed R&D costs of £0.49 million in 2021
(2020: £0.60 million). In addition, there were intangible asset
development cost additions of £0.17 million during the year
in respect to the Group’s d2p bread technology (2020: £nil).
An R&D tax credit of £0.13 million (2020: £0.11 million) was
received during 2021 relating to the previous period. A further
R&D tax credit will be receivable in 2022 with respect to 2021.
The reported operating loss was £1.48 million
(2020: £0.39 million) and loss after tax of £1.41 million
(2020: £0.33 million) with basic loss per share of 0.81 pence
(2020: loss per share 0.19 pence).
The Group’s primary selling currency is the US Dollar and
therefore a strong dollar against sterling, our reporting currency,
is beneficial for the Group. The Group self-hedges its foreign
exchange exposure by purchasing goods where possible
in US Dollars and utilises bank forward currency contract
agreements to minimise exchange risk. As at 31 December
2021, the Group had a net balance of US Dollar assets
(US Dollar cash balances and receivables less overdrafts and
payables) totalling $2.91 million (2020: $1.93 million). To part
offset this, the Group had bank forward currency contracts
to sell 1.50 million US Dollars and receive a fixed amount of
sterling as at 31 December 2021 (31 December 2020:
0.75 million US Dollars).
Balance sheet and cash flow
The Group had net cash of £0.20 million as at 31 December
2021 (2020: £0.47 million). The Group used cash of
£0.60 million from operations (2020: £1.44 million) primarily
as a result of the loss incurred, but mitigated by favourable
movements in receivables and payables. Stock levels
increased substantially during the year and is expected to fall
back to previous levels during the first half of 2022.
During the year, the Group raised net proceeds of £0.75 million
by way of a share placement. The Group also has a
£1.5 million invoice finance facility with HSBC Bank which was
not drawn upon as at 31 December 2021 (2020: £1.5 million).
On the basis of current financial projections, including a
sensitised cash flow analysis, together with available funds and
facilities, including the above invoice finance facility with the
Group’s bankers, the Directors are satisfied that the Group has
adequate resources to fulfil its objectives and opportunities.
EU action
As previously announced, Symphony commenced a legal
action against the Commission, Parliament and Council of
the EU having been advised by three specialists in EU law that
Article 5 of the Directive 2020/904 is unconstitutional. We are
currently waiting for the court to fix a date for an oral hearing
in Luxembourg. This is expected in 2022.
The Defences did not reveal anything unexpected, and
Symphony’s legal team remain confident that the EU acted
unlawfully in imposing a ban on a material which they call
“oxo-degradable plastic” in Article 5 of the Directive. In any
event, Symphony does not accept that the ban applies to
oxo-biodegradable plastics, which are made by incorporating
Symphony’s d2w masterbatch into ordinary plastic, and do not
have any of the undesirable characteristics listed in Recital 15
of the Directive.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
17
Chief Executive’s Review
Continued
Eranova
As announced in October 2020, The Group made an
investment representing 1.6% of the enlarged capital of
Eranova SAS (£123,000 including costs) as part of a €6 million
pre-industrial plant project. The pilot plant was completed
on schedule during October 2021 and is operational and
processing small volume commercial orders. We expect
further positive developments during 2022.
Ukraine
The Board is deeply concerned with events in Ukraine and hopes
for a speedy and amicable conclusion to the current horrific
situation. Symphony has no business ties with Russia and whilst
we have not seen any further increase to our raw material costs,
these events may impact future raw material costs as most of
the Group’s products are derivatives of oil and gas.
Covid-19
In the latter part of the year, Covid-19 started to affect some
of our markets which resulted in trials being delayed, together
with erratic and sometimes reduced demand.
Other than the above, the effects to Group operations and
finances have been minimal, while the focus on hygiene has
enhanced interest in our d2p range. There is still the possibility
of disruption to operations (customer or supplier disruption) or
finances (customer bad debt or ability of customers or suppliers
to carry on trading). The Group uses multiple supply sources
and continues in the main to credit-insure receivables, or to do
business on a letter of credit or proforma basis.
Current trading and outlook
Current trade has started to improve following a slow start to
the year, and as set out above, tangible progress is continuing
to be made with our pipeline of development projects. Many of
these are customer led, providing the Board with confidence
that Symphony’s financial performance will be much stronger
in 2022 and beyond. We currently continue to work with high
shipping costs and potential delays. Some raw material costs
have reduced so far in 2022, but this again may become
affected by the current global uncertainties.
d2p USA FDA & Canadian approved bread-
packaging technology
Customer led trials in commercial environments continue for
this innovative d2p technology and small commercial sales
have started, with growing volumes expected in Q2 2022.
Further updates will be made in due course.
Our technical teams and representatives are active in Canada,
USA, Latin America, the Middle East, Pakistan, and South
Africa. These markets have shown strong interest in using our
d2p technology if the local trials confirm the expected positive
results. The sales volumes would be potentially large and
transformative for our business.
Nitrile disposable gloves made with d2p
technology
Regulatory application process has started, and if approved
as expected, will allow the marketing and negotiations to start
and complete for sales in the UK, EU and the US by Q3 2022.
Based on current and ongoing communications with several
key customers and distributors, the Board are confident that
upon regulatory approval being received, the Group will be
able to generate immediate and material revenues from the
sale of d2p enhanced nitrile gloves and d2p additives for glove
production into these significant markets.
d2p pipeline
In addition to antimicrobial bread packaging and gloves, this
pipeline, which covers a global geographic market, has a
number of exciting opportunities expected to complete during
Q2 2022 and throughout the rest of the year.
d2w
The d2w brand has been improved to reflect that our technology
is biodegradable leaving no microplastics or ecotoxicity. This
brand improvement is being well received in key markets such
as Latin America and India where considerable confusion had
been caused by the EU action in relation to oxo-degradable
plastics. These are not the same as oxo-biodegradable plastics,
and both are defined by the EU CEN (European Committee for
Standardisation) in TR15351.
Strategic Report 18
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chief Executive’s Review
Continued
We have continued to strengthen our Middle East operational
infrastructure with local manufacturing being planned for
the second half of 2022 to support a significant increase in
volumes. This is a strategy that we are also using in India where
we are beginning to see increasing interest and sales. In both
the Middle East and India, demand for a low cost, non-disruptive
biodegradable option, supported by legislation changes and
enforcement thereof is expected to materially increase sales in
those regions and potentially further afield as well.
Whilst many of our current deals have taken longer to close
than expected, several are now finally nearing closure.
Individually, each are material to the business but collectively
would be transformational. We have strengthened the sales
and technical teams to match the maturing business, reducing
the reliance on the executive management team, and now
look forward to building from this stronger base in creating
a highly profitable company with low capital expenditure
requirements, and a valuable portfolio of environmental and
health benefitting products.
M Laurier
Chief Executive
29 March 2022
Symphony Environmental Technologies plc Annual Report and Accounts 2021
19
2021 Roundup
In February 2021 Symphony signed an agreement with
Sun Ace in South Africa to promote and distribute our
d2p range of additives - perfect timing given that our d2p
antimicrobial technology had recently proved to be effective
against viruses including coronavirus. Sun Ace are marketing
to several sectors including cling film, plastic-pipe producers,
flooring companies, pvc compounders medical companies
and the food packaging industry among others. Major bread
manufacturers are evaluating our proposal to run a 2nd phase
of trials.
Face masks are a candidate for d2p antimicrobial and also
biodegradable technology as according to a new study
published in December 21 in “Nature Sustainability” the
amount of disposable face-masks littered in the environment
increased by nearly 9,000% from March to October 20 as
we battled the coronavirus pandemic. Personal protective
equipment found its way on to the list of plastic items most
commonly littered, with 29,000 tons of covid-related plastic
reportedly floating in the ocean.
Reducing plastic litter in the environment is our passion, so
we are always working behind the scenes to let governments
and organisations know that there is a viable alternative to
conventional plastic available. With this in mind, we sent a
submission to the Government of New South Wales, after
publication of their discussion paper, ‘Cleaning up our act’
proposing to phase out lightweight plastic shopping bags,
despite the fact that they only represent 0.6% of plastic litter.
We also wrote to the Canadian Environment Minister regarding
their proposals to reduce plastic use and made a submission
to the Scottish Government in response to their draft
Environmental Protection bill (for single-use plastic products
and oxo-degradable plastic products) to ensure that they were
fully informed of the difference between oxo-degradable and
oxo-biodegradable, and the benefits to the environment of
Symphony’s d2w technology.
Our directors regularly speak at conferences. The pandemic
put a stop to face to face appearances, but they still managed
a couple of on-line conferences - appearing at the Pack for
Change summit and the RWM Packaging event.
Some good news in September as Health Canada followed the
FDA in the US and approved our d2p antimicrobial masterbatch
for bread-packaging, which applies to polyolefin and polyester
multi-layer films. This inhibits the growth of bacteria on the
surface of the packaging film and is vital to such a hygiene-
conscious industry.
November was a good month for several reasons, the Scottish
Government issued draft Regulations restricting plastics,
which did not list oxo-biodegradable as a problematic plastic,
and the UK Government gave grants for the development
of oxo-biodegradable technology (sometimes described as
biotransformation) demonstrating an understanding that these
technologies can reduce the problem of plastic litter which
escapes collection for recycling and ends up in the environment.
We were also honoured by the London Stock Exchange to be
one of the winners in the ninth annual Small Cap Awards.
Symphony was awarded ESG Company of the Year for
outstanding global achievements in the ever-important areas
of Environmental, Social and Governance. This award follows
Symphony attaining the ‘Green Economy Mark’ from the
London Stock Exchange, recognising that we derive over 50%
of our activity from the green economy.
It was also fantastic to be able to attend the 15th Arabplast
exhibition in Dubai and to meet potential customers face to
face. We were sharing a stand with our Middle East distributor
Eco-polymers and were very happy to see industry specialists
and experts showcasing advancements and innovations from
all over the world personally, rather than via zoom.
Finally, following on from the successful testing of our
d2p antimicrobial product against viruses including the
Coronavirus, we appointed a new Head of Finished Products
in December. Deborah Styth is a PPE Specialist who will be
leading the development of our antimicrobial product range
and disposable gloves.
Strategic Report 20
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Corporate Social Responsibility
We are committed to reducing our energy requirements and
waste, so we carefully monitor the energy we consume and
the waste we generate. We actively work to avoid pollution and
to help our customers to avoid pollution.
We have worked hard to ensure that we have production
facilities in several locations around the world, to minimise
the transport of products and raw materials and reduce our
carbon footprint.
We have embedded these principles into our business models
and activities.
Our d2w prodegradant technology has been specifically
designed to be consistent with these principles.
In 2021, we were honoured to be voted ESG company of the
year at the small cap awards of the London Stock Exchange.
This was for outstanding global achievement in the important
subjects of Environment, and social governance. In the same
month our Distributor in Brazil was awarded first prize in the
masterbatch category, for their product incorporating both
d2p antimicrobial and d2w biodegradable technologies in
supermarket carrier bags.
In 2022 our Joint-venture company in India was awarded the
prize for scientific innovation in sustainability, and pioneering
efforts "to achieve a better and more sustainable future for
all" at the Vivekananda Sustainability Summit 2022. This
recognises efforts across India to implement the United
Nations’ 17 Sustainable Development Goals.
We are committed to the wider community, and we regularly
provide opportunities for young people in our offices and
laboratory.
This year we are supporting four students, three of whom are
completing their professional training in industry as part of
their undergraduate science degrees, and one on secondment
to the company, who is undertaking a research project for her
PhD in polymer degradation and biodegradation.
We are also pleased to report that a member of our Technical
team has recently completed a Master’s Degree in Analytical
Chemistry, while working at Symphony. His expertise is a great
asset to the company and helps to facilitate our continuing
collaboration with academia and further research and
development of our technologies and products.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
21
Strategic Report
Principal activities, business review and future developments
The primary business activities of the Group are the development and supply of environmental plastic additives and
masterbatches, together with the development and supply of environmental plastic and rubber finished products to a global
market.
A review of the business is given in the Chairman’s Statement on pages 12-13 together with the Chief Executive’s Review on
pages 15-18. Future developments are summarised in the Current Trading and Outlook section of the Chief Executive’s Review on
page 17.
Key performance indicators
The Directors have monitored the progress of the overall Group strategy by reference to certain financial and non-financial key
performance indicators.
Key performance indicator
Revenue (£’000)
Gross profit margin (%)
Number of distributors
2021
9,161
39.2%
77
2020
9,766
42.1%
72
Method of calculation
Revenues for the Group.
The ratio of gross profit to sales.
Number of distribution agreements
These are discussed within the Chairman’s Statement and Chief Executive’s Review.
Research and development
The Group invests in research and development expenditure and an amount of £494,000 (2020: £600,000) are included in the
operating loss for the year. Development expenditure of £166,000 (2020: £nil) has been incurred during the year as an addition to
intangible fixed assets. See note 12.
The Group makes claims under the Government’s R&D tax credit scheme. See note 8.
Section 172 report
The Section 172 Report is shown on page 22.
Principal risks and uncertainties
The Principal Risks and Uncertainties of the Group are shown on page 23.
Approval
The Strategic Report was approved on behalf of the Board on 29 March 2022.
M Laurier
Chief Executive
29 March 2022
Strategic Report 22
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Section 172 Report
This report describes how the Directors have regard to the matters set out in section 172 (1) (a)
to (f) of the Companies Act 2006 when performing their duties. This report should be read in
conjunction with the Chairman’s Statement on pages 12-13 and Chief Executive’s Review on
pages 15-18.
Shareholders
The Board’s main duty is to promote the Company and
Group for the benefit of shareholders and it does this by
developing products which it believes will be commercially
successful, and by implementing routes and channels in
order to maximise revenues generated by these products.
The Board considers this in the long-term and has over many
years developed its networks of customers and distributors,
and extensive product offerings. The Board uses its regular
meetings to oversee strategy implementation and challenge
when necessary. The Company discusses its activities and
plans with its corporate advisors and brokers who are able
to review and advise considering the Company’s wider
shareholder base. Regular communications are carried out
with larger shareholders. Any communications received from
shareholders are responded to in good time.
Communities and the environment
Symphony is built around sustainability and commitment
to the environment and is constantly searching for ways to
further protect the natural and human world. The Group’s suite
of d2w and d2p products have been developed with human
health and the environment in mind. The Board believes that
the Group’s technologies enable end users to fulfil many of
their own community and environmental criteria. The Group
also uses factories located as close to its customers as
possible, reducing the transport carbon footprint.
The Group and its associates are constantly engaged with
governmental decision makers and associated organisations
around the world in order to input on developing key packaging
regulations. The Group is on the approved lists of many
governmental regulatory authorities including SASO (Saudi
Arabia) and ESMA (UAE).
Employees
The Board is committed to a culture of openness and
integrity. There is an open-door policy for all staff, and the
executives make themselves available to all members of
staff at all times. The Group also has heads of departments
who are responsible for day to day management of staff,
which ensures meeting agendas, change management and
other topics include input from all of the Group’s staff. This
also allows for effective dialogue and feedback between the
executives and staff via the department heads. Staff training is
actively encouraged and the Group is certified to ISO 9001 and
ISO 14001.
Distributors, customers and suppliers
The Group operates an extensive distributor network with a
number of distributors selling Symphony’s products for ten
years or more. The Group works alongside its distributors in
helping end-customers with their packaging solutions. Every
three years, the Group holds distributor conferences and
works alongside them at exhibitions held globally. The Group
has dedicated teams managing the distribution network on
a regional basis which allows for input from, and dialogue
with, the Group’s distributors on areas that affect them.
Meetings are also held regularly between the executives and
the distributors. The Group uses a small number of dedicated
suppliers and works with them on many areas of product
development. The executives also meet with key suppliers
from time to time.
Key decisions made during the year
During the year the Board made certain decisions relating to
the operations of the Group and developments of its products.
Three key decisions were:
o An application was made to reapply for a widened technical
scope of its FDA approved d2p antimicrobial bread film
technology. This was successful and enables greater
commercial opportunities where FDA approval is recognised;
o In order to maximise opportunities in one of the Group’s key
regions, India, the Group agreed to form a joint venture with
Indorama Corporation. Though this may sacrifice some
control, this is far outweighed by the partners expertise which
is expected to bring a more rapid penetration of the market.
The joint venture was completed after the period end; and
o A strategy to strengthen the intellectual property owned by
the Group by applying for patents for some of the Group’s
developed technologies.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
23
Principal Risks and Uncertainties
The Board is responsible for developing a comprehensive risk framework and a system of internal controls. We have identified the
following as the principal risks and uncertainties the Group faces.
Principal Activity
Principal Risk
Impact
Mitigation
Political and
Regulatory Risk
Negative government
policy
The Group may not be able to market or sell
products in areas where there are regulations
in place which favour other technologies or
are explicitly negative towards the Group’s
technologies.
The Group mitigates this risk by having a
large and well-established global footprint
and by being active in international standards
committees, as well as liaising with
appropriate governmental departments.
Publicity Risk
Negative media
comments
Market Risk
Market competition
Operational Risk
Commodity pricing
and availability
Financial Risk
Foreign exchange rate
fluctuation
The Group’s products are in a high-profile
area with a number of organisations
competing for mainstream technological
acceptance. This may lead to negative
comments in the media who may prefer
these other technologies over the Group’s.
The Group faces competition from suppliers
of similar products which could affect
revenues and/or gross margins.
The Group mitigates this risk with active
public relations activities both in house and
use of external resources.
The Group mitigates this risk by having a
large number of distributors globally who can
concentrate on any competition issues within
their market, and also by differentiating the
Group and its products by branding and
marketing activities.
The Group uses commodity and speciality
materials in the make-up of its products.
There is a risk of price volatility and material
availability.
The Group mitigates this risk by using more
than one supplier of its raw materials and
continually researching separate supply
alternatives for the materials used.
The Group sells products in many countries
and generates revenues in US Dollars and
Euros. Foreign exchange rates fluctuate and,
as such, assets created in foreign currencies
are liable to constant revaluations into their
Sterling equivalent.
The Group mitigates this risk by purchasing,
where practicable, in currencies to match
revenues. The Group also has foreign
exchange forward contracts and other
facilities with its bank to use as and when
appropriate.
Other Risks
COVID-19
Ukraine
Covid-19 is causing general uncertainty
which has affected shipping costs and transit
times as well as causing delays in trials being
undertaken.
The invasion in Ukraine has not impacted the
business but may affect raw material costs
in the future with plastic being a by-product
of oil and gas.
The Group uses multiple supply sources and
manufactures products in multiple locations.
Strategic Report 24
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Board of Directors
Michael
Laurier
Ian
Bristow
Michael
Stephen
Chief Executive Officer
Chief Financial Officer
Commercial Director &
Deputy Chairman
Appointed to the Board:
4th December 1998
Committee Membership:
None
Appointed to the Board:
4th December 1998
Committee Membership:
None
Appointed to the Board:
3rd August 2007
Committee Membership:
None
Background and Experience:
Michael Laurier is the Chief Executive of
the Company. Michael’s career began with
his long-established family packaging
business, Brentwood Sack and Bag Co
Limited. He took over responsibility for
sales and production in the mid-seventies
and changed the emphasis of the
company’s business from jute products
to polythene packaging, introducing the
then innovative high density and medium
density polythene bags into the UK market
in 1975. He co-founded Symphony
Plastics in 1995.
Background and Experience:
Ian Bristow was in private practice for
seven years, qualifying as a Chartered
Certified Accountant in 1992. In 1994, he
joined Brentapac UK Plc until it was sold in
1994. He went on to co-found Symphony
in 1995 and has been Finance Director/
Chief Financial Officer and Company
Secretary of the Group since inception.
Background and Experience:
Michael Stephen was a member of the UK
Parliament from 1992 to 1997 and was a
member of the Trade and Industry Select
Committee and the Environment Select
Committee of the House of Commons, and
was Parliamentary Private Secretary at the
Ministry of Agriculture. He is Commercial
Director and Deputy Chairman of the plc,
and Chairman of its subsidiary companies
since 2007. He qualified as a Solicitor with
Distinction in Company Law. He was called
to the Bar, and practised from chambers
in London for many years, dealing with
civil cases in the High Court and Court of
Appeal.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
25
Nicolas
Clavel
Robert (Bob)
Wigley
Shaun
Robinson
Alexander
Brennan
Independent Non-
Executive Director &
Interim Chairman
Independent Non-
Executive Director
Non-Executive
Director
Executive Director
Appointed to the Board:
16th October 2008
Appointed to the Board:
6th April 2018
Appointed to the Board:
19th December 2014
Appointed to the Board:
18th May 2022
Committee Membership:
Audit, Remuneration
(Chairman)
Background and Experience:
Shaun Robinson has over
25 years’ corporate finance,
restructuring and active asset
management experience
and is a Chartered Certified
Accountant. Shaun specialises
in business development, M&A
and tax/corporate structuring
and management oversight.
Committee Membership:
Audit (Chairman),
Remuneration
Background and Experience:
Nicolas Clavel started his
career in international banking
in the mid-seventies and his
area of expertise has been
structured trade finance
and equity investments
with a particular focus on
Emerging Markets. He is Chief
Investment Officer of Scipion
Capital Ltd, (the Investment
Manager of Scipion African
Opportunities Fund SPC).
Nicolas is Swiss, and is based
in London and Geneva.
Committee Membership:
None
Background and Experience:
Bob is Chairman of UK
Finance, Secure Broadcast
Ltd, Vesta Global Holdings
Ltd and Bink Ltd. He is
Non-Executive Director of
the Qatar Finance Centre
Authority. From 2004-2009
he was Chairman of Merrill
Lynch EMEA. He is a former
member of the Court of the
Bank of England and a former
NED of Royal Mail Group. In
2009 he chaired the Green
Investment Bank Commission
for the then Chancellor of the
Exchequer. He is an Honorary
Fellow of Judge Business
School, Cambridge University
and a Visiting Fellow of Oxford
University’s Saïd Business
School.
Committee Membership:
None
Background and Experience:
Alexander Brennan is an
Executive Director of the
Company. The Founder and
CEO of Brennan & Partners,
Alexander has two decades’
experience of delivering
growth for businesses, both as
a principal and as an advisor.
He is a Non-Executive Director
of Big Technologies PLC.
Prior to founding Brennan &
Partners in 2016, he was the
CEO of a global infrastructure
investment business, with
investors drawn from Europe,
the Middle East and Asia.
This role built upon five
years of international sales
and business development
experience with De La Rue PLC,
working firstly in Europe and
then the Americas. He began
his career at Slaughter and
May, where he practised as a
corporate lawyer in London for
several years.
Governance
26
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chairman’s Corporate
Governance Statement
Dear Shareholder
As Interim Chairman of the Board of Directors of Symphony
Environmental Technologies plc (“Symphony”, the “Company”,
or, together with the subsidiary companies, the “Group”), it is
my responsibility to ensure that Symphony has both sound
corporate governance and an effective Board. As Chairman,
my responsibilities include leading the Board effectively,
overseeing the Company’s corporate governance model, and
ensuring that information flows freely between Executives and
Non-Executives in a timely manner.
It is the Board’s job to ensure that Symphony is managed
for the long-term benefit of all shareholders, with effective
and efficient decision-making. Corporate governance is
an important part of that role, reducing risk and adding
value to our business. Our role as a Board is to create the
conditions in which a resilient and successful business can
continue to grow. Annually we review and determine our
strategy and business model and then continuously monitor
how management is implementing those plans. We review
performance to ensure those plans remain on track or else are
modified to take account of unforeseen circumstances.
The Directors of Symphony recognise the value of good
corporate governance in every part of its business.
As Symphony is an AIM listed company, it is required to
have adopted a recognised corporate governance code and
disclose how it complies with that code and, to the extent
Symphony departs from the corporate governance provisions
outlined by that code, it must explain its reasons for doing
so. The Directors continue to adopt the Quoted Companies
Alliance Corporate Governance Code (the “QCA Code”),
which we believe is the most appropriate for a company of
the size and stage of development of Symphony. The Board
considers that compliance with the QCA Code enables us to
serve the interests of all our key stakeholders, including our
shareholders, and will promote the maintenance and creation
of long-term value in the Company. This report describes our
approach to governance, including information on relevant
policies, practices and the operation of the Board and its
Committees. Additional detail is also provided in the corporate
governance statement on our website.
The Board considers that Symphony complies with the QCA
Code so far as is practicable, having regard to the Group’s
current stage of evolution. A statement detailing both how the
Company complies with the QCA Code, and areas of non-
compliance, is outlined below.
QCA Principles:
1. Establish a strategy and business model which
promotes long-term value for shareholders
The principal activity of the Group is the development and
supply of environmental plastic additives and masterbatches,
together with the development and supply of environmental
plastic and rubber finished products to a global market. The
Board has concluded that the Group’s strategy of driving sales
of its d2w range of products through its network of distributors
will deliver the highest medium and long-term value to its
shareholders. In addition, the Board is focused on increasing
revenues generated by its d2p (designed to protect) range of
products and technologies.
The Board intends to deliver shareholder returns through
capital appreciation. Challenges to delivering strategy and
long-term goals are governmental policy (both preventative
and adoptive), market competition, foreign exchange risks and
raw material price volatility and availability, all of which are
outlined in Principle Risks and Uncertainties on page 23, as
well as steps the Board takes to protect the Group, mitigate
these risks and secure a long-term future for the Group.
2. Seek to understand and meet shareholder
needs and expectations
Symphony places a great deal of importance on
communication with its stakeholders and is committed to
establishing constructive relationships with investors and
potential investors in order to assist it in developing an
understanding of the views of its shareholders. Beyond the
Annual General Meeting, the Chief Executive Officer (CEO),
Chief Financial Officer (CFO) and, where appropriate, other
members of the senior management team meet regularly
with investors and analysts to provide them with updates on
the Group’s business and to obtain feedback regarding the
market’s expectations of the Group.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
27
Chairman’s Corporate Governance Statement
Continued
The Group’s investor relations activities encompass dialogue
with both institutional and private investors. In addition, the
Company communicates with its shareholders through its
website, RNS and RNS Reach announcements, investor
relations web interviews, investor shows, and the Company’s
Annual Report and Accounts.
The Annual General Meeting of the Company, normally
attended by all the Directors, provides the Directors the
opportunity to report to shareholders on current and proposed
operations, and enables the shareholders to express their
views of the Group’s business activities. Shareholders are
invited to ask questions during the meeting and to meet with
Directors after the formal proceedings have ended. The CEO is
considered the key contact for shareholder liaison.
Information on the Corporate Information section
of the Group’s Information on the website,
www.symphonyenvironmental.com/corporate-information, is
kept updated and contains details of relevant financial reports,
presentations and other key information.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-
term success
Symphony recognises that the Group’s long-term future
depends on environmental and social performance. Excellence
in operational performance generates financial returns,
however, enduring sustainable growth depends on being a
responsible global citizen and earning the continued support
of our customers, shareholders, communities and staff.
All of Symphony’s stakeholders are encouraged to provide
feedback to the Company by emailing info@d2w.net. The
Company is open to receiving feedback from key stakeholders,
and will take action where appropriate.
The Board recognises its responsibility to manage a business
whilst acknowledging the Group’s responsibility for the
environment and helping its customers make the most
environmentally-beneficial purchasing decisions. As the
whole concept of Symphony is built around sustainability and
commitment to the environment, we are constantly searching
for ways to continue to protect the natural and human world.
The Group’s strategy is focused on providing environmentally-
friendly plastic solutions, as well as plastic solutions which
augment healthcare, food preservation and other human
protection requirements, demonstrating the Group’s
commitment to Corporate Social Responsibility. Furthermore,
Symphony Environmental Limited (the Company’s trading
subsidiary) is BSI certified to ISO 9001 and 14001. The Group
also has an Environmental Policy in place.
All employees within the Group are valued members of the
team, and the Board seeks to implement provisions to retain and
incentivise its employees. The Group offers equal opportunities
regardless of race, gender, gender identity or reassignment, age,
disability, religion or sexual orientation. The Company’s Executive
Directors regularly meet managers to discuss staff comments,
progress and well-being, and employees are also encouraged to
engage directly with Directors. This allows the Board to obtain
feedback from employees. Symphony has Anti-Corruption and
Health and Safety policies in place.
At the ninth annual Small Cap Awards held in November 2021,
The Company was the winner of “ESG Company of the Year”
for its outstanding global achievements in Environmental,
Social and Governance. The Company is also a holder of the
LSE Green Economy Mark. Further information in relation to the
Company’s corporate social responsibility and copies of the
above-stated policies can be found on the Company’s website
www.symphonyenvironmental.com/corporate-information.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
The Board recognises the need for an effective and well-
defined risk management process and it oversees and
regularly reviews the current risk management and internal
control mechanisms. The Company’s key risks can be found in
Principal Risks and Uncertainties on page 23.
The Board has overall responsibility for identifying, monitoring
and reviewing the Company’s risks, and assessing the systems
of external control for effectiveness. They are also responsible
for updating and maintaining the Company’s risk register,
which evaluates the impact of identified risks, as well as their
mitigations. The Executive Directors report any new or changed
risks, and any changes in risk management/control to the
Board. The Board discusses all business matters having regard
to the risk for the Group and to the extent that risks inherent in a
particular activity are considered significant, appropriate action
is taken and steps taken to mitigate the issue.
The Board is satisfied that the procedures in place meet the
particular needs of the Group in managing the risks to which
it is exposed. The Board is satisfied with the effectiveness of
the system of internal controls, but by their very nature, these
procedures can provide reasonable, not absolute, assurance
against material misstatement or loss. The Board has delegated
Governance 28
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chairman’s Corporate Governance Statement
Continued
responsibility to the Audit Committee for ensuring that the
Company’s management has designed and implemented an
effective system of internal financial controls and for reviewing,
monitoring and reporting on the integrity of the consolidated
financial statements of the Company and related financial
information. The Audit Committee will maintain effective
working relationships with the Board of Directors, executive
management, and the external auditors and will monitor the
independence and effectiveness of the auditors and the audit.
The Board has reviewed the need for an internal audit function
and has decided that, given the nature of the Group’s business
and assets and the overall size of the Group, the systems and
procedures currently employed provide sufficient assurance
that a sound system of internal controls are in place, which
safeguards the shareholders’ investment and the Group’s assets.
An internal audit function is therefore considered unnecessary.
However, the Board will continue to monitor the need for this
function.
5. Maintain the Board as a well-functioning,
balanced team led by the Chair
The Board comprises three Executive Directors, Michael
Laurier, Ian Bristow and Michael Stephen, and three
Non-Executive Directors, Shaun Robinson, Nicolas Clavel
and Robert Wigley. Nicolas Clavel is currently the Company’s
Interim Chairman. Nicolas Clavel and Robert Wigley are
each regarded as Independent Directors by the Board
notwithstanding that they hold a small number of shares and
also hold options over Ordinary Shares. The Board considers
that both Nicolas Clavel and Robert Wigley have demonstrated
the utmost regard for independence, appropriately challenging
the Board and maintaining high standards of corporate
governance on the Board. Neither Nicolas nor Robert represent
any shareholder on the Board and both have a background
in finance within regulated industries. Accordingly, the Board
believes that both Nicolas and Robert exercise independent
judgement in all matters relating to the Group.
Shaun Robinson has an interest in Somerston Environmental
Technologies Limited, which has a holding of 18.81% in the
Group. For this reason he is not considered independent as
required by the QCA Code. Shaun Robinson adds value with
extensive knowledge of corporate, finance and public affairs. The
Board is satisfied it has a suitable balance between independence
on the one hand, and knowledge of the Company on the other.
Biographies for each of the Directors are outlined on page 24.
Board meetings are open and constructive, with every
Director participating fully. Senior management are also
invited to meetings when required, providing the Board with a
thorough overview of the Group. The Board aims to meet at
least four times in the year and, together with the Audit and
Remuneration Committees, deals with all important aspects of
the Group’s affairs. The Committees have the necessary skills
and knowledge to discharge their duties effectively. The Group
considers that, at this stage of its development and given
the current size of its Board, it is not necessary to establish
a formal Nominations Committee. Instead, appointments to
the Board are made by the Board as a whole. This position,
however, is reviewed on a regular basis by the Board.
Attendance at Board and Committee Meetings for 2021 is shown below.
Director
Position
Michael Laurier
Chief Executive Officer
Ian Bristow
Chief Financial Officer
Michael Stephen
Commercial Director & Deputy Chairman
Nicholas Clavel
Non-Executive Director & Interim Chairman
Shaun Robinson
Non-Executive Director
Robert Wigley
Non-Executive Director
Board Meetings
attended in 2020
Audit Committee
meetings
Remuneration
Committee
meetings
8/9
9/9
9/9
9/9
9/9
8/9
–
–
–
2/2
2/2
–
–
–
–
1/1
1/1
–
Symphony Environmental Technologies plc Annual Report and Accounts 2021
29
Chairman’s Corporate Governance Statement
Continued
In order to be efficient, the Directors meet formally and
informally both in person or where this is not possible, by
internet conference, and by telephone. The Board receives
timely information in a form and of a quality appropriate to
enable it to discharge its duties. Board papers are circulated
by email with sufficient time before meetings, allowing time
for full consideration and necessary clarifications before the
meetings. Board papers are compiled into a board pack for the
meetings themselves.
All Directors of the Board have sufficient time, availability,
skills and expertise to perform their roles and this is regularly
reviewed by the Board. The Board has considered other
roles that each Non-Executive Director has outside of the
Company and consider that they are able to devote such time
as is necessary for the proper performance of their duties
and attend all Board meetings, unless prior good reason is
provided in advance.
The Company has two Committees, an Audit Committee
and a Remuneration Committee. The Committees have the
necessary skills and knowledge to discharge their duties
effectively. As with Board papers, Committee papers are
drafted and circulated to members of the Committee with
sufficient time before the meeting.
The Company has effective procedures in place to monitor
and deal with conflicts of interest. The Board is aware of the
other commitments and interests of its Directors, and changes
to these commitments and interests are reported to and,
where appropriate, agreed with the rest of the Board.
6. Ensure that between them the Directors have
the necessary up-to-date experience, skills and
capabilities
The Company believes that the current balance of skills in
the Board as a whole reflects a very broad range of personal,
commercial and professional skills. The Directors’ varied
backgrounds and experience give Symphony a good mix of the
knowledge and expertise necessary to manage the business
effectively (see biographies on page 24).
Ian Bristow is Symphony’s Company Secretary and is
responsible for ensuring that Board procedures are followed
and that the Company complies with all applicable rules,
regulations and obligations governing its operation, as well
as helping the Chairman maintain standards of corporate
governance.
There are processes in place enabling Directors to take
independent advice at the Company’s expense in the
furtherance of their duties, and to have access to the advice
and services of the Company Secretary.
In order to keep Director skillsets up to date, the Board uses
third parties to advise the Directors of their responsibilities as
a Director of an AIM company, which includes receiving advice
from the Company’s nominated adviser and external lawyers.
External advice is sought for material legal and regulatory
matters when required. During the year external advice was
sought in relation to a legal case taken against the European
Union and US regulatory advice in respect to the Groups d2p
technology for bread wrapping. The Board encourages Directors
to receive training on relevant developments if required.
The Board reviews the appropriateness and opportunity for
continuing professional development in order to keep each
Director’s skillset up-to-date.
The Board will seek to take into account any Board imbalances
for future nominations. The Company is committed to a
culture of equal opportunities for all employees regardless
of gender. The Board aims to be diverse in terms of its range
of culture, nationality and international experience. All six
Board members are currently male. If it is agreed to expand
the Board, the Board will, subject to identifying suitable
candidates, look to fill at least one of the vacancies with
a female Director. The current position as Chairman is an
interim measure and the Board will seek a suitable permanent
Chairman when appropriate.
If required, the Directors are entitled to take independent legal
advice and if the Board is informed in advance, the cost of the
advice will be reimbursed by the Company. In addition to their
general Board responsibilities, Non-Executive Directors are
encouraged to be involved in specific workshops or meetings,
in line with their individual areas of expertise. The Board
shall review annually the appropriateness and opportunity
for continuing professional development, whether formal or
informal.
7. Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The structure of the Board is subject to continual review to
ensure that it is appropriate for the Company. The Board
currently runs a self-evaluation process on Board effectiveness.
It is intended that the Board will create a more formal Board
evaluation process in the future, which will focus more closely
on defined objectives and targets for improving performance.
Governance 30
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chairman’s Corporate Governance Statement
Continued
In Board meetings/calls, the Directors discuss areas where
they feel a change would be beneficial for the Group taking
appropriate advice when required.
The Company has not yet adopted a policy on succession
planning, in particular with regard to the Company’s Chief
Executive, Michael Laurier. The Chief Executive is however
required to give one months’ notice under his contract of
employment if he wishes to leave the Company. The Board is
considering succession planning as part of its regular review
of Board effectiveness and will implement a policy at the
appropriate time.
The Board is committed to undertaking reviews of Board and
Committee performance and of individual Board members
which will be carried out regularly as part of a board
performance evaluation and in particular that:
o their contribution is relevant and effective;
o that they are committed; and
o where relevant, they have maintained their independence.
There were no formal evaluations undertaken during the year.
8. Promote a corporate culture that is based on
ethical values and behaviour
The Board recognises that its decisions regarding strategy
and risk will impact the corporate culture of the Group as a
whole and that this will impact performance. The Board is
aware that the tone and culture set by the Board will greatly
impact all aspects of the Group as a whole and the way that
employees behave. The corporate governance arrangements
that the Board has adopted are designed to ensure that the
Group delivers long term value to its shareholders, and that
shareholders have the opportunity to express their views and
expectations for the Group in a manner that encourages open
dialogue with the Board.
A large part of the Group’s activities are centred upon an open
and respectful dialogue with employees, customers and other
community and environmental stakeholders. Therefore, the
importance of sound ethical values and behaviour is crucial to
the ability of the Group to successfully achieve its corporate
objectives and successfully promote its eco-friendly products.
The Board places great importance on this aspect of corporate
life and seeks to ensure that this flows through all that the
Group does.
The Directors consider that at present the Group has an open
culture facilitating comprehensive dialogue and feedback
and enabling positive and constructive challenge. The
Executive Directors regularly meet managers and discuss
staff well-being, development and staff feedback. Employees
are encouraged to engage directly with Directors, and the
Group seeks to promote Group values and behaviour through
a top-down approach. Symphony also has an employee
handbook.
Furthermore, Symphony has a number of policies in place
aimed to protect its staff, such as Anti-corruption and
Health and Safety, as well as an Environmental Policy. The
Environmental Policy is focused on supplying the most
environmentally beneficial products to its customers,
and to purchase and sell products which can be re-used,
recycled and will biodegrade, demonstrating the Company’s
commitment to its corporate social responsibility. As stated
above, Symphony’s trading subsidiary is also BSI certified to
ISO 9001 and 14001.
The Company has adopted a Share Dealing Policy which is
intended to assist the Company and its staff in complying with
their obligations under the Market Abuse Regulation (“MAR”)
which came into effect in 2016. The Policy addresses the
securities dealing restrictions set out in MAR and reflects the
requirements set out in the AIM Rules.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the Board
The Board is committed to, and ultimately responsible for, high
standards of corporate governance, and has chosen to adopt
the QCA Code. The Board reviews its corporate governance
arrangements regularly and expects them to evolve these over
time, in line with the growth of the Group. The Board delegates
responsibilities to certain Committees and individuals as it
sees fit.
The Chairman’s principal responsibilities are to ensure that
the Company and its Board are acting in the best interests of
shareholders, and leadership of the Board is undertaken in a
manner which ensures that the Board retains its integrity and
effectiveness, with the right Board dynamic and ensuring that
all important matters, in particular strategic decisions, receive
adequate time and attention at Board meetings.
The CEO has, through powers delegated by the Board, the
responsibility for leadership of the management team in the
execution of the Group’s corporate strategies and for the
day-to-day management of the business. The CEO can be
assisted in his duties by the other Executive Directors. The
CEO for Symphony is also the principle contact for liaison
with shareholders and, together with the CFO, all other
stakeholders.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
31
Chairman’s Corporate Governance Statement
Continued
The Non-Executives Directors are tasked with constructively
challenging the decisions of executive management and
satisfying themselves that the systems of business risk
management and internal financial controls are robust.
The Executive Directors seek regular counsel from the
Non-Executive Directors outside of Board meetings.
Whilst the Board has not formally adopted appropriate
delegations of authority setting out matters reserved to the
Board, there is effectively no decision of any consequence
made other than by the Directors. All Directors participate
in the key areas of decision-making, including the following
matters:
o oversee the Group’s strategic objectives and policies;
o review of performance and controls;
o oversee all aspects of the Company’s finances;
o decide on key business transactions;
o manage risk; and
o manage the interests of all stakeholder groups.
The Board delegates authority to two Committees to assist
in meeting its business objectives whilst ensuring a sound
system of internal control and risk management. The
Committees meet independently of Board meetings. The
committees are currently being reviewed in relation to the
number of independent members.
Audit Committee
The Audit Committee Report is on page 37.
Committee members and attendance
The Audit Committee currently comprises Nicolas Clavel
(Chair) and Shaun Robinson. The Board is in the process of
reviewing the members as Nicolas Clavel is currently also
Interim Chairman of the Board.
The Board considers that Nicolas Clavel has sufficient relevant
financial experience to chair the Audit Committee given that he
has over 30 years’ experience in financial services and is Chief
Investment Officer of Scipion Capital Limited. Shaun Robinson
is a Chartered Certified Accountant.
The Committee is required by its terms of reference to meet
at least twice a year. The Committee Chairman may invite
other Directors or executives of the Company and any external
advisors to attend all or part of any meetings as and when
deemed appropriate.
Objectives and responsibilities
The Committee is responsible for monitoring the integrity of
the Group’s financial statements, including its Annual and
Interim Reports, preliminary results announcements and
any other formal announcements relating to its financial
performance prior to release.
The Committee’s main responsibilities can be summarised as
follows:
o to review the Group’s internal financial controls and risk
management systems;
o to monitor the integrity of the financial statements and any
formal announcements relating to the Group’s financial
performance, reviewing significant judgements contained
in them;
o to make recommendations to the Board in relation to the
appointment of the external auditors and to recommend to
the Board the approval of the remuneration and terms of
engagement of the external auditors;
o to review and monitor the external auditors’ independence
and objectivity, taking into consideration relevant UK
professional and regulatory requirements;
o to develop and implement policy on the engagement of the
external auditors to supply non-audit services, taking into
account relevant ethical guidance regarding the provision of
non-audit services by the external auditors; and
o to report to the Board, identifying any matters in respect of
which it considers that action or improvement is needed,
and to make recommendations as to steps to be taken.
Remuneration Committee
The Remuneration Committee Report starts on page 38.
Committee members and attendance
Symphony’s Remuneration Committee currently comprises
Shaun Robinson (chair) and Nicolas Clavel. The Board
considers that Shaun Robinson has sufficient relevant
experience to chair the Remuneration Committee, given that
he is a Chartered Certified Accountant, with over 25 years’
experience in the financial operation and management
oversight of a number of businesses. The Board is in the
process of reviewing the members as Nicolas Clavel is
currently also Interim Chairman of the Board.
Governance 32
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Chairman’s Corporate Governance Statement
Continued
The Chair and the Board continue to monitor and evolve the
Company’s corporate governance structures and processes,
and maintain that these will evolve over time, in line with the
Company’s growth and development.
10. Communicate how the company is governed
and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board is committed to maintaining effective
communication and having a constructive dialogue with its
shareholders, other relevant stakeholders and prospective
investors. The Company intends to have ongoing relationships
with both its private and institutional shareholders (through
meetings and presentations) as well with analysts, and for
them to have the opportunity to discuss issues and provide
feedback at meetings with the Directors.
In addition, all shareholders are encouraged to attend
the Company’s Annual General Meetings. All 2021 AGM
resolutions were passed comfortably. The Board already
discloses the result of general meetings by way of an
announcement, which discloses the proxy voting numbers
to those attending the meetings. The Company has not
historically announced the detailed results of shareholder
voting to the market but it intends to do so for future General
Meetings. The Board intends that, if there is a resolution
passed at a General Meeting with 20% or more votes against,
the Company will seek to understand the reason for the result
and, where appropriate, take suitable action.
The Corporate Information section of the Group’s website,
www.symphonyenvironmental.com/corporate-information is
kept updated and contains details of relevant financial reports,
corporate videos/presentations and other key information.
N Clavel
Interim Chairman
29 March 2022
The Committee is required by its terms of reference to meet
at least once a year. The Committee Chairman may invite
other Directors or executives of the Company and any external
advisors to attend all or part of any meetings as and when
deemed appropriate.
Objectives and responsibilities
The Remuneration Committee’s main responsibilities can be
summarised as follows:
o To determine the framework or broad policy for the
remuneration of the Executive Directors, and such other
senior executives as it is requested by the Board to
consider. The remuneration of the Non-Executive Directors
shall be a matter for the executive members of the Board.
No Director shall be involved in any decisions as to their
own remuneration;
o To determine such remuneration policy, taking into account
all factors which it deems necessary (including relevant
legal and regulatory requirements);
o To review the ongoing appropriateness and relevance of
the remuneration policy, including policy comparisons with
market competitors;
o To design and determine targets for any performance
related pay schemes operated by the Company and
approving the total annual payments made under such
schemes;
o To review the design of, and any changes to, all share
incentive plans;
o To advise on any major changes in employee benefits
structures throughout the Company or Group; and
o To consider any matter specifically referred to the
Committee by the Board.
Terms of reference for the Audit and
Remuneration Committees are available at:
https://www.symphonyenvironmental.com/corporate-
information/corporate-governance
Nomination Committee
The Group considers that, at this stage of its development and
given the current size of its Board, it is not necessary to establish
a formal Nominations Committee. Instead, appointments to the
Board are made by the Board as a whole. This position however,
is reviewed on a regular basis by the Board.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
33
Directors’ Report
The Directors present their report and the audited annual report
and accounts of the Group for the year ended 31 December 2021.
Directors
Principal activity
Symphony Environmental Technologies plc is a public limited
company incorporated in England and Wales, registered number
03676824, with registered office at 6 Elstree Gate, Elstree
Way, Borehamwood, Hertfordshire, WD6 1JD. The Company is
quoted on the AIM market of the London Stock Exchange.
The principal activity of the Group is the development and
supply of environmental plastic additives and masterbatches,
together with the development and supply of environmental
plastic and rubber finished products to a global market.
Review of business and future
developments
The Strategic Report on page 21 provides a review of the
business, the Group’s trading for the year ended 31 December
2021, key performance indicators, and an indication of future
prospects and developments. Page 23 presents the principal
risks and uncertainties facing the business. The Directors
as referred to in these annual report and accounts are the
directors of Symphony Environmental Technologies plc only.
Results and dividends
The trading results for the year and the Group’s financial
position at the end of the year are shown in the attached
annual report and accounts.
The loss for the year after taxation amounted to £1,406,000
(2020: loss £328,000).
The Directors do not recommend the payment of a dividend
(2020: £nil).
The results for the year ended 31 December 2021 are set out
in the consolidated statement of comprehensive income on
page 47.
The Directors who served during the year ended 31 December
2021 and up to the date of signing the financial statements
were as follows:
N Clavel – Non-Executive Director & Interim Chairman
M Laurier – Chief Executive Officer
I Bristow FCCA – Chief Financial Officer
M Stephen – Commercial Director & Deputy Chairman
S Robinson – Non-Executive Director
R Wigley – Non-Executive Director
In accordance with the Articles of Association, one third of the
Directors must retire by rotation from office at each AGM.
Directors’ interests
The Directors in office at the end of the year, together with
their beneficial interests in the shares of the Company, were as
follows:
Ordinary Shares of
£0.01 each
At 31 December
2021
At 1 January
2021
M Laurier
I Bristow
M Stephen
N Clavel
S Robinson
R Wigley
23,424,316
23,424,316
1,163,731
1,352,176
550,000
1,163,731
1,352,176
550,000
11,518,248
11,518,248
200,000
200,000
Details of the Directors’ interests in options granted under
the Group’s share scheme are set out in the Remuneration
Committee Report on page 38.
Financial risk management policies and
objectives
The Group’s financial risk management policies are detailed in
note 22 to the annual report and accounts.
A summary of the Group’s key operating risks is set out on
page 23. The Group’s risk management policies and objectives
including exposure to liquidity risk, interest rate risk, currency
risk, and credit risk, are contained in note 22 to the annual
report and accounts.
Governance 34
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Directors’ Report
Continued
Streamlined Energy and Carbon Reporting
(SECR)
The Companies Act 2006 (Strategic Report and Directors’
Report) Regulation 2018 requires disclosure of annual
UK energy consumption and Greenhouse Gas (GHG)
emissions from SECR regulated sources.
Reported energy and GHG emissions data is compliant with
SECR requirements and has been calculated in accordance
with the GHG Protocol and SECR guidelines. Energy and GHG
emissions are reported from buildings and transport where
operational control is held – this includes electricity and
natural gas. The Group does not have any company-owned
vehicles. The table below details the regulated SECR energy
and GHG emission sources for the reported periods.
100% UK
Natural gas
Electricity
Total
Intensity ratio
£million revenue
tCO2e per £million
of revenue
2021
Energy
mWh
2021
Emissions
tCO2e
2020
Energy
mWh
2020
Emissions
tCO2e
44.2
8.10
30.2
166.8
35.42
186.3
211.0
43.52
216.5
9,161
4.7
5.6
43.4
49.0
9,766
5.0
Metered kWh consumption is taken from supplier invoices
where possible or calculated using manual meter readings.
Transport emissions were significantly below 1 tonne and so
have not been reported. Conversions to tCO2e were made
using DEFRAs “UK Government GHG Conversion Factors for
Company Reporting” Conversion Factors 2021 publication.
The Group is committed to reducing its environmental impact
and contribution to climate change. The Group is certified
to ISO 14001, monitors its energy impact on a regular basis
and undertakes to minimise energy consumption where
practicable.
Share capital
Full details of changes in the Company’s share capital during
the year and after the year end are set out in note 17 to the
annual report and accounts. Details of employee share options
and warrants are also set out in note 17.
Significant shareholdings
The significant shareholders in the Company (holding shares
in excess of 3%) as at 31 December 2021 are as follows:
Shareholder
Somerston Capital
M Laurier
Vincel Investments
S Robinson*
% total
shareholding
18.81%
13.07%
14.83%
6.43%
*
Including S Robinson’s interests in Somerston Environmental Technologies
Limited shareholding
Political donations
During the year ended 31 December 2021 the Group made no
political donations (2020: £nil).
Going concern
The Group has made an operating loss of £1.48 million for
the year (2020: loss £0.39 million). The Group has invested
heavily on marginal costs to drive its operations on a technical
and marketing standpoint. This has resulted in multiple sales
opportunities which are expected to come to fruition in the
short-term.
Covid-19, Brexit, climate change and the current Russian
invasion of Ukraine have been considered resulting in two
areas that may potentially impact on the business, being
raw material cost and foreign exchange rates. Although raw
material costs could increase, and foreign exchange rates
become more volatile, the Group does not see this having
any critical impact on financial performance over the ensuing
12 months. The Group does not have any current direct
business with Russia or Ukraine.
On the basis of current financial projections derived from
this, which have been drawn out to the end of 2023, including
a sensitised cash flow analysis, together with available funds
and facilities, including an invoice finance facility with the
Group’s bankers, the Directors are satisfied that the Group
has adequate resources to continue in operational existence
for at least 12 months from the date of approval of the
financial statements, and accordingly, continue to adopt the
going concern basis in preparing the Group and Company
financial statements.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
35
Directors’ Report
Continued
The projections include expected growth in key d2w markets,
the main areas being Latin America and the Middle East,
together with some of the imminent d2p prospects which are
expected to commercialise. This was then revenue sensitised
by 20%. The main Group costs incurred and projected are
marginal and tie in closely to respective projects and markets.
Events since statement of financial
position date
Since the year end, the Group has invested £46,500
representing 46.5% of Symphony Environmental India (Private)
Limited, a company incorporated in India.
On 24 February 2022 Russian Forces entered Ukraine, resulting
in Western Nation reactions including announcements of
sanctions against Russia and Russian interests worldwide and
an economic ripple effect on the global economy. The directors
have carried out an assessment of the potential impact of
Russian Forces entering Ukraine on the business, including the
impact of mitigation measures and uncertainties, and have
concluded that this is a non-adjusting post balance sheet event
with the greatest impact on the business expected to be from
the economic ripple effect on the global economy.
The directors have taken account of these potential impacts in
their going concern assessments.
There have been no other material events since the statement
of financial position date.
Information received by the Board
The Board receives information on a regular basis enabling
it to review operational and financial performance (including
sales activity and working capital management); forecasts
(including comparison with market expectations); potentially
significant transactions and strategy.
Website
Our corporate website at www.symphonyenvironmental.
com/corporate-information/company-reports-and-general-
meetings provides access to Company information, public
announcements, published financial reports and contact details.
Directors’ indemnification and insurance
The Company’s articles of association provide for the directors
and officers of the Company to be appropriately indemnified,
subject to the provisions of the Companies Act 2006. The
Company purchases and maintains insurance for the directors
and officers of the Company in performing their duties, as
permitted by section 233 of the Companies Act 2006.
Matters covered in the Strategic Report
As permitted by section 414C(11) of The Companies Act
2006, certain matters which are required to be disclosed in the
Director’s Report have been omitted as they are included in
the Strategic Report instead. The matters relate to; principal
risks and uncertainties, research and development and key
performance indicators.
Auditor
Mazars LLP has expressed its willingness to continue in office
as auditor to the Company. A resolution to reappoint Mazars
LLP will be proposed at the forthcoming AGM.
Provision of information to the auditors
Each of the Directors who held office at the date of approval of
this Directors’ Report confirms that:
o so far as he is aware, there is no relevant audit information
of which the Company’s and Group’s auditor is unaware;
and
o he has taken all the steps he ought to have taken as a
Director in order to make himself aware of any information
needed by the Company and the Group’s auditors in
connection with their report and to establish that the
auditors are aware of that information.
AGM
The 2022 AGM date is still to be set. The notice of AGM and the
ordinary and special resolutions to be put to the meeting will be
notified to shareholders separately from these accounts.
Approval
The Directors’ report was approved on behalf of the Board on
29 March 2022.
M Laurier
Chief Executive
29 March 2022
Governance 36
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Directors’ Responsibilities Statement
The Directors are responsible for preparing the Annual
Report and the Group and Company financial statements
in accordance with applicable UK law and UK-adopted
international accounting standards.
Under Company law the Directors must not approve the
Group and Company financial statements unless they are
satisfied that they present fairly the financial position, financial
performance, and cash flows of the Group and Company
for that period. In preparing those financial statements, the
Directors are required to:
o Select suitable accounting policies for the Group’s financial
statements and apply them consistently;
o Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
will continue in business;
o Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
o Provide additional disclosures when compliance with the
specific requirements in the UK-adopted international
accounting standards is insufficient to enable users to
understand the impact of particular transactions, other
events and conditions on the Group’s financial position and
financial performance;
o State that the Group and the Company have complied with
UK-adopted international accounting standards subject
to any material departures disclosed and explained in the
financial statements; and
o Make judgements and estimates that are reasonable
and prudent.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any
time the financial position of the Company and the Group and
enable them to ensure that the financial statements comply
with the Companies Act 2006 and Article 4 of the IAS regulation.
They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the UK may differ from
legislation in other jurisdictions.
Each of the active Directors, whose names are listed in the
Directors’ Report above, confirms that, to the best of his
knowledge:
o The Group financial statements which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group.
o The Strategic Report includes a fair review of the development
and performance of the business and the position of the
Group and the Company, together with a description of the
principal risks and uncertainties that it faces.
o The Directors consider that the Annual Report and
Accounts, taken as a whole is fair, balanced and
understandable.
This responsibility statement was approved by the Board on
29 March 2022.
N Clavel
Interim Chairman
29 March 2022
Symphony Environmental Technologies plc Annual Report and Accounts 2021
37
Audit Committee Report
In addition to the Committee’s ongoing duties, the Committee
has and will continue to:
o consider significant issues and areas of judgement with
the potential to have a material impact on the financial
statements; and
o keep the need for an internal audit function under review,
having regard to the Company’s strategy and resources.
Significant issues considered for the year
ending 31 December 2021
The Committee considered:
o Revenue recognition and in particular the revenue cut-off
over the year-end, and was satisfied that IFRS 15 was
correctly applied.
o Capitalised development costs and was satisfied that
IAS 38 was correctly applied.
Audit Committee effectiveness
The Committee reviews its effectiveness on an ongoing basis.
Nicolas Clavel
Chairman of the Audit Committee
29 March 2022
Dear Shareholder
As the Chairman of Symphony’s Audit Committee, I present
my Audit Committee Report for the year ended 31 December
2021, which has been prepared by the Committee and
approved by the Board.
The Committee is responsible for reviewing and reporting
to the Board on financial reporting, internal control and
risk management, and for reviewing the performance,
independence and effectiveness of the external auditors
in carrying out the statutory audit. The Committee advises
the Board on the statement by the Directors that the Annual
Report and Accounts when read as a whole is fair, balanced
and understandable, and provides the information necessary
for shareholders to assess the Group’s performance, business
model and strategy.
During the year, the Committee’s primary activity involved
meeting with the external auditors, considering material issues
and areas of judgement, and reviewing and approving the
interim and year end results and accounts.
Accordingly, the Committee recommended to the Board that
Mazars LLP be re-appointed for the next financial year.
During 2021, the Committee:
o met with the external auditors to review and approve the
annual audit plan and receive their findings and report on
the annual audit;
o considered significant issues and areas of judgement with
the potential to have a material impact on the financial
statements;
o considered the integrity of the published financial
information and whether the Annual Report and Accounts
taken as a whole are fair, balanced and understandable and
provide the information necessary to assess the Group’s
position and performance, business model and strategy;
and
o reviewed and approved the interim and year end results.
Governance 38
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Remuneration Committee Report
Dear Shareholder
As the Chairman of Symphony’s Remuneration Committee, I present my Remuneration Committee Report for the year ended
31 December 2021, which has been prepared by the Committee and approved by the Board.
The Committee is responsible for determining the remuneration policy for the Executive Directors, and for overseeing the
Company’s long-term incentive plans. The Board as a whole is responsible for determining Non-executive Directors’ remuneration.
As an AIM company, the Directors’ Remuneration Report Regulations do not apply to Symphony and so this report is disclosed
voluntarily and has not been subject to audit.
Remuneration policy for 2021 and future years
The Remuneration Committee determines the Company’s policy on the structure of Executive Directors’ and if required, senior
management’s remuneration. The objectives of this policy are to:
o Reward Executive Directors and senior management in a manner that ensures that they are properly incentivised and motivated
to perform in the best interests of shareholders.
o Provide a level of remuneration required to attract and motivate high-calibre Executive Directors and senior management of
appropriate calibre.
o Encourage value creation through consistent and transparent alignment of incentive arrangements with the agreed company
strategy over the long term.
o Ensure the total remuneration packages awarded to Executive Directors, comprising both performance-related and non-
performance-related remuneration, are designed to motivate the individual, align interests with shareholders, and comply with
corporate governance best practice.
The Committee will continue to monitor market trends and developments in order to assess those relevant for the Group’s future
remuneration policy.
Remuneration Policy for Non-Executive Directors
N Clavel, S Robinson and R Wigley each receive a fee for their services as a Director, which is approved by the Board, mindful
of the time commitment and responsibilities of their roles and of current market rates for comparable organisations and
appointments.
Remuneration decisions for 2021
No annual bonuses are payable for the year ended 31 December 2021 (2020: £nil).
As announced by RNS on 19 November 2021, extensions were granted to the exercise period of options held by the Directors.
This was to ensure that option exercises would be done where the options could be placed in an orderly manner which would not
have been possible with the previously set dates.
Remuneration Committee effectiveness
The Committee reviews its effectiveness on an ongoing basis.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
39
Remuneration Committee Report
Continued
Directors’ emoluments
The table below sets out the total emoluments received by each Director who served during the year ended 31 December 2021.
M Laurier
I Bristow
M Stephen
N Clavel
S Robinson
R Wigley
Basic Salary
£’000
Benefits
£’000
2021 Total
Emoluments £’000
2020 Total
Emoluments £’000
202
138
137
16
16
16
525
13
4
25
-
-
-
42
215
142
162
16
16
16
567
213
141
159
16
16
16
561
The Company has taken out insurance for its officers against liabilities in relation to the Company under Section 233 of the
Companies Act 2006. There were no directors pension contributions made during the year (2020: £nil).
Share options and warrants
The Directors have share options and warrants, or interests in share options and warrants as follows:
M Laurier
M Laurier
I Bristow
I Bristow
M Stephen
M Stephen
N Clavel
N Clavel
S Robinson
R Wigley
R Wigley
Number of share
options or warrants
Exercise price
(pence per share)
1,851,500
350,000
3,000,000
280,000
2,000,000
210,000
500,000
250,000
1,500,000
750,000
250,000
4.500
12.500
4.500
12.500
4.500
12.500
4.500
12.500
12.500
12.500
12.500
Exercisable from
Exercisable to
26 November 2008
31 March 2022
31 March 2010
30 March 2022
26 November 2008
31 March 2022
31 March 2010
30 March 2022
26 November 2008
31 March 2022
31 March 2010
30 March 2022
16 October 2009
31 March 2022
18 December 2010
31 March 2022
19 November 2019
31 March 2022
15 May 2018
6 April 2023
19 November 2019
31 March 2022
The above share options and warrants are HM Revenue and Customs unapproved.
Options exercisable to 31 March 2022 were extended from exercise dates in November and December 2021 and have since the
year end been extended to 31 December 2022.
S Robinson
Chairman of the Remuneration Committee
29 March 2022
Governance 40
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Independent Auditor’s Report
to the members of Symphony Environmental Technologies plc
Opinion
We have audited the financial statements of Symphony
Environmental Technologies PLC (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2021
which comprise the Consolidated statement of comprehensive
income, the Consolidated statement of financial position, the
Consolidated statement of changes in equity, the Consolidated
cash flow statement, the Company statement of financial
position, the Company statement of changes in equity, and
notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied
in their preparation is applicable law and international
accounting standards in conformity with the requirements
of the Companies Act 2006 and, as regards the parent
company financial statements, FRS 101 “Reduced Disclosure
Framework” (United Kingdom Generally Accepted Accounting
Practice) as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion, the financial statements have been prepared in
accordance with the requirements of the Companies Act 2006
and:
o give a true and fair view of the state of the group’s and of
the parent company’s affairs as at 31 December 2021 and
of the group’s loss for the year then ended; and
o have been properly prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and, as regards
the parent company financial statements, FRS 101
“Reduced Disclosure Framework” (United Kingdom
Generally Accepted Accounting Practice) as applied in
accordance with the provisions of the Companies Act 2006.
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 audit procedures to evaluate the directors’ assessment
of the group’s and the parent company’s ability to continue
to adopt the going concern basis of accounting included but
were not limited to:
o Undertaking an initial assessment at the planning stage
of the audit to identify events or conditions that may cast
significant doubt on the group’s and the parent company’s
ability to continue as a going concern;
o Obtaining an understanding of the relevant controls relating
to the directors’ going concern assessment;
o Evaluating the directors’ method to assess the group’s and
the parent company’s ability to continue as a going concern;
o Evaluating the key assumptions used and judgements
applied by the directors in forming their conclusions on
going concern; and
o Reviewing the appropriateness of the directors’ disclosures
in the financial statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and the parent company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Basis for opinion
Key audit matters
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the “Auditor’s responsibilities for the audit of the financial
statements” section of our report. We are independent of the
group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, as
applied to SME 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.
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
41
Independent Auditor’s Report
Continued
Key Audit Matter
How our scope addressed this matter
The Group’s accounting policy in respect of revenue recognition is
set out in the accounting policies on pages 50-51 of the financial
statements. For Symphony Environmental Technologies PLC, we identify
the risk around revenue recognition as being principally in relation to cut
off, due to the potential to inappropriately shift the timing and basis of
revenue recognition. Due to revenue being a key benchmark in a user’s
assessment of the performance of the Group, we consider revenue
recognition to be a key audit matter.
We addressed this risk by performing audit procedures which
included, but were not limited to:
o Reviewing the design and implementation of the controls in place
surrounding revenue recognition, in particular cut off;
o Obtaining and reviewing the revenue recognition policy to ensure
they comply with the IFRS requirements; and
o Substantive sampling of revenue reported one month pre and
post year end. We assessed the right to and timing of revenue by
reference to shipment or delivery documentation depending on
the specific contractual terms.
Our observations
Based on the results of our procedures performed above, we
consider revenue recognition is appropriate, and in line with the
accounting policy described on pages 50-51.
Our application of materiality and an overview of the scope of our audit
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 on the financial statements as a whole. Based on our professional judgement, we determined
materiality for the financial statements as a whole as follows:
Group materiality
Group
Overall materiality
£183,220
Parent company
£91,610
How we
determined it
Group materiality has been calculated by reference to
total revenue, of which it represents 2%.
Materiality for the Parent company has been calculated
with reference to net assets, of which is represents 5%
(capped to the above balance due to group audit limits).
Rationale for
benchmark applied
Revenue has been identified as the principal benchmark
within the Group financial statements as it is considered
to be the focus of shareholders at this time due to the
Group being historically loss making.
Net assets has been identified as the principal benchmark
within the Parent company financial statements as it is
considered to be the focus of shareholders due to being a
holding company with no trade.
Performance
materiality
Performance materiality is set to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements in the
financial statements exceeds materiality for the financial
statements as a whole. We set performance materiality at
£137,415, which represents 75% of overall materiality.
Performance materiality is set to reduce to an appropriately
low level the probability that the aggregate of uncorrected
and undetected misstatements in the financial statements
exceeds materiality for the financial statements as a
whole. We set performance materiality at £73,288, which
represents 80% of overall materiality.
Reporting
threshold
We agreed with the directors that we would report to
them misstatements identified during our audit above
£5,497 as well as misstatements below that amount that,
in our view, warranted reporting for qualitative reasons.
We agreed with the directors that we would report to them
misstatements identified during our audit above £2,748 as
well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to fraud or
error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors
made subjective judgements, such as making assumptions on significant accounting estimates.
Governance
42
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Independent Auditor’s Report
Continued
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole. We used the outputs of our risk
assessment, our understanding of the group and parent
company, their environment, controls and critical business
processes, to consider qualitative factors in order to ensure
that we obtained sufficient coverage across all financial
statement line items.
Our group audit scope included an audit of the group and
the parent company financial statements. Based on our risk
assessment, all active entities of the group, including the parent
company, were subject to full scope audit performed by the
group audit team.
At the parent company level, the group audit team also
tested the consolidation process and carried out analytical
procedures to confirm our conclusion that there were no
significant risks of material misstatement of the aggregated
financial information.
Other information
The other information comprises the information included in
the Annual Report and Accounts 2021 other than the financial
statements and our auditor’s report thereon. The directors
are responsible for the other information. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of audit or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by
the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
o 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
o the Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report
by exception
In light of the knowledge and understanding of the group
and the parent company and 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:
o adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
o the parent company financial statements are not in
agreement with the accounting records and returns; or
o certain disclosures of directors’ remuneration specified by
law are not made; or
o 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 36, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
43
Independent Auditor’s Report
Continued
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of the financial statements.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
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.
Based on our understanding of the group and the parent
company and its industry, we identified that the principal
risks of non-compliance with laws and regulations related
to UK tax legislation, and we considered the extent to which
non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations
that have a direct impact on the preparation of the financial
statements such as the Companies Act 2006, UK-adopted
international accounting standards, FRS 101 “Reduced
Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice) and the AIM rules.
To help us identify instances of non-compliance with these
laws and regulations, and in identifying and assessing the
risks of material misstatement in respect to non-compliance,
our procedures included, but were not limited to:
o Inquiring of management and, where appropriate, those
charged with governance, as to whether the group and the
parent company is in compliance with laws and regulations,
and discussing their policies and procedures regarding
compliance with laws and regulations;
o Inspecting correspondence, if any, with relevant licensing or
regulatory authorities;
o Communicating identified laws and regulations to the
engagement team and remaining alert to any indications of
non-compliance throughout our audit; and
o Considering the risk of acts by the group and the parent
company which were contrary to applicable laws and
regulations, including fraud.
We also considered those laws and regulations that have a
direct effect on the preparation of the financial statements,
such as UK tax legislation, UK-adopted international
accounting standards and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s
incentives and opportunities for fraudulent manipulation of
the financial statements, including the risk of management
override of controls, and determined that the principal risks
related to posting manual journal entries to manipulate
financial performance, management bias through judgements
and assumptions in significant accounting estimates, and
revenue recognition (which we pinpointed to the cut off
assertion), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not
limited to:
o Making enquiries of the directors and management on
whether they had knowledge of any actual, suspected or
alleged fraud;
o Gaining an understanding of the internal controls
established to mitigate risks related to fraud;
o Discussing amongst the engagement team the risks of
fraud; and
o Addressing the risks of fraud through management override
of controls by performing journal entry testing.
o Our audit procedures in relation to fraud through revenue
recognition specific to cut-off included, but were not
limited to:
o Assessing management’s revenue recognition policy; and
o Agreeing a sample of revenue transactions pre and post year
end, to ensure they have been recognised in the appropriate
period and in line with the group accounting policy.
There are inherent limitations in the audit procedures
described above and the primary responsibility for the
prevention and detection of irregularities including fraud rests
with management. As with any audit, there remained a risk of
non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations or the
override of internal controls.
Governance 44
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Independent Auditor’s Report
Continued
The risks of material misstatement that had the greatest effect
on our audit are discussed in the “Key audit matters” section of
this report.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of the audit 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.
Stephen Brown (Senior Statutory Auditor) for and on behalf
of Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
Date: 29 March 2022
Symphony Environmental Technologies plc Annual Report and Accounts 2021
45
46
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Consolidated statement of financial position
as at 31 December 2021
Company number 03676824
Non-current
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments
S
T
E
S
S
A
Current
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Note
2021
£’000
2020
£’000
10
11
12
13
14
15
16
171
548
260
123
1,102
1,316
3,146
881
5,343
6,445
1,793
3,910
(2,231)
3,472
338
167
667
1,791
2,635
2,973
6,445
166
510
45
123
844
1,060
3,614
1,388
6,062
6,906
1,768
3,185
(865)
4,088
381
128
918
1,391
2,437
2,818
6,906
Equity - Equity attributable to shareholders of Symphony Environmental Technologies plc
Ordinary shares
Share premium
Retained earnings
S
E
I
T
I
L
I
B
A
I
L
D
N
A
Y
T
I
U
Q
E
Total equity
Liabilities
Non-current
Lease liabilities
Current
Lease liabilities
Borrowings
Trade and other payables
Total liabilities
Total equity and liabilities
17
17
17
18
18
18
19
These annual report and accounts were approved by the Board of Directors on 29 March 2022 and authorised for issue on
29 March 2022. They were signed on its behalf by:
I Bristow FCCA
Chief Financial Officer
The accompanying notes form an integral part of these annual report and accounts.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
47
Consolidated statement of comprehensive income
for the year ended 31 December 2021
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating loss
Finance costs
Loss for the year before tax
Taxation
Loss for the year
Total comprehensive loss for the year
Basic earnings per share
Diluted earnings per share
Note
4
-
-
-
-
5
7
-
8
-
-
9
9
2021
£’000
9,161
(5,569)
3,592
(500)
(4,571)
(1,479)
(54)
(1,533)
127
(1,406)
(1,406)
(0.81)p
(0.81)p
2020
£’000
9766
(5,658)
4,108
(364)
(4,136)
(392)
(45)
(437)
109
(328)
(328)
(0.19)p
(0.19)p
All results are attributable to the parent company equity holders. There were no discontinued operations for either of the above
periods.
The accompanying notes form an integral part of these annual report and accounts.
Financial Statements 48
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Consolidated statement of changes in equity
for the year ended 31 December 2021
Equity attributable to the equity holders of Symphony Environmental Technologies plc:
For the year to 31 December 2021
Balance at 1 January 2021
Share based options (note 17)
Issue of share capital (note 17)
Transactions with owners
Total comprehensive loss for the year
Share
capital equity
Share premium
Retained earnings
£’000
£’000
£’000
1,768
3,185
(865)
-
25
25
-
-
725
725
-
Balance at 31 December 2021
1,793
3,910
For the year to 31 December 2020
Balance at 1 January 2020
Issue of share capital (note 17)
Transactions with owners
Total comprehensive loss for the year
Balance at 31 December 2020
1,700
68
68
-
1,768
2,077
1,108
1,108
-
3,185
The accompanying notes form an integral part of these annual report and accounts.
Total
equity
£’000
4,088
40
750
790
(1,406)
3,472
3,240
1,176
1,176
(328)
4,088
40
-
40
(1,406)
(2,231)
(537)
-
-
(328)
(865)
Symphony Environmental Technologies plc Annual Report and Accounts 2021
49
Consolidated cash flow statement
for the year ended 31 December 2021
Cash flows from operating activities
Loss after tax
Adjustments for:
Depreciation
Amortisation
Profit on disposal of tangible assets
Share-based payments
Foreign exchange
Interest expense
Tax credit
Changes in working capital:
Movement in inventories
Movement in trade and other receivables
Movement in trade and other payables
Net cash used in operations
R&D tax credit
Net cash used in operating activities
Cash flows from investing activities
Additions to property, plant and equipment
Additions to right of use asset
Additions to intangible assets
Additions to investments
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Repayment of lease capital
Proceeds from share issue
Lease interest paid
Bank and invoice finance interest paid
Net cash generated in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Represented by:
Cash and cash equivalents (note 16)
Bank overdraft (note 18)
The accompanying notes form an integral part of these annual report and accounts.
2021
£’000
2020
£’000
(1,406)
(328)
223
12
-
40
25
46
(127)
(256)
453
389
(601)
127
(474)
(54)
(17)
(227)
-
-
(298)
(198)
750
(29)
(17)
506
(266)
470
204
881
(677)
204
185
18
(67)
-
37
45
(109)
(178)
(1,346)
301
(1,442)
109
(1,333)
(36)
-
(21)
(123)
97
(83)
(123)
1,176
(27)
(18)
1,008
408
878
470
1,388
(918)
470
Financial Statements
50
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
1 General information
Going concern
Symphony Environmental Technologies plc (‘the Company’)
and subsidiaries (together ‘the Group’) develops and supplies
environmental plastic additives and masterbatches, together
with plastic and rubber finished products to a global market.
The Company, a public limited company, is the Group’s
ultimate parent company. It is incorporated and domiciled in
England (Company number 03676824). The address of its
registered office is 6 Elstree Gate, Elstree Way, Borehamwood,
Hertfordshire, WD6 1JD, England. The Company’s shares are
listed on the AIM market of the London Stock Exchange.
2 Basis of preparation and significant
accounting policies
Basis of preparation
This consolidated annual report and accounts has been
prepared in accordance with UK-adopted international
accounting standards in conformity with the requirements of
the Companies Act 2006.
These consolidated annual report and accounts have been
prepared under the historical cost convention except for
investments and derivative financial instruments that are
measured at fair value. Financial information is presented in
pounds sterling unless otherwise stated, and amounts are
expressed in thousands (£’000) and rounded accordingly.
Changes to accounting policies during the year are detailed in
‘Standards and interpretations adopted during the year’ further
in this note.
Consolidation
This consolidated annual report and accounts are made up to
31 December 2021.
All intra-group transactions, balances and unrealised gains
on transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
asset transferred. Where necessary, adjustments are made
to the annual report and accounts of subsidiaries to bring the
accounting policies used into line with those used by other
members of the Group.
The Group has made an operating loss of £1.48 million for
the year (2020: loss £0.39 million). The Group has invested
heavily on marginal costs to drive its operations on a technical
and marketing standpoint. This has resulted in multiple sales
opportunities which are expected to come to fruition in the
short-term.
Covid-19, Brexit, climate change and the current Russian
invasion of Ukraine have been considered resulting in two
areas that may potentially impacting on the business, being
raw material cost and foreign exchange rates. Although raw
material costs could increase, and foreign exchange rates
become more volatile, the Group does not see this having
any critical impact on financial performance over the ensuing
12 months. The Group does not have any current direct
business with Russia or Ukraine.
On the basis of current financial projections derived from this,
which have been drawn out to the end of 2023, including a
sensitised cash flow analysis, together with available funds
and facilities, including an invoice finance facility with the
Group’s bankers, the Directors are satisfied that the Group has
adequate resources to continue in operational existence for
at least 12 months from the date of approval of the financial
statements, and accordingly, continue to adopt the going
concern basis in preparing the Group and Company financial
statements.
The projections include expected growth in key d2w markets, the
main areas being Latin America and the Middle East, together
with some of the imminent d2p prospects which are expected
to commercialise. This was then revenue sensitised by 20%.
The main Group costs incurred and projected are marginal and tie
in to closely to respective projects and markets.
Revenue
- Plastic additives and finished products, and
associated products
Revenue is stated at the fair value of the consideration
receivable and excludes VAT and trade discounts.
The Group’s revenue is from the sale of goods. Revenue from
the sale of goods is recognised in conformity to IFRS 15
following the 5 step approach. This has been detailed below:
o Identification of the contract – Due to the nature of the
goods sold, the Group effectively approves an implied
contract with a customer when it accepts a purchase order
from the customer.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
51
Notes to the Annual Report and Accounts
Continued
o Identification of the separate performance obligations
in the contract – The Group must fulfil the following
obligations, which are agreed on acceptance of the
purchase order:
– To make the goods available for dispatch on the required
date;
– To organise freight in accordance with agreed
INCOTERMs (a series of pre-defined commercial terms
published by the International Chamber of Commerce).
o Determine the transaction price of the contract –
The transaction price is determined as the fair value of the
consideration the Group expects to receive on transfer of
the goods. The price of the sale includes the goods price
and the cost of the transport, if applicable.
o Allocation of the transaction price to the performance
obligations identified – Sales prices are agreed with
each customer and are not generally a fixed price per
unit. The transport price will also vary across sales as
it is based on quotes received from the Group’s freight
agents, as transport is charged at cost. Although the
Group is effectively an agent in the provision of transport
rather than the principal under IFRS 15, the transport cost
is insignificant in the context of the overall sale price and
therefore it is not netted out of revenue and cost;
o Recognition of revenue when each performance
obligation is satisfied – Provided that the goods have
been made available for dispatch on the required date, this
performance obligation has been fulfilled and the revenue
for this performance obligation is therefore recognised
at this date. In respect to the freight element, the agreed
INCOTERMs need to be satisfied. At this point, the Group
recognises the revenue for this separate performance
obligation.
o the Group has the ability to use or sell the intangible asset;
and
o the intangible asset will generate probable future economic
benefits.
Among other things, this requires that there is a market for
the output from the intangible asset or for the intangible asset
itself, or, if it is to be used internally, the asset will be used in
generating such benefits:
o there are adequate technical, financial and other resources
to complete the development and to use or sell the
intangible asset; and
o the expenditure attributable to the intangible asset during
its development can be measured reliably.
Development costs not meeting the criteria for capitalisation
are expensed as incurred.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce, and
prepare the asset to be capable of operating in the manner
intended by management. The nature of the Group’s activities
in the field of development work renders some internally
generated intangible assets unable to meet the above criteria
at present.
Amortisation commences upon completion of the asset and is
shown within administrative expenses and is included at the
following rate:
Plastic masterbatches and other additives - 10 years
straight line.
Judgements and estimates made by the Directors
when deciding whether the recognition requirements for
development costs have been met are included in note 3.
All amounts disclosed within note 12 in development costs
relate to plastic masterbatches and other additives.
Intangible assets
- Research and development costs
- Trademarks
Expenditure on research (or the research phase of an internal
project) is recognised as an expense in the period in which it is
incurred. Development costs incurred on specific projects are
capitalised when all the following conditions are satisfied:
Trademarks represent the cost of registration and are carried
at cost less amortisation. Amortisation is calculated so as to
write off the cost of an asset, less its estimated residual value,
to administrative expenses over the useful economic life of
that asset as follows:
o completion of the intangible asset is technically feasible so
Trademarks - 10 years straight line.
that it will be available for use or sale;
o the Group intends to complete the intangible asset and use
or sell it;
Financial Statements 52
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
depreciation and any provision for impairment. The cost
comprises of the purchase price of the asset plus directly
attributable costs.
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, to administrative
expenses over the useful economic life of that asset as
follows:
Plant and machinery - 20% reducing balance.
Fixtures and fittings - 10% straight line.
Motor vehicles -
Office equipment -
25% reducing balance.
25% straight line.
The residual value and useful economic lives are reconsidered
annually.
Impairment testing of intangible assets and
property, plant and equipment
All individual assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of fair value, reflecting
market conditions less costs to sell, and value in use based
on an internal discounted cash flow evaluation. All assets are
subsequently reassessed for indications that an impairment
loss previously recognised may no longer exist. Any
impairment is recognised within expenses in the statement of
comprehensive income.
Leased assets
A lease is defined as ‘a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset) for
a period of time in exchange for consideration’. To apply this
definition three key evaluations are assessed:
o whether the contract contains an identified asset, which
is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made
available to the Group
o whether the Group has the right to obtain substantially all
of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within
the defined scope of the contract
o whether the Group has the right to direct the use of the
identified asset throughout the period of use. The Group
assess whether it has the right to direct ‘how and for what
purpose’ the asset is used throughout the period of use.
A right-of-use asset and a lease liability is recognised on the
balance sheet at the lease commencement date. The right-
of-use asset is measured at cost, which is made up of the
initial measurement of the lease liability, any initial direct costs
incurred, 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 (net of any
incentives received).
Right-of-use assets are depreciated 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. Impairment is assessed when such indicators exist.
The lease liability is measured on commencement of the lease
at the present value of the lease payments unpaid at that date,
discounted using the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease
liability are made up of fixed payments included in the
lease agreement and together with any in-substance fixed
payments.
Subsequent to initial measurement, the liability will be
reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, or if
there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit and
loss if the right-of-use asset is already reduced to zero.
Investments
Minority investments in shares are held at fair value using level
3 inputs per the IFRS 13 fair value hierarchy.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
53
Notes to the Annual Report and Accounts
Continued
Inventories
Inventories are valued at the lower of cost and net realisable
value, after making due allowance for obsolete and slow
moving items. Cost is determined on the basis of purchase
value plus all directly attributable costs of bringing the
inventory to the current location and condition, on a first-in
first-out basis.
Employee costs
- Employee compensation
Employee benefits are recognised as an expense.
- Post employment obligations
The Group operates a defined contribution pension scheme for
employees. The assets of the scheme are held separately from
those of the Group. The pension costs charged against profits
are the contributions payable to the scheme in respect of the
accounting period.
Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred income taxes are calculated using the liability
method on temporary differences. Deferred tax is generally
provided on the difference between the carrying amounts of
assets and liabilities and their tax bases. Tax losses available
to be carried forward as well as other income tax credits
to the Group are assessed for recognition as deferred tax
assets, insofar as Group companies are entitled to UK tax
credits on qualifying research and development expenditure,
such amounts are presented in the income tax line within the
statement of comprehensive income.
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is
probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax
rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted
at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised
as a component of tax expense in profit or loss, except
where they either relate to items that are charged or credited
directly to equity in which case the related deferred tax is
also charged or credited directly to equity, or where they
relate to items charged or credited in other comprehensive
income the deferred tax change is recognised in other
comprehensive income.
Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into Sterling at the rates of exchange ruling at the
statement of financial position date. Transactions in foreign
currencies are translated into Sterling at the rate of exchange
ruling at the date of the transaction. Exchange differences
are taken into account in arriving at the operating result. The
Group uses derivatives such as forward rate agreements
to mitigate its current or future positions against foreign
exchange rate risks. These derivatives are measured at fair
value, determined by reference to observable market prices at
the reporting date.
Financial assets
The Group classifies all of its financial assets measured
at amortised cost, apart from investments and derivatives
which are measured at fair value through profit and loss.
Financial assets do not comprise prepayments. Management
determines the classification of its financial assets at initial
recognition.
These assets arise principally from the provision of goods
and services to customers (e.g. trade receivables), but also
incorporate other types of financial assets where the objective
is to hold their assets in order to collect contractual cash flows
and the contractual cash flows are solely payments of the
principal and interest. They are initially recognised at fair value
plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment.
Impairment provisions are recognised based on the simplified
approach within IFRS 9 using the lifetime expected credit
losses. During this process the probability of the non-payment
of the trade receivables is assessed. This probability is
then multiplied by the amount of the expected loss arising
from default to determine the lifetime expected credit loss
for the trade receivables. The Group considers a financial
asset in default when it is unlikely to receive the outstanding
contractual amounts in full. For trade receivables, which
are reported net; such provisions are recorded in a separate
provision account with the loss being recognised within
administrative expenses in the consolidated statement
of comprehensive income. On confirmation that the trade
receivable will not be collectable, the gross carrying value of
the asset is written off against the associated provision.
Financial Statements 54
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
The Group’s financial assets held at amortised cost comprise
trade and other receivables and cash and cash equivalents in
the consolidated statement of financial position.
The Group has an invoice financing facility whereby it transfers
the rights to the cash flows from the related receivables to a
third party but retains the credit risk by providing a guarantee.
As the Group does not transfer substantially all the risks
and rewards of the receivables, no derecognition of financial
assets is required.
- Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and other
short-term, highly liquid deposits that are readily convertible
into known amounts of cash and which are subject to an
insignificant risk of changes in value.
Equity settled share-based payments
All goods and services received in exchange for the grant of
any share-based payment are measured at their fair values.
Where employees and third parties are rewarded using share-
based payments, the fair values of the instrument granted are
determined using the Black-Scholes model. This fair value is
appraised at the grant date. For employees, the fair value is
charged to the statement of comprehensive income between
the date of issue and the date the share options vest with a
corresponding credit taken to equity. For third parties the fair
value is charged over the length of services received.
Equity
Equity comprises the following:
o “Share capital” represents the nominal value of equity
Financial liabilities
shares;
The Group classifies its financial liabilities in the category of
financial liabilities at amortised cost. All financial liabilities are
recognised in the statement of financial position when the
Group becomes a party to the contractual provision of the
instrument.
o “Share premium” represents the excess over nominal
value of the fair value of consideration received for equity
shares, net of expenses of the share issue and after capital
reduction; and
o “Retained earnings” represents non-distributed but
Financial liabilities measured at amortised cost include:
distributable reserves.
o Trade payables and other short-dated monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest rate
method.
o Bank and other borrowings are initially recognised at fair
value net of any transaction costs directly attributable
to the issue of the instrument. Such interest-bearing
liabilities are subsequently measured at amortised cost
using the effective interest rate method, which ensures
that any interest expense over the period to repayment
is at a constant rate on the balance of the liability carried
in the consolidated statement of financial position. For
the purposes of each financial liability, interest expense
includes initial transaction costs and any premium payable
on redemption, as well as any interest or coupon payable
while the liability is outstanding.
Unless otherwise indicated, the carrying values of the Group’s
financial liabilities measured at amortised cost represents a
reasonable approximation of their fair values.
Standards and interpretations adopted during the
year
At the date of authorisation of these annual report and
accounts, certain new standards, amendments and
interpretations to existing standards became effective, as they
had not been previously adopted by the Group.
Information on new standards, amendments and interpretations
that are relevant to the Group’s annual report and accounts is
provided below. Certain other new standards and interpretations
have been issued but are not expected to have a material
impact on the Group’s annual report and accounts.
Other new effective Standards and interpretations
with no material impact to the Group
The following new and amended standards became effective
during the current year and have not had a material impact on
the Group’s/Company’s financial statements:
o IFRS 9 Financial Instruments, IAS 39 Financial Instruments:
Recognition and Measurement, IFRS 7 Financial
Instruments: Disclosures, IFRS 4 Insurance contracts and
IFRS 16 Leases (Amendments): Interest Rate Benchmark
Reform – Phase 2
Symphony Environmental Technologies plc Annual Report and Accounts 2021
55
Notes to the Annual Report and Accounts
Continued
New and revised IFRS Standards in issue but not
yet effective
3 Significant accounting estimates and
judgements
At the date of authorisation of these financial statements,
The Group has not applied the following new and revised
UK-adopted international accounting standards that have been
issued but are not yet effective. The Group does not expect
any of the standards which have been issued, but are not yet
effective, to have a material impact on the Group.
o IAS 16 Property, Plant and Equipment: Amendments
in relation to proceeds before intended use. Effective
1 January 2022
o IAS 37 Provisions, Contingent Liabilities and Contingent
Assets: Amendments in relation to the cost of fulfilling
a contract when assessing onerous contracts. Effective
1 January 2022
o IFRS 3 Business Combinations: Amendments to update
references to the Conceptual Framework. Effective
1 January 2022
o Annual Improvements to IFRSs (2018-2021 cycle). Effective
1 January 2022
o IAS 1 Presentation of Financial Statements: Amendments in
relation to the classification of liabilities as current or non-
current. Effective 1 January 2023
Estimates and judgements are evaluated continually and
are based on historical experience and other factors,
including expectations of future events that are believed to
be reasonable under the circumstances. Although these
estimates are based on management’s best knowledge of
current events and actions, actual results may ultimately differ
from those actions. Material changes to the estimates and
judgements made in the preparation of the interim statements
are detailed in the notes.
Estimates:
In preparing these accounts the following areas were
considered to involve significant estimates:
- Recognition of deferred tax assets
Judgements and estimates relating to a deferred tax asset
are detailed in notes 2 and 8. In particular, estimates are made
as to future revenues which derive profit and loss projections.
However, management does not consider it appropriate to
recognise a deferred tax asset where there is uncertainty over
the amount of future profits. The unrecognised deferred tax
asset as at 31 December 2021 was approximately £4,013,000.
o IFRS 17 Insurance Contracts. Effective 1 January 2023
- Share-based payments
o IAS 1 Presentation of Financial Statements: Disclosure of
accounting policies. Effective 1 January 2023
o IAS 8 Accounting policies, changes in accounting estimates
and errors (Amendment): Definition of accounting
estimates. Effective 1 January 2023
o IAS 12 Income taxes: Deferred tax relating to assets
and liabilities arising from a single transaction. Effective
1 January 2023
Other
The Group does not expect any other standards issued by the
IASB, but not yet effective, to have a material impact on the
group.
Estimates and related judgements in respect to share-based
payment charges are detailed in note 17. Estimates are made
on the fair value of the option using the Black-Scholes model.
Changes to these estimates would not have a material impact
on the Group’s statement of comprehensive income. The
carrying amount of share options as at 31 December 2021
was £128,000.
- Investments
Estimates and judgements are made as to the carrying value
of Investments based on the status of the investment against
expectations and the forward-looking prospects. The Eranova
SAS project is currently on schedule with the pre-industrial
plant completed during October 2021. Forward prospects
are encouraging, and the Board currently consider that the
fair value is consistent with cost while the project considers
the next phase. The carrying value of investments as at
31 December 2021 was £123,000. See note 13.
Financial Statements 56
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
- Inventory provisions
Estimates are made as to impairment provisions to the
carrying value of inventories based whether the items are still
saleable, and also the expected net value that can be achieved
on sale. The impairment provision for 2021 includes a 50%
reduction in certain glove carrying values due to a sharp fall
in prices during the latter part of 2021. The resultant value
was calculated based on net proceeds fairly achievable over
the short to medium term. There is a provision of £26,000
for the impairment of inventories as at 31 December 2021.
See note 14.
- Expected credit losses (ECLs)
Trade receivables are reflected net of an estimated
provision for impairment losses. In line with IFRS 9, the
Group uses an expected credit loss model to determine the
provision for doubtful debts and also specific provisions
for balances for which it has specific concerns over
recoverability. The expected credit loss model involves
segmenting debtors into groups and applying specific
percentages to each of the debtor groupings. The Group
has considered the profile of its debtor balance and has
determined that a grouping based on credit terms and aging
is considered the most appropriate. In addition, forward
looking information has been used in the assessment and
conclusion of ECLs in line with the model.
Higher percentages are applied the longer the term with the
customer and the older the debt with the customer, with the
view that there is a greater risk of unforeseen circumstances
arising the further away the settlement date. See note 15 for
further information. At the year end, the Group has provisions
of £35,000 (2020: £18,000) on a total trade receivables
balance of £2,608,000 (2020: £2,398,000) calculated using this
method.
Judgements:
In preparing these accounts the following areas were
considered to involve significant judgements:
- Functional currency
A significant proportion of the revenues generated by entities
within the group are denominated in United States Dollars
(USD). The functional currency of the Company and of all
individual entities within the Group has been determined to
be Sterling. Identification of functional currencies requires
a judgement as to the currency of the primary economic
environment in which the companies of the Group operate.
This is based on analysis of the economic environment
and cash flows of the subsidiaries of the Group, which
has determined, based upon the currency of funding and
operating costs, that the functional currency continues to
be Sterling.
- Development costs
Judgements by the Directors are applied when deciding
whether the recognition requirements for development costs
have been met. In capitalising these costs, judgements are
made relating to ongoing feasibility and commerciality of
products being developed. In making these judgements,
cash flow forecasts are used, and these include significant
estimates in respect to sales forecasts and future economic
feasibility. See note 12.
4 Segmental information and revenue
analysis
The Board has reviewed the requirements of IFRS 8
“Operating Segments”, including consideration of what
results and information the Board reviews regularly to assess
performance and allocate resources, and concluded that all
revenue falls under a single business segment. The Board
assesses the commercial performance of the business based
upon the revenues of the main products items within its single
business segment as follows:
Revenues
d2w additives
d2p additives
Finished products
Other
Total
2021
£’000
7,191
447
1,401
122
9,161
The revenues of the Group are divided in the following
geographical areas:
Geographical area
UK
Europe
North America
Central and South America
Middle East
Asia
Total
2021
£’000
541
1,490
227
3,289
2,476
1,138
9,161
2020
£’000
7,268
466
1,796
236
9,766
2020
£’000
468
2,193
203
2,820
2,767
1,315
9,766
Symphony Environmental Technologies plc Annual Report and Accounts 2021
57
Notes to the Annual Report and Accounts
Continued
Revenues attributable to the above geographical areas are
made on the basis of final destination of the customer to
which the goods are sold. The geographical areas above
are what the Company considers to be key markets. All
revenue is of the same nature, timing and uncertainty and so
the Directors have not provided a further disaggregation of
the revenue beyond the geographical and product analysis
provided above. Credits are made to revenue on agreement
of a dispute. Payments are made by customers either before
or after satisfaction of performance obligations depending on
the credit risk associated with the customer. Payments made
before satisfaction of performance obligations are disclosed
as a liability in accounts payable in the financial statements.
If the satisfaction of performance obligations is made before
payment, then the value is included in accounts receivable
until extinguished by the payment.
Products are sold based on quality criteria, and the Group
warrants performance of its products after appropriate tests
and trials are undertaken. Refunds are given or products are
replaced if there is a failure within the product quality assured
by Symphony, or its agreed performance.
Non-current assets of £14,000 are held outside of the UK
(2020: £20,000).
Major customers
There were two customers that each accounted for
greater than 10% of total Group revenues for 2021 (2020:
one customer). In 2021 the two customers accounted for
£2,477,000 or 27% (2020: £2,553,000 and one customer
being 26%) of total group revenues. The Group promotes its
products through a global network of distributors and aims to
generate revenues from as many sources as practicable.
5 Operating loss
The operating loss is stated after charging:
2021
£’000
2020
£’000
Depreciation – property,
plant and equipment
Depreciation – right-of-use
assets
Amortisation
Profit on disposal of
property, plant and
equipment
Research and development
expenditure*
Fees payable to the
Company’s auditor:
Audit related services:
Audit of the annual report
and accounts
Audit of the annual report
and accounts of the
Company’s subsidiaries
Net foreign exchange
(gain)/loss
49
174
12
-
494
25
30
41
58
127
18
(67)
600
19
20
(74)
*
Further development expenditure of £166,000 (2020: £nil) is included in
Development cost additions – see note 12.
6 Directors and employees
Staff costs (including directors) during the year comprise:
Wages and salaries
Social security costs
Pension contributions
Total
2021
£’000
1,836
264
130
2,230
2020
£’000
1,660
284
97
2,041
Average monthly number of people (including
directors) by activity:
2021
2020
R&D, testing and technical
Selling
Administration
Management
Marketing
Total average headcount
10
9
13
6
3
41
8
8
12
6
3
37
Financial Statements 58
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
Remuneration in respect of the Directors, who are also the key
management, was as follows:
Emoluments (all short term)
2021
£’000
567
2020
£’000
561
There were no Directors’ pension contributions made during
the year (2020: £nil).
The Directors are considered to be the key management
personnel of the Group. Further details on Directors’
remuneration and share options are set out in the
Remuneration Committee Report.
Remuneration in respect to the highest paid director was as
follows:
Highest paid director
7 Finance costs
Interest expense:
Bank and invoice finance
borrowings
Lease interest (right-of-use
assets)
Total and net finance costs
8 Taxation
R&D tax credit
Total income tax credit
No tax arises on the loss for the year.
2021
£’000
215
2021
£’000
25
29
54
2021
£’000
127
127
2020
£’000
213
2020
£’000
18
27
45
2020
£’000
109
109
The tax assessed for the year is different from the standard
rate of corporation tax in the UK of 19% (2020: 19%).
The differences are explained as follows:
Loss for the year before
tax
Tax calculated by rate of
tax on the result
Effective rate for year at
19% (2019: 19%)
Expenses not deductible
for tax purposes
Expenses not taxable
R&D tax relief
Differences between
capital allowances and
depreciation
Surrender of tax losses for
R&D tax credit refund
R&D tax credit not yet
recognised
R&D tax credit in respect of
previous periods
Total income tax credit
2021
£’000
2020
£’000
(1,533)
(437)
(291)
15
-
(89)
208
37
120
(127)
(127)
(83)
(23)
3
(94)
31
39
127
(109)
(109)
Symphony Environmental Limited continues to undertake
research and development work which results in a research
and development tax credit being made repayable to the
company by HMRC in exchange for tax losses surrendered by
the company at a tax rate of 14.5%. As in prior years, the group
has chosen to recognise such cash tax credits in its financial
statements, once the relevant research and development claim
has been accepted and repaid by HMRC. Usually this is shortly
after the submission of the company’s tax return. The cash tax
credit of £127,000 shown above relates to a repayment made
by HMRC in relation to the year ended 31 December 2021
(£109,000 relates to the year ended and 31 December 2020).
In calculating the overall tax charge for the Group for the
period, Symphony Environmental Limited has provisionally
included a portion of the anticipated research and
development claim for year ended 31 December 2021 to
increase the trading losses made available for surrender to
Symphony Environmental Technologies Plc as group relief. In
doing so, the overall current year tax charge for the Group for
the period has been reduced to £nil. Symphony Environmental
Limited intends to surrender any remaining trading losses,
not claimed as group relief, in exchange for a cash tax credit.
The Group expects to be able to recognise this cash tax credit
within next year’s financial statements once this is repaid.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
59
Notes to the Annual Report and Accounts
Continued
The recognition of the deferred tax asset is based on sensitising management forecasts to estimate the future taxable profits
against which the losses will be relieved. Judgements have been made in respect to profitability going forward based upon
current sales leads and market receptiveness to anticipated product launches.
The Group has not recognised a deferred tax asset in respect of losses available for use against future taxable profits due to
uncertainties on timing. The Group has tax losses of approximately £15,050,000 (2020: £14,890,000). These tax losses have no
expiry date. The unrecognised deferred tax asset in respect of these losses based on latest profit projections is approximately
£4,013,000 (2020: £2,531,000).
These brought forward losses are subject to the loss restriction rules introduced on 1 April 2017. Groups with more than £5m
taxable profits per annum will only be able to utilise 50% of their brought forward losses against taxable profits exceeding the £5m
cap. As Symphony does not expect its taxable profits to exceed £5m in the near to immediate term, it is not possible to quantify
the impact of these changes at this moment in time.
The UK corporation tax rate applicable for the year is 19% (2020: 19%).
On 3 March 2021, the UK government announced that it intended to increase the main rate of corporation tax to 25% for the
financial years beginning 1 April 2023. This new rate was enacted by Finance Act 2021 on 10 June 2021.
The Group also has gross fixed assets of £197,000 (2020: £116,000) which give rise to a deferred tax liability of £49,000 (2020:
£22,000). Other gross temporary timing differences of £177,000 (2020: £147,000) give rise to a deferred tax asset of £44,000
(2020: £28,000). The deferred tax liability of £49,000 (2020: £22,000) is sheltered by the unrecognised deferred tax asset in
respect of losses and temporary timing differences.
The unrecognised deferred tax balances disclosed in the above for 2021 have been calculated at 25%.
9 Earnings per share and dividends
The calculation of basic earnings per share is based on the loss attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the year. The calculation of diluted earnings per share is based on the basic earnings
per share, adjusted to allow for the issue of shares on the assumed conversion of all dilutive options and warrants.
Reconciliations of the profit and weighted average numbers of shares used in the calculations are set out below:
Basic and diluted
Loss attributable to equity holders of the Company
Weighted average number of ordinary shares in issue
Basic earnings per share
Dilutive effect of weighted average options and warrants
Total of weighted average shares together with dilutive effect of weighted options- see below
Diluted earnings per share
No dividends were paid for the year ended 31 December 2021 (2020: £nil).
2021
2020
£(1,406,000)
£(328,000)
172,851,825
172,207,989
(0.81) pence
(0.19) pence
4,041,984
4,962,878
172,851,825
172,207,989
(0.81) pence
(0.19) pence
The effect of options and warrants for the years ended 31 December 2021 and 31 December 2020 are anti-dilutive.
A total of 16,441,500 options and warrants were outstanding at the end of the year which may become dilutive in future years.
Financial Statements 60
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
10 Property, plant and equipment
Year ended 31 December 2021
Cost
At 1 January 2021
Additions
Disposals
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the Year
Disposals
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
Plant &
Machinery
£’000
Fixtures
& Fittings
£’000
Motor
Vehicles
£’000
Office
Equipment
£’000
Total
£’000
346
41
-
387
264
18
-
282
105
82
304
2
(8)
298
267
10
(8)
269
29
37
14
-
(14)
-
14
-
(14)
-
-
-
133
11
(4)
140
86
21
(4)
103
37
47
797
54
(26)
825
631
49
(26)
654
171
166
Year ended 31 December 2020
Plant &
Machinery
£’000
Fixtures
& Fittings
£’000
Motor
Vehicles
£’000
Office
Equipment
£’000
Total
£’000
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the Year
Disposals
At 31 December 2020
Net Book Value
At 31 December 2020
At 31 December 2019
444
-
(98)
346
313
23
(72)
264
82
131
296
8
-
304
253
14
-
267
37
43
31
-
(17)
14
26
2
(14)
14
-
5
114
28
(9)
133
75
19
(8)
86
47
39
885
36
(124)
797
667
58
(94)
631
166
218
Symphony Environmental Technologies plc Annual Report and Accounts 2021
61
Notes to the Annual Report and Accounts
Continued
11 Right-of-use assets
Year ended 31 December 2021
Cost
At 1 January 2021
Additions
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the Year
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
Land & buildings
£’000
Office Equipment
£’000
Total
£’000
707
198
905
225
160
385
520
482
56
14
70
28
14
42
28
28
763
212
975
253
174
427
548
510
Right-of-use assets are assets used by the business under operating lease agreements and accounted for under IFRS 16.
The resultant lease liability is included in borrowings. See note 18.
Year ended 31 December 2020
Cost
At 1 January 2020
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the Year
At 31 December 2020
Net Book Value
At 31 December 2020
At 31 December 2019
Land & buildings
£’000
Office Equipment
£’000
Total
£’000
707
707
112
113
225
482
595
56
56
14
14
28
28
42
763
763
126
127
253
510
637
Financial Statements 62
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
12 Intangible assets
Year ended 31 December 2021
Cost
At 1 January 2021
Additions
Disposals
At 31 December 2021
Amortisation
At 1 January 2021
Charge for the Year
Disposals
At 31 December 2021
Impairment
At 1 January 2021
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
Development costs
£’000
Trademarks
£’000
1,973
166
–
2,139
245
–
–
245
1,728
1,728
166
–
64
61
(6)
119
19
12
(6)
25
–
–
94
45
Total
£’000
2,037
227
(6)
2,258
264
12
(6)
270
1,728
1,728
260
45
Development costs are capitalised in accordance with the policy set out in note 2. Judgements and estimates applied in accordance
with this policy are set out in note 3. Development costs include a net book value of £166,000 (2020: £nil) which have 10 years of
amortisation remaining as at 31 December 2021 (2020: nil).
Symphony Environmental Technologies plc Annual Report and Accounts 2021
63
Notes to the Annual Report and Accounts
Continued
Year ended 31 December 2020
Development costs
£’000
Trademarks
£’000
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Amortisation
At 1 January 2020
Charge for the Year
Disposals
At 31 December 2020
Impairment
At 1 January 2020
Disposals
At 31 December 2020
Net Book Value
At 31 December 2020
At 31 December 2019
13 Investments
The Group holds investment interests in the following minority unlisted shares.
Investments held at fair value through profit and loss:
At 1 January 2021 and 31 December 2021
Balance at 31 December 2021
1,973
–
–
1,973
234
11
–
245
1,728
–
1,728
–
11
101
21
(58)
64
25
7
(13)
19
45
(45)
–
45
31
Total
£’000
2,074
21
(58)
2,037
259
18
(13)
264
1,773
(45)
1,728
45
42
2021
£’000
123
123
In October 2020, the Group invested £123,000 (1.6%) into Eranova SAS, a French company developing products from green algae,
as part of a total €6,000,000 financing to build a pre-industrial plant. The project is currently on schedule with the pre-industrial
plant completed during October 2021. Forward prospects are encouraging, and the Board currently consider that the fair value is
consistent with cost while the project considers the next phase. There is therefore no impairment as at 31 December 2021.
Since the year end, the Group has invested £46,500 representing 46.5% of Symphony Environmental India (Private) Limited, a
company incorporated in India.
Financial Statements 64
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
The Company is parent to the following subsidiary undertakings
Name
Country of incorporation
Nature of business
Proportion of ordinary
shares held by parent
Proportion of ordinary
shares held by the Group
Symphony Environmental Limited
England and Wales
Development and supply
of environmental plastic
additives and products
D2W Limited
Symphony Recycling
Technologies Limited
England and Wales
England and Wales
Dormant
Dormant
Symphony Energy Limited
England and Wales
Dormant
100%
0%
100%
100%
100%
100%
100%
100%
All of the above subsidiaries are consolidated in the Group annual report and accounts. The above companies have their
registered offices at 6 Elstree Gate, Elstree Way, Borehamwood, WD6 1JD.
14 Inventories
Finished goods and goods for resale
Raw materials
2021
£’000
779
537
1,316
2020
£’000
554
506
1,060
The cost of inventories recognised as an expense and included in ‘cost of sales’ amounted to £4,798,000 (2020: £4,815,000).
There is a provision of £26,000 for the impairment of inventories (2020: £19,000). During the year, there was a write down of an
inventory item by 50% to its net realisable value of £130,000.
There is no collateral on the above amounts.
15 Trade and other receivables
Trade receivables
Other receivables
VAT
Prepayments
2021
£’000
2,608
199
82
257
3,146
2020
£’000
2,398
589
33
594
3,614
The Directors consider that the carrying value of trade and other receivables approximates to their fair values.
Symphony Environmental Technologies plc applies the IFRS 9 simplified approach to measuring expected credit losses (ECL)
which uses a lifetime expected loss allowance for all trade receivables. The ECL balance has been determined based on historical
data available to management such as adherence to payment terms and length of time to settle payment, in addition to forward
looking information utilising management knowledge such as the anticipated condition of the market in which its customers
operate. Based on the analyses performed, management expect that all balances will be recovered.
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
They are generally due for settlement within 120 days and therefore are all classified as current. The majority of trade and other
receivables are non-interest bearing. Where the effect is material, trade and other receivables are discounted using discount rates
which reflect the relevant costs of financing.
The maximum credit risk exposure at the balance sheet date equates to the carrying value of trade receivables. Further
disclosures are set out in note 22.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
65
Notes to the Annual Report and Accounts
Continued
Trade receivables are secured against the facilities provided by the Group’s bankers.
Included in trade receivables are debtors which are past due but where no provision has been made as there has not been a
change in the credit worthiness of these debtors and the amounts are considered recoverable. The ageing analysis of debt taking
into account credit terms is shown below.
Days past due
31 December 2021
31 December 2020
0 - 30
£’000
2,534
2,284
31-60
£’000
33
39
61-90
£’000
29
–
91-120
£’000
>120
£’000
Total Gross
£’000
ECL
£’000
Total Net
£’000
–
–
47
93
2,643
2,416
(35)
(18)
2,608
2,398
The ECL is included within debts past 120 days overdue at 74% for 2021 and 19% for 2020.
16 Cash and cash equivalents
Cash at bank and in hand
Invoice finance facility surplus
The carrying amount of cash equivalents approximates to their fair values.
2021
£’000
881
–
881
17 Equity
At 1 January 2021
Issue of share capital
Loss for the year
Share based payments
At 31 December 2021
At 1 January 2020
Issue of share capital
Loss for the year
Group and Company
Group
Ordinary shares
Ordinary shares
Share premium
Retained earnings
Number
176,751,277
2,500,000
–
–
179,251,277
170,026,277
6,725,000
–
£’000
1,768
25
–
–
1,793
1,700
68
–
£’000
3,185
725
–
–
3,910
2,077
1,108
–
3,185
£’000
(865)
–
(1,406)
40
(2,241)
(537)
–
(328)
(865)
At 31 December 2020
176,751,277
1,768
During the year the Company issued 2,500,000 Ordinary Shares (2020: 6,725,000 ordinary shares) for a net consideration of
£750,000 (2020: £1,176,000).
Ordinary shares in the Company carry one vote per share and each share gives equal rights to dividends and to the distribution of
the Company’s assets in the event of liquidation.
Share options and warrants
As at 31 December 2021 the Group maintained an approved share-based payment scheme for employee compensation. All
share-based employee compensation will be settled in equity. The Group has no legal or constructive obligation to repurchase
or settle the options. As at 31 December 2021 there were nil approved staff options outstanding. No approved staff options were
issued in 2021.
2020
£’000
1,383
5
1,388
Total
£’000
4,088
750
(1,406)
40
3,472
3,240
1,176
(328)
4,088
Financial Statements 66
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
The Company has an unapproved share option scheme which is open to directors and consultants. Options granted under the
scheme are for £nil consideration and are exercisable at a price equal to the quoted market price of the Company’s shares on the
date of the grant. The vesting period is 0 to 12 months. If the options remain unexercised after a period of 2-12 years from the
date of grant, the option expires. The Options are forfeited subject to Board discretion on leaving or termination of services.
During the year 2,500,000 warrants were issued as part of a placing at a price of 40p and exercisable for 6 months. In addition,
250,000 unapproved options were issued at a price of 25p exercisable for 2 years to a consultant for professional services.
The weighted average exercise price of all of the Group’s options and warrants are as follows:
Outstanding at 1 January
Granted
Exercised
Lapsed
Outstanding at 31 December
Number
18,891,500
2,750,000
–
(5,200,000)
16,441,000
2021 Weighted
average exercise
price £
0.13
0.39
–
0.25
0.14
Number
24,826,500
1,000,000
(6,725,000)
(210,000)
18,891,500
2020 Weighted
average exercise
price £
0.09
0.30
0.17
0.09
0.13
The weighted average exercise price of options exercised in 2021 was £nil as no options were exercised during the period (2020:
17p). The number of share options and warrants exercisable at 31 December 2021 was 16,441,000 (2020: 18,891,500). The
weighted average exercise price of those options and warrants exercisable was 14p (2020: 13p). The weighted average option
and warrant contractual life is nine years (2020: eight years) and the range of exercise prices is 4.5p to 40p (2020: 4.5p to 30p).
Directors
Directors’ interests in shares and share incentives are contained in the Remuneration Committee Report on page 39.
IFRS2 expense
The IFRS 2 share-based payment charge for the year is £40,000 (2020: nil). The charge was calculated using the Black Scholes
model with a three-year term, risk free rate of 0.48%, volatility of 68.36% and dividend yield of 0%.
18 Borrowings
Non-current
Leases
Current
Bank overdraft
Leases
Total
2021
£’000
338
677
167
844
1,182
2020
£’000
381
918
128
1,046
1,427
The bank overdraft relates to US Dollars and kept for hedging purposes as at the year end. Interest is charged on overdrafts at 5%
above the host countries currency base rate. The Group also has an invoice finance facility with its bankers. The invoice finance
facility was not drawn down as at 31 December 2021 (31 December 2020: £nil).
The bank overdraft and invoice finance facility are secured by a fixed and floating charge over the Group’s assets.
Symphony Environmental Technologies plc Annual Report and Accounts 2021
67
Notes to the Annual Report and Accounts
Continued
The Group’s leasing activities are detailed in the table below:
Right-of-use asset
Head office
Office equipment
Number of
assets leased
1
2
Remaining
term
2 years
2 – 5 years
The weighted average discount rate on initial application was 4.2%.
None of the above leases has a remaining option extension, option to purchase or termination option. The Head office rent was
re-priced during the year with reference to current market rentals. This resulted in a further £181,000 net lease liability for the
remainder of the lease term. In addition, an office equipment lease completed during the period and a new office equipment lease
for £14,000 was entered into.
The maturity of lease liabilities are as follows:
Gross payments
No later than one year
Later than one year and no later than five years
During the year the Group had no other leases other than those included above.
The following lease payments were made during the year:
Gross payments
Lease capital
Lease interest
Total cash outflows
Reconciliation of liabilities arising from financing activities
For the year ended 31 December 2021
2021
£’000
188
359
547
2021
£’000
199
29
228
2020
£’000
149
413
562
2020
£’000
122
27
149
Bank overdraft
Leases
Total liabilities from financing activities
1 January
2021
£’000
918
509
1,427
Cash flows
£’000
(241)
(228)
(469)
Non-cash
changes
£’000
31 December
2021
£’000
–
224
224
677
505
1,182
The non-cash changes for 2021 are in respect to £195,000 new lease additions and £29,000 interest.
For the year ended 31 December 2020
Bank overdraft
Leases
Total liabilities from financing activities
The non-cash changes for 2020 are in respect to lease interest.
1 January
2020
£’000
283
631
914
Cash flows
£’000
635
(149)
486
Non-cash
changes
£’000
31 December
2020
£’000
–
27
27
918
509
1,427
Financial Statements 68
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
19 Trade and other payables
Current
Financial liabilities measured at amortised cost:
Trade payables
Other payables
Social security and other taxes
Accruals
2021
£’000
1,351
61
130
249
1,791
2020
£’000
1,071
35
59
226
1,391
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 85 days (2020: 81 days). The Group has financial risk management policies in place to
ensure that all payables are paid within the pre-agreed credit terms.
The Directors consider that the carrying value of trade and other payables approximate to their fair value.
20 Commitments and contingencies
a) Capital commitments
The Group had capital commitments totalling £nil at the end of the year (2020: £nil).
b) Contingent liabilities
Together with its subsidiary, Symphony Environmental Limited, the Group’s bankers have provided a Group composite facility of
£100. (2020: £100).
21 Related party transactions
There were no related party transactions during the year (2020: none).
22 Financial Instruments
Classification and measurement
The Group’s financial assets and liabilities, which are all held at amortised cost, are summarised as follows:
Financial assets:
Trade receivables
Other receivables
Cash and cash equivalents
Financial liabilities:
Trade payables
Other payables
Accruals
Bank overdraft
Leases
2021
£’000
2,608
199
881
3,688
1,351
61
249
677
505
2020
£’000
2,398
589
1,388
4,375
1,071
35
226
918
509
2,843
2,759
Symphony Environmental Technologies plc Annual Report and Accounts 2021
69
Notes to the Annual Report and Accounts
Continued
The Group’s £123,000 carrying investment in Eranova SAS, see note 13, is measured at fair value. The Group has currency option
derivative liabilities of £2,000 which are measured at fair value (included within other payables in note 19).
Risk management
The main risks arising from the Group’s financial instruments are liquidity risk, interest rate risk, currency risk and credit risk.
The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have
remained unchanged from previous years.
Liquidity risk
The Group seeks to manage financial risk to ensure financial liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitability. Short term flexibility is achieved through trade finance arrangements and overdrafts.
Having reviewed the maturity of financial liabilities and the forecast cash flows for the forthcoming twelve month period, the
Directors believe that sufficient cash will be generated from trading operations to meet debt obligations as they fall due.
The maturity of financial liabilities as at 31 December 2021 is summarised as follows:
Gross cash flows:
Zero to sixty days
Sixty one days to three months
Four months to six months
Seven months to one year
One to three years
Four to five years
Trade and other
payables and
accruals
£’000
1,661
–
–
–
–
–
1,661
The maturity of financial liabilities as at 31 December 2020 is summarised as follows:
Gross cash flows:
Zero to sixty days
Sixty one days to three months
Four months to six months
Seven months to one year
One to three years
Four to five years
Interest rate risk
Trade and other
payables and
accruals
£’000
1,332
–
–
–
–
–
1,332
3
44
46
95
358
1
547
24
12
38
75
281
132
562
Leases
£’000
Bank overdraft
& other loans
£’000
677
2,885
Leases
£’000
Bank overdraft
& other loans
£’000
Total
£’000
2,341
44
46
95
358
1
Total
£’000
2,274
12
38
75
281
132
677
–
–
–
–
–
918
–
–
–
–
–
918
2,812
The Group seeks to reduce its exposure to interest rate risk where possible, but this is offset by the availability of trade finance
arrangements which are transaction specific to meet liquidity needs and so have variable interest rate terms.
Sensitivities have been looked at in the range of an absolute rate increase of 5% or a decrease of 1% which enable an objective
calculation to be made depending on any interest rate changes in the future. Any rate changes would be outside the control of
the Group.
Financial Statements 70
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
The Group’s exposure to interest rate risk as at 31 December 2021 is summarised as follows:
Fixed
£’000
Variable
£’000
Cash and cash equivalents
Trade receivables
Other receivables
Trade payables
Other payables
Leases
Bank overdraft
Sensitivity: increase in interest rates of 5%
Sensitivity: decrease in interest rates of 1%
–
–
–
–
–
–
(505)
–
(505)
–
–
881
–
–
881
–
–
–
(677)
204
10
(2)
The Group’s exposure to interest rate risk as at 31 December 2020 is summarised as follows:
Cash and cash equivalents
Trade receivables
Other receivables
Trade payables
Other payables
Leases
Bank overdraft
Sensitivity: increase in interest rates of 5%
Sensitivity: decrease in interest rates of 1%
Fixed
£’000
–
–
–
–
–
–
(509)
–
(509)
–
–
Variable
£’000
1,388
–
–
1,388
–
–
–
(918)
470
24
(5)
Sensitivity shows the effect on equity and statement of comprehensive income.
Zero
£’000
–
2,608
199
2,807
(1,351)
(61)
–
–
1,395
–
–
Zero
£’000
–
2,398
589
2,987
(1,071)
(35)
–
–
1,881
–
–
Total
£’000
881
2,608
199
3,688
(1,351)
(61)
(505)
(677)
1,094
10
(2)
Total
£’000
1,388
2,398
589
4,375
(1,071)
(35)
(509)
(918)
1,842
24
(5)
Symphony Environmental Technologies plc Annual Report and Accounts 2021
71
Notes to the Annual Report and Accounts
Continued
Currency risk
The Group operates in overseas markets and is subject to currency exposure on transactions undertaken during the year. The
Group hedges the transactions where possible by buying goods and selling them in the same currency. The Group also has bank
facilities available for hedging purposes.
A summary of foreign currency financial assets and liabilities as stated in the statement of financial position together with a
sensitivity analysis showing the effect of a 10% change in rate with Sterling is shown below:
Financial assets
Financial liabilities
Net balance
Effect of 10% Sterling increase
Effect of 10% Sterling decrease
Financial assets
Financial liabilities
Net balance
Effect of 10% Sterling increase
Effect of 10% Sterling decrease
Currency
Sterling
balance 2021
£’000
Currency
balance 2021
’000
Sterling
balance 2020
£’000
Currency
balance 2020
’000
Euro
Euro
Euro
USD
USD
USD
288
(90)
198
2,933
(778)
2,155
€344
€(107)
€237
(18)
22
$3,963
$(1,051)
$2,912
(196)
239
262
(15)
247
2,546
(1,133)
1,413
€290
€(16)
€274
(22)
27
$3,437
$(1,509)
$1,928
(128)
157
Sensitivity shows the effect on equity and statement of comprehensive income. A 10% change is shown to enable an objective
calculation to be made on exchange rates which may be assumed for the future.
As at 31 December 2021 the Group had outstanding forward foreign currency contacts which all matured within three months of
the year end and committed the Group to selling 1,500,000 US Dollars and to receive a fixed Sterling amount (2020: the Group had
outstanding forward foreign currency contacts which all matured within five months of the year end and committed the Group to
selling US Dollars 750,000 and to receive a fixed Sterling amount).
The forward currency contracts are measured at fair value, which is determined using the valuation techniques that utilise
observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for USD:GBP. The fair value of the
forward-foreign currency contracts at 31 December 2021 is a loss of £2,000 (2020: profit £30,000).
Credit risk
The Group’s exposure to credit risk is limited to the carrying value of financial assets at the balance sheet date, summarised as follows:
Trade receivables
Other receivables
Cash and cash equivalents
2021
£’000
2,608
199
881
3,688
2020
£’000
2,398
589
1,388
4,375
The credit risk associated with the cash is limited as the counterparties have high credit ratings assigned by international
credit-rating agencies. The principal credit risk arises therefore from trade receivables. The seven largest customer balances at
the end of the year make up 85% (2020: 74%) of the above trade receivables.
Financial Statements 72
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Annual Report and Accounts
Continued
In order to manage credit risk, the Directors set limits for customers based on a combination of payment history, third party
credit references and use of credit insurance. These limits are reviewed regularly. The maturity of overdue debts and details of
impairments and amounts written off are set out in note 15.
Capital requirements and management
Interest bearing loans and borrowings are monitored regularly to ensure the Group has sufficient liquidity and its exposure to
interest rate risk is mitigated. Management consider the capital of the Group comprises the share capital as detailed in note 17
and interest bearing loans and borrowings as detailed in note 18. The Company satisfies the Companies Act 2006 requirement to
hold £50,000 issued share capital of which at least 25% is paid up. See note 17.
The Group’s capital management objectives are:
o to ensure the Group’s ability to continue as a going concern; and
o to provide an adequate return to shareholders
The Group monitors capital on the basis of the gearing ratio calculated as net debt divided by total capital. Net debt is calculated
as total borrowings as shown in the consolidated statement of financial position less cash and cash equivalents. Total capital
is calculated as equity as shown in the consolidated statement of financial position plus net debt. The Group’s goal in capital
management is to maintain an optimal gearing ratio (the ratio of net debt over debt plus equity).
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
The gearing ratios at 31 December 2021 and 2020 were as follows:
Total borrowings (note 18)
Cash and cash equivalents (note 16)
Net debt
Total equity (note 17)
Borrowings
Overall financing
Gearing ratio
2021
£’000
1,182
(881)
301
3,472
1,182
4,654
6%
2020
£’000
1,427
(1,388)
39
4,088
1,427
5,515
1%
The gearing ratios are in line with the management’s working capital financing strategy.
23 Events since statement of financial position date
Since the year end, the Group has invested £46,500 representing 46.5% of Symphony Environmental India (Private) Limited, a
company incorporated in India.
On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of
sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors
have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the Group, including the impact
of mitigation measures and uncertainties, and have concluded that this is a non-adjusting post balance sheet event with the
greatest impact on the business expected to be from the economic ripple effect on the global economy.
The directors have taken account of these potential impacts in their going concern assessments.
There have been no other material events since the statement of financial position date.
The following pages contain the financial statements for the parent company, prepared in accordance with the Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (‘FRS 101’)
Symphony Environmental Technologies plc Annual Report and Accounts 2021
73
Company statement of financial position
at 31 December 2021
Company number 03676824
Fixed assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Trade and other payables: amounts falling due within one year
Net current assets
Net assets
Equity
Share capital
Share premium account
Retained earnings
Note
2021
£’000
2020
£’000
26
27
28
30
1,190
1,190
7,028
292
7,320
87
7,233
8,423
1,793
3,910
2,720
8,423
1,150
1,150
5,236
882
6,118
92
6,026
7,176
1,768
3,185
2,223
7,176
The Company has applied the exemption under section 408 of the Companies Act 2006 not to present a statement of
comprehensive income for the year ended 31 December 2021.
The profit after tax for the financial year 2021 within the annual report and accounts of the Company was £457,000
(2020: £377,000).
These annual report and accounts were approved by the Directors on 29 March 2022 and are signed on their behalf by:
I Bristow FCCA
Chief Financial Officer
The accompanying notes form an integral part of these annual report and accounts.
Financial Statements
74
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Company statement of changes in equity
for the year ended 31 December 2021
Share
capital equity
Share premium
Retained earnings
£’000
£’000
£’000
Total
equity
£’000
1,768
3,185
2,223
7,176
For the year to 31 December 2021
Balance at 1 January 2021
Share option reserve movement
Issue of share capital
Transactions with owners
Total comprehensive income for the year
–
25
25
–
–
725
725
–
Balance at 31 December 2021
1,793
3,910
For the year to 31 December 2020
Balance at 1 January 2020
Issue of share capital
Transactions with owners
Total comprehensive income for the year
Balance at 31 December 2020
1,700
68
68
–
1,768
2,077
1,108
1,108
–
3,185
The accompanying notes form an integral part of these annual report and accounts.
40
–
40
457
2,720
1,846
–
–
377
2,223
40
750
790
457
8,423
5,623
1,176
1,176
377
7,176
Symphony Environmental Technologies plc Annual Report and Accounts 2021
75
Notes to the Company statement of
financial position
24 Basis of preparation and significant
accounting policies
Basis of preparation
Symphony Environmental Technologies plc (“The Company”),
is a public limited company. It is incorporated and domiciled
in England (Company number 03676824). The address of its
registered office is 6 Elstree Gate, Elstree Way, Borehamwood,
Hertfordshire, WD6 1JD, England. The Company’s shares are
listed on the AIM market of the London Stock Exchange.
The principal activity of the Company is to hold investments in
subsidiaries which develop and supply environmental plastic
additives and products.
The individual annual report and accounts have been
prepared in accordance with United Kingdom accounting
standards, including Financial Reporting Standard 101 –
‘Reduced Disclosure Framework: Disclosure exemptions
from international accounting standards in conformity with
the requirements of the Companies Act 2006 for qualifying
entities’ (‘FRS 101’), and with the Companies Act 2006. This
separate annual report and accounts have been prepared
on a going concern basis, under the historical cost basis, as
modified by the recognition of certain financial assets and
liabilities measured at fair value.
Financial reporting standard 101 - reduced
disclosure exemptions
The Company has taken advantage of the following disclosure
exemptions under FRS 101:
o the requirements of IAS 7 Statement of Cash Flows
o the requirements of paragraphs 30 and 31 of IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors
o the requirements of paragraph 17 of IAS 24 Related Party
Disclosures
o the requirements in IAS 24 Related Party Disclosures to
disclose related party transactions entered into between
two or more members of a group, provided that any
subsidiary which is a party to the transaction is wholly
owned by such a member
o the requirements of paragraphs 134(d)-134(f) and 135(c)-
135(e) of IAS 36 Impairment of Assets.
The Company has taken advantage of section 408 of the
Companies Act 2006 and has not included its own statement
of comprehensive income in these annual report and accounts.
The annual report and accounts are presented in Sterling, the
functional and presentational currency of the Company and
are expressed in round thousands unless otherwise stated
(£’000s).
New standards and interpretations have been issued but are
not expected to have a material impact on the Company’s
annual report and accounts.
Property, plant and equipment
Tangible fixed assets are stated at cost, net of depreciation
and any provision for impairment.
Depreciation is calculated so as to write off the cost of
an asset, less its estimated residual value, over the useful
economic life of that asset as follows:
o the requirements of IFRS 7 Financial Instruments:
Motor vehicles - 25% reducing balance.
Disclosures
o the requirements of paragraphs 91-99 of IFRS 13 Fair Value
Measurement
o the requirement in paragraph 38 of IAS 1 ‘Presentation of
Financial Statements’ to present comparative information
in respect of:
o paragraph 79(a)(iv) of IAS 1;
o paragraph 73(e) of IAS 16 Property, Plant and Equipment;
o paragraph 118(e) of IAS 38 Intangible Assets;
o the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B,
38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1
Presentation of Financial Statements
Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred income taxes are calculated using the liability
method on temporary differences. Deferred tax is generally
provided on the difference between the carrying amounts of
assets and liabilities and their tax bases. Tax losses available
to be carried forward as well as other income tax credits to
the Company are assessed for recognition as deferred tax
assets, insofar as the Company is entitled to UK tax credits
on qualifying research and development expenditure, such
amounts are presented in the income tax line within statement
of comprehensive income.
Financial Statements 76
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Company statement of financial position
Continued
Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is
probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax
rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted
at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised
as a component of tax expense in profit or loss, except
where they either relate to items that are charged or credited
directly to equity in which case the related deferred tax is also
charged or credited directly to equity, or where they relate to
items charged or credited in other comprehensive income the
deferred tax change is recognised in other comprehensive
income.
Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into Sterling at the rates of exchange ruling at the
balance sheet date. Transactions in foreign currencies are
translated into Sterling at the rate of exchange ruling at the
date of the transaction. Exchange differences are taken into
account in arriving at the operating profit.
Investments - Company
Investments in subsidiaries are accounted for at cost less
impairment in the individual annual report and accounts.
Impairment of assets
At each reporting date fixed assets are reviewed to determine
whether there is any indication that those assets have suffered
an impairment loss. If there is an indication of possible
impairment, the recoverable amount of any affected asset
is estimated and compared with its carrying amount. If
estimated recoverable amount is lower, the carrying amount
is reduced to its estimated recoverable amount, and an
impairment loss is charged immediately to statement of
comprehensive income.
If an impairment loss subsequently reverses, the carry
amount of the asset is increased to the revised estimate
of its recoverable amount, but not in excess of the amount
that would have been determined had no impairment loss
been recognised for the asset in prior years. A reversal of an
impairment loss is recognised immediately in statement of
comprehensive income.
Financial instruments
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the entity after
deducting all of its financial liabilities.
Where the contractual obligations of the financial instruments
(including share capital) are equivalent to a similar debt
instrument, those financial instruments are classified as
financial liabilities. Financial liabilities are presented as such
in the balance sheet. Finance costs are calculated so as to
produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any
terms meeting the definition of a financial liability then this is
classified as an equity instrument. Dividends and distributions
relating to equity instruments are debited direct to equity.
Equity
Equity comprises the following:
o “Share capital” represents the nominal value of equity shares;
o “Share premium” represents the excess over nominal
value of the fair value of consideration received for equity
shares, net of expenses of the share issue and after capital
reduction; and
o “Retained earnings” represents non-distributed reserves.
Equity-settled share-based payments
Warrants and options granted to employees which relate to
salary sacrifices of employees employed by this company are
attributed a fair value by reference to the services provided.
This fair value is charged to statement of comprehensive
income over the vesting period when the service is provided
with a corresponding credit taken to shareholders’ funds.
Significant judgements and estimates
Preparation of the annual report and accounts requires
management to make significant judgements and estimates.
The items in the parent company annual report and accounts
where these estimates have been made include:
Estimates - impairment of investments
An impairment loss is recognised for the amount by which
the asset’s or cash generating unit’s carrying amount exceeds
its recoverable amount. To determine the recoverable
amount, management estimates expected future cash flows
Symphony Environmental Technologies plc Annual Report and Accounts 2021
77
Notes to the Company statement of financial position
Continued
27 Trade and other receivables
Amounts owed by Group
undertakings
VAT
Prepayments
2021
£’000
7,015
3
10
7,028
2020
£’000
5,222
4
10
5,236
The Directors consider that the carrying value of amounts
owed by Group undertakings approximate to their fair values.
Included in the amounts owed by Group undertakings is an
adjustment for expected credit losses of £3,394,000 (2020:
£3,394,000). The Company applies the IFRS 9 simplified
approach to measuring expected credit losses (ECL) which
uses a lifetime expected loss allowance in respect to amounts
owed by Group undertakings. The ECL balance has been
determined based on historical data available to management
in addition to forward looking information utilising
management knowledge.
28 Trade and other payables: amounts
falling due within one year
Trade payables
Accruals
2021
£’000
10
77
87
2020
£’000
28
64
92
29 Contingent liabilities
The Company has guaranteed all monies due to its bankers
by Symphony Environmental Limited. At 31 December 2021
the net indebtedness of this company amounted to £677,000
(2020: £918,000). The Company has guaranteed the lease
rental payable by Symphony Environmental Limited in respect
to the Group’s head office in Borehamwood amounting to
£475,000 as at 31 December 2021 (2020: £509,000).
30 Share capital
The Company’s share capital is detailed in note 17 of the
Group consolidated accounts.
from each cash-generating unit and determines a suitable
discount rate in order to calculate the present value of those
cash flows. In the process of measuring expected future
cash flows management makes assumptions about future
operating results. These assumptions relate to future events
and circumstances. In most cases, determining the applicable
discount rate involves estimating the appropriate adjustment
to market risk and the appropriate adjustment to asset-specific
risk factors. No impairment has been recognised during the
period. See note 26 for the carrying value.
There are no items in the parent company annual report and
accounts where judgements have been made.
25 Property, plant and equipment
Motor
vehicles
£’000
Total
£’000
Cost
At 1 January 2021
Disposal
At 31 December 2021
Depreciation
At 1 January 2021
Disposal
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
26 Investments
Cost
At 1 January 2021
Additions - in relation to
share option movement
At 31 December 2021
Impairment
At 1 January 2021
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
14
(14)
–
14
(14)
–
–
–
Shares
in Group
Undertaking
£’000
2,150
40
2,190
1,000
1,000
1,190
1,150
Group undertakings are detailed in note 13.
14
(14)
–
14
(14)
–
–
–
Total
£’000
2,150
40
2,190
1,000
1,000
1,190
1,150
Financial Statements
78
Symphony Environmental Technologies plc Annual Report and Accounts 2021
Notes to the Company statement of financial position
Continued
31 Directors and employees
All employees of Symphony Environmental Technologies plc
are Directors. See note 6 of the Group consolidated accounts.
The average number of staff employed by the Company during
the financial year amounted to:
Management
The aggregate payroll
costs of the above were:
Wages and salaries
Social security costs
2021
No.
3
2021
£’000
48
1
49
2020
No.
3
2020
£’000
48
3
51
The company has taken advantage of the FRS 101 exemption
that allows intra-Group transactions with a 100% subsidiary
to not be disclosed. There were no other related party
transactions throughout the period.
32 Events since statement of financial
position date
On 24 February 2022 Russian Forces entered Ukraine,
resulting in Western Nation reactions including
announcements of sanctions against Russia and Russian
interests worldwide and an economic ripple effect on the
global economy. The directors have carried out an assessment
of the potential impact of Russian Forces entering Ukraine on
the Group, including the impact of mitigation measures and
uncertainties, and have concluded that this is a non-adjusting
post balance sheet event with the greatest impact on the
business expected to be from the economic ripple effect on
the global economy.
The directors have taken account of these potential impacts in
their going concern assessments.
There have been no other material events since the statement
of financial position date.
Symphony Environmental is a world-leading
developer of technology to make ordinary plastic
biodegradable, and a range of other technologies to
protect plastic and rubber against microbes, insects,
fire, and many other threats.
Our technology is sold, usually in the form of
masterbatches, in nearly 100 countries around the
world to protect the environment, food supply and
human health and safety.
Contents
Overview
2021 Highlights ������������������������������������������������������������������������1
Business Highlights �����������������������������������������������������������������1
Symphony at a Glance �������������������������������������������������������������2
Symphony’s Distribution Network ������������������������������������������4
Product Focus ��������������������������������������������������������������������������6
Strategic Report
Chair’s Statement �������������������������������������������������������������������12
Chief Executive’s Review �������������������������������������������������������15
2021 Roundup ������������������������������������������������������������������������19
Corporate Social Responsibility ��������������������������������������������20
Strategic Report ���������������������������������������������������������������������21
Section 172 Report �����������������������������������������������������������������22
Principal Risks and Uncertainties �����������������������������������������23
Governance
Board of Directors ������������������������������������������������������������������24
Chairman’s Corporate Governance Statement ���������������������26
Directors’ Report ��������������������������������������������������������������������33
Directors’ Responsibilities Statement ����������������������������������36
Audit Committee Report ��������������������������������������������������������37
Remuneration Committee Report ������������������������������������������38
Independent Auditor’s Report ������������������������������������������������40
Financial Statements
Consolidated statement of financial position ����������������������46
Consolidated statement of comprehensive income ������������47
Consolidated statement of changes in equity ����������������������48
Consolidated cash flow statement ���������������������������������������49
Notes to the Annual Report and Accounts ���������������������������50
Company statement of financial position �����������������������������73
Company statement of changes in equity ����������������������������74
Notes to the Company statement of financial position �������75
Company Information ������������������������������������������������������������79
Symphony Environmental Technologies plc Annual Report and Accounts 2021
79
Company Information
Company registration number
Nominated adviser and joint broker
03676824
Registered office
6 Elstree Gate
Elstree Way
Borehamwood
Hertfordshire
WD6 1JD
Directors
Michael Laurier
Chief Executive Officer
Ian Bristow FCCA
Chief Financial Officer
Michael Stephen, LL.M
Commercial Director & Deputy Chairman
Nicolas Clavel
Non-Executive Director & Interim Chairman
Shaun Robinson
Non-Executive Director
Robert (Bob) Wigley
Non-Executive Director
Alexander Brennan
Executive Director
Secretary
Ian Bristow
Perivan 263261
Zeus Capital Limited
10 Old Burlington Street
London
W1S 3AG
Joint broker
Hybridan LLP
1 Poultry
London
EC2R 8EJ
Bankers
HSBC Bank Plc
103 Station Road
Edgware
Middlesex
HA8 7JJ
Solicitors
Eversheds Sutherland (International) LLP
1 Wood Street
London
EC2V 7WS
Auditor
Mazars LLP
Chartered Accountants and
Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Annual Report and Accounts
For the year ended 31 December 2021