2023
AnnuAl RepoRt
And Accounts
symphony environmental technologies plc
Symphony Environmental is a global pioneer in developing technology
that renders conventional plastic biodegradable as well as a diverse
range of technologies designed to safeguard plastic and rubber
materials from microbes, insects, fire, and other hazards.
our innovative solutions are distributed in nearly 100 countries
worldwide contributing to environmental protection, food safety
and human health and well-being.
Contents
Overview
2023 Highlights .................................................................................. 1
Symphony at a Glance ...................................................................... 2
Symphony’s Distribution Network ................................................. 4
Product Focus .................................................................................... 6
Strategic Report
Chairman’s Statement .................................................................... 12
Chief Executive’s Review................................................................. 13
Corporate Social Responsibility ................................................... 16
Strategic Report ............................................................................... 17
Section 172 Report .......................................................................... 18
Principal Risks and Uncertainties ................................................ 19
Governance
Board of Directors ........................................................................... 20
Chairman’s Corporate Governance Statement ......................... 22
Directors’ Report .............................................................................. 29
Directors’ Responsibilities Statement ......................................... 32
Audit Committee Report ................................................................ 33
Remuneration Committee Report ............................................... 34
Independent Auditor’s Report ....................................................... 36
Financial Statements
Consolidated statement of comprehensive income ............... 43
Consolidated statement of financial position............................ 44
Consolidated statement of changes in equity........................... 45
Consolidated cash flow statement............................................... 46
Notes to the Annual Report and Accounts................................. 47
Company statement of financial position.................................. 71
Company statement of changes in equity.................................. 72
Notes to the Company statement of financial position........... 73
Company information .................................................................... 77
overview
overview
1
2023 Highlights:
Financial highlights:
Group
revenues
Gross
profit
Reported loss
before tax
Basic loss
per share
Cash used in
operations
£6.35
million
2022
£6.15
million
£2.33
million
2022
£2.28
million
£2.25
million
2022
£3.01
million
1.18p
2022
1.65p
£0.62
million
2022
£1.59
million
Post year end
o The conversion dates of the convertible loans with Sea Pearl Ventures Limited have been extended to 31 December 2025
with no other changes, including the Group’s rights to repay in whole or in part at any time or times until 30 days before
the conversion date
o On 22 March 2024 the Group raised £1.4 million of equity (before expenses) by way of a subscription and retail offer
Symphony Environmental Technologies plc Annual Report and Accounts 2023 2
2
Symphony Environmental Technologies plc Annual Report and Accounts 2021
overview
overview
Symphony at a Glance
Symphony at a Glance
Global specialists in technologies that make plastic and rubber products smarter, safer and
Global specialists in technologies that make plastic and rubber products smarter, safer and
more sustainable.
more sustainable.
Established with
£69m Sales
since 2015
ESG Credentials
High margin
Underlying
41% gross margins
Investing in
£5.0m
R & D investment
technology
A global market
Strong
partners
Strong pipeline
Multiple live
opportunities globally
High gross margin and
High margin
capital light
High gross margin
and capital light.
Global network of
Operationally geared.
distributors and
Global network of
manufacturing bases
distributors.
7% of revenue invested
Investing in
into research and
technology
development over the
c.8% of revenue
past 6 years
invested into research
and technology
Approvals in place for
since 2015.
key technologies
Emerging markets
Blue chip
have driven growth to
global partners
date. 22 countries have
including Grupo
adopted regulations
Bimbo, Indorama
mandating the use of
Corporation
and Rivulis.
d2w type technologies
Engaging with public
Strong pipeline
and private sector
Engaging with public
targets internationally,
and private sector
we have multiple
targets international.
customer trials
Symphony has
multiple customer
underway
trials underway.
Listed on the London
An established
Stock Exchange since
disruptor.
2001.
Established in 1995
– ESG Awarded
Awarded the LSE’s
the LSE’s Green
Green Economy Mark
Economy mark
for sustainability in
for sustainability
2019
in 2019
Strong partners in
key regions
Our Solutions:
Our Solutions:
Biodegradable Technology
Biodegradable Technology
Perfect for single use plastics and packaging
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
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
food from contamination and damage and reducing waste. However, 30% of plastic escapes into the environment annually with
with 8-10 million tonnes of plastic finding its way into in the oceans of the world, with dire consequences for people, wildlife,
8-10 million tonnes of plastic finding its way into in the oceans of the world, with dire consequences for people, wildlife, and water
and water quality.
quality.
With over 20 years of solid scientific research and development behind it, our d2w masterbatch has been proven
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.
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
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
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.
produced annually, and among the top ten items littered. It is also much kinder to the environment. So,
So, there is plenty of room for revenue growth.
there is plenty of room for revenue growth.
The lifecycle of plastic products enhanced with d2w biodegradable technology
The lifecycle of plastic products enhanced with d2w biodegradable technology
1
2
3
4
R
R
Just 1% of d2w added to polymer
Just 1% of d2w added to polymer
during manufacture
during manufacture
Can be used for all the same
Can be used for all the same
purposes as regular plastic
purposes as regular plastic
Can be recycled with regular
Can be recycled with regular
plastic during product life
plastic during product life
If littered, products will
If littered, products will
biodegrade and be recycled
biodegrade and be recycled
back into nature by bacteria
back into nature by bacteria
and fungi on land or sea
and fungi on land or sea
Without leaving toxic residues or microplastics behind.
Without leaving toxic residues or microplastics behind.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Symphony Environmental Technologies plc Annual Report and Accounts 2021
overview
overview
Overview
3
3
Designed to Protect
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,
d2p is the brand name for a suite of masterbatches offering extra protection
fouling and fire.
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
The d2p range of products are relatively new compared to d2w. Over the last few years, we have conducted, along with our
commercialise including anti-insect, bread, gloves and flame retardants, obtaining regulatory approval where necessary.
global partners, a significant number of tests and trials, resulting in several technologies maturing and ready to commercialise
The Product Focus section of this report highlights a few of these key technologies and their applications.
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.
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.
A benefit-led additive suite of technologies that enhances plastics
Problem
Problem:
Food spoilage and wastage
Protecting food
Hygiene and virus transmission
Hygiene and Virus transmission
Solution
Solution
• d2p FDA-approved antibacterial bread packaging
• Ethylene and moisture adsorbers for packaging fruit,
• FDA approved antibacterial bread packaging
vegetables, and other food products.
•
Ethylene and moisture absorbers for packaging
• Antimicrobial water pipes and tanks
• d2p antimicrobial for water pipes and tanks
• Antimicrobial gloves
and other plastic surfaces.
Flammable plastics
Fire risk and emission of toxins
• Flame retardant plastic masterbatches
• d2p lame-retardant plastic masterbatches
Electric cable, deterioration and damage
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Metal deterioration and damage
• Rodent repellents
• d2p corrosion-inhibitors
Insect borne disease transmission and damage
Insect-borne disease transmission
• Anti-insect masterbatch
• d2w nsecticide embedded in plastic surfaces
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
www.d2p.net
Symphony Environmental Technologies plc Annual Report and Accounts 2023Michael Laurier Chief ExecutiveTel: +44 (0)208 207 5900 Mobile: +44 (0)78 3135 0077Email: michael.laurier@d2w.netSymphony Environmental Ltd, 6 Elstree Gate, Elstree Way, Borehamwood, Hertfordshire WD6 1JD, United Kingdom 4
Symphony Environmental Technologies plc Annual Report and Accounts 2023
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.
R
e B
R i c
a g s
P l a y p it b alls
P l a y p it b alls
Dominican Republic
R
R
a
e
B r
d b a gs
d b a gs
a
e
B r
Latin America/Turkey/
Dominican Republic
overview
overview
5
Israel
Pakistan
Pakistan
China
D rip tape
D rip tape
s
s
e
e
k in g water pip
k in g water pip
b rush
h
D r i n
D r i n
T o o t
R
R
R
M ulch fi lm
M ulch fi lm
s
e
ol
s
C o m f o s ole in
South Korea
R
R
g straws
g straws
D r i n k i n
D r i n k i n
R
R
r i e r b ags
r i e r b ags
C a r
C a r
R
o u ches
r p
e
W a t
R
s e sacks
u
f
R e
R
o r a g e bags
Foo d s t
Colombia
Brazil
Ghana
Middle East*
Thailand
NB-0002
Symphony Environmental Technologies plc Annual Report and Accounts 2023 overview
overview
6
Product Focus
Making a Difference with d2p AI (Anti-insect)
d2p AI (anti-insect) technology has been very successful in protecting
flexible plastic irrigation-pipes and drip-tapes from damage caused by
boring and chewing insects. Helping to save valuable water, but also time
and money spent on repairs and replacements. outperforming traditional
8mm and 10mm drip tape.
d2p AI can be added to regular polymer during the manufacturing process, and requires little
or no change to processing methods.
d2p AI can also protect against insects and the diseases spread by them by adding it to the following:
o Agricultural film
o Mosquito nets – LLIN
o Polystyrene and other plastic ceilings
o Plastic coated laminate floorings
Protection lasts for the lifetime of the product.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
d2p AM (Antimicrobial)
Safe, Affordable, Effective
Polymers are susceptible to microbial attack which causes
odours, staining and physical degradation.
d2p AM is a masterbatch suitable for a wide range of food
and non-food applications. It has been successfully used to
inhibit the growth of bacteria on the surface of film in bread
packaging after receiving approval from the FDA in the USA
in 2021 and Health Canada shortly afterwards. d2p AM has
an effective kill rate greater than 99.999% with no migration
into the food and no changes to:
• Clarity
• Strength or print adhesion.
• Texture, taste, colour or smell
overview
overview
7
d2p AM is also safe for repeated use products like chopping
boards, food containers and conveyor belts and it can be
incorporated into a wide variety of plastics and polymeric
materials, e.g. insoles for trainers, ball pit balls in children’s
play areas and disposable gloves for the food processing
and healthcare industries.
It can make surfaces lethal to dangerous microbes, including
Coronavirus, making it perfect for plastic fittings in high
-traffic areas and high touch points like handrails, door
handles and light switches. It can also be incorporated
into drinking water pipes to inhibit the build-up of biofilm.
It will not affect the mechanical, optical or physical properties
of the product and globally recognised test methods ensure
peace of mind for our partners and customers.
Crucially, the protection lasts for the lifetime of the product.
Scan this QR code to see
possible applications of d2p AM
Symphony Environmental Technologies plc Annual Report and Accounts 2023 overview
overview
8
d2w Biodegradable Plastic
Plastic is a fantastic invention because it is such a versatile
material. There is nothing quite like it for protecting food and
other goods from damage and contamination, and it has
a better life-cycle assessment than most other packaging
materials. See https://www.biodeg.org/subjects-of-interest/
life-cycle-assessments/
The downside of plastic is that if it does get into the
environment, it can accumulate there for decades, and
despite our best efforts there will always be some plastic
that escapes collection.
During the last few years, we have become increasingly
aware of the problem caused microplastics which are
now found in every environment, in the food chain and not
surprisingly, the human body. Some of the microplastics
found in the environment are coming from tyres and
man-made fibres, and recycling can also be a source of
microplastics, but most of the microplastics found in the
environment are caused by the fragmentation of ordinary
plastic when exposed to sunlight. Fragmentation will be
accelerated by colorants in the plastic. See https://www.
biodeg.org/subjects-of-interest/microplastics/
These fragments are very persistent because their molecular
weight is too high for microbes to consume them, and can
remain so for decades, but Symphony’s d2w technology
converts plastics into biodegradable materials which are
no longer plastics.
d2w is added to regular plastic products at the manufacturing
stage. There is no difference in the properties of the plastic
product during its useful life, it is just as strong, flexible
and waterproof and it can be recycled with regular plastic
if collected. But if a product made with d2w does escape
collection and ends up as litter on land or sea, it will degrade
and biodegrade just like nature’s wastes.
This self-destructing plastic technology has been extensively
researched for many years. In 2021 the Environmental
Protection Agency of the United States issued an important
report, saying that the technology “could significantly reduce
the persistence of plastic pollution without creating undesired
by-products, and a research team at Tokyo University has
confirmed the biodegradation of biodegradable plastics
even in extreme deep-sea environments.
These studies follow on from research by Queen Mary
University London, and the Oxomar Project sponsored
by the French Government, both of which confirmed
biodegradability and non-toxicity.
There are companies all over the world using d2w
technology and some countries have legislated to make
its use mandatory. It is a drop in technology costing little
or nothing extra, so companies could easily switch to d2w
right now. Not only would they be doing the right thing for
the environment – they would also be improving their own
ESG rating. The technology is simple, but the result is quite
extraordinary.
For a detailed explanation see https://www.
symphonyenvironmental.com/why-biodegradable/
technology is simple, but the result is quite extraordinary.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 overview
overview
9
d2w Biodegradable Plastic
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.
Scan the QR code
to see a short video
Symphony Environmental Technologies plc Annual Report and Accounts 2023 overview
overview
10
Protecting against fire
Fire-Retardant Masterbatches
In most cases plastics propagate fire because they quickly convert to volatile combustible materials
when exposed to heat. In many fields such as electrical engineering, transport, building construction
etc, the use of polymers is restricted by their flammability, whatever benefits the material may bring.
However, the versatility of plastic means that its role in building construction is constantly expanding
and it is now used in coatings, paint, water, soil and waste pipes, cabling, insulation and even fire-
sprinkler systems due to their cost-effectiveness, ease of installation and corrosion resistance.
Symphony has done extensive research and development in this field. Our fire-retardant masterbatches
can be added at manufacture and will significantly decrease the ignitability of the plastic product and
inhibit the combustion process, thereby limiting the amount of heat and toxins released.
The role of fire retardants is to increase the time for people to escape, and the time available to tackle
the fire, by slowing down the polymer combustion, reducing smoke emissions and reducing the
dripping of molten polymer.
The use of flame retardants is driven by legislation, Symphony has paid close attention to the approval
processes in product development and has achieved M1 Classification according to French standard
NFP92-503 and American Standard NFP 701, and excellent results according to BS476-12
fr
www.d2p.net
Symphony Environmental Technologies plc Annual Report and Accounts 2023
overview
overview
11
Introducing Joseph Lee
polymer scientist and Founder
and ceo of cps technologies
Symphony distributor in South Korea since 2013
Joseph’s Professional Journey and Comfosole’s Success
Joseph’s journey from polymer science graduate to the
founder of a successful company, highlights his innovative
approach and ability to identify and fill market needs.
Comfosole’s success is a testament to the effective
combination of advanced materials science, consumer-
focused product development and a highly committed team,
including his daughter Haena who joined the company in
2018 as market development executive for Symphony’s
d2w and d2p antimicrobial technology.
https://www.cpstech.net
Amazon.com: Comfosole Comfort
Amazon.com: Comfosole Performance
Joseph graduated from Hanyang University in South Korea,
majoring in polymer science.
He began his early career in Busan as a Technical Engineer for
Hyundai Motor Cars’ injection moulding applications, moving
to the Head Office of LG Industries in Seoul as part of the
planning and development team.
He then held research and development roles between
1989– 2004, including five years at DuPont Korea and
12 years at DuPont Asia region. He served as CEO at
Comtech/Sunshin Korea.
Joseph founded CPS Technologies (CPST) in 2005, leveraging
his experience in polymer science for product development.
CPST focuses on masterbatch compounds for footwear
foam applications, and sells BtoB in many countries including
China, Vietnam, Indonesia, India, Turkey, Ukraine, Brazil and
South Korea. In 2015 Joseph recognised a gap in the market
for insoles with improved cushioning, durability and odour-
control. This led him to develop “Comfosole” an insole aimed
at direct consumer sales in the USA, Europe and South Korea.
Already a distributor for Symphony’s d2w biodegradable
plastic technology in South Korea, he was well positioned to
innovate and when introduced to the d2p range of products
including d2p antimicrobial technology later the same year,
he began to explore how to incorporate this technology into
his insole, aiming to enhance its features and market appeal.
Comfosole was launched in 2017 and has several advantages
over regular insoles. Comfosole insoles are 100% recyclable
and non-toxic. Their closed-cell structure prevents sweat
accumulation and d2p antimicrobial technology combats
odour-causing bacteria, algae and fungi.
Comfosole was initially launched in the domestic market,
selling in South Korea and Thailand. There are two versions
available – Comfosole Comfort designed for standing, walking,
work and life in general and Comfosole Athletic, designed for
high performance. Comfosole is now available to consumers
through Amazon in the USA, Canada, and Mexico. It has been
praised by customers including Danny Abshire a very well-
known running coach with years of experience and expertise.
He spoke very highly of Comfosole, saying that it provided
comfy, soft cushioning and no odour through 500 km running.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
strategic Report
12
Chairman’s Statement
As indicated in the highlights section above, I am pleased to report that the year ended
31 december 2023 showed a reversal of the negative financial trend with all reported
indicators being positive. Revenue for the year slightly increased to £6.35 million
(2022: £6.15 million), with a 25% reduction in the operating loss.
One of the Group’s focuses was to reduce cost, without causing any drag on the sales initiative. This was achieved and
continues into 2024.
On 22 March 2024 the Group issued a Circular and a Notice of General Meeting, which provided information on a £1.4 million
capital raise by way of a subscription and a business update that showed “progress and opportunities” in several areas
of the business.
I will not repeat the information contained in the above, other than to reconfirm that the opportunities are significant and
that the Board remains confident that these can develop into material commercial sales in the short to medium term.
N Clavel
Chairman
6 June 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023 strategic Report
13
Chief Executive’s Review
As reported in the Chairman’s statement above, a recent business update was issued
on 22 March 2024.
d2w - progress and opportunities
The update focused on the opportunities in our main markets,
the Middle East and Latin America which represent the Group’s
largest volume for d2w. Our business model targets several
global markets, through 76 distributors. Entry into any of these
markets can be rapid, as d2w technology does not disrupt the
existing supply chain or products. It is an upgrade process that
requires virtually no change to the manufacturing process,
machinery or distribution. ESG compliance requirements and
continual changes to legislation are encouraging customers
to consider alternatives to ordinary plastics.
I am pleased to report that sales of d2w products increased
from £4.8 million in 2022 to £5.2 million in 2023. However, our
distributors report via their market intelligence that the sales
volumes should have been considerably higher. While we have
regular customers buying our products, volumes will increase
with the introduction of local enforcement policies which, at
this time, are nearly non-existent and have been delayed in
various markets. Specifically, Saudi Arabia had expected to
complete a biodegradable technical evaluation process before
31 December 2023, with the view of more widely enforcing
Phase 1 of the legislation which requires a range of products
to be oxo-biodegradable and progressing to Phases 2 and 3
which include an even wider range of products. Yemen has also
legislated to make oxo-biodegradable plastic compulsory, but
implementation has been delayed by logistical issues, mainly
caused by the intense political situation that disrupted product
movements. The combined effect of these delays has pushed
sales into the 2024 trading year.
In Latin America the market opportunity is mainly driven by
a growing demand for ESG compliance, with concerns that
changes to legislation will force customers to substitute
ordinary plastics for paper, compostable plastics or a
biodegradable alternative. In some markets, certain plastic
products have been banned and paper alternatives for drinking
straws are an example of these continual changes make
matters worse for the environment, and that the problem of
plastic litter would be solved if d2w were more widely adopted.
Globally we have seen increased activity indicating near-term,
genuine interest in parts of Africa, such as Kenya, Ghana and
South Africa, as well as in the Far East markets which include
China, Vietnam, Thailand, Indonesia and South Korea.
d2w - progress and opportunities
The Group has continued to invest in strengthening its
portfolio with a large range of d2p formulations which are
being used and commercially trialled in many different
applications.
d2p anti insecticide in agricultural products
A large proportion of current d2p revenues were generated
from sales of d2p anti-insect technology (“d2p AI”), the majority
of which being to Rivulis. They have incorporated d2p AI
technology into their Eurodrip product ranges, sold under
the trade name, Rivulis Defend. Symphony anticipates further
adoption of its d2p AI technology for other applications and
in other markets
d2p and FDA approval for bread packaging
Sales of d2p antimicrobial (“d2p AM”) for bread applications
have grown slowly to date, with the technology currently being
used in small volumes in specialised brands in Mexico and
Peru. We expect these markets to steadily expand into more
mainstream locations and brands, as well as into other parts
of Latin America on completion of their commercial trials.
Apart from the markets where Grupo Bimbo have exclusivity,
our d2p AM technology is currently at different stages of
development with a number of other customers. Some
customers are in pre-commercial trials and others are
at early stages of development.
d2p flame retardant
The d2p flame retardant range of technologies has trials being
carried out in many different applications globally. Currently. the
Middle Eastern construction market is a particularly active area,
and recent reports indicate that we are near completion of an
important certification process, which if successful should lead
to significant sales in a very large market.
Other technologies
The Group has also developed other technologies including
corrosion inhibitors for various metals, ethylene and moisture
adsorbers for food packaging, as well as antimicrobials for
pipes and tanks.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Chief Executive’s Review
Continued
Joint venture in India with Indorama
Corporation - Symphony Environmental
India Pvt Ltd (“Symphony India”)
Symphony India is a joint venture company established in
2022 between Symphony and Indorama India Pvt. Limited, a
wholly owned subsidiary of Indorama Corporation. Symphony
India is owned 46.5% by Symphony Environmental Limited,
46.5% by Indorama and 7% by Mr. Arjun Aggarwal, an Indian
citizen, who is its Managing Director.
The Government of India has published guidelines to reduce
plastic pollution. The product offered by Symphony India,
falls within the standard IS 17899 T:2022 Assessment of
Biodegradability of Plastics in Varied Conditions.
If this standard is satisfied, the opportunities in India could
be substantial. Symphony India has identified more than
500 prospective companies for which d2w could provide a
material benefit. Active discussions are underway with the
majority of these target customers have already been directly
corresponded with, but the Board believe the prospects of
Symphony India extend far beyond this initial 500 companies.
A number of d2p trials are also ongoing in India including d2p
AM for bread bags, of which one has completed successful
small trials and is now conducting semi commercial trials,
which could lead to full commercial orders during 2024.
Trading results
Group revenue was £6.35 million (2022: £6.15 million) and is
analysed in the table below. d2w revenues increased in 2023,
primarily due to the new Middle East factory while d2p revenues
fell in 2023. This was of timing differences with late receipt of
expected 2023 orders being received in early 2024. Finished
product sales were in line with last year thanks to a reliable
primary market in the UK.
d2w masterbatch revenues
d2p masterbatch revenues
Finished products and sundry revenue
Total revenues
Gross profit
Gross profit margin
Distribution costs
Percentage of revenues
Contribution after
distribution costs
Percentage of revenues
2023
£’000
5,221
512
618
6,351
2,333
37%
(203)
3%
2,130
34%
2022
£’000
4,768
793
593
6,154
2,280
37%
(408)
7%
1,872
30%
strategic Report
14
Gross profit margins were stable at 37% (2022: 37%). Gross
profit increased slightly to £2.33 million from £2.28 million in
2022. Distribution costs reduced by 50% to £0.20 million (2022:
£0.41 million) mainly due to the UAE market being supplied with
locally made product and also shipping rates having generally
softened since the end of Covid.
The board decided to increase the inventory impairment
provision profile. The resultant value was calculated based
on net proceeds fairly achievable over the short to medium
term and were based on specific items where saleability is in
doubt, and the dates of the last movements of each stock item
as an indicator to future value except for certain raw material
items which are known to be required in the short term. The
inventory provision was £235,000 (2022: £252,000 due to glove
provisions which the Group no longer trade). Adding back this
provision gives an underlying gross profit margin of 41%
(2022: 41%) and contribution after distribution costs over
revenues of 37% (2022: 35%).
Administrative expenses reduced by £0.68 million to £4.12
million (2022: £4.80 million). Staff costs reduced by £0.22
million to £2.22 million. Further reductions were made in
respect to professional fees and consultancy costs. Equity-
settled share-based charges of £0.08 million were included
in the year (2022: £0.12 million). One-off court costs in relation
to the EU case of £0.18 million were incurred in 2023.
The Group expensed R&D costs of £0.21 million in 2023
(2022: £0.51 million). In addition, there were intangible asset
development cost additions of £0.25 million during the year
in respect to the Group’s d2p bread technology (2022: £0.17
million). An R&D tax credit of £0.10 million (2022: £0.12 million)
was received during 2023 relating to the previous period. A
further R&D tax credit will be receivable in 2024 with respect
to 2023.
The share of loss in respect to the joint venture in India was
£73,000 (2022: £nil). This loss was incurred while Symphony
India was working on satisfying the standard in relation to
biodegradable plastic, as descried above, as well as developing
d2p opportunities.
The reported operating loss was £1.99 million (2022: £2.93
million) and loss after tax of £2.18 million (2022: £2.89 million)
with basic loss per share of 1.18 pence (2022: loss per share
1.65 pence).
The Group self-hedges its US Dollar foreign exchange exposure
by purchasing goods where possible in US Dollars and utilises,
when deemed appropriate, bank forward currency contract
agreements to minimise exchange risk. As at 31 December
2023, the Group had a net balance of US Dollar assets (US
Dollar cash balances and receivables less overdrafts and
payables) totalling $1.40 million (2022: $1.46 million).
Symphony Environmental Technologies plc Annual Report and Accounts 2023 strategic Report
15
Eranova
As announced in October 2020, the Group made an
investment representing 1.6% of the enlarged capital of
Eranova SAS (at £130,000 including costs) as part of a
€6.00 million pre-industrial plant project. The pilot plant
was completed on schedule during October 2021 and was
operational and processing small volume commercial
orders during 2022 which continued into 2023.
Eranova is in receipt of pledged government grants and
loans to further expand the early-stage production facility
in Marseille, France. They anticipate completing this process
in 2024. They have finished products made using Eranova
technology in the French retail sector and in particular
listed in Casino, Carrefour, Intermarche and Franprix.
In 2023 Eranova signed its first €2.10 million pre-production
licencing agreement to build a facility in Indonesia and is
currently producing trial materials. Symphony, as a strategic
shareholder of Eranova has an agreement to market Eranova’s
biobased green algae product derived from green algae.
Our d2w and d2p technologies are fully compatible with
Eranova’s biobased product and we expect this will become
a major growth area for Symphony in the longer term.
Current trading and outlook
Good progress continues to be made on cost reductions and
increasing sales. As previously indicated several product trials
and regularity applications are still in process. Our expectations
based on the current information is that we will start to see
completion and commercial starts during H2 2024.
We continue to rely on our network of 76 distributors (2022:
79) for managing their markets and hence are sustaining and
creating many opportunities for the Group.
The opportunities for Symphony are significant, and whilst
taking considerably longer to convert than originally anticipated,
a combination of more positive conversations, trials and other
factors give the Board confidence that these can and will be
converted in the short to medium term.
In the meantime, with the lower cost structure and higher
gross margins, the 2024 outlook shows a much more positive
commercial position for the Group compared to recent years.
M Laurier
Chief Executive
6 June 2024
Chief Executive’s Review
Continued
Convertible Loan
The Company has entered into two Convertible Loan
Agreements (“CLAs”) entered into with Sea Pearl, who are
also an existing 17.4% shareholder of the Company.
Details announced to the market were:
First CLA:
13 March 2023: £1.0 million facility -
£1.0 million drawn down
Second CLA: 18 October 2023: £1.0 million facility -
£0.5 million drawn down
On 13 March 2024, Sea Pearl and the Company announced
extensions to the repayment date of the CLAs by 15 months to
31 December 2025. This substantially improves the working
capital requirements and balance sheet profile of the Group
Other key terms remain unchanged.
The full terms are as follows:
o CLAs total drawn principal: £1.5 million (unsecured)
o If not repaid on or before 31 December 2025, conversion on
that date
o Conversion price: 80% of the volume-weighted average
share price for the 3 months prior to 31 December 2025
o Interest: 7% per annum, payable as accrued on repayment
and/or conversion
o Repayment of the CLAs, in full or in part solely at
Symphony’s discretion
As at the date of this document, the Company has not drawn
down the remaining £0.5 million of the second £1.0 million
CLA facility. Following Sea Pearl’s investment of £0.5 million
pursuant to the subscription inmarch 2024, the Board has
confirmed to Sea Pearl that it will not draw down on this
remaining £0.5 million under the CLA.
Statement of financial position and
cash flow
The Group had net borrowings (excluding convertible loans and
lease liabilities) of £0.58 million as at 31 December 2023 (2022:
net borrowings (excluding convertible loans and lease liabilities)
of £0.84 million). The Group used cash of £0.62 million from
operations (2022: £1.59 million) primarily as a result of the loss
incurred but mitigated by favourable movements in receivables.
During the year the Group received £1.5 million from the issue
of convertible loans, of which conversion has since the year end
been extended from 30 September 2024 to 31 December 2025,
and post year end raised £1.4 million of equity by subscription
and retail offer.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
strategic Report
16
Corporate Social Responsibility
We are committed to reducing energy requirements and waste, and meticulously monitor
our energy consumption and waste generation. Additionally, we proactively work to prevent
pollution and assist our customers in doing the same. these principles are deeply embedded
in our business models and activities.
Our focus is on supplying environmentally beneficial
products, and our d2w prodegradant technology aligns
perfectly with these principles.
To minimize our carbon footprint, we have established
production facilities in several global locations, reducing
the transportation of products and raw materials.
Beyond our business operations, we actively support the
wider community by contributing to local and national
charities. This year we supported Crisis at Christmas, the
local food bank and supplied items for sale at a local jobs fair.
We also create opportunities for young individuals, regularly
hosting students completing work experience in our office
and laboratory.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 strategic Report
17
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 page 12 together with the Chief Executive’s Review on pages 13 to
15. Future developments are summarised in the Current Trading and Outlook section of the Chief Executive’s Review on page 15.
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
2023
6,351
36.8%
76
2022
6,154
37%
79
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 £210,000 (2022: £510,000) are included in the
operating loss for the year. Development expenditure of £250,000 (2022: £168,000) 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. The Group received £97,000 in the year relating to the
2022 claim. A claim will be made for 2023. See note 8.
Section 172 report
The Section 172 Report is shown on page 18.
Principal risks and uncertainties
The Principal Risks and Uncertainties of the Group are shown on page 19.
Approval
The Strategic Report was approved on behalf of the Board on 6 June 2024.
M Laurier
Chief Executive
6 June 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023 strategic Report
18
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 and chief executive’s
Review on pages 13 to 15.
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. See below in respect
to a new production facility in the Middle East.
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. 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.
Two key decisions were:
o The Group reduced operating costs where strategic product
and market development had been achieved. This primarily
affected employees with little effect on other stakeholders
save for the shareholders in seeing a more efficient cost
structure. Employees who left were not replaced and allowed
for enhanced roles for the employees that remained; and
o The Group focused on gaining regulatory approvals for
products where those product sales were successful in
other markets. In particular d2p AI, which is currently an
ongoing process for two new major markets. This is to
the benefit of shareholders, distributors, customers and
suppliers by way of increases business potential with no
negative impacts to other stakeholders. There is also a
benefit to the environment by use of the product in saving
on water, where used for the protection of irrigation drippers.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 strategic Report
19
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. The risks are listed in order of risk weighting. Other than removing
Covid, there have been no changes to the Group’s risk profile during the year.
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
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.
Operational Risk
Commodity
pricing and
availability
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.
Financial Risk
Foreign exchange
rate fluctuation
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
20
Board of Directors
Michael
Laurier
Ian
Bristow
Michael
Stephen
Chief Executive Officer
Chief Financial Officer
Commercial Director
& Deputy Chairman
Appointed to the Board:
4 December 1998
Committee Membership:
None
Appointed to the Board:
4 December 1998
Committee Membership:
None
Appointed to the Board:
3 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.
Michael drives the strategies and main
relationships of the Group.
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. Ian’s continued experience with
Symphony, as an AIM listed company
with the many financial and governance
requirements that are required, continues
to build as the Group develops.
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 has been
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. Michael is able to
use his legal and political knowledge to
assist in shaping the commercial structure
of the Group’s many trading relationships
as well as managing product and country
regulatory issues.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
21
Nicolas
Clavel
Michael
Kayser
Independent Non-
Executive Director &
Chairman
Appointed to the Board:
16 October 2008
Independent
Non-Executive Director
Appointed to the Board:
2 January 2024
Committee Membership:
Audit, Remuneration (Chairman)
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 Active
Impact Fund DAC). Nicolas is Swiss
and is based in London and Geneva.
Nicolas brings high level commercial and
financial analysis, especially in emerging
markets where Symphony has many of
its opportunities.
Background and Experience:
Michael is an experienced finance
professional with more than 40 years’
experience across a variety of roles
in both UK and with international
organisations. During the last 10 years
he has primarily provided non-executive
director services to organisations
including the Transport Research
Foundation, Biome Technologies Plc, the
Transport Systems Catapult and Stobart
Group Limited. Prior to this, Michael
also worked for Accenture, Guinness
(worldwide Finance Director for its beer
division), HSBC, Laporte plc (Finance
Director), Lloyds Register (CFO and Chief
Operating Officer), Royal Bank of Scotland
(private equity) and Unilever. Michael
brings to the board commercial and
financial expertise gained from large and
small quoted and unquoted businesses.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
22
Chairman’s Corporate
Governance Statement
Dear Shareholder
QCA Principles:
As 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 main changes affecting governance were in
respect to changes in non-executive directors affecting the
make-up of the Board and its committees.
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 as follows.
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 19, as well as steps
the Board takes to protect the Group, mitigate these risks and
secure a long-term future for the Group. The Group’s strategy
and principal risks had remained unchanged during the year.
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.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Governance
23
Chairman’s Corporate Governance Statement
Continued
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.
The Company was the winner of “ESG Company of the Year”
at the 2021 Small Cap Awards 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 19.
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 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
24
Chairman’s Corporate Governance Statement
Continued
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 two Non-
Executive Directors, Nicolas Clavel and Michael Kayser. Nicolas
Clavel is the Company’s Chairman. Nicolas Clavel and Michael
Kayser are each regarded as Independent Directors by the
Board notwithstanding that Nicolas holds a small number of
shares and they both hold options over Ordinary Shares. The
Board considers that both Nicolas Clavel and Michael Kayser
have demonstrated the utmost regard for independence,
appropriately challenging the Board and maintaining high
standards of corporate governance on the Board. Neither
Nicolas Clavel nor Michael Kayser represents any shareholder
on the Board and both have a background in finance within
regulated industries. Accordingly, the Board believes that
both Nicolas Clavel and Michael Kayser exercise independent
judgement in all matters relating to the Group.
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 2023 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 (Resigned 3 July 2023)
Robert Wigley
Non-Executive Director (Resigned 11 August 2023)
Alexander Brennan
Non-Executive Director (Resigned 11 August 2023)
Board Meetings
attended in 2023
Audit Committee
meetings
Remuneration
Committee
meetings
5/5
5/5
5/5
5/5
2/2
2/2
2/2
–
–
–
2/2
1/2
–
–
–
–
–
1/1
1/1
–
–
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
25
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 pages 20 to 21).
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 five 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.
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.
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
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
26
Chairman’s Corporate Governance Statement
Continued
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 their contribution
is relevant and effective, that they are committed, and where
relevant, they have maintained their independence. There were
no formal evaluations undertaken during the year which saw
a change in some of the non-executive team.
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 foremost 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.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
27
Chairman’s Corporate Governance Statement
Continued
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 33 which details work
undertaken during the year.
Committee members and attendance
The Audit Committee currently comprises Michael Kayser
(Chair) and Nicolas Clavel (previous Chair). With Michael Kayser
joining the Board it was deemed appropriate for him to be the
audit committee chair due to his extensive accounting and
committee experience.
The Board considers that Michael Kayser has sufficient relevant
financial experience to chair the Audit Committee given that he
has over 40 years’ experience as chief accountant and non-
executive director in many listed and non-listed entities.
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 is on pages 34-35
which details work undertaken during the year.
Committee members and attendance
Symphony’s Remuneration Committee currently comprises
Nicolas Clavel (Chair) and Michael Kayser. The Board considers
that Nicolas Clavel has sufficient relevant experience to
chair the Remuneration Committee, given that has been
at Symphony for 15 years, most of which being on the
remuneration committee.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
28
Chairman’s Corporate Governance Statement
Continued
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 2023 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
Chairman
6 June 2024
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 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.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Directors’ Report
The Directors present their report and the audited annual
report and accounts of the Group for the year ended
31 December 2023.
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 17 provides a review of the
business, the Group’s trading for the year ended 31 December
2023, key performance indicators, and an indication of future
prospects and developments. Page 19 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 £2,180,000
(2022: loss £2,887,000). The Directors do not recommend the
payment of a dividend (2022: £nil).
The results for the year ended 31 December 2023 are set
out in the consolidated statement of comprehensive income
on page 43.
Governance
29
Directors
The Directors who served during the year ended 31 December
2023 and up to the date of signing the financial statements
were as follows:
N Clavel – Non-Executive Director & Chairman
M Laurier – Chief Executive Officer
I Bristow FCCA – Chief Financial Officer
M Stephen – Commercial Director & Deputy Chairman
M Kayser – Independent non-executive director
(appointed 2 January 2024)
S Robinson – Non-Executive director (resigned 3 July 2023)
R Wigley – Non-Executive Director (resigned 11 August 2023)
A Brennan – Executive Director (resigned 11 August 2023)
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
2023
At 1 January
2023
M Laurier
I Bristow
M Stephen
N Clavel
23,424,316
23,424,316
1,163,731
1,352,176
550,000
1,163,731
1,352,176
550,000
Details of the Directors’ interests in options granted under
the Group’s share scheme are set out in the Remuneration
Committee Report on page 34.
Financial risk management policies
and objectives
The Group’s financial risk management policies are detailed
in note 23 to the annual report and accounts.
A summary of the Group’s key operating risks is set out on
page 19. 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 23 to the annual
report and accounts
Symphony Environmental Technologies plc Annual Report and Accounts 2023 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
2023
Emissions
tCO2e
2022
Energy
mWh
2022
Emissions
tCO2e
2023
Energy
mWh
39.85
187.63
7.17
38.5
227.48
45.67
6.36
7.18
34.4
194.7
229.1
6.18
37.65
43.83
6.15
7.13
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 2023 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 18 to the
annual report and accounts. Details of employee share options
and warrants are also set out in note 18.
Governance
30
Significant shareholdings
The significant shareholders in the Company (holding shares in
excess of 3%) as at 31 December 2023 were as follows:
Shareholder
Somerston Environmental Technologies Limited
M Laurier
Sea Pearl Ventures Limited
(Prior Vincel Investments Limited)
S Robinson*
% total
shareholding
18.24%
12.68%
17.39%
6.23%
* Including S Robinson’s interests in Somerston Environmental Technologies
Limited shareholding.
Political donations
During the year ended 31 December 2023 the Group made no
political donations (2022: £nil).
Going concern
The Group has made an operating loss of £1.99 million for the
year (2022: loss £2.93 million). With underlying gross margins
(before provisions) remaining above 40%, the Group has also
been able to reduce costs after investing heavily and having
created significant opportunities on a technical and marketing
standpoint. This has resulted in multiple sales opportunities
which are expected to come to fruition in the short-term.
On the basis of current financial projections, which have been
drawn out to the end of 2025, including a sensitised cash
flow analysis (sensitised by revenue being the primary area of
forecast risk), together with available funds and facilities, 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.
This is primarily underpinned by the following:
o Middle East volumes expected to increase
o Repeat and growing d2p AI and other d2p business
o Steadier main markets in Far East and Latin America with
good growth potential
o Administrative costs further reduced from 2023 levels
Although net current liabilities are £1.6 million at the end of the
year, this includes £1.5 million in unsecured convertible loan
funding received during the year for which repayment since the
year end has been extended to 31 December 2025. In addition,
the Group has since the year end raised £1.4 million of equity by
subscription and retail offer and is also supported by an invoice
finance facility from the Group’s bankers.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
31
Directors’ Report
Continued
Systems are in place which enable monitoring of cashflow
requirements of the business which identifies any need for
borrowing and usage of borrowed funding. The Group is not
materially affected by any political or economic uncertainty.
Auditor
Forvis Mazars LLP has expressed its willingness to continue
in office as auditor to the Company. A resolution to reappoint
Forvis 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 2024 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
6 June 2024.
M Laurier
Chief Executive
6 June 2024
Events since statement of financial
position date
On 13 March 2024 The conversion dates of the convertible
loans with Sea Pearl Ventures Limited (see note 28) have
been extended 15 months from 30 September 2024 to
31 December 2025.
On 24 March 2024 the Group raised £1.4 million of equity by
subscription and retail offer.
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
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.
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, matters relating to research and development which
are required to be disclosed in the Director’s Report have been
omitted as they are included in the Strategic Report instead.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
32
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
6 June 2024.
N Clavel
Chairman
6 June 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Governance
33
Audit Committee Report
Significant issues considered for the year
ending 31 December 2023
The Committee considered:
o Revenue recognition and in particular the revenue cut-off
over the year-end, and was satisfied that IFRS 15 ‘Revenues
from contracts with customers’ 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.
M Kayser
Chairman of the Audit Committee
6 June 2024
Dear Shareholder
As the Chairman of Symphony’s Audit Committee, I present my
Audit Committee Report for the year ended 31 December 2023,
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
Forvis Mazars LLP be re-appointed for the next financial year.
During 2023, 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.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
34
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 2023, 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 2023 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, and M Kayser 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 2023
No annual bonuses are payable for the year ended 31 December 2023 (2022: £nil).
As announced by RNS on 28 December 2023, extensions were granted to the exercise period of options held by the Directors.
See page 35.
Remuneration Committee effectiveness
The Committee reviews its effectiveness on an ongoing basis.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
35
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 2023.
M Laurier
I Bristow
M Stephen
N Clavel
S Robinson (resigned 11 August 2023)
R Wigley (resigned 11 August 2023)
A Brennan (resigned 11 August 2023)
Basic Salary
£’000
Benefits
£’000
2023 Total
Emoluments £’000
2022 Total
Emoluments £’000
257
160
165
16
8
10
10
626
3
–
–
–
–
–
–
3
260
160
165
16
8
10
10
629
221
145
166
16
16
16
10
590
There were no directors pension contributions made during the year (2022: £nil).
Share options
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
Number of share
options or warrants
Exercise price
(pence per share)
Exercisable from
Exercisable to
See below
1,851,500
350,000
3,000,000
280,000
2,000,000
210,000
500,000
250,000
4.500
26 November 2008
31 December 2024
12.500
31 March 2010
31 December 2024
4.500
26 November 2008
31 December 2024
12.500
31 March 2010
31 December 2024
4.500
26 November 2008
31 December 2024
12.500
31 March 2010
31 December 2024
4.500
16 October 2009
31 December 2024
12.500
18 December 2010
31 December 2024
The above share options and warrants are HM Revenue and Customs unapproved.
Options were due to expire on 31 December 2023 but have been extended to 31 December 2024.
N Clavel
Chairman of the Remuneration Committee
6 June 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
36
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 2023
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 material
accounting policy information.
The financial reporting framework that has been applied in
their preparation is applicable law and UK-adopted international
accounting standards 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:
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 2023 and of
the group’s loss for the year then ended;
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;
o Evaluating the group’s performance in the year as well as
post year end information available;
o Review of funding in place including terms thereof and
o have been properly prepared in accordance with UK-adopted
any new funding requirements;
international accounting standards 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: and
o have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the “Auditor’s responsibilities for the audit of the financial
statements” section of our report. We are independent of the
group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard,
as applied to 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.
o Review of the cashflow forecasts; 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.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) 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 2023 Governance
37
Independent Auditor’s Report
Continued
Key Audit Matter
How our scope addressed this matter
Revenue recognition policy - Group only (Note 2)
The Group’s accounting policy in respect of revenue recognition is set
out in the accounting policies on page 48 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.
Key Audit Matter
Intercompany debtors and Investments - Parent only (Note 2, 26, 27)
The group’s accounting policy in respect of financial assets is set out
in the accounting policies on page 50 of the financial statements.
For Symphony Environmental Technologies PLC, we identify the
risk around recovery of intercompany balances held with Symphony
Environmental Limited (SEL) of £4,550,000 (2022: £6,912,000), as per
note 27, and the investment value of £1,386,000 (2022: £1,309,000),
as per note 26, held due to the trading results of the group which is still
loss making.
We confirmed our understanding of the processes and controls
relevant to the revenue recognition policy of the company by
performing walkthrough procedures. We evaluated the design and
implementation of the controls and concluded that a substantive
audit approach should be adopted. Consequently, we did not test the
operating effectiveness of the controls identified.
As part of our substantive procedures:
o Obtained and critically assessed the revenue recognition policy
to ensure they comply with the IFRS requirements and
o On sample basis from 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 page 48.
We confirmed our understanding of the processes and controls
relevant by performing walkthrough procedures. We evaluated the
design and implementation of the controls and concluded that a
substantive audit approach should be adopted. Consequently,
we did not test the operating effectiveness of the controls identified.
Followed by the following substantive procedures performed:
o We critically assessed the information included in forecast
prepared for SEL including the underlying assumptions used;
o Assessed the historic levels of managements forecasting
accuracy;
o We assessed managements discounted cash flow forecasts and
reperformed the calculation to confirm its accuracy;
o Challenged discount rates used in discounted cashflow forecasts;
o Performed sensitivity analysis on key assumptions and expected
cash flows in the model; and
o Assessed the forecasts and preformed a stand back review to
look for disconfirming evidence in post year end data and market
information.
Our observations
Based on the results of our procedures performed above, we consider
the intercompany debtors and investments to be materially correct,
and in line with the accounting policy described on page 50.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
38
Independent Auditor’s Report
Continued
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
£114,400 (2022: £110,772)
How we
determined it
Group materiality has been calculated by reference
to total revenue, of which it represents 2%
(2022: 2% of total revenue).
Parent company materiality
Parent company
£57,200 (2022: £55,386)
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)
(2022: 5% of net assets).
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.
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 £85,800, which
represents 75% of overall materiality.
We set performance materiality at £42,900, which
represents 75% of overall materiality.
Reporting threshold We agreed with the directors that we would report to them
misstatements identified during our audit above £3,432 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 £1,716 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 assumptions on significant accounting estimates.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
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
the parent company, their environment, controls, and critical
business processes, to consider qualitative factors 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 thus covering 100% of revenue, the loss of
the group and the assets of the group.
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 2023 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.
Governance
39
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 32, 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 2023 Governance
40
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.
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.
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.
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 company and its industry,
we considered that non-compliance with the following laws
and regulations might have a material effect on the financial
statements: employment regulation, health and safety
regulation and anti-money laundering regulations.
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 and the Companies Act 2006.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Governance
41
Independent Auditor’s Report
Continued
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 Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
6 June 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Symphony Environmental Technologies plc Annual Report and Accounts 2023
42
Financial statements
43
Consolidated statement of comprehensive income
for the year ended 31 december 2023
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating loss
Finance costs
Share of results of joint ventures
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
14
8
9
9
2023
£’000
6,351
(4,018)
2,333
(203)
(4,119)
(1,989)
(189)
(73)
(2,251)
71
(2,180)
(2,180)
(1.18)p
(1.18)p
2022
£’000
6,154
(3,874)
2,280
(408)
(4,802)
(2,930)
(77)
-
(3,007)
120
(2,887)
(2,887)
(1.65)p
(1.65)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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
44
Consolidated statement of financial position
as at 31 december 2023
Company number 03676824
S
T
E
S
S
A
Non-current
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments
Interest in joint venture
Current
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Note
10
11
12
13
14
15
16
17
I
S
E
T
I
L
I
B
A
I
L
D
N
A
Y
T
U
Q
E
I
Equity - Equity attributable to shareholders of Symphony Environmental Technologies plc
Ordinary shares
Share premium
Retained earnings
Total equity
Liabilities
Non-current
Lease liabilities
Current
Lease liabilities
Borrowings
Trade and other payables
Total liabilities
Total equity and liabilities
18
18
18
19
19
19
20
2023
£’000
168
270
653
130
28
1,249
645
1,812
1,123
3,580
4,829
1,848
4,854
(7,102)
(400)
47
187
3,270
1,725
5,182
5,229
4,829
2022
£’000
138
379
439
130
101
1,187
1,175
2,349
1,152
4,676
5,863
1,848
4,854
(4,999)
1,703
181
167
1,991
1,821
3,979
4,160
5,863
These annual report and accounts were approved by the Board of Directors on 6 June 2024 and authorised for issue on 6 June
2024. 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 2023
Financial statements
45
Consolidated statement of changes in equity
for the year ended 31 december 2023
Equity attributable to the equity holders of Symphony Environmental Technologies plc:
For the year to 31 December 2023
Balance at 1 January 2023
Share based options (note 18)
Transactions with owners
Total comprehensive loss for the year
Balance at 31 December 2023
For the year to 31 December 2022
Balance at 1 January 2022
Share based options (note 18)
Issue of share capital (note 18)
Transactions with owners
Total comprehensive loss for the year
Share
capital
£’000
Share premium
£’000
Retained earnings
£’000
1,848
4,854
(4,999)
-
-
-
1,848
1,793
-
55
55
-
-
-
-
4,854
3,910
-
944
944
-
77
77
(2,180)
(7,102)
(2,231)
119
-
119
(2,887)
(4,999)
Total
equity
£’000
1,703
77
77
(2,180)
(400)
3,472
119
999
1,118
(2,887)
1,703
Balance at 31 December 2022
1,848
4,854
The accompanying notes form an integral part of these annual report and accounts.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Consolidated cash flow statement
for the year ended 31 december 2023
Cash flows from operating activities
Loss after tax
Adjustments for:
Depreciation
Amortisation
Loss on disposal of fixed assets
Loss on disposal intangible
Share-based charges
Share of JV loss
Interest expense
Net exchange differences
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 intangible assets
Additions to joint venture
Additions to investments
Net cash used in investing activities
Cash flows from financing activities
Drawdown cash received from invoice finance facility
Customer receipts repayment of invoice finance facility
Convertible loan
Repayment of lease capital
Proceeds from share issue
Lease interest paid
Bank, invoice finance and other interest paid
Net cash generated in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Effect of exchange rates on cash
Cash and cash equivalents, end of year
Represented by:
Cash and cash equivalents
Bank overdraft
Note
10-11
12
5
5
18
14
7
8
15
16
20
8
10
12
14
13
19
19
19
19
18
7
7
17
19
Financial statements
46
2023
£’000
2022
Restated
£’000
(2,180)
(2,887)
220
15
3
28
77
73
189
(12)
(71)
530
594
(85)
(619)
97
(522)
(84)
(257)
-
-
(341)
5,686
(5,927)
1,500
(174)
-
(17)
(172)
896
33
18
(19)
32
1,123
(1,091)
32
229
14
14
-
119
77
-
(120)
141
797
30
(1,586)
120
(1,466)
(18)
(194)
(101)
(7)
(320)
5,406
(4,549)
-
(179)
999
(22)
(55)
1,600
(186)
204
-
18
1,152
(1,134)
18
Cash flows from financing activities has been restated in 2022 to show gross monies drawn down against customer receipts as
opposed to a net movement in the facility drawn.
The accompanying notes form an integral part of these annual report and accounts.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Financial statements
47
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 2023.
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 £1.99 million for the
year (2022: loss £2.93 million). With underlying gross margins
(before provisions) remaining above 40%, the Group has also
been able to reduce costs after investing heavily and having
created significant opportunities on a technical and marketing
standpoint. This has resulted in multiple sales opportunities
which are expected to come to fruition in the short-term.
On the basis of current financial projections, which have been
drawn out to the end of 2025, including a sensitised cash flow
analysis (sensitised by revenue being the main area of forecast
risk), together with available funds and facilities, 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.
This is primarily underpinned by the following:
o Middle East volumes expected to increase
o Repeat and growing d2p AI and other d2p business
o Steadier main markets in Far East and Latin America
with good growth potential
o Administrative costs further reduced from 2023 levels
Although net current liabilities are £1.6 million at the end of the
year, this includes £1.5 million in unsecured convertible loan
funding received during the year for which repayment since the
year end has been extended to 31 December 2025. In addition,
the Group has since the year end raised £1.4 million of equity by
subscription and retail offer and is also supported by an invoice
finance facility from the Group’s bankers. Systems are in place
which enable monitoring of cashflow requirements of the
business which identifies any need for borrowing and usage
of borrowed funding. The Group is not materially affected by
any political or economic uncertainty.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
48
Notes to the Annual Report and Accounts
Continued
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
‘Revenues from Contracts with Customers’ 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.
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; and
- 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 an agent in the
provision of transport rather than the principal under
IFRS 15 “Revenues from Contracts with Customers”.
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.
Intangible assets
- Research and development costs
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:
o completion of the intangible asset is technically feasible
so that it will be available for use or sale;
o the Group intends to complete the intangible asset and
use or sell it;
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Financial statements
49
Notes to the Annual Report and Accounts
Continued
- Trademarks
Leased assets
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:
Trademarks
- 10 years straight line.
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.
Office equipment
- 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.
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
statement of financial position 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.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest.
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
50
Notes to the Annual Report and Accounts
Continued
Investments in joint ventures
Taxation
A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the
contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The results and assets and liabilities of joint ventures are
incorporated in these financial statements using the equity
method of accounting.
Under the equity method, an investment in a joint venture is
recognised initially in the consolidated statement of financial
position at cost as at the date of acquisition and adjusted
thereafter to recognise the Group’s share of the profit or loss
and other comprehensive income of the joint venture. When the
Group’s share of losses of a joint venture exceeds the Group’s
interest in that associate or joint venture (which includes any
long-term interests that, in substance, form part of the Group’s
net investment in the associate or joint venture), the Group
discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has
incurred legal or constructive obligations or made payments
on behalf of the joint venture.
Investments
Minority investments in shares are initially held at cost. Fair
value is assessed on an annual basis and any gain or loss is
adjusted through profit and loss.
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.
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 statement of financial position 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.
Financial assets
The Group classifies all of its financial assets measured at
amortised cost, apart from investments. 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
51
Notes to the Annual Report and Accounts
Continued
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.
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. Cash balances which
are overdrawn are referenced in financial liabilities below.
Financial liabilities
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.
Financial liabilities measured at amortised cost include:
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, convertible loans 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. Redemption of the convertible
loan can be in cash or equity in accordance with note 19.
Convertible loans are classified as financial liabilities unless
and until they are converted into equity. The convertible loans
accrue interest and can be repaid by cash at the Group’s
discretion up until the contracted day of conversion.
Unless otherwise indicated, the carrying values of the Group’s
financial liabilities measured at amortised cost represents
a reasonable approximation of their fair values.
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 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 gains and losses arising
from amounts recognised in profit or loss and the fair value
of options granted under the Group’s share-based payment
schemes.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Financial statements
52
Notes to the Annual Report and Accounts
Continued
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:
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.
3. Significant accounting estimates and
judgements
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:
o IAS 1 Presentation of Financial Statements: Disclosure
- 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 2023 was approximately £5,078,000.
- 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. In order to
calculate fair value, judgements and estimates have been made
as to the financing and operating risk of the invested company,
together with the marketability of the investment. The carrying
value of investments as at 31 December 2023 was £130,000.
See note 13.
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
o IFRS 17 Insurance contracts: Amendments in relation to
initial application and IFRS 9 – comparative information.
Effective 1 January 2023
New and revised UK-adopted international
accounting standards in issue but not yet effective
At the date of authorisation of these financial statements,
The Group has not applied the following new and revised
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 1 Presentation of Financial Statements: Amendments
in relation to the classification of liabilities as current or
non-current. Effective 1 January 2024
o IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments Disclosures: Amendments in relation to supplier
finance arrangements. Effective 1 January 2024
o IAS 16 Leases: Amendments in relation to lease liability
in a sale and leaseback. Effective 1 January 2024
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
53
Notes to the Annual Report and Accounts
Continued
- Inventory provisions
Judgements:
Estimates are made as to impairment provisions to the carrying
value of inventories based whether the items are still sellable
and also the expected net value that can be achieved on sale.
The resultant value was calculated based on net proceeds fairly
achievable over the short to medium term and were based on
specific items where saleability is in doubt, and the dates of the
last movements of each stock item as an indicator to future
value except for certain raw material items which are known to
be required in the short term. There is a provision of £235,000
for the impairment of inventories as at 31 December 2023.
See note 15. Shortening the period of last movements by six
months has an effect of increasing the provision by £15,000
as at 31 December 2023.
- 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 16 for
further information. At the year end, the Group has provisions
of £75,000 (2022: £78,000) on a total trade receivables balance
of £1,586,000 (2022: £1,901,000) calculated using this method.
An increase of 10% on the ECL as at 31 December 2023 would
increase the provision by £7,000.
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 operating segment. The Board assesses the
commercial performance of the business based upon the
revenues of the main products items within its single
operating segment as follows:
Revenues
d2w masterbatches
d2p masterbatches
Finished products
Other
Total
2023
£’000
5,221
512
424
194
6,351
2022
£’000
4,768
793
472
121
6,154
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Financial statements
54
Notes to the Annual Report and Accounts
Continued
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
2023
£’000
428
878
161
2,066
2,073
745
6,351
2022
£’000
408
722
274
2,582
1,183
985
6,154
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.
Within the above, revenues are attributed to the following
countries which are represented by over 5% of total revenues:
Country
UAE
Mexico
UK
China
France
Other countries
Total
2023
£’000
1,985
1,455
428
375
354
1,754
6,351
2022
£’000
803
1,659
408
312
337
2,635
6,154
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.
Major customers
There was one customer that accounted for greater than
10% of total Group revenues for 2023 (2022: one customer).
In 2023 the one customer accounted for £1,863,000 or 29%
(2022: £654,000 and one customer being 11%) 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 crediting:
2023
£’000
2022
£’000
Depreciation – property,
plant and equipment
Depreciation – right-of-use
assets
Loss on disposal of
property, plant and
equipment Amortisation
Amortisation
Loss on disposable of
intangible assets
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
loss/(gain)
51
169
3
15
28
210
35
50
26
* Further development expenditure of £250,000 (2022:
£168,000) is included in Development cost additions
– see note 12.
6. Directors and employees
Staff costs (including directors) during the year comprise:
50
179
14
14
-
510
30
45
(29)
2022
£’000
2,115
162
156
2,433
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.
Wages and salaries
Social security costs
Pension contributions
Total
Non-current assets of £9,000 are held outside of the UK
(2022: £14,100).
Remuneration in respect of the Directors, who are also the key
management, was as follows:
2023
£’000
1,874
216
127
2,217
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Notes to the Annual Report and Accounts
Continued
Average monthly number of people (including directors)
by activity:
8. Taxation
R&D, testing and technical
Selling
Administration
Management
Marketing
Total average headcount
2023
2022
6
9
11
6
1
33
10
11
12
7
3
43
Remuneration in respect of the Directors, who are also the key
management, was as follows:
Emoluments (all short term)
2023
£’000
629
2022
£’000
590
There were no Directors’ pension contributions made during
the year (2022: £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, invoice finance
borrowings, and other
Convertible loan
Lease interest (right-of-
use assets)
Total finance costs
2023
£’000
260
2022
£’000
221
2023
£’000
2022
£’000
109
63
17
189
55
-
22
77
Financial statements
55
2023
£’000
71
71
2022
£’000
120
120
R&D tax credit
Total income tax credit
No tax arises on the loss for the year.
The tax assessed for the year is different from the standard
rate of corporation tax in the UK of 19% up to 31 March 2023
and 25% from 1 April 2023 (2022: 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
23.5% (2022: 19%)
Fixed asset differences
Expenses not deductible for
tax purposes
R&D tax relief
Movement in deferred tax
not recognised
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
2023
£’000
(2,251)
2022
£’000
(3,007)
(529)
(571)
1
38
(38)
451
40
37
(71)
(71)
(2)
24
(39)
520
16
52
(120)
(120)
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 £71,000 shown above relates to a repayment made
by HMRC in relation to the year ended 31 December 2022
(£120,000 relates to the year ended 31 December 2021).
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 2023 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 Technologies plc Annual Report and Accounts 2023
Financial statements
56
Notes to the Annual Report and Accounts
Continued
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.
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 £20,600,000 (2022: £18,939,000). These tax losses have no
expiry date. The unrecognised deferred tax asset in respect of these losses based on latest profit projections is approximately
£5,178,000 (2022: £4,735,000).
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% up to 31 March 2023 and 25% from 1 April 2023 (2022: 19%).
The Group also has gross fixed assets of £254,000 (2022: £258,000) which give rise to a deferred tax liability of £63,500 (2022:
£65,000). Other gross temporary differences of £75,000 (2022: £85,000) give rise to a deferred tax asset of £18,750 (2022:
£21,000). The deferred tax liability of £63,500 (2022: £65,000) is sheltered by the unrecognised deferred tax asset in respect
of losses and temporary differences.
The unrecognised deferred tax balances disclosed in the above for 2023 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
2023
2022
£(2,180,000)
£(2,887,000)
184,806,833
175,226,254
(1.18) pence
(1.65) pence
3,686,662
7,498,557
Total of weighted average shares together with dilutive effect of weighted options- see below
184,806,833
175,226,254
Diluted earnings per share
(1.18) pence
(1.65) pence
No dividends were paid for the year ended 31 December 2023 (2022: £nil).
The effect of options and warrants for the years ended 31 December 2023 and 31 December 2022 are anti-dilutive.
A total of 12,866,500 options and warrants were outstanding at the end of the year which may become dilutive in future years.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
57
Notes to the Annual Report and Accounts
Continued
10. Property, plant and equipment
Year ended 31 December 2023
Plant & Machinery
£’000
Fixtures & Fittings
£’000
Office Equipment
£’000
Total
£’000
Cost
At 1 January 2023
Additions
Disposals
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the Year
Disposals
At 31 December 2023
Net Book Value
At 31 December 2023
At 31 December 2022
397
2
(14)
385
305
19
(13)
311
74
92
293
-
-
293
272
8
-
280
13
21
138
82
(74)
146
113
24
(72)
65
81
25
828
84
(88)
824
690
51
(85)
656
168
138
Year ended 31 December 2022
Plant & Machinery
£’000
Fixtures & Fittings
£’000
Office Equipment
£’000
Total
£’000
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the Year
Disposals
At 31 December 2022
Net Book Value
At 31 December 2022
At 31 December 2021
387
10
-
397
282
23
-
305
92
105
298
-
(5)
293
269
8
(5)
272
21
29
140
8
(10)
138
103
19
(9)
113
25
37
825
18
(15)
828
654
50
(14)
690
138
171
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
58
Notes to the Annual Report and Accounts
Continued
11. Right-of-use assets
Year ended 31 December 2023
Cost
At 1 January 2023
Additions
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the Year
At 31 December 2023
Net Book Value
At 31 December 2023
At 31 December 2022
Land & buildings
£’000
Plant & Machinery
£’000
Office Equipment
£’000
905
-
905
545
160
705
200
360
-
60
60
-
4
4
56
-
78
-
78
59
5
64
14
19
Total
£’000
983
60
1,043
604
169
773
270
379
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 19.
Year ended 31 December 2022
Land & buildings
£’000
Land & buildings
£’000
Office Equipment
£’000
Total
£’000
Cost
At 1 January 2022
Additions
Disposal
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the Year
Disposal
At 31 December 2022
Net Book Value
At 31 December 2022
At 31 December 2021
905
-
-
905
385
160
-
545
360
520
-
-
-
-
-
-
-
-
-
-
70
22
(14)
78
42
19
(2)
59
19
28
975
22
(14)
983
427
179
(2)
604
379
548
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
59
Notes to the Annual Report and Accounts
Continued
12. Intangible assets
Year ended 31 December 2023
Cost
At 1 January 2023
Additions
Disposals
At 31 December 2023
Amortisation
At 1 January 2023
Charge for the Year
Disposals
At 31 December 2023
Impairment
At 1 January 2023
At 31 December 2023
Net Book Value
At 31 December 2023
At 31 December 2022
Development costs
£’000
Trademarks
£’000
2,307
250
-
2,557
245
-
-
245
1,728
1,728
584
334
142
7
(41)
108
37
15
(13)
39
-
-
69
105
Total
£’000
2,449
257
(41)
2,665
282
15
(13)
284
1,728
1,728
653
439
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 £584,000 (2022: £334,000). Amortisation will
start on completion of the project in accordance with note 2.
Year ended 31 December 2022
Development costs
£’000
Trademarks
£’000
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
Amortisation
At 1 January 2022
Charge for the Year
Disposals
At 31 December 2022
Impairment
At 1 January 2022
At 31 December 2022
Net Book Value
At 31 December 2022
At 31 December 2021
2,139
168
-
2,307
245
-
-
245
1,728
1,728
334
166
119
26
(3)
142
25
14
(2)
37
-
-
105
94
Total
£’000
2,258
194
(3)
2,449
270
14
(2)
282
1,728
1,728
439
260
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
60
Notes to the Annual Report and Accounts
Continued
13. Investments
The Group holds investment interests in the following minority unlisted shares.
Investment held at fair value:
At 1 January 2023
Net change in fair value (unrealised)
At 31 December 2023
At 31 December 2022
Total
£’000
130
-
130
130
The Group has invested £130,000 (1.6%) into Eranova SAS, a French company developing products from green algae.
The fair value for this investment, as shown above, is categorised as Level 3 because the shares were not listed on the exchange
but there are inputs that are directly or indirectly observable.
Sensitivity analysis
For the fair value of this equity security as a whole, reasonably possible changes at the reporting date of one of the significant
unobservable inputs, holding other inputs constant, would have the following effect.
Adjusted total company value (5% movement)
The valuation process relied on the following factors:
o Equity valuation based on a recent fund raising creating an arms-length valuation
o Recent fund-raising initiatives by Eranova
o The current non-marketability of the shares
o Inherent risks surrounding a developing company not at a fully commercial stage
The Company is parent to the following subsidiary undertakings
Increase
£’000
7
Decrease
£’000
(7)
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
D2W Limited
England and Wales
Development and supply
of environmental plastic
additives and products
Dormant
Symphony Recycling
Technologies Limited
Symphony Energy Limited
England and Wales
Dormant
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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
61
Notes to the Annual Report and Accounts
Continued
14. Interest in joint ventures
At 1 January 2023
Share of joint venture total comprehensive income (see below)
At 31 December 2023
Total
£’000
101
(73)
28
The Group has a 46.5% share of Symphony Environmental India (Private) Limited, a company incorporated in India.
The primary activity of Symphony Environmental India (Private) Limited is the marketing and sale of the Groups d2w and d2p product
range in India. The contractual arrangement provides the Group with only the rights to the net assets of the joint arrangement, with
the rights to the assets and obligation for liabilities of the joint arrangement resting primarily with Symphony Environmental India
(Private) Limited. Under IFRS 11 this joint arrangement is classified as a joint venture and has been included in the consolidated
financial statements using the equity method.
Summarised material financial information in relation to the joint venture in accordance with IFRS 12 is shown below.
Revenue
(Loss)/profit from continuing operations (before and after tax)
Total comprehensive income
Group’s share of total comprehensive income (46.5%)
Current assets
Non-current assets
Current liabilities
Net assets
Group’s share of net assets (46.5%)
Year to
31 December 2023
£’000
Year to
31 December 2022
£’000
114
(156)
(156)
(73)
117
2
(171)
(52)
-
198
3
3
1
169
1
(70)
100
48
Within current liabilities are cash borrowings of £141,000 (2022: £29,000). There was no material cash and cash equivalents at the
end of the year (2022: £nil).
The joint venture’s reporting date is 31 March. The above is based on management information. There are no unrecognised
losses, material capital commitments or contingent liabilities as at 31 December 2023. There were no dividends received during
the year (2022: £nil).
15. Inventories
Finished goods and goods for resale
Raw materials
2023
£’000
364
281
645
2022
£’000
671
504
1,175
The cost of inventories recognised as an expense and included in ‘cost of sales’ amounted to £3,035,000 (2022: £3,094,000).
There is a provision of £235,000 for the impairment of inventories (2022: £252,000).
There is no collateral on the above amounts.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Notes to the Annual Report and Accounts
Continued
16. Trade and other receivables
Trade receivables
Other receivables
VAT
Prepayments
Financial statements
62
2023
£’000
1,511
90
18
193
1,812
2022
£’000
1,901
174
29
245
2,349
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 statement of financial position date equates to the carrying value of trade receivables.
Further disclosures are set out in note 23.
Trade receivables are secured against the facilities provided by the Group’s bankers. As at 31 December 2023, £1,027,000 (2022:
£1,530,000) of trade receivables had been sold to the Group’s bankers who are a provider of invoice discounting services. The Group
is committed to underwrite any of the debts transferred and therefore continues to recognise the debts sold within trade receivables
until the debtors repay or default. Since the trade receivables continue to be recognised, the business model of the Group is not
affected. The proceeds from transferring the debts of £616,000 (2022: £857,000) are included in borrowings (note 19 - invoice
finance facility) until the debts are collected or the Group makes good any losses incurred 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 2023
31 December 2022
0 - 30
£’000
1,272
1,488
31-60
£’000
0
236
61-90
£’000
100
61
91-120
£’000
0
19
>120
£’000
Total Gross
£’000
214
175
1,586
1,979
ECL
£’000
(75)
(78)
Total Net
£’000
1,511
1,901
The ECL is included within debts past 120 days overdue at 36% for 2023 and 45% for 2022.
17. Cash and cash equivalents
Cash at bank and in hand
The carrying amount of cash equivalents approximates to their fair values.
2023
£’000
1,123
1,123
2022
£’000
1,152
1,152
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
63
Notes to the Annual Report and Accounts
Continued
18. Equity
At 1 January 2023
Loss for the year
Share based payments
At 31 December 2023
At 1 January 2022
Issue of share capital
Loss for the year
Share based payments
At 31 December 2022
Group and Company
Group
Ordinary shares
Number
Ordinary shares
£’000
Share premium
£’000
Retained earnings
£’000
184,806,833
1,848
4,854
-
-
184,806,833
179,251,277
5,555,556
-
-
-
-
1,848
1,793
55
-
-
-
-
4,854
3,910
944
-
-
184,806,833
1,848
4,854
(4,999)
(2,180)
77
(7,102)
(2,231)
-
(2,887)
119
(4,999)
Total
£’000
1,703
(2,180)
77
(400)
3,472
999
(2,887)
119
1,703
During the year the Company issued nil Ordinary Shares (2022: 5,555,556 ordinary shares) for a net consideration of £nil
(2022: £999,000).
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
Share options
As at 31 December 2023 the Group maintained an approved share-based payment scheme for employee compensation.
All share-based employee compensation will be settled in equity. There were no new approved staff options issued in the
year (2022:4,000,000). As at 31 December 2023 there were 2,675,000 approved staff options outstanding (2022: 2,975,000).
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 2-15 years from the
date of grant, the option expires.
The weighted average exercise price of all of the Group’s options are as follows:
Outstanding 1 January
Granted
Exercised
Lapsed
Outstanding 31 December
Number
21,666,500
-
-
(8,800,000)
12,866,500
2023 Weighted
average exercise
price £
0.15
-
-
0.22
0.04
Number
16,441,500
7,725,000
-
(2,500,000)
21,666,500
2022 Weighted
average exercise
price £
0.14
0.25
-
0.40
0.15
The weighted average exercise price of options exercised in 2023 was £nil as no options were exercised during the period
(2022: £nil). The number of share options and warrants exercisable at 31 December 2023 was 12,866,500 (2022: 21,666,500).
The weighted average exercise price of those options and warrants exercisable was 4p (2022: 15p). The weighted average option
and warrants contractual life is fifteen years (2022: ten years) and the range of exercise prices is 4.5p to 25p (2022: 4.5p to 30p).
Directors
Directors’ interests in shares and share incentives are contained in the Remuneration Committee Report on page 34.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
64
Notes to the Annual Report and Accounts
Continued
IFRS2 expense
The IFRS 2 share-based payment charge for the year is £77,000 (2022: £119,000). This relates to two schemes as follows:
£30,000 of the charge was calculated using the Black Scholes model with a three-year term, risk free rate of 0.48%, volatility
of 68.36% (based on 12 months share price month prior to grant) and dividend yield of 0%.
£47,000 of the charge was calculated using the Black Scholes model with a two-year term, risk free rate of 1.60% to 1.72%,
volatility of 54.9% (based on 12 months share price movement prior to grant) and dividend yield of 0%.
19. Borrowings
Non-current
Leases
Current
Bank overdraft
Invoice finance facility
Convertible Loan
Borrowings
Leases
Total
2023
£’000
2022
£’000
47
181
1,091
616
1,563
3,270
187
3,457
3,504
1,134
857
-
1,991
167
2,158
2,339
The bank overdraft relates to US Dollars and kept for hedging purposes as at the year end. Interest is charged on overdrafts at 2.4%
above the host countries currency base rate. The Group also has an invoice finance facility with its bankers. The bank overdraft and
invoice finance facility are secured by a fixed and floating charge over the Group’s assets.
The main terms of the convertible loan agreements with Sea Pearl Ventures Limited (who is a 17.4% shareholder in the Group) are:
o March 2023 loan principal: £1,000,000 (unsecured) of which £1,000,000 drawn down in the year.
o October 2023 loan principal: £1,000,000 (unsecured) of which £500,000 drawn down in the year.
o Conversion if not repaid, on 30 September 2024.
o Conversion price: 80% of the volume weighted average share price for the 3 months prior to conversion.
o Interest: 7% per annum, payable as accrued on repayment and/or conversion.
o Symphony able to repay the loans in full or in part before conversion at its discretion.
The repayment dates have since been extended. See note 24, events since statement of financial position.
The Group’s leasing activities are detailed in the table below:
Right-of-use asset
Head office
Plant & Machinery
Office equipment
Office equipment
Number of
assets leased
1
1
1
1
Remaining
term
1 year
3 years
Ended in year
4 years
The weighted average discount rate on initial application was 4.5%. None of the above remaining leases has a remaining option
extension, option to purchase or termination option except for the new plant and machinery lease for £60,000 which was entered
into which has an option to purchase. The office equipment asset under the lease that ended in the year was purchased at no
additional cost.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Notes to the Annual Report and Accounts
Continued
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
Financial statements
65
2023
£’000
201
55
256
2023
£’000
174
17
191
2022
£’000
182
190
372
2022
£’000
167
22
189
Reconciliation of liabilities arising from financing activities
For the year ended 31 December 2023
Gross payments
Bank overdraft
Invoice finance facility
Convertible loan
Leases
Total liabilities from financing activities
1 January
2023
£’000
1,134
857
-
348
2,339
Cash flows
£’000
(43)
5,686
1,500
(191)
6,952
Non-cash
changes
£’000
-
(5,927)
63
77
(5,787)
31 December
2023
£’000
1,091
616
1,563
234
3,504
The non-cash changes for the invoice finance facility reflects customer receipts repaid directly to the bank. The non-cash changes
for the lease pertain to a new lease addition of £60,000 and interest of £17,000. The non-cash changes for the convertible loan is
an interest amount of £63,000.
For the year ended 31 December 2022
Gross payments
Bank overdraft
Invoice finance facility
Leases
Total liabilities from financing activities
1 January
2022
£’000
677
-
505
1,182
Cash flows
£’000
457
857
(189)
1,125
Non-cash
changes
£’000
31 December
2022
£’000
-
-
32
32
1,134
857
348
2,339
The non-cash changes relate to a new lease addition of £22,000, the replacement of a £12,000 lease, and interest of £22,000.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Notes to the Annual Report and Accounts
Continued
20. Trade and other payables
Current
Financial liabilities measured at amortised cost:
Trade payables
Other payables
Social security and other taxes
Accruals
Financial statements
66
2023
£’000
1,158
35
136
396
1,725
2022
£’000
1,395
23
214
189
1,821
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 99 days (2022: 82 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.
21. Commitments and contingencies
a) Capital commitments
The Group had capital commitments totalling £nil at the end of the year (2022: £nil).
b) Contingent liabilities
Together with its subsidiary, Symphony Environmental Limited, the Group’s bankers have provided a Group composite facility
of £10,000 and invoice finance facility of £1.5million (2022: £10,000 and £1.5 million).
22. Related party transactions
Alexander Brennan was a member of the Board as an executive director until 11 August 2023. The Group was employing the
services of a company which he is a shareholder and director, Brennan and Partners Limited. While Alexander Brennan was a
member of the Board, the Group has paid £84,600 to Brennan and Partners Limited (2022: £89,400) for advocacy and other
advisory services in relation to the Group’s d2w products in the UK, Spain and Latin America.
The table below shows the inter company management charge and interest charge made by Symphony Environmental
Technologies plc to Symphony Environmental Limited together with the end of year balance due from Symphony Environmental
Limited to Symphony Environmental Technologies plc.
Current
Management charge for the year
Interest charge for the year
Inter company balance at the end of the year
There were no other related party transactions during the year (2022: none).
2023
£’000
380
686
13,806
2022
£’000
348
469
11,513
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
67
Notes to the Annual Report and Accounts
Continued
23. 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
2023
£’000
1,511
90
1,123
2,724
1,158
35
396
1,091
234
2,915
2022
£’000
1,901
174
1,152
3,227
1,395
23
189
1,134
348
3,089
The Group’s £130,000 carrying investment in Eranova SAS see note 13, is held at fair value.
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 2023 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
1,589
-
-
-
-
-
1,589
Leases
£’000
5
48
47
101
52
3
256
Bank overdraft
& other loans
£’000
1,091
-
-
-
-
-
Total
£’000
2,685
48
47
101
52
3
1,091
2,936
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
68
Notes to the Annual Report and Accounts
Continued
The maturity of financial liabilities as at 31 December 2022 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
1,607
-
-
-
-
-
1,607
Leases
£’000
3
46
44
89
182
8
372
Bank overdraft
& other loans
£’000
1,134
-
-
-
-
-
Total
£’000
2,744
46
44
89
182
8
1,134
3,113
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.
The Group’s exposure to interest rate risk as at 31 December 2023 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
-
-
-
-
-
-
(234)
-
(234)
-
-
Variable
£’000
1,123
-
-
1,123
-
-
-
(1,091)
32
2
-
The Group’s exposure to interest rate risk as at 31 December 2022 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
-
-
-
-
-
-
(348)
-
(348)
-
-
Variable
£’000
1,152
-
-
1,152
-
-
-
(1,134)
18
1
-
Sensitivity shows the effect on equity and statement of comprehensive income.
Zero
£’000
-
1,511
90
1,601
1,601
(1,158)
(35)
-
408
-
-
Zero
£’000
-
1,901
174
2,075
(1,395)
(23)
-
-
657
-
-
Total
£’000
1,123
1,511
90
2,724
2,724
(1,158)
(35)
(234)
206
2
-
Total
£’000
1,152
1,901
174
3,227
(1,395)
(23)
(348)
(1,134)
327
1
-
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
69
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
Sterling balance
2023
£’000
Currency balance
2023
C’000
Sterling balance
2022
£’000
Currency balance
2022
C’000
Currency
Euro
Euro
Euro
USD
USD
USD
39
(21)
18
1,968
(879)
1.089
€45
€(24)
€21
(2)
2
$2,506
$(1,104)
$1402
(88)
134
235
(98)
137
1,943
(1,018)
925
€266
€(111)
€155
(12)
(15)
$2,695
$(1,232)
$1,463
(110)
134
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.
Credit risk
The Group’s exposure to credit risk is limited to the carrying value of financial assets at the statement of financial position date,
summarised as follows:
Gross payments
Trade receivables
Other receivables
Cash and cash equivalents
2023
£’000
1,511
90
1,123
2,724
2022
£’000
1,901
174
1,152
3,227
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 81% (2022: 82%) of the above trade receivables.
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 16.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
70
Notes to the Annual Report and Accounts
Continued
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 18 and interest
bearing loans and borrowings as detailed in note 19. 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 18.
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 2023 and 2022 were as follows:
Total borrowings (note 19)
Cash and cash equivalents (note 17)
Net debt
Total equity (note 18)
Borrowings
Overall financing
Gearing ratio
2023
£’000
3,504
(1,123)
2,381
(400)
2,381
1,982
120%
2022
£’000
2,339
(1,152)
1,187
1,703
1,187
2,890
41%
The gearing ratio for 2023 is high due to the low balance sheet total. Within net debt is £1,563,000 representing convertible loans
which can be repaid in equity in accordance with the terms. See Note 19. If converted this would reduce the gearing ratio to 40%
which is in line with management’s working capital financing strategy.
24. Events since statement of financial position date
On 13 March 2024 the conversion dates of the convertible loans with Sea Pearl Ventures Limited (see note 19) has been extended by
15 months from 30 September 2024 to 31 December 2025.
On 24 March 2024 the Group raised £1.4 million of equity by subscription and retail offer.
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 2023 Financial statements
71
Company statement of financial position
at 31 december 2023
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
26
27
28
30
2023
£’000
1,386
1,386
4,558
762
5,320
1,684
3,636
5,022
1,848
4,854
(1,680)
5,022
2022
£’000
1,309
1,309
6,929
729
7,658
110
7,548
8,857
1,848
4,854
2,155
8,857
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 2023.
The loss after tax for the financial year 2023 within the annual report and accounts of the Company was £3,912,000
(2022: loss £684,000).
These annual report and accounts were approved by the Directors on 6 June 2024 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
72
Company statement of changes in equity
for the year ended 31 december 2023
For the year to 31 December 2023
Balance at 1 January 2023
Share option reserve movement
Transactions with owners
Total comprehensive income for the year
Balance at 31 December 2023
For the year to 31 December 2022
Balance at 1 January 2022
Share option reserve movement
Issue of share capital
Transactions with owners
Total comprehensive income for the year
Share
capital
£’000
Share
premium
£’000
1,848
4,854
-
-
-
-
-
-
1,848
4,854
1,793
3,910
-
55
55
-
-
944
944
-
Balance at 31 December 2022
1,848
4,854
The accompanying notes form an integral part of these annual report and accounts.
Retained
earnings
£’000
2,155
77
77
(3,912)
(1,680)
2,720
119
-
119
(684)
2,155
Total
equity
£’000
8,857
77
77
(3,912)
5,022
8,423
119
999
1,118
(684)
8,857
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Financial statements
73
Notes to the Company statement of
financial position
25. 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 IFRS 7 Financial Instruments:
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
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:
Motor vehicles - 25% reducing balance.
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.
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 statement of financial position 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
74
Notes to the Company statement of financial position
Continued
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 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 statement of financial position. 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” gains and losses arising from amounts
recognised in profit or loss and the fair value of options
granted under the Group’s share-based payment schemes.
Equity-settled share-based payments
Options granted to employees which relate to salary sacrifices
of employees employed by this company are attributed a
air 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 assets or cash, generating unit’s carry amount exceeds
its recoverable amount. To determine the recoverable
amount, management estimates expected future cash flows
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
operation 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.
Estimates expected credit losses in amounts due
from group undertakings
In line with IFRS 9, the Company uses an expected credit loss
model to determine the provision for specific provisions for
balances for which it has specific concerns over recoverability.
The expected credit loss model estimates expected future
cash flows 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.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
75
Notes to the Company statement of financial position
Continued
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.
An impairment of £4,654,000 has been recognised during
the period. See note 27 for the carrying value.
The above can be sensitised as follows:
o A 25% reduction in revenues growth going forward would
increase the impairment by £530,000.
o A 1% increase in the discount rate would increase the
impairment by £260,000.
There are no items in the parent company annual report
and accounts where judgements have been made.
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. The ECL balance is
reconciled as follows:
Brought forward
Increase in ECL
Carried forward
2023
£’000
4,601
4,654
9,255
28. Trade and other payables: amounts
falling due within one year
Shares in
Group
Undertaking
Total
2,309
Trade payables
Accruals
Convertible loans
2023
£’000
49
72
1,563
1,684
2022
£’000
3,394
1,207
4,601
2022
£’000
47
63
-
110
26. Investments
Cost
At 1 January 2023
Additions - share option
expense (note 18)
At 31 December 2023
Impairment
At 1 January 2023
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
2,309
77
2,386
1,000
1,000
1,386
1,309
Group undertakings are detailed in note 13.
27. Trade and other receivables
Amounts owed by Group
undertakings
VAT
Prepayments
2023
£’000
4,550
6
2
4,558
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 £9,255,000 (2022:
£4,601,000).
77
2,386
1,000
1,000
1,386
1,309
2022
£’000
6,912
10
7
6,929
The main terms of the convertible loan agreements with Sea
Pearl Ventures Limited (who is a 17.4% shareholder in the
Company) are:
o March 2023 loan principal: £1,000,000 (unsecured) of which
£1,000,000 drawn down in the year
o October 2023 loan principal: £1,000,000 (unsecured) of
which £500,000 drawn down in the year
o Conversion if not repaid, on 30 September 2024
o Conversion price: 80% of the volume weighted average
share price for the 3 months prior to conversion
o Interest: 7% per annum, payable as accrued on repayment
and/or conversion
o Symphony able to repay the loans in full or in part before
conversion at its discretion
The repayment dates have since been extended. See note 32,
events since statement of financial position.
Symphony Environmental Technologies plc Annual Report and Accounts 2023 Financial statements
76
Notes to the Company statement of financial position
Continued
29. Contingent liabilities
The Company has guaranteed all monies due to its bankers by
Symphony Environmental Limited. At 31 December 2023 the
net indebtedness of this company amounted to £1,346,000
(2022: £1,571,000). The Company has guaranteed the lease
rental payable by Symphony Environmental Limited in respect
to the Group’s head office in Borehamwood amounting to
£171,000 as at 31 December 2023 (2022: £342,000).
30. Share capital
The Company’s share capital is detailed in note 18 of the Group
consolidated accounts.
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
2023
No.
3
2023
£’000
44
2
46
2022
No.
4
2022
£’000
58
3
61
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 13 March 2024 the conversion dates of the convertible
loans with Sea Pearl Ventures Limited (see note 28) have been
extended 15 months from 20 September 2024 to 31 December
2025.
On 24 March 2024 the Group raised £1.4 million of equity by
subscription and retail offer.
There have been no other material events since the statement
of financial position date.
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Symphony Environmental Technologies plc Annual Report and Accounts 2023
Company Information
overview
overview
77
solicitors
Eversheds Sutherland (International) LLP
1 Wood Street
London
EC2V 7WS
Auditor
Forvis Mazars LLP
Chartered Accountants and
Statutory Auditor
The Pinnacle
160 Midsummer Boulevard
Milton Keynes
MK9 1FF
Registrars
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
company registration number
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 & Chairman
Michael Kayser
Independent non-executive director
secretary
Ian Bristow
nominated adviser and joint broker
Zeus Capital Limited
125 Old Broad Street
London
EC2N 1AR
Bankers
HSBC Bank Plc
103 Station Road
Edgware
Middlesex
HA8 7JJ
Symphony Environmental Technologies plc Annual Report and Accounts 2023