Registered in England and Wales number 10114644
Verditek PLC
Group Annual Report and Financial Statements
Year Ended 31 December 2019
CONTENTS
STRATEGIC REPORT ............................................................................................................................. 1
2019 HIGHLIGHTS........................................................................................................................................ 3
CHAIRMAN’S STATEMENT........................................................................................................................... 4
CHIEF EXECUTIVE’S REVIEW ........................................................................................................................ 5
FINANCIAL REVIEW ..................................................................................................................................... 8
PRINCIPAL RISKS AND UNCERTAINTIES ....................................................................................................... 9
GOVERNANCE .................................................................................................................................... 12
BOARD OF DIRECTORS .............................................................................................................................. 12
CORPORATE GOVERNANCE REPORT ......................................................................................................... 14
AUDIT COMMITTEE REPORT ..................................................................................................................... 19
DIRECTORS’ REMUNERATION REPORT ..................................................................................................... 20
CORPORATE AND SOCIAL RESPONSIBILITY ............................................................................................... 22
DIRECTORS’ REPORT ................................................................................................................................. 23
STATEMENT OF DIRECTORS’ RESPONSIBILITIES........................................................................................ 26
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC ............................................. 27
FINANCIAL STATEMENTS .................................................................................................................... 32
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................... 32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................ 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................. 34
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................................................... 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ....................................................................... 36
COMPANY STATEMENT OF FINANCIAL POSITION .................................................................................... 64
COMPANY STATEMENT OF CHANGES IN EQUITY ..................................................................................... 65
NOTES TO THE COMPANY FINANCIAL STATEMENTS ................................................................................ 66
OFFICERS AND ADVISERS .......................................................................................................................... 72
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
STRATEGIC REPORT
Verditek is a cleantech company, its principal interest being the manufacturing and commercialistion of cutting edge
solar technologies.Verditek holds interests in three businesses operating within the clean energy, CO2 emission
reduction and deodorisation markets.. This includes full control of Verditek Solar Italy housed in a new factory in
Lainate Italy comprising two solar manufacturing lines (total of 20MWp p.a.) producing innovative lightweight solar
modules. Additionally, the company has interests in a sustainable filtration and deodorization technology which is
commercially proven to remove a wide range of odours found in wastewater and exhausts, and a unique liquid gas
absorption technology which can revolutionize the global CO2-capture industry. At the date of approval of this report
the Company has the following holdings:
100% holding in Verditek Solar Italy s.r.l – our Verditek Solar Italy subsidiary manufactures light weight solar modules
which offer several innovations including: interconnectivity of individual PV cells, increased flexibility, and are
particularly light weight compared to conventional PV modules. These properties open up markets that otherwise
cannot consider solar energy to address their power requirements. The business generates revenues from the sale
of ‘solar enhanced’ PV products. Our start-up capacity comprises two solar PV production lines with a total
manufacturing capacity of 20MWp of solar panels per annum.
51% holding in BBR: BBR applies patented filtration and deodorisation technology to wastewater and industrial
effluents. Our technology can be adapted to address specific odour, VOC, and HAP problems, using sustainable green
methods to process industrial scale volumes of effluent. For example, our technology can remove over 99% of
hydrogen sulphide from wastewater streams, as well as nuisance odours arising from mercaptans and aldehydes.
Our patented reactor provides a highly efficient and cost-effective solution that can be scaled from small to very
large process streams.
22.34% holding in Industrial Climate Solutions (ICSI): Many important industrial processes are governed by the
effectiveness of mixing a gas with a liquid to bring about a separation or reaction of chemicals. The ICSI gas-liquid
contactor does this significantly more efficiently than conventional reactors and is particularly effective when
processes are influenced by precipitation. An extremely important example is that of Carbon Capture where typical
flue gas streams (e.g. electricity generation, cement manufacture) must by treated to prevent carbon dioxide from
entering the atmosphere. Another huge application is the treatment of natural gas (commonly contaminated with
2-5% of H2S) to meet sales gas requirements (<25 ppm). ICSI has developed a novel multiphase contacting process
using a proprietary froth generator that can dramatically enhance mass transfer in gas/liquid absorption systems.
We believe the reduction in capital costs, as well as operational burden, will revolutionize these markets, making
access to the technology affordable to industry and protecting our planet.
In addition to these holdings, we have an exciting relationship in place with Paragraf, a start-up which has developed
what we believe to be world-leading graphene technology. Together we have worked to produce the world’s first
working Graphene Integrated Photovoltaic cell and in late 2019 we commenced our second Joint Development
Programme (JDP) to focus on enhancing efficiency and commercialising this new generation technology.
Covid 19
We have considered the impact of the Covid 19 pandemic on the businesses of the Group both in terms of experience
to date (the impact of the pandemic was felt somewhat earlier in Italy than in the UK) and our assessment of its
potential impact on the markets which Verditek expects to commercialise its products in.
As described in this statement, the Group’s sales team has been working on advancing commercial opportunities to
further commercialise Verditek’s lightweight low-profile Solar PV solutions during this challenging period. At the
date of approval of these financial statements the Group is preparing to ship product from its factory. A number of
1
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
commercial counterparties are interested in arranging trials for Verditek’s solar solutions in their markets (e.g.
military, transport, recreational homes, commercial real estate). The Group’s manufacturing site in Lainate Italy
reopened on 6 April 2020 and re-commenced production. Employees were self-isolating during previous weeks in
compliance with Italian government directives. No virial symptoms have been registered. Verditek has permission
to work and has access to the government wage compensation program which is part of the "Cura Italia" (Cure Italy)
Decree signed on 17 March 2020. Verditek will balance its production rota to optimise the welfare of its staff and
the company.
The Group has prepared financial forecasts include modelling management’s assessment of the impact of Covid-19
on the business of the Group, including consideration of the overall impact on those parts of the business expected
to be significantly impacted and those parts which are expected to grow in the short term, the steps taken by the
Directors to utilise the various support mechanisms instigated by government, including the Cura Italia scheme and
the financial impact of the steps taken by and available to the Directors to protect and manage the business during
the coming period, including the introduction of temporary pay reductions across the business and overhead
reductions.
S172 Statement
As required by Section 172 of the Companies Act, a director of a company must act in the way he or she considers,
in good faith, would likely promote the success of the company for the benefit of the shareholders. In doing so, the
director must have regard, amongst other matters, to the following issues:
• the likely consequences of any decisions in the long term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships with suppliers/customers and others;
• the impact of the company’s operations on the community and environment;
• the company’s reputation for high standards of business conduct; and
• the need to act fairly between members of the company.
The information required by s172 of the Companies Act 2006 is included in the Strategic Report above, the
Directors Report on pages 23 to 25 and the Corporate Governance Report pages 14 to 18.
On behalf of the Board
Rob Richards
Chief Executive Officer
30 June 2020
2
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
2019 HIGHLIGHTS
In 2019 Verditek has maintained its’ position in the companies invested in and focused on developing its
exceptional solar business in Europe and the UK. Our collaboration with Paragraf is on track and progressing the
engineering of our unique Graphene Integrated PV technology.
Verditek Solar Italy has developed a deeper understanding of our Unique Selling Proposition that differentiates
our technology from conventional PV panels, as we transitioned to creating solar solutions for our clients across
six key market areas. The key markets identified comprise Transportation, EV Charging, Commercial Real Estate,
Recreational Homes, Mobile Shelters and Telecommunications. In each application our technology, often
integrated into a power solution, provides the client with the opportunity to harvest renewable energy that they
would otherwise not have. In most cases our technology displaces or completely removes the need for diesel
fuel in remote, dangerous, or pristine environments.
Regarding the growth of electric vehicles in personal and fleet transport, we have seen many cities in the UK and
Europe reducing or removing internal combustion engines from core urban environments. The transport of
people and goods in these environments will become electric and that provides an opportunity to provide
renewable power. We are partnering with companies to provide solutions that keep EV’s on the road longer and
charged when back at the depot or residence. In this respect we have recently announced several partnerships
and paid trials with EAV Cargo (https://www.eavcargo.com/) and IM Efficiency (https://imefficiency.com/) to
demonstrate the savings and ROI possible.
In the commercial real estate market we have signed an agreement with Green Unit to trial our technology and
create a solar roof package for their beautiful ARC buildings ( https://www.greenunit.co.uk/). More examples
will follow.
Our factory in Italy continues to grow, and we have installed our own remote monitoring station that compares
our lightweight low-profile PV panels with conventional PV and demonstrates several mounting configurations.
In our second Joint Development Program (JDP) with Paragraf we continue to make progress on the
development of the exclusive Graphene Integrated PV proof-of-concept cells we created in our first JDP. We
have deepened our understanding of the science promoting the performance of our new technology and have
successfully grown graphene on an entire mono-silicon PV wafer and established a working cell. The program is
on track and adapted for Covid-19 social distancing precautions that are required to protect the scientists.
In September 2019 , Verditek successfully closed on £600k of equity funding through the issuance of 13.3 million
shares at 4.5p for working capital purposes to support of the continued growth of the Company's solar
manufacturing capacity and to further fund the Joint Development Programme with Paragraf.
During the period, the businesses did not record any revenue with first commercial sales expected in 2020.
3
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CHAIRMAN’S STATEMENT
As a strong supporter of clean technologies, I continue to guide this forward-thinking business in its mission to
commercialise clean technologies. I believe that Verditek's innovative range of clean energy products will help to
meet the growing demand for a greener, cleaner planet.
With our now firmly established wholly owned subsidiary – Verditek Solar Italy – manufacturing light weight solar
modules which offer several innovations including, interconnectivity of individual PV cells, increased flexibility, and
are particularly light weight compared to conventional PV modules opening up markets that otherwise cannot
consider solar energy to address their power requirements, we continue to pursue sales aggressively - both in solar
solutions and distribution.
As part of this aggressive sales drive the board has made significant changes to accelerate the commercialisation of
our solar offering: Rob Richards has been appointed to the role of CEO, replacing Geoff Nesbitt who has been
appointed CTO. Rob, a chartered electrical engineer, joins Verditek with an impressive sales record spanning over
20 years in the Oil and Gas and Energy Industry. In his short time with Verditek, Rob has shown a remarkable capacity
to open up new sales prospects and has a strong grasp of the production side of the business.
At the same time, we recognise the need to devote more time and technical resource to our second Joint
Development Programme (JDP) which is underway with Paragraf Ltd. the Cambridge University spin out. To that
end, the appointment of Geoff Nesbitt as CTO will facilitate acceleration of the second JDP which is focused on
improving the performance of the working graphene integrated photovoltaic cell, developing patents and
commencing commercial discussions for the product.
I would like to thank Geoff Nesbitt for all his hard work over the past two years as CEO. He has a strong technical
mastery of our products and I am delighted that he will be staying on as CTO.
With recent equity issuances totalling £1.5 million in the first half of 2020, together with a significant Innovate UK
Grant application in the pipeline, an aggressive - dedicated - focus on sales and R&D coupled with strongly growing
addressable markets and a strong “green tailwind”, I am confident that the outlook for the business is extremely
positive - offering customers good value solutions to their environmental challenges.
The Rt Hon. Lord David Willetts FRS
Non-Executive Chairman
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Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CHIEF EXECUTIVE’S REVIEW
Overview
As the newly appointed CEO I can say that it is a privilege to take charge of this young dynamic European
manufacturing company and to help transition it from an innovative R&D project to a commercial success.
In my prior roles I have witnessed first-hand the enormous shift now taking place from burning hydrocarbons
towards utilising solar. This move from "wet" to "dry" energy source is now both inextricable and exponential in
trend. As the world evolves from its dependency on hydrocarbon-based energy sources to cleaner more
environmentally friendly energy, I believe the Verditek Solar product is very well positioned to become a market
leader in the ultra-lightweight, flexible solar market. The Company's TUV approved product has numerous potential
applications that hitherto were not available to the traditional, heavy and fragile solar panel technology. I believe
major new market opportunities are now opening in military, transportation, cellular telecoms to name a few, where
the advantages of a highly durable, efficient ultra-lightweight solar solution will now be embraced.
The Company's existing product lays an excellent foundation ahead of the very exciting work currently being
conducted with our Joint Development Partners, Paragraf in Cambridge, in further developing the first graphene
integrated PV cell.
Strategy
Verditek takes early stage positions in technology businesses and provides financial discipline and funding to take
them through to commercial revenue and growth. Technology and market risk are managed by investing in
technologies which service different markets and are at different stages of maturity. Cash generation from interests
which are closest to revenue will supplement the investment needs of the businesses with longer technology
development cycles. Near term strategic objectives include:
Sales: Verditek Solar Italy, our next generation solar cell technology company, is now in production and is generating
revenue. As has been seen by the recent RNS, we have already achieved our first commercial order in the oil and
gas business, subsequent to which we have received our first order in the marine sector and agricultural sector.
We continue to expand into verticals into which we can displace liquid fuels, and secure orders at attractive prices,
the majority of these clients will operate in harsh environments which are ideally suited to the durable, lightweight
panels we manufacture.
We continue strengthen our global sales reach increasing the number of agents and distributors appointed around
the world, this deeper market penetration will allow Verditek to ramp up the sales funnel quicker and hence deliver
the projects we need. This increased global presence has already enabled us to secure order in South Asia, South
East Asia and Europe, while we are also targeting Australia as a potentially important market in the mining, marine
and agricultural sectors.
This new team has already identified a previously untapped opportunity requiring, we believe, 2GW of lightweight
solar panels, in one vertical, in one geographical area alone.
In our push to move from wet to dry fuels, we are aggressively targeting the remote microgrid market which
combines our solar panels with batteries and/or back up generation to provide dependable power in remote
locations.
5
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CHIEF EXECUTIVE’S REVIEW (continued)
Verditek continue to talk with other complementary world leading manufacturers and suppliers to build solutions
to clients by forming strategic partnerships.
Continuing to invest in longer term development opportunities: The joint development project with Paragraf
Limited has been created to harness the significant potential advantages of graphene to improve the performance
of solar power generation over state-of-the-art cells and panels.
The first development project is completed and has resulted in the creation of working graphene integrated
photovoltaic Proof of Concept (PoC) cells that successfully convert sunlight to electrical energy without the
encumbrance of busbars or backplates required in conventional PV cells. A second JDP has commenced and is
focussed on improving performance of the PoC cell, developing patents and commencing commercial discussions
for the product.
This is very exciting and provides an opportunity to move the Verditek solar business to the cutting edge of the
solar industry.
investment
The
liquid gas absorption technology,
global CO2 capture market offers a longer-term blue-sky opportunity for investors.
its unique
ICSI with
in
is set to revolutionize the
Developing the organisation: build out a strong and reliant organisation with an emphasis on attracting and
retaining excellent people supported by effective systems, processes and tools.
Markets and Products
During the period we continued to see strong growth in our addressable markets.
Solar: We estimate that the lightweight solar market is growing strongly and is going to be at least $28 billion by
2022. Verditek Solar Italy can offer customers solar modules at a fraction of the weight of conventional glass panels
opening up new market opportunities for customers with residential and light industrial estates.
Due to the increased demand seen, one of my first decisions was to increase the operating capacity of the facility in
Italy to cope with the expected order levels over the coming months. The work to increase capacity has already
commenced.
We are in an advanced stage to licence our manufacturing technology to a new plant and we have received
expressions of interest from others to build similar plants elsewhere in the world.
Filtration: Our BBR fluidized biofilter offers deodorisation and filtration systems into established markets where
growth is driven by increasingly strict national and local regulations. Addressable markets include food processing,
wastewater treatment, industrial and chemical processing. The scale of the global market for new capital equipment
expenditure on abatement technology is estimated to be in the region of £450m-£600m per annum, and BBR is
ideally suited to exploit the trend for new biological based solutions.
CO2 and H2S removal: The unique WES liquid gas absorption technology provides the opportunity to supply more
space efficient absorption solutions to customers with lower running costs than existing solutions. Addressable
market growth is driven by increased legislative pressure and growth in the underlying markets. Markets include
fossil fuel power generation plants, cement production, oil refining, upstream management of sour gas, any
precipitating solvent process and ultra-fine particular scrubbing. The sour gas market is growing rapidly and expected
to be around $55 billion by 2022.
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Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
Financials
During the period the businesses did not record any revenue. The investment funds raised during the year were used
to invest in additional production equipment, sales and marketing, product development and other operating
expenses. In the first weeks of my tenure, I have addressed the overheads within the company to make us lean for
a more fit for purpose, hence significantly reducing the monthly burn rate. I expect that with the reduced overhead
and expectant ramp up in revenues that we will be generating free cash flow within 2020. Subsequent to the year
end, the Company issued 20.23million new ordinary shares at 2.5p each and 40 million new ordinary shares at 2.5p
each, raised the gross proceed of £505,750 and £1,000,000 respectively as additional working capital.
Outlook
We are excited about the future of Verditek and believe the outlook remains very positive.
Verditek was established with the vision of building a leading clean technology company, delivering game changing
technology solutions for the sector. We believe with our initial three investments in solar, bio filtration and gas
processing and carbon capture, we are well placed to do this.
Our growth strategy is centered on accelerating the Verditek Solar commercialisation and defining the commercial
opportunities of the Paragraf JDP, to drive first revenues and enhance shareholder value for the Company.
All of our businesses hold the following characteristics which we believe set us apart from our peers; they are all
proven proprietary products, technologies within emergent and fast growing cleantech sector and have large,
lucrative and global addressable markets. We also have the ability to add investments in synergistic technologies
that bring value to our core three businesses.
I would like to take this opportunity to thank my fellow Board members, valued shareholders and advisers for their
support. As noted, we look forward to delivering on our vision of building a cash-generative and profitable clean
technology company and we will continue to update the market in the coming months on these developments.
Rob Richards
Chief Executive Officer
7
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
FINANCIAL REVIEW
Income statement
During the year 2019 the Group’s loss after taxation was £1,864,313 (December 2018: £2,663,415). The
administration costs incurred for the year ended 31 December 2019 of £1,660,719.
Loss per share
The basic and diluted loss per share was £0.01(2018: £0.01).
Financial Position
At 31 December 2019, the Group’s net liabilities were £365,035 (2018: net liabilities of £112,449). This comprised
total assets of £1,486,782 and total liabilities of £1,851,817. The total assets included property, plant and equipment
and goodwill of £633,491 (2018: £498,969).
Cashflow
The Group’s cash balance at the period end was £107,243 (2018: £683,885).
During the period the net cash outflow from operating activities was £1,324,285 (2018: 1,704,546) with financing
activities generating net proceeds of £904,905 (2018: £1,483,328).
Dividends
No dividend is recommended (2018: £nil) due to the early stage of the development of the Group.
Capital management
The Board’s objective is to maintain a statement of financial position that is both efficient and delivers long term
shareholder value. The Group had cash balances of £107,243 at 31 December 2019 (2018: £683,885). The Board
continues to monitor the balance sheet to ensure it has an adequate capital structure.
Key Performance Indicators
As the group is pre-revenue the main measures of performance are the level of expenditure compared to budget
and forecast expectations. Going forwards the Board will work with the businesses to develop a suite of KPIs to
monitor and report performance.
Events after the reporting period
Events after the reporting period are described in Note 27 to the financial statements.
Tim Lord
Chief Financial Officer
8
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
PRINCIPAL RISKS AND UNCERTAINTIES
The Board is committed to protecting and enhancing our reputation and assets, while safeguarding the interests of
our shareholders. It has overall responsibility for the Group’s system of risk management and internal control.
The Board assesses the Company’s principal risks and monitors the risk management process at least twice a year.
Over the course of the year, the Board has also considered specific risks of intellectual property and physical asset
security, fluctuations in exchange rates and liquidity.
Accepting that it is not possible to identify, anticipate or eliminate every risk that may arise and that risk is an
inherent part of doing business, our risk management process aims to provide reasonable assurance that we
understand, monitor and manage the main uncertainties that we face in delivering our objectives. Our principal
risks are shown in the table below.
Risk Framework
Managing risk is an inherent part of any vital commercial enterprise. Verditek has prepared a risk review using an
established framework that assists the recognition and mitigation of risk. Ranking risk and opportunity is critical to
any successful business and assists the executive in managing priorities to extract the maximum value from our
investments, while maintaining vigilance on those aspects which most influence an outcome.
Over the course of the year we have continued to focus on the risk framework developed in our first year of
operation to maintain and enhance a fit for purpose governance model and to ensure compliance. Financial control
continues to figure prominently in this overall framework.
Risk Review
Verditek businesses span three separate markets and industry segments, providing a natural hedge to the company.
The key risks identified per business are as follows:
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Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
RISK
MITIGATION and MANAGEMENT
ASSESSMENT
s
n
o
i
t
i
d
n
o
c
t
e
k
r
a
M
Solar: subsidized tariffs for
conventional “brown” electricity
and the application of massive
investment of capital automation
similar to what happened in
conventional PV.
Deodorisation: established players
enter into a price war, destroying
value proposition in the market or,
regulatory bodies relax odour
emission laws.
CO2 & H2S Capture: major
governments opt out of the Paris
accord, encouraging industry to
vent CO2, or sulphur emissions
legislation is relaxed by the IMO and
EU.
s
s
e
c
c
u
S
l
a
i
c
r
e
m
m
o
C
Our products are considered too
expensive or providing a low return
on investment.
Since we are ramping up production
our leverage on procurement costs
and economies of scale are low.
Establishing organic sales leads is
slow.
The risk requires
constant vigilance.
The risk requires
continued vigilance
For all three businesses the mitigation
strategy is similar: pursue clients who
are themselves active in different
regions, markets, and industry
segments.
In Solar we are securing relationships
with developers in India, Australia the
GCC and Europe. Our product can be
used in light industrial sheds, mining
camps and affordable housing projects.
In our deodorisation business we are
pursuing relationships in the US across
many new areas such as food
processing and horticulture (e.g.
cannabis).
In CO2 and H2S capture we are working
with recognised industry leaders to
benchmark our technology in CO2
capture and H2S gas processing.
In our solar business we are
establishing procurement relationships
and debottlenecking our WIP cycle to
optimize material cost. As we grow, we
will be able to negotiate more
competitive rates.
In our deodorisation business we are
working with our supplier to analyse
costs and where possible manufacture
in-country to avoid FX burden.
Our CO2 and H2S capture investment
will remain precommercial until 2020.
We are pursuing licensing relationships
in both solar and deodorisation to
benefit from established sales
presence.
10
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
RISK
MITIGATION and MANAGEMENT
ASSESSMENT
e
t
a
r
e
p
O
o
t
e
s
n
e
c
i
L
Failure to meet AIM corporate
governance requirements.
Leadership in Verditek or our
operating companies behave
fraudulently
HSE violations in our operating
companies.
l
a
i
c
n
a
n
i
F
Failure to secure cashflow and
remain a going concern.
Growth ambitions outpace cash
reserves.
l
a
g
e
L
Poorly constructed sales contracts
expose the company to punitive
commercial conditions.
Partnering relationships expose
Verditek to unlimited liabilities.
The executive benchmarked its
corporate governance, policies and
procedures against the newly
published QCA guidelines to ensure
compliance.
We have published our Code of
Conduct and rolled out to the Board
and executive. The Board has agreed
that each member of Verditek sign the
CoC and confirm they have read and
understand the contents.
Regarding HSE we are directly
responsible for installing and auditing
an HSE culture in our solar business,
auditing our supplier in our
deodorisation business and advising in
our CO2 & H2S capture business.
Implementation of an HSE program is
underway in our solar business, and we
are working with our supplier in
deodorisation to implement policy in
the manufacture of the equipment.
We are taking steps to develop a
differentiated approach to contracting
to encourage lease, lease to buy and
sales contracts which will build robust
line of sight on earnings.
Funding of £1.5mm secured in Q1/Q2
2020.
Early stage financing of growth will be
done with partners, using major
anchor projects to provide line of sight
on income and service financing.
Verditek has secured Peachey as their
single corporate counsel and have
developed a suite of proforma
contracts to ensure commercial
negotiations begin soundly.
The HSE risk requires
vigilance
The risk requires
constant vigilance.
This risk is in control.
11
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
GOVERNANCE
BOARD OF DIRECTORS
There were no changes to the Board during 2019. The Board as at the date of signing the report and accounts
comprised:
Robert Richards (Chief Executive Officer)
Robert was appointed Chief Executive Officer in May 2020. Robert is a chartered electrical engineer with over 20
years' experience in the Oil and Gas and Energy Industry. Robert joins Verditek plc, having held senior
management positions in Ecolog International, FZE, Penspen Ltd, Thailand, KNM Process Systems Sdn Bhd in
Malaysia and Siemens Oil and Gas, Singapore and Alstom Power.
Tim Lord (Chief Financial Officer)
Tim has held a number of CFO positions, including at JP Morgan, based in Japan, and Société Générale, based in
France, USA and Japan. Most recently he was the Financial Controller at Standard Chartered in Singapore and the
UK. Tim is a qualified Chartered Accountant, holds a BSc (hons) in Physics from Imperial College London and an MSc
in Geophysics from Birmingham University.
The Rt Hon. Lord David Willetts FRS (Non-Executive Chairman)
The Rt Hon. Lord David Willetts FRS is the Chairman of Verditek plc. He is also the President of the Resolution
Foundation. He served as the Member of Parliament for Havant (1992-2015), as Minister for Universities and Science
(2010-2014) and previously worked at HM Treasury and the No. 10 Policy Unit.
Lord Willetts is a visiting Professor at King’s College London, a Board member of UK Innovation and Research (UKRI)
a Board member of Surrey Satellites and of the Biotech Growth Trust. He is an Honorary Fellow of Nuffield College
Oxford.
George Katzaros (Non-Executive Director)
George is the founder of Verditek plc, identifying the three core technologies and leading the company to IPO on
AIM. George has over 30 years’ experience in advisory and asset management as well as investment banking and
venture capital particularly for cleantech companies.
Gavin Mayhew (Non-Executive Director)
Gavin was formerly the CEO of Energy Savers FZE, a UAE consultancy providing energy saving solutions to commercial
and industrial clients. Before that Gavin was president of Zubair Terminal Company in Iraq, which was set up to
finance, develop and operate a new commercial port in Iraq – a 38 year port concession was signed with the Iraqi
government in 2018. He has over 20 years of business management experience in Latin America, Europe and the
Middle East. Gavin has an MBA from INSEAD and undergraduate degree from Brown University in the USA
The Board and responsibilities
The Board hold strategic face to face meetings 4 times a year, complemented with teleconference meetings 8 times
a year to review, formulate and approve the Group’s strategy, budgets, corporate actions and oversee the Group’s
progress towards its goals. There is an Audit Committee and a Remuneration Committee in place with formally
delegated duties and responsibilities and with specific terms of reference. From time to time separate committees
may be set up by the Board to consider specific issues when the need arises. Due to the size of the Group, the
Directors have decided that issues concerning the nomination of directors will be dealt with by the Board rather
than a committee but will regularly reconsider whether a nominations committee is required.
12
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
The Audit Committee
The Audit Committee comprises The Rt Hon. Lord David Willetts FRS as chairman and Gavin Mayhew.
The Audit Committee determines the terms of engagement of the Group’s auditors and will determine, in
consultation with the auditors, the scope of the audit. The Audit Committee receives and reviews reports from
management and the Group’s auditors relating to the interim and annual accounts and the accounting and internal
control systems in use throughout the Group. The Audit Committee has unrestricted access to the Group’s auditors.
The Audit Committee Report is presented on page 19.
The Remuneration Committee
The Remuneration Committee comprises Gavin Mayhew as chairman and George Katzaros.
The Remuneration Committee reviews the scale and structure of the executive Directors’ and senior employees’
remuneration and the terms of their service or employment contracts, including share option schemes and other
bonus arrangements. The remuneration and terms and conditions of the non-executive Directors are set by the
entire Board.
Details of board meetings held, and attendance of Board directors is shown below
Board Members
Executive Directors
Geoffrey John Nesbitt
Tim Lord
Non-Executive Directors
The Rt Hon. Lord David Willetts FRS
George Francis Katzaros
Anthony Neil Rawlinson
Gavin Mayhew
Eligible to attend
Attended
12
12
12
12
4
12
12
12
12
12
4
12
The Directors’ Remuneration Report is presented on page 20.
Investor relations
The General Meeting is the principal forum for dialogue with shareholders. Updates on the progress of the business
are regularly published on the Group’s website.
On behalf of the Board
Rob Richards
Chief Executive Officer
13
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CORPORATE GOVERNANCE REPORT
The Directors recognise that good corporate governance is a key foundation for the long-term success of the Group.
As the Company is listed on the AIM market of the London Stock Exchange and is subject to the continuing
requirements of the AIM Rules. The Board has therefore adopted the principles set out in the Corporate Governance
Code for small and midsized companies published by the Quoted Companies Alliance (“QCA Code”).
The principles are listed below with an explanation of how the Company applies each principle, and what we do and
why.
QCA Code Principle
Application (as set out by QCA)
What we do and why
1. Establish a strategy and
business model which promote
long-term value for shareholders
2. Seek to understand and meet
shareholder needs and
expectations
The board must be able to express a
shared view of the company’s
purpose, business model and
strategy. It should go beyond the
simple description of products and
corporate structures and set out how
the company intends to deliver
shareholder value in the medium to
long-term. It should demonstrate
that the delivery of long-term growth
is underpinned by a clear set of
values aimed at protecting the
company from unnecessary risk and
securing its long-term future.
Directors must develop a good
understanding of the needs and
expectations of all elements of the
company’s shareholder base.
The board must manage
shareholders’ expectations and
should seek to understand the
motivations behind shareholder
voting decisions.
3. Take into account wider
stakeholder and social
implications for long-term
success responsibilities and their
Long-term success relies upon good
relations with a range of different
stakeholder groups both internal
(workforce) and external (suppliers,
customers, regulators and others).
The board needs to identify the
Verditek’s strategy is explained fully within
our Strategic Report section of our Report
and Accounts for the year ended 31
December 2019.
Our strategy is focused on achieving first
sales; investing in longer term development
opportunities and developing the
organisation.
The key challenges to the business and how
these are mitigated are detailed on pages 9
to 11 of our Report and Accounts for the
year ended 31 December 2019.
Whilst the company is pre-revenue the
Board is committed to returning value to our
shareholders through execution of our
strategy.
Verditek plc encourages two-way
communication with its investors and
responds quickly to all queries received.
The Board recognises the AGM as an
important opportunity to meet
shareholders. The Directors are available to
listen to the views of shareholders informally
immediately following the AGM.
The people responsible for shareholder
liaison are:
The Chief Executive Officer
The Chief Financial Officer
Nomad (W.H. Ireland Limited)
Details of the investor engagement and the
people responsible for shareholder liaison
can be found on the Company website.
The executive has created a communications
program that engages with trade and
interest groups working in the markets
where our products are sold and applied.
14
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
QCA Code Principle
Application (as set out by QCA)
What we do and why
implications for long-term
success
4. Embed effective risk
management, considering both
opportunities and threats,
throughout the organisation
5. Maintain the board as a well-
functioning, balanced team led
by the chair
company’s stakeholders and
understand their needs, interests and
expectations.
Where matters that relate to the
company’s impact on society, the
communities within which it
operates, or the environment have
the potential to affect the company’s
ability to deliver shareholder value
over the medium to long-term, then
those matters must be integrated
into the company’s strategy and
business model.
Feedback is an essential part of all
control mechanisms. Systems need to
be in place to solicit, consider and act
on feedback from all stakeholder
groups.
The board needs to ensure that the
company’s risk management
framework identifies and addresses
all relevant risks in order to execute
and deliver strategy; companies need
to consider their extended business,
including the company’s supply chain,
from key suppliers to end-customer.
Setting strategy includes determining
the extent of exposure to the
identified risks that the company is
able to bear and willing to take (risk
tolerance and
risk appetite).
The board members have a collective
responsibility and legal obligation to
promote the interests of the
company and are collectively
responsible for defining corporate
governance arrangements. Ultimate
responsibility for the quality of, and
approach to, corporate governance
lies with the chair of the board.
The board (and any committees)
should be provided with high quality
information in a timely manner to
facilitate proper assessment of the
matters requiring a decision or
insight.
The board should have an
appropriate balance between
executive and non-executive
directors and should have at least
two independent non- executive
We have prepared and published articles on
topics addressing the ethical and social
aspects of our products as a renewable
energy solution alternative to conventional
products. We attend conferences each year
to ensure we remain informed.
Our website maintains a channel to receive
feedback from all stakeholders.
Risk Management on pages 9 to 11 of our
Report and Accounts for the year ended 31
December 2019 details the risks to the
business and how these are mitigated.
The Board considers risk to the business at
every Board meeting. The Board are
appraised of any changes in the risk profile
through monthly Board calls and quarterly
face to face Board meetings. The Company
formally reviews and documents the
principal risks to the business at least
annually.
The Company is controlled by the Board of
Directors. The Rt Hon. Lord David Willetts
FRS, the Non-executive Chairman, is
responsible for the running of the Board and
Rob Richards, the Chief Executive, has
executive responsibility for running the
Group’s business and implementing Group
strategy.
All Directors receive regular and timely
information on the Group’s operation and
financial performance. Relevant information
is circulated to the Directors in advance of
meetings. All Directors have direct access to
the advice and services of the Company
Secretary and are able to take independent
professional advice in the furtherance of the
duties, if necessary, at the company’s
expense.
The Board comprises two Executive
Directors and three Non-Executive Directors.
The Board considers that all Non- executive
Directors bring an independent judgement
to bear.
15
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
QCA Code Principle
Application (as set out by QCA)
What we do and why
6. Ensure that between them
the directors have the necessary
up-to-date experience, skills and
capabilities
directors. Independence is a board
judgement.
The board should be supported by
committees (e.g. audit,
remuneration, nomination) that have
the necessary skills and knowledge to
discharge their duties and
responsibilities effectively.
Directors must commit the time
necessary to fulfil their roles.
The board must have an appropriate
balance of sector, financial and public
markets skills and experience, as well
as an appropriate balance of personal
qualities and capabilities. The board
should understand and challenge its
own diversity, including gender
balance, as part of its composition.
The board should not be dominated
by one person or a group of people.
Strong personal bonds can be
important but can also divide a
board.
The Executive Directors are full time and the
Non-Executive Directors provide such time
as is required to fully and diligently perform
their duties.
The Board holds monthly Board calls and
quarterly face to face Board meetings.
Details of the attendance record of each
director at Board meetings is included in
Director’s report of the Annual Report.
Directors of the Board have attended
professional NED instruction and have
proven track-records of serving on boards
previously.
The Board comprises members with a mix of
class and national origins and speaks four
languages.
The Board will work to increase the diversity
of the Directors.
As companies evolve, the mix of skills
and experience required on the board
will change, and board composition
will need to evolve to reflect this
change.
Further information about the Board’s
skillset, including each Director’s experience
and CV, is set out on the Company website
and additional information is shown in page
12 of the Annual Report for the year ending
31 December 2019.
7. Evaluate board performance
based on clear and relevant
objectives, seeking continuous
improvement
The board should regularly review the
effectiveness of its performance as a
unit, as well as that of its committees
and the individual directors.
The Company was admitted to trading on
AIM in August 2017. Since that time there
has been a greater than 50% turnover in
Board membership with the appointment of
a new Non-Executive Chairman; two new
CEO’s; a new CFO and resignation of two
Non-Executive Directors and the
appointment of one Non-Executive Director.
Appraisals are scheduled to be carried out
each year with all Executive Directors.
All continuing Directors stand for re-election
on an annual basis.
The Company has no previous performance
criteria were in place from which the current
performance criteria set out above have
evolved.
16
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
QCA Code Principle
Application (as set out by QCA)
What we do and why
The Company is pre-revenue and as such the
new Board has been focussed on ensuring
that sufficient capital is in place to execute
its strategy: first sales; investing in longer
term development opportunities and
developing the organisation.
It is against the performance of this strategy
that the Board is currently assessed.
As the Board of the Company was formed
only relatively recently, no formal succession
plans are currently in place, but the Board
will continue to review this also keeping in
mind the outcome of each performance
review.
The Corporate and Social Responsibility
section on page 23 of our Report & Accounts
for the year ended 31 December 2019
details the ethical values of the Company.
The board performance review may
be carried out internally or, ideally,
externally facilitated from time to
time. The review should identify
development or mentoring needs of
individual directors or the wider
senior management team.
It is healthy for membership of the
board to be periodically refreshed.
Succession planning is a vital task for
boards. No member of the board
should become indispensable.
The board should embody and
promote a corporate culture that is
based on sound ethical values and
behaviours and use it as an asset and
a source of competitive advantage.
The policy set by the board should be
visible in the actions and decisions of
the chief executive and the rest of the
management team.
Corporate values should guide the
objectives and strategy of the
company.
The culture should be visible in every
aspect of the business, including
recruitment, nominations, training
and engagement. The performance
and reward system should endorse
the desired ethical behaviours across
all levels of the company.
The Company’s Policy and Procedures
manual is made available to staff as part of
their induction and anti-bribery and anti-
corruption training is compulsory.
Staff are encouraged to ask questions and
seek clarifications from senior members of
the team on these policies.
This year, to complement our existing
Policies and Procedures, the company has
implemented policies around Code of
Conduct, Social Media and Share Dealing.
The corporate culture should be
recognisable throughout the
disclosures in the annual report,
website and any other statements
issued by the company.
The company should maintain
governance structures and processes
in line with its corporate culture and
appropriate to its:
• size and complexity; and
• capacity, appetite and tolerance for
risk.
The governance structures should
evolve over time in parallel with its
objectives, strategy and business
Our Corporate Governance Report on page
14 to 18 of our Report & Accounts for the
year ended 31 December 2019 details the
company’s governance structures and why
they are appropriate and suitable for the
company.
The Board has a formal schedule of matters
reserved to it and is supported by the Audit
and Remuneration Committees. Due to the
17
8. Promote a corporate culture
that is based on ethical values
and behaviours
9. Maintain governance
structures and processes that
are fit for purpose and support
good decision- making by the
board
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
QCA Code Principle
Application (as set out by QCA)
What we do and why
model to reflect the development of
the company.
10. Communicate how the
company is governed and is
performing by maintaining a
dialogue with shareholders and
other relevant stakeholders.
A healthy dialogue should exist
between the board and all of its
stakeholders, including shareholders,
to enable all interested parties to
come to informed decisions about the
company.
Appropriate communication and
reporting structure should exist
between the board and all
constituent parts of its shareholder
base. This will assist:
•
•
the communication of
shareholders’ views to the
board; and
the shareholders’ understanding
of the unique circumstances and
constraints faced by the
company.
It should be clear where these
communication practices are
described (annual report or website).
size of the Group, the Directors have
decided that issues concerning the
nomination of directors will be dealt with by
the Board rather than a committee but will
regularly reconsider whether a nominations
committee is required
The Audit Committee and a Remuneration
Committee have formally delegated duties
and responsibilities and with specific terms
of reference and these are available from
the Company website.
The Company encourages two-way
communication with its investors and
responds quickly to all queries received.
The Board recognizes the AGM as an
important opportunity to meet private
shareholders. The Directors are available to
listen to the views of shareholders informally
immediately following the AGM.
The executive has developed a mature
communications program to engage in
dialogue with our stakeholders through a
mix of media channels.
A range of corporate information (including
all Company announcements, historical
annual reports and other governance related
material since the company was admitted to
AIM in August 2017) is also available to
shareholders, investors and the public on
the Company website.
The Company will disclose outcomes of all
votes at shareholder meetings in a clear and
transparent manner by either publishing a
market announcement or by reporting it on
the Company website. If a considerable
proportion of votes (20%) have been cast
against a resolution at any meeting of
shareholders, the Company will include an
explanation of what actions it intends to
take to understand the reasons behind that
vote result and, where appropriate, any
different action it has taken, or will take, as a
result of the vote.
18
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
AUDIT COMMITTEE REPORT
The Audit Committee helps the Board discharge its responsibilities regarding financial reporting, external and
internal audits and controls as well as reviewing the Group’s annual and half-year financial statements, other
financial information and internal Group reporting.
This will include:
•
•
considering whether the Company has followed appropriate accounting standards and, where necessary,
made appropriate estimates and judgments taking into account the views of the external auditors;
reviewing the clarity of disclosures in the financial statements and considering whether the disclosures
made are set properly in context;
• where the audit committee is not satisfied with any aspect of the proposed financial reporting of the
Company, reporting its view to the Board of directors;
•
•
reviewing material information presented with the financial statements and corporate governance
statements relating to the audit and to risk management; and
reviewing the adequacy and effectiveness of the Company’s internal financial controls and, unless expressly
addressed by a separate board risk committee composed of independent directors, or by the Board itself,
review the Company’s internal control and risk management systems and, except where dealt with by the
Board or risk management committee, review and approve the statements included in the annual report in
relation to internal control and the management of risk.
The Audit Committee assists by reviewing and monitoring the extent of non-audit work undertaken by external
auditors, advising on the appointment of external auditors and reviewing the effectiveness of the Group’s internal
audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and
approving the Annual Report and financial statements and the half-yearly reports remains with the Board.
For the year under review, there were no non-audit services rendered to the Group and the Company. The audit
committee considered the nature, scope of engagement and remuneration paid were such that the independence
and objectivity of the auditors were not impaired. Fees paid for audit services are provided in Note 5.
During the financial year, the Audit Committee met twice with the auditor, Crowe U.K. LLP, to review audit planning
and findings with regard to the Annual Report and the comment review of the interim financial statements.
Significant reporting issues considered during the year included the following:
2. Going concern
The Committee also considered the Going Concern basis on which the accounts have been prepared and can refer
shareholders to the Group’s accounting policy set out in Note 2.4. The directors are satisfied that the going concern
basis is appropriate for the preparation of the financial statements.
The Rt Hon. Lord David Willetts FRS
Chairman – Audit committee
19
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
DIRECTORS’ REMUNERATION REPORT
This report sets out the remuneration policy operated by the Company in respect of the Executive and Non-Executive
Directors. The remuneration policy is the responsibility of the Remuneration Committee, a sub-committee of the
Board. No Director is involved in discussions relating to their own remuneration.
Remuneration policy
The objective of the proposed remuneration policy is to attract, retain and motivate high calibre executives to deliver
outstanding shareholder returns and at the same time maintain an appropriate compensation balance with the
other employees of the Group.
Directors’ remuneration
The normal remuneration arrangements for Executive Directors consists of base salary, performance bonuses and
other benefits as determined by the Board. Each of the Executive Directors has a service agreement that can be
terminated at any time by either party giving to the other six months’ written notice. Compensation for loss of office
is restricted to base salary and benefits only.
The remuneration packages for the Executive Directors are detailed below:
• Base Salary:
Annual review of the base salaries of the Executive Directors are concluded after considering the Executive
Directors’ role, responsibilities and contribution to the Group performance.
• Performance Bonus:
Bonus arrangements are discretionary and are payable depending on the performance of the Executive
Directors in meeting their key performance indicators and in the wider context with the performance of
the Group.
• Benefits:
Benefits include payments for provident funds that are mandatory and statutory pension payments as
required by laws of the resident countries of the Executive Directors, health insurance and other benefits.
•
Longer term incentives:
In order to further incentivise the Directors and employees, and align their interests with shareholders, the
Company has granted share options in the current year, as set below. The share options will vest at various
future dates as described in the Note 23 to the financial statements. There are no conditions attached to
vesting other than service conditions.
Non-Executive Directors are remunerated solely in the form of Director Fees and shares determined by the Board
and not entitled to pensions, annual bonuses or employee benefits.
20
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
DIRECTORS’ REMUNERATION REPORT (Continued)
Performance evaluation
All Directors undergo a performance evaluation before being proposed for re- election to ensure that their
performance is and continues to be effective, that where appropriate they maintain their independence and that
they are demonstrating continued commitment to the role.
Appraisals are carried out each year with all Executive Directors. All continuing Directors stand for re-election on
annual basis. Succession planning at the current time is limited due to the current size of the Board.
The remuneration of the directors in Verditek plc who held office during the year to 31 December 2019 was as
follows:
The emoluments of the Directors were as follows (Audited):
Year ended 31 December 2019
Year ended 31
December
2018
Salary &
Directors’
fees
£
Pension
Contributions
£
Share
based
payment
£
Total
Total
£
£
150,000
100,000
-
-
50,000
30,000
-
5,667
-
2,888
2,438
-
-
-
-
-
-
-
-
-
-
-
152,888
102,438
-
-
141,534
65,525
52,590
53,954
12,976
-
-
-
-
62,976
30,000
41,994
27,133
-
-
5,667
-
30,894
12,016
335,667
5,326
12,976
353,969
425,640
Executive directors
Geoffrey Nesbitt
Tim Lord
Theo Chapman (Resigned 31 January 2018)
Janet Donovan (Resigned 24 May 2018)
Non-executive directors
The Rt Hon. Lord David Willetts FRS
George Katzaros
Gavin Mayhew (Appointed 4 March 2019)
Anthony Rawlinson (Resigned 4 March 2019)
José Luis Del Valle Doblado (Resigned 9 May
2018)
Total
There are 1,500,000 share options held by The Rt Hon. Lord David Willetts FRS, details are shown in Note 23.
George Katzaros
Chairman – Remuneration committee
21
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CORPORATE AND SOCIAL RESPONSIBILITY
The Company understands that its impact reaches beyond that of its core business and into the environment and
society in which it operates. With integrity at the heart of our corporate social goals our aim is to make a lasting
positive contribution to all our stakeholders.
In view of the limited number of stakeholders, the Company has not adopted a specific policy on Corporate Social
Responsibility. However, it does seek to protect the interests of stakeholders in the Company through its policies,
combined with ethical and transparent business operations. The Company has adopted an Anti-Corruption and Anti-
Bribery Policy and compliance with regulations like Competition Law.
Environment
Verditek Plc is sensitive to the environment in which it operates and has established well defined operating
guidelines with some of the manufacturing partners where it seeks their compliance with ISO14001 when relevant,
to ensure certain environmental standards are complied with.
Human Rights
Verditek plc is committed to social and morally responsible research, development and manufacturing processes for
the benefit of all stakeholders. The activities of the Company are in line with applicable laws on human rights.
Employees
Our employees are key to achieving the business objectives of the Company. The Company has established policies
for recruitment, diversity and equal opportunities, training and development. Our priority is to provide a working
environment in which our employees can develop to achieve their full potential and have opportunities for both
professional and personal development. We aim to invest time and resource to support, engage and motivate our
employees to feel valued, to be able to develop rewarding careers and want to stay with us. The Company embraces
employee participation in issue raising and resolution through regular update sessions that value contributions from
all levels regardless of position in the business.
Shareholders
The Board of Directors actively encourage communication and they seek to protect the interest of shareholders at
all times. The Company updates shareholders regularly through regulatory news, financial reports and through our
nominated Financial PR firm. The company also engages directly with investors at our Annual General Meeting or
investor events.
Health and Safety
Company activities are carried out in according with its Health and Safety Policy which adheres to all applicable laws
and are audited both internally and by an external organisation.
22
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
DIRECTORS’ REPORT
The directors present their report and the audited financial statements for Verditek plc (“Verditek” or the
“Company”) for the year ended 31 December 2019.
The preparation of financial statements is in compliance with International Financial Reporting Standards as adopted
by the European Union (IFRSs). The Group financial statements comprise of the financial information of the parent
Company and its subsidiaries (together with the “Group”). The parent Company financial statements present
information about the Company as a separate entity and not about its Group.
Principal Activities
Verditek plc is a holding company based in UK. The principal activity of the Group is to develop and commercialise
clean technologies.
A detailed review of the business activities of the Group is contained in the Strategic Report.
Business review and future developments
The review of the business’s operations, future developments and key risks is contained in the Strategic Report. The
Directors do not recommend a final ordinary dividend for the year (2018: £nil).
Directors and directors’ interests
The directors who held office during the year and subsequently were as follows:
Geoffrey John Nesbitt
Tim Lord
The Rt Hon. Lord David Willetts FRS
George Francis Katzaros
Gavin Mayhew
Robert Richards
With regard to the appointment and replacement of Directors, the Company is governed by its articles of association,
the Companies Act and related legislation. The articles themselves may be amended by special resolution of the
shareholders.
23
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
DIRECTORS’ REPORT (Continued)
Directors’ interests
The Directors held the following beneficial interests in the shares of Verditek plc at the date of this report:
George Katzaros
Gavin Mayhew
Geoffrey Nesbitt
Tim Lord
Robert Richards
Notes
1.1 Shares held by George Katzaros
- through BBHISL NOMINEES LIMITED A/c 120165
- through MF Limited
- directly
- family member
1.2 Shares held by Gavin Mayhew
- through Platform Securities Nominees Limited
Directors’ indemnities
Issued
share
capital %
8.96%
7.24%
1.67%
0.05%
Note
Ordinary shares
of £0.0004 each
1.1
1.2
26,166,675
21,157,381
4,875,000
150,000
2,437,833
10,550,000
5,900,000
9,000,000
716,675
26,166,675
21,157,38100
The Company has made qualifying third-party indemnity provisions for the benefit of its directors which were made
during the period and remain in force at the date of this report.
Post Balance Sheet Events
There are no material post balance sheet events to disclose, other than those disclosed in the note 27 of the
accounts.
Research and Development Activities
Verditek continues to invest in research and development activities such as the joint development project with
Paragraf Limited on application of graphene to solar devices. Research and development seeks to develop and
enhance the existing product portfolio and new products that will compliment and expand the product offering
and spent £95,833 during the year (2018: £55,486).
Financial Risk management
Details of financial risk management are provided in Note 3 to the accounts.
Political and charitable contributions
The Group made no charitable or political contributions during the year.
24
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
DIRECTORS’ REPORT (Continued)
Going Concern
As described in note 2.4, the Directors, having made appropriate enquiries, consider that the Company and the
Group as a whole have adequate resources to continue in operational existence for the foreseeable future.
Therefore, they continue to adopt the going concern basis in preparing the financial statements.
Substantial shareholdings
The Company has been advised of the following interests in more than 3% of its ordinary share capital as at 31
December 2019:
Hargreaves Lansdown (Nominees) Limited
Pershing Nominees Limited
Fiske Nominees Limited
Platform Securities Nominees Limited
BBHISL Nominees Limited
Ha Aviation Limited
George Katzaros
MF LTD
No. of Shares
%
28,253,580
18,193,888
13,935,000
13,172,535
10,550,000
9,890,000
9,000,000
6,900,000
13.11%
8.44%
6.47%
6.11%
4.90%
4.59%
4.18%
3.20%
Statement of Disclosure to the Auditors
All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any
information needed by the Group’s auditors for the purposes of their audit and to establish that the auditors are
aware of that information. The directors are not aware of any relevant audit information of which the auditors are
unaware.
Auditors appointment
Crowe U.K. LLP has indicated its willingness to continue in office and a resolution to re-appoint them will be proposed
at the annual general meeting.
By order of the Board
Rob Richards
Chief Executive Officer
25
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year.
Under that law the Directors have elected to prepare the Group consolidated financial statements in accordance
with International Financial Reporting Standards as adopted by the European Union (IFRSs) and elected to prepare
the parent company financial statements under United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable laws including FRS 101 Reduced Disclosure Framework).
Under company law the Directors must not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for
that period.
In preparing each of the Group and Company financial statements, the Directors are required to:
•
•
•
•
•
Select suitable accounting policies and then apply them consistently;
Make judgments and estimates that are reasonable and prudent;
State whether they have been prepared in accordance with IFRSs or UK Accounting Standards have
been followed, subject to any material departures disclosed and explained;
Prepare the Strategic Report and Directors’ report which comply with the requirements of the
Companies Act 2006; and
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Group and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of
the Group and the Company and enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also generally responsible for taking such steps as are reasonably open to them to safeguard the
assets of the group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Information published on the website is accessible in many countries and legislation in
the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess the Group’s position and performance, business
model and strategy. Each of the directors confirms that, to the best of their knowledge:
The Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a
true and fair view of the assets, liabilities, financial position and profit of the Group; and the Annual Report includes
a fair review of the development and performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that it faces.
26
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC
Opinion
We have audited the financial statements of Verditek plc (the ‘parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2019 which comprise the consolidated statement of comprehensive income,
consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement
of cash flows, company statement of financial position, company statement of changes in equity and notes to the
financial statements, including a summary of significant accounting policies. The financial reporting framework that
has been applied in the preparation of the Group financial statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been
applied in the preparation of the parent Company financial statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s
affairs as at 31 December 2019 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the parent Company and the Group in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to
you when:
•
•
The directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
The directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the Group’s or the parent company’s ability to continue to adopt the going concern basis
of accounting for a period of at least twelve months from the date when the financial statements are authorised
for issue.
27
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC (Continued)
Our audit approach
Overview of the scope of our audit
Our audit approach was developed by obtaining a thorough understanding of the Group’s activities and is risk based.
Based on this understanding we assessed those aspects of the Group and subsidiary companies’ transactions and
balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities
including fraud or error. Specifically, we identified what we considered to be key audit matters and planned our
audit approach accordingly. We undertook a combination of analytical procedures and substantive testing on
significant transactions, balances and disclosures, the extent of which was based on various factors such as our
overall assessment of the control environment, the effectiveness of controls over individual systems and the
management of specific risks.
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the financial statements as a whole to
be £90,000 based on approximately 5% of Group’s normalised loss for the year (2018: £97,500), which is the most
appropriate measure for an entity which has yet to record revenues.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the
audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the
judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the
internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £4,500. Errors below that
threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
28
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC (Continued)
This is not a complete list of all risks identified by our audit.
Key audit matter
o Going concern and Covid-19 impact assessment
Note 2.4 of the Group financial statements
At 31 December 2019 the Group had cash and cash
equivalents of £107,243 (2018: £683,885) and loans
and borrowings of £668,319 (2018: £1,213,243) and
a deficiency of shareholders’ equity of £395,035
(2018: deficiency of £112,449). Subsequent to the
year end, the Company issued 20.23million new
ordinary shares at 2.5p each and 40 million new
ordinary shares at 2.5p each, raised the gross
proceeds of £505,750 and £1,000,000 respectively as
additional working capital
The Covid-19 pandemic had a significant adverse
impact on the Group’s operations, although the
company was able to reopen its manufacturing site in
Lainate, Italy, on 6 April 2020.
The Group had yet to realise any commercial
revenues. At the date of approval of these financial
statements it is not clear what the long term
economic impact of the pandemic will be on the
Group’s target markets.
The risk that the Covid-19 pandemic and the resulting
economic consequences would adversely impact on
the Group and its ability to operate as a going
concern was considered to be a key audit matter.
How our audit addressed the key audit matter
We obtained management’s assessment of the
impact of Covid-19 on the business of the Group and
the Group’s financial projections. We performed
audit procedures,
including applying challenge
regarding reasonableness on the inputs into the
model as follows:
•
•
•
•
•
the
forecast
reviewed forecast future revenues and
resulting cash flows within the assessment
period;
compared
to available
management information for the business
and normal seasonality;
impact on the
considered the overall
forecast of those parts of the business
expected to be significantly impacted and
those parts which are expected to grow in
the short term;
benchmarked the financial impact of the
steps taken by the directors to utilise the
various support mechanisms instigated by
Italia
government,
scheme; and
reviewed and challenged the
financial
impact of the steps taken by and available to
the directors to protect and manage the
business during
coming period,
the
including the introduction of temporary pay
reductions, overhead
and
suspension of certain capital investment
projects.
reductions
the Cura
including
We considered management’s sensitivity analysis
range of
and also performed an additional
sensitivities to assess whether a reasonably likely
change to a key input would result in an erosion of
revised headroom in the re-forecast.
We tested to ensure the mathematical accuracy of
the model presented
We reviewed the appropriateness of the disclosure
made and its consistency with our knowledge of the
business and its Covid-19.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They
were not designed to enable us to express an opinion on these matters individually and we express no such opinion.
29
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC (Continued)
Other information
The directors are responsible for the other information. The other information comprises the information included
in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and 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:
•
•
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns;
or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement on page 26, 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 and the parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
30
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VERDITEK PLC (Continued)
using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent
Company or to cease operations or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our 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 Bullock (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
30 June 2020
31
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended
31 December 19
£
Year ended
31 December 18
£
Notes
5
7
9
9
8
Revenue
Administrative expenses
Operating loss
Finance income
Finance costs
Impairment loss of net investment in associate
Share of post-tax loss of equity accounted associate
Loss before tax
Income Tax
Loss for the period
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Translation of foreign operations
Total comprehensive loss for the period from continuing
operations
Loss for the period attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss for the period attributable to:
Owners of the Company
Non-controlling interest
(1,660,719)
(1,690,719)
185
(203,779)
-
-
(1,864,313)
-
(1,919,700)
(1,919,700)
(20,553)
(624,926)
(98,236)
(2,663,415)
-
-
(1,864,313)
(2,663,415)
(43,942)
14,868
(1,908,255)
(2,648,547)
(1,867,957)
3,644
(1,864,313)
(2,396,962)
(266,453)
(2,663,415)
(1,906,885)
(1,370)
(1,908,255)
(2,396,424)
(261,123)
(2,648,547)
Loss per ordinary share - basic and diluted (£)
10
(0.01)
(0.01)
The accompanying notes are an integral part of these financial statements.
All amounts are derived from continuing operations.
32
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets
Non-current assets
Investments
Property, plant and equipment
Right of use assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
TOTAL ASSETS
Equity and liability
Non-current liabilities
Loans and borrowings
Lease liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Loans and borrowings
Lease liabilities
Total current liabilities
TOTAL LIABILITIES
Equity
Share capital
Share premium account
Share based payment reserve
Accumulated losses
Foreign exchange reserve
Equity attributable to equity holders of the parent
Non-controlling interests
Total shareholder’s equity
Notes
31 December 19
£
31 December 18
£
12
13
15
16
17
18
20
21
19
20
21
22
22
23
24
24,229
633,491
249,706
907,426
35,038
437,075
107,243
579,356
25,153
498,969
-
524,122
-
431,099
683,885
1,114,984
1,486,782
1,639,106
-
186,612
186,612
959,360
668,319
37,526
1,665,205
1,170,000
-
1,170,000
538,312
43,243
-
581,555
1,851,817
1,751,555
91,666
5,466,376
21,703
(5,878,716)
(36,190)
(335,161)
(29,874)
(365,035)
80,847
3,858,691
8,727
(3,817,534)
749
131,480
(243,929)
(112,449)
TOTAL EQUTY AND LIABILITES
1,486,782
1,639,106
These financial statements were approved and authorised for issue by the Board of directors on 30 June 2020 and
were signed on its behalf by:
Rob Richards
Chief Executive Officer
Company Registration Number: 10114644
The accompanying notes are an integral part of these financial statements.
33
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued
Share
capital
£
80,847
-
-
-
-
80,847
-
80,847
-
-
-
Share
Premium
£
3,858,691
-
-
-
-
3,858,691
-
3,858,691
-
-
-
Share
based
payment
reserve
-
-
-
-
8,727
8,727
-
8,727
-
-
-
Accumulated
losses
£
(1,420,572)
(2,396,962)
-
(2,396,962)
-
(3,817,534)
24,189
(3,793,345)
(1,867,957)
-
(1,867,957)
Foreign
Exchange
reserve
£
(8,789)
-
9,538
9,538
-
749
-
749
-
(38,928)
(38,928)
Non-
Controlling
interests
£
17,194
(266,453)
5,330
(261,123)
-
(243,929)
-
(243,929)
3,644
(5,014)
(1,370)
Total
£
2,527,371
(2,663,415)
14,868
(2,648,547)
8,727
(112,449)
24,189
(88,260)
(1,864,313)
(43,942)
(1,908,255)
-
-
-
(217,415)
1,990
215,425
-
-
10,819
-
91,666
-
1,607,685
-
5,466,376
-
-
12,976
21,703
(217,415)
-
-
(5,878,717)
1,990
-
-
(36,189)
215,425
-
-
(29,874)
-
1,618,504
12,976
(365,035)
Balance as at 1-Jan-18
Loss for the year
Translation of subsidiary
Total comprehensive loss
Share based payment
Balance as at 31-Dec-18
IFRS 16 adjustment at 1-Jan-19
Adjusted balance at 1-Jan-19
Loss for the year
Translation of subsidiary
Total comprehensive loss
Acquisition of NCI without a
change in control
Total changes in ownership
interests
Issue of shares net of expenses
Share based payment
Balance as at 31-Dec-19
The accompanying notes are an integral part of these financial statements.
34
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Loss after tax from continuing operations
(1,864,313)
(2,663,415)
Year ended
Year ended
31 December 2019
31 December 2018
£
£
Adjustments for:
Finance costs
Finance income
Share of post-tax profits of equity accounted associates
Depreciation
Loss on disposal of assets
Share based payment
Impairment of investment in associate
Impairment of associate loan
Impairment of goodwill
Working capital adjustments
Decrease / (increase) in inventory
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade and other payables
Cash used in operations
Taxation
Net cash outflow from operating activities
Investing activities
Associate Loan
Purchase of property, plant and equipment
Net cash outflow from investing activities
Financing activities
Issue of ordinary share capital (net of expenses)
Issue of Convertible bonds (Refer note 20)
Interest received
Interest paid
Proceeds from loans
Repayments of loans (Refer note 20)
Payments of lease liabilities
Net cash inflows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange gains on cash and cash equivalents
Cash and cash equivalents at the end of the year
The accompanying notes are an integral part of these financial statements.
203,779
(185)
-
70,742
1,119
12,976
-
-
-
20,553
-
98,236
6,081
47,905
8,727
467,882
157,044
31,405
(1,575,882)
(1,825,582)
(35,038)
(24,961)
311,596
(1,324,285)
-
(1,324,285)
-
(156,399)
(156,399)
521,469
-
180
(134)
455,076
-
(71,686)
904,905
(575,779)
683,885
(863)
107,243
446
63,719
56,871
(1,704,546)
-
(1,704,546)
(157,044)
(137,018)
(294,062)
380,000
1,170,000
-
(4,597)
-
(62,075)
-
1,483,328
(515,280)
1,190,975
8,190
683,885
35
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate information
Verditek plc (“Verditek”, “Company”) is a public limited company incorporated, registered and domiciled in England
Wales (registration number 10114644), whose shares are quoted on the Alternative Investment Market on the
London Stock Exchange. Its registered office is located at 29 Farm Street, London W1J 5RL.
Verditek is the holding company of a group of companies engaged in the clean technology sector.
The consolidated financial statements comprised of the Company and its subsidiaries (together referred to as “the
Group”) as at and for the year to 31 December 2019. The parent Company financial statements present information
about the Company as a separate entity and not about its Group.
The comparative financial information is for the year ended 31 December 2018.
2. Accounting policies
The principal accounting policies applied in the preparation of the consolidated financial statements are set out
below. These policies have been consistently applied to all periods presented, unless otherwise stated.
2.1. Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards,
International Accounting Standards (IASB) and Interpretations (collectively IFRSs), as adopted by the European Union
(“adopted IFRSs”) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis except for certain assets which are stated
at their fair value.
The consolidated financial statements are presented in GBP, which is also the Group’s functional currency.
2.2. Basis of consolidation
The financial information consolidates the financial statements of Verditek plc and the entities controlled by the
Company.
2.2.1. Subsidiaries
Subsidiaries are all entities (including special purpose entities) over whose financial and operating policies the Group
has the power to govern, generally accompanying a shareholding of more than one half of the voting rights. The
existence and effect of the potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies
adopted by the Group.
36
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.2. Basis of consolidation (continued)
2.2.2. Business combinations and goodwill
The acquisition method of accounting is used to account for business combinations by the Group. The consideration
transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities
incurred, and the equity interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group
recognises any non-controlling interest in the acquiree either at fair value or at the noncontrolling interest’s
proportionate share of the acquiree’s net assets.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the
fair value of the total net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets
of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the Statement
of Comprehensive Income.
Goodwill is capitalised as an intangible asset at cost less any accumulated impairment losses. Any impairment in
carrying value is being charged to the consolidated statement of comprehensive income. An impairment loss
recognised for goodwill is not reversed.
Goodwill is allocated to appropriate cash generating units (CGUs). Goodwill is not amortised but is tested annually
for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. The recoverable amount is determined based on value in use calculations. The use of this method
requires the estimation of future cash flows and the determination of a discount rate in order to calculate the
present value of the cash flows.
2.2.3. Associates
Where the Group has significant influence on (but not control of) the financial and operating policy decisions of
another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of
financial position at cost. Subsequently associates are accounted for using the equity method, where the Group's
share of post-acquisition profits and losses and other comprehensive income is recognised in the consolidated
statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment
in the associate unless there is an obligation to make good those losses).
Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of
unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from
these transactions is eliminated against the carrying value of the associate.
Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and
contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is
objective evidence that the investment in an associate has been impaired the carrying amount of the investment is
tested for impairment in the same way as other non-financial assets.
The assumption that an investment is an associate is reviewed annually at the balance sheet date. Where the
retained interest is no longer an associate, the former interest is reclassified as a financial asset in accordance with
IFRS 9 and the retained interest is measured at fair value. Any profit or loss is recognised on any difference between:
(i) the fair value of any retained interest and any proceeds from disposing of a part interest in the associate; and
(ii) the carrying amount of the investment at the date the equity method was discontinued.
37
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.3. Changes in accounting policies and disclosures
2.3.1. New standards, interpretations and amendments effective from 1 January 2018
New standards impacting the Group that were adopted in the annual financial statements for the year ended 31
December 2019, and which have given rise to changes in the Group’s accounting policies are:
•
IFRS 16 Leases (IFRS 16)
The Group applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial
application is recognised in retained earnings at 1 January 2019. Accordingly, the comparative information presented
for 2018 is not restated – i.e. it is presented, as previously reported, under IAS 17 and related interpretations.
Additionally, the disclosure requirements in IFRS 16 have not generally been applied to comparative information.
An adjusted position at 1 January 2019 is presented in the Consolidated Statement of Changes in Equity, in order to
reflect the prior period impact of transition to IFRS 16 on brought forward balances at that date. On transition to
IFRS 16, the Group recognised a right-of-use asset and a lease liability in relation to its operating lease on a factory
in Lainate, Italy. The difference between these items was recognised in retained earnings at 1 January 2019. The
impact on transition is summarised below:
Operating lease commitments disclosed on 31 December 2018 (restated)
Discounted using weighted average of Group’s incremental borrowing rate
Lease liability recognised as at 1 January 2019
Right-of-use asset
Lease liability
Other receivables (discount applied to lease deposit)
Retained earnings
£
(315,323)
44,455
(270,868)
1 January 2019
£
319,336
(270,868)
(24,278)
(24,189)
When measuring the lease liability, the Group discounted lease payments using its incremental borrowing rate at 1
January 2019. The rate applied is 15%.
Several other amendments and interpretations apply for the first time in 2019, but do not have an impact on the
consolidated financial statements of the Group.
2.3.2. New, amended standards, interpretations not yet effective and not adopted by the Group
As at date of approval of the Group financial statements, the following new and amended standards, interpretations
and amendments in issue are applicable to the Group but not yet effective and thus, have not been applied by the
Group:
Amendments to References to Conceptual Framework in IFRS
Standards.
Definition of a Business (Amendments to IFRS 3)
Definition of Material (Amendments to IAS 1 and IAS 8)
Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest rate
benchmark reform
Effective Date
1 January 2020
1 January 2020
1 January 2020
1 January 2020
At the date of authorisation of these financial statements, all the above standards and interpretation have been
endorsed or adopted by the EU. The Directors do not expect the adoption of these standards, interpretations and
amendments to have a material impact on the Consolidated or parent Company financial statements in the period
of initial application.
38
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.4. Going concern
The Group had not commenced generating revenues in the period and has yet to make its first commercial receipt
at the date of approval of the financial statements. As such the Group must develop its business plan to commercial
revenues based on its current cash resources and on expected revenues in the future based on commercial
arrangements put in place to date. The Directors have prepared a cash flow forecasts covering a period extending
beyond 12 months from the date of the approval of these financial statements.
Despite challenging conditions, management remains intensely engaged with several initiatives to further
commercialise Verditek’s lightweight low-profile Solar PV solutions.
The Group’s manufacturing site in Lainate Italy reopened on 6 April 2020 and re-commenced production. Employees
were self-isolating during previous weeks in compliance with Italian government directives. No viral symptoms have
been registered. Verditek has permission to work and has access to the government wage compensation program
which is part of the "Cura Italia" (Cure Italy) Decree signed on 17 March 2020. Verditek will balance its production
rota to optimise the welfare of its staff and the company.
The Group’s forecasts include modelling management’s assessment of the impact of Covid-19 on the business of the
Group, including consideration of the overall impact on those parts of the business expected to be significantly
impacted and those parts which are expected to grow in the short term, the steps taken by the Directors to utilise
the various support mechanisms instigated by government, including the Cura Italia scheme and the financial impact
of the steps taken by and available to the Directors to protect and manage the business during the coming period,
including the introduction of temporary pay reductions across the business and overhead reductions.
The Group’s sales team has been working on advancing commercial opportunities during this challenging period. At
the date of approval of these financial statements the group is preparing to ship product from its factory. A number
of commercial counterparties are interested in arranging trials for Verditek’s solar solutions in their markets (e.g.
military, transport, recreational homes, commercial real estate)
The Group’s forecasts contain certain assumptions about the performance of the business including growth in future
revenue, the cost model and margins; and importantly the level of cash recovery from trading. The Directors are
aware of the risks and uncertainties facing the business and the assumptions used are the Directors’ best estimate
of the future development of the business. The Directors do not consider that the uncertainties facing the business
indicate that a material uncertainty exists related to events or conditions that, individually or collectively, may cast
significant doubt on the entity’s ability to continue as a going concern.
During the reporting period and since the balance sheet date the Group raised new funding of £2.1 million, before
costs, from the issue of new equity and also converted debt liabilities of more than a further £1 million into equity
as follows:
• On 27 September 2019 the Company announced that it had raised gross proceeds of £600,000 as a placing
of new ordinary shares
• On 2 December 2019 the Company announced that it had received a notice of conversion from Gavin
Mayhew, a Non-Executive Director, in respect of his CLN holding of £1 million together with accrued interest
up to the point of exercise, resulting in the conversion a debt amount to equity
• On 9 March 2020 the Company raised £505,750 before expenses by way of a subscription of 20,230,000
ordinary shares at 2.5 pence per share
• On 7 May 2020 the Company announced that it has raised £1,000,000 before expenses by way of a
subscription of 40,000,000 ordinary shares at 2.5 pence per share
39
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
After considering the forecasts and the risks, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue
to adopt the going concern basis of accounting in preparing the annual financial statements.
Foreign currency
2.5.
The Group’s consolidated financial statements are presented in Sterling. The functional currencies of the Group’s
subsidiaries include the Euro and the US dollar. For each entity, the Group determines the functional currency and
items included in the financial statements of each entity are measured using that functional currency.
The assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the balance
sheet date. Income and expenses are translated at weighted average exchange rates for the period. The exchange
differences arising on translation for consolidation are recognized in Other Comprehensive Income.
2.6. Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision maker has been identified as the management team including the two
main directors and two non-executive directors.
The Board considers that the Group’s activity constitutes one operating and one reporting segment, as defined under
IFRS 8. Management reviews the performance of the Company by reference to total results against budget.
The total profit measures are operating profit and profit for the period, both disclosed on the face of the income
statement. No differences exist between the basis of preparation of the performance measures used by
management and the figures in the Group’s financial information.
40
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Employee benefits and post-employment benefits
2.7.
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in
which the associated services are rendered by employees of the Group.
The Group provides post-employment benefits through a defined contribution. The Group pays fixed contributions
into independent entities in relation to several state plans and insurances for individual employees. The Group has
no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognised
as an expense in the period that related employee services are received.
Share-based payments
2.8.
The Group has issued share options to one Non-Executive Director, in return for which the Group receives services
from the Non-Executive Director. The fair value of the services received in exchange for the grant of the options is
recognised as an expense. The Group valued the options at the grant date using the Black Scholes valuation model
to establish the relevant fair values.
The total amount to be expensed is determined by reference to the fair value of the options granted including any
market performance conditions (for example the Group's share price) but excluding the impact of any service or
non-market performance vesting conditions (for example the requirement of the grantee to remain an employee of
the Group).
Non-market vesting conditions are included in the assumptions regarding the number of options that are expected
to vest. The total expense is recognised over the vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the non-market vesting conditions. It recognises the
impact of any revision in the income statement with a corresponding adjustment to equity.
2.9. Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement
of financial position differs from its tax base, except for differences arising on:
•
•
•
the initial recognition of goodwill;
the initial recognition of an asset or liability in a transaction which is not a business combination and at the
time of the transaction affects neither accounting or taxable profit; and
investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and
it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantially enacted by
the balance sheet date and are expected to apply when the deferred tax liabilities or assets are settled or recovered.
Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax
assets and liabilities.
41
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.10. Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the
acquired item, less accumulated depreciation and impairment losses.
Depreciation is provided to write off cost, less estimated residual values, of all property, plant and equipment, evenly
over their expected useful lives, when the asset comes into service, and calculated at the following rates:
Property improvements
Plant and machinery
Computer equipment
- 20% straight line
- 10% straight line
- 33.33% straight line
The carrying value of the property, plant and equipment is compared to the higher of value in use and the fair value
less costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the
asset, then the asset is impaired and its value reduced by recognising an impairment provision.
2.11. Leased assets
At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except for short-
term leases that have a lease term of 12 months or less and leases of low-value assets, which are expensed to the
profit & loss over the expense term.
The right-of-use asset is initially recognised at cost, which comprises the initial amount of the lease liability plus any
lease payments made at or before the commencement date, plus any initial direct costs incurred, plus any costs
associated with restoring the asset to its original condition, less any lease incentive received. The right-of-use asset
is subsequently stated at cost less accumulated depreciation and impairment losses.
Lease payments included in the measurement of the lease liability comprise the following:
•
•
•
•
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments
in an optional renewal period if the group is reasonably certain to exercise such an option to extend and
penalties for early termination of a lease unless the group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. The liability recognised at
inception of the lease comprises the present value of future payments payable under the lease contract, discounted
at the rate implicit in the lease. If there is no discount rate implicit in the lease, then the incremental rate of
borrowing is used. The liability is remeasured when there is a change in future lease payments arising from a change
in an index or rate, or there is a change in the Group's estimate of the amount expected to be payable under a
residual value guarantee, or there is a change arising from the reassessment of whether the Group will be reasonably
certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this way,
a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss
if carrying amount has been reduced to zero.
2.12. Financial Instruments
The Group classifies a financial instrument, or its component parts, as a financial asset, a financial liability or an
equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial
liability, a financial asset and an equity instrument.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets are de-recognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and substantially all the risks and rewards are transferred.
42
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Financial assets
2.12.1.
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient, the Group
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under IFRS 15.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are
subject to impairment. Gains and losses are recognised in profit or loss when the asset is de-recognised, modified
or impaired.
The Group’s financial assets at amortised cost includes trade receivables and loan to related parties, are included
under other non-current financial assets. In the periods presented the Group does not have any financial assets
categorised as fair value through OCI.
Financial liabilities
2.12.2.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial
date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability
as at fair value through profit or loss.
Loans after initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well
as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
A financial liability is de-recognised when the obligation under the liability is discharged, cancelled or expires.
43
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.12. Financial instrument (continued)
Impairment
2.12.3.
The Group assess all other current receivables on a forward looking basis, with expected credit losses (ECL)
associated with debt instruments measured at amortised cost. These are deemed short term (i.e., less than 12
months) and apply the Group policy for credit rating and risk management policies in place.
The impairment stages are defined as:
Stage 1 – When a receivable is recognised, ECLs resulting from default events that are possible within the next 12
months are expensed to the statement of comprehensive income (12-month ECL) and a loss allowance is established.
On subsequent reporting dates, 12-month ECL also applies to existing receivables with no significant increase in
credit risk since their initial recognition. In determining whether a significant increase in credit risk has occurred
since initial recognition, the Company assesses the change, if any, in the risk of default over the expected life of the
receivable (that is, the change in the probability of default, as opposed to the amount of ECLs).
Stage 2 – If the receivables credit risk has increased significantly since initial recognition and is not considered low,
lifetime ECLs are recognised.
Stage 3 – If the receivables credit risk increases to the point where it is considered credit-impaired, lifetime ECLs are
recognised, as in Stage 2.
The impairment methodology applied for the Group is stage 1, which require 12 month expected credit losses to be
recognised until a change in credit risk occurs in which case stage 2 would apply.
2.13. Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for, as follows:
• Raw materials: purchase cost on a first-in/first-out basis;
•
Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing
overheads based on the normal operating capacity but excluding borrowing costs.
Initial cost of inventories includes the transfer of gains and losses on qualifying cash flow hedges, recognised in OCI,
in respect of the purchases of raw materials.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
2.14. Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid
investments which are not subject to significant changes in value and have original maturities of less than three
months.
44
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.15. Summary of critical accounting estimates and judgements
The preparation of financial information in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires the Directors to exercise their judgement in the process of applying the accounting policies
which are detailed above. These judgements are continually evaluated by the Directors and management and are
based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future and other key sources of estimation
uncertainty at the statement of financial position date, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial period are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future periods if the revision affects both current and future
periods.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount
of assets and liabilities within the next financial year are discussed below:
2.15.1. Estimates
Useful lives of depreciable assets
Management reviews the useful lives and residual value of depreciable assets at each reporting date to ensure that
the useful lives represent a reasonable estimate of likely period of benefit to the Group. Tangible fixed assets are
depreciated over their useful lives taking into account the residual values, where appropriate. The actual lives of the
assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing
asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into
account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset
and projected disposal values.
Lease liability discount rate
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• Where possible, uses recent third-party financing received by the individual lessee as a starting point,
adjusted to reflect changes in financing conditions since third party financing was received;
• Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by
the company, which does not have recent third party financing; and
• Makes adjustments specific to the lease, e.g. term, currency and security.
The Group used incremental borrowing rates at a prevailing rate of 15%.
Share based payments
Share options are recognised as an expense based on their fair value at date of grant. The fair value of the options
is estimated through the use of a valuation model – which require inputs such as the risk-free interest rate, expected
dividends, expected volatility and the expected option life - and is expensed over the vesting period. Some of the
inputs used to calculate the fair value are not market observable and are based on estimates derived from available
data, such as employee exercise behaviour and employee turnover.
45
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.15.2. Judgements
Associates
Where the Group holds more than 20% but less than 50% of voting rights in an investment but the Group has the
power to exercise significant influence, such an investment is treated as an associate, unless it can be clearly
demonstrated that this is not the case.
The Company holds a 22.34% investment stake in Industrial Climate Solutions (ICSI), an unlisted company registered
in Canada. As the directors have no seat on the board of ICSI, they consider that they do not have significant influence
over the business, and therefore that ICSI is not an associate. The investment has therefore been reclassified as a
financial asset measured at fair value through the profit or loss.
3. Financial Risk Management
The Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods used to measure them. Further
quantitative information in respect of these risks is presented throughout these financial statements.
3.1. Principal financial instruments and their categories
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
Categories of financial assets
Cash and cash equivalents
Other receivables
Loans to related parties
Unpaid Share Capital
31 December 2019
£
31 December 2018
£
107,243
91,748
62,100
-
683,885
148,591
62,100
-
Total current financial assets at amortised cost
261,091
894,576
Categories of financial liabilities
Trade payables
Wages payable
Pension payable
Accruals
Loans from related parties
Trade and other payables
Current loans and borrowings
Non current loans and borrowings
Loans and borrowings
Current lease liabilities
Non current lease liabilities
Lease liabilities
31 December 2019
£
364,632
57,235
1,750
429,102
38,542
891,261
31 December 2018
£
161,145
42,103
504
278,259
29,403
511,414
668,319
-
668,319
37,526
186,612
224,138
43,243
1,170,000
1,213,243
-
-
-
Total financial liabilities at amortised cost
1,783,718
1,724,657
46
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.2. General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies
and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating
processes that ensure the effective implementation of the objectives and policies to the Group's finance function.
The Board receives monthly reports from the CFO through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Group's competitiveness and flexibility. Further details regarding these policies are set out below:
3.2.1. Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. In order to minimise this risk the Group endeavours only to deal with companies which are
demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The maximum exposure to credit risk is the value of the
outstanding amount of bank balances. The Group’s exposure to credit risk on cash and cash equivalents is considered
low as the bank accounts are with banks with high credit ratings. Amounts due from related parties is considered
to be low risk as the large part of this amount is related to a payment in advance under a distribution rights
agreement. Other receivables of £91,748 (2018: £148,591) related to various advanced payments to suppliers. Other
receivables includes a supplier advanced payment of £109,162 (2018: £109,162) which is overdue for repayment by
greater than one year, which management is actively seeking to recover. A 100% allowance has been made for non-
recovery (2018: 50%).
3.2.2. Liquidity risk
Liquidity risk arises from the Group's management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected
requirements for a period of at least 45 days.
The Group currently holds cash balances to provide funding for normal trading activity and is managed centrally.
Trade and other payables are monitored as part of normal management routine.
The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash
balances. At the end of the financial year, these projections indicated that the Group expected to have sufficient
liquid resources to meet its obligations under all reasonably expected circumstances.
The liquidity risk of each group entity is managed centrally by the group treasury function. Each operation has a
facility with group treasury, the amount of the facility being based on budgets. The budgets are set locally and agreed
by the Board in advance, enabling the Group's cash requirements to be anticipated. Where facilities of group entities
need to be increased, approval must be sought from the group finance director. Where the amount of the facility is
above a certain level, agreement of the Board is needed. The following table sets out the contractual maturities
(representing undiscounted contractual cash-flows, including contractual interest) of financial liabilities:
47
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.2. General objectives, policies and processes (continued)
31 December 2019
Up to 3
Months
Between 3 and 12
months
Between 1
and 2 year
Between 2
and 5 years
Trade payables
Wages payable
Pension payable
Accruals
Amounts due from related parties
Current related party loan
Lease liability
Current related party loan – interest
bearing
Non-current loan – interest bearing
Financial liabilities at amortised cost
364,632
57,235
1,750
429,102
38,542
43,243
17,415
-
951,919
-
-
-
-
-
-
52,636
455,076
186,396
694,108
-
-
-
-
-
-
70,707
-
-
70,707
-
-
-
-
-
-
179,027
-
-
179,027
31 December 2018
Up to 3
Months
Between 3 and 12
months
Between 1
and 2 year
Between 2
and 5 years
Trade payables
Wages payable
Pension payable
Accruals
Loans from related parties
Current loan
Non-current loan – interest bearing
Financial liabilities at amortised cost
161,145
42,103
504
278,259
29,403
-
-
511,414
-
-
-
-
-
43,243
-
43,243
-
-
-
-
-
-
1,404,000
1,404,000
-
-
-
-
-
-
-
-
3.2.3. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates
primarily to the Group’s debt obligations with floating interest rates.
The Group’s exposure to interest rate risk is minimal as all its loans and borrowings are interest-free except for the
convertible loan £170,000 (2018: £1,170,000), which has a fixed interest rate of 10%, and the related party fixed
rate loan £455,076, which has an interest rate of 20%.
3.2.4. Foreign exchange risk
Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other
than their functional currency. The Group's policy is, where possible, to allow group entities to settle liabilities
denominated in their functional currency with the cash generated from their own operations in that currency. Where
group entities have liabilities denominated in a currency other than their functional currency (and have insufficient
reserves of that currency to settle them), cash already denominated in that currency will, where possible, be
transferred from elsewhere within the Group.
In order to monitor the continuing effectiveness of this policy, the Board receives a monthly forecast, analysed by
the major currencies held by the Group, of liabilities due for settlement and expected cash reserves. The current
year shows that the Group is predominantly exposed to currency risk on purchases made in EUR and USD.
48
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.2.4. Foreign exchange risk (continued)
31 December 2019
Financial assets
Cash and cash equivalents
Other receivables
Loans to related parties
Financial assets at amortised costs
Financial liabilities
Trade payables
Wages payable
Pension payable
Accruals
Loans from related parties
Current loans
Non-current loans
Lease liabilities
USD
£
685
-
-
685
USD
£
-
-
-
-
-
455,076
-
-
GBP
£
72,597
-
62,100
EUR
£
33,961
91,748
-
Total
£
107,243
91,748
62,100
134,697
125,709
261,091
GBP
£
326,701
57,235
1,750
409,054
38,542
213,243
-
-
EUR
£
37,931
-
-
20,048
-
-
-
224,138
Total
£
364,632
57,235
1,750
429,102
38,542
668,319
-
224,138
Financial liabilities at amortised costs
455,076
1,046,525
282,117
1,783,718
31 December 2018
Financial assets
Cash and cash equivalents
Other receivables
Loans to related parties
Financial assets at amortised costs
Financial liabilities
Trade payables
Wages payable
Pension payable
Accruals
Loans from related parties
Current loans
Non-current loans
Lease liabilities
USD
£
547
-
-
547
USD
£
-
-
-
-
-
-
-
-
GBP
£
670,342
53,871
62,100
EUR
£
12,996
94,720
-
Total
£
683,885
148,591
62,100
786,313
107,716
894,576
GBP
£
88,385
42,103
504
272,415
29,403
43,243
1,170,000
-
EUR
£
72,760
-
-
5,844
-
-
-
-
Total
£
161,145
42,103
504
278,259
29,403
43,243
1,170,000
-
Financial liabilities at amortised costs
-
1,646,053
78,604
1,724,657
49
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3.2.4. Foreign exchange risk (continued)
As of 31 December 2019 the Group's net exposure to foreign exchange risk was as follows:
Net Financial Assets/(Liabilities)
USD
£
(454,391)
GBP
£
(911,828)
EUR
£
(156,408)
Total
£
(1,522,627)
As of 31 December 2018, the Group's net exposure to foreign exchange risk was as follows:
Net Financial Assets/(Liabilities)
USD
£
547
GBP
£
(859,740)
EUR
£
29,112
Total
£
(830,081)
The following table details the Group’s exposure at the end of the year to currency risk arising from recognised
assets or liabilities denominated in a currency other than the functional currency of the entity to which they relate.
Differences resulting from the translation of the financial statements of the entity within the Group into the Group’s
presentation currency are excluded:
As of 31 December 2019 the Group’s exposure to changes in foreign exchange rate was as follows:
Change in
USD
Effect on Loss
before tax
Change in Net
Assets
Change in
EUR
Effect on Loss
before tax
Change in Net
Assets
1%
-1%
£
(5,214)
5,214
£
5,214
(5,214)
1%
-1%
£
(364)
364
£
364
(364)
As of 31 December 2018 the Group’s exposure to changes in foreign exchange rate was as follows:
Change in
USD
Effect on Loss
before tax
Change in Net
Assets
Change in
EUR
Effect on Loss
before tax
Change in Net
Assets
1%
-1%
£
991
(991)
£
(991)
991
1%
-1%
£
6,042
(6,042)
£
(6,042)
6,042
4. Segment information
The chief operating decision maker has been identified as the management team including the two main directors
and two non-executive directors. The chief operating decision-maker allocates resources and assesses performance
of the business and other activities at the operating segment level.
The chief operating decision maker has determined that in the year end 31 December 2019 Verditek had one
operating segment, the development and commercialisation of clean technologies, although it is likely that in future
periods the Group’s segmental reporting will be expanded as different technologies are developed and
commercialised.
50
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Geographical Segments
Apart from holding company activities in the UK the Group’s had operations in Italy in Europe in the period.
An analysis of non-current assets by geographical market is given below:
UK
Rest of Europe
USA
5. Operating loss
Year ended
31 December 2019
£
24,994
882,431
-
907,425
Year ended
31 December 2018
£
28,416
495,706
-
524,122
Year ended
31 December 2019
£
Year ended
31 December 2018
£
Operating loss is stated after charging:
Auditors’ remuneration:
Audit fees – audit of the company and its subsidiaries pursuant to
legislation
Non-audit fees – other assurance services
Depreciation of fixed assets
Goodwill Impairment
Disposal of asset
Staff costs (note 6)
Advertising, marketing and development
Re-organisation costs
Research costs
Other costs
28,000
2,500
70,742
-
1,119
645,380
323,906
54,582
95,833
438,657
27,650
-
6,081
31,405
47,904
709,297
352,498
133,993
55,486
555,386
6. Employees and directors
The average number of employees (including directors) during the period was made up as follows:
Directors
Administrative
Total
Year ended
31 December 2019
Number
5
1
6
Year ended
31 December 2018
Number
6
2
8
The cost of employees (including directors) during the period was made up as follows:
Salaries
Share based payments
Social security costs
Pension costs
Year ended
31 December 2019
£
592,938
12,976
32,112
7,355
645,381
Year ended
31 December 2018
£
676,211
8,727
23,553
806
709,297
51
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Key management personnel compensation
The compensation of key management personnel, the directors of Verditek plc, are disclosed in the Directors’
Remuneration Report.
7. Finance costs
Finance expenses
Interest on loans (note 20)
Finance charge
Finance lease interest
Interest on Overdue Taxation
Total finance expense
Details of the interest rate on the loans are shown in note 20.
8.
Income tax
UK Corporation tax
Tax expense– current year
Total current tax
Deferred tax
Origination and reversal of timing differences
Total tax expense
Year ended
31 December 2019
£
Year ended
31 December 2018
£
165,480
127
38,172
-
203,779
19,766
781
-
6
20,553
Year ended
31 December 2019
Year ended
31 December 2018
£
-
-
-
-
£
-
-
-
-
Factors affecting the tax expense
The reasons for the difference between the actual tax expense for the year and the standard rate of corporation tax
in the United Kingdom applied to the result for the year are as follows:
Year ended
31 December 2019
£
Year ended
31 December 2018
£
Loss on ordinary activities before income tax
Standard rate of corporation tax
Loss before tax multiplied by the standard rate of corporation tax
Effects of:
Adjustment in respect of the previous year
Non-deductible expenses
Difference in overseas tax rates
Deferred tax not recognised
Withholding tax
Tax credit
(1,864,313)
19.00%
(354,219)
-
9,485
(27,791)
372,525
-
-
(2,663,415)
19.00%
(506,049)
-
132,843
32,135
341,071
-
-
52
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Group has not recognised deferred tax assets arising from the accumulated tax losses due to uncertainty of
their future recovery. The deferred tax asset not recognised is £852,807 at 31 December 2019 (2018: £480,281).
9. Share of post-tax loss of equity accounted associate
Share of post tax loss of equity associated for the year
Impairment of investment (note 12)
Impairment of loan provided to associate (note 12)
Total share of post tax loss of equity associate
Year ended
31 December 2019
£
-
-
-
-
Year ended
31 December 2018
£
98,236
467,882
157,044
723,162
The investment in an associate was reclassified as a financial asset in the year, see Note 12.
10. Earnings per share
Basic and diluted
Loss for the period and earnings used in basic & diluted EPS (£)
Weighted average number of shares used in basic and diluted
EPS
Loss per share:
Basic and diluted
Year ended
31 December 2019
Year ended
31 December 2018
(1,867,957)
(2,396,962)
206,787,734
202,117,265
0.9p
1.2p
Basic loss per share is calculated by dividing the loss for the period from continuing operations of the Group by the
weighted average number of ordinary shares in issue during the period. Due to the loss in the periods and there are
no potentially dilutive ordinary shares, there is no difference between the basic and diluted loss per share.
11. Intangible assets
COST
At 1 January 2018
Acquisitions through business combinations
At 31 December 2018 and 31 December 2019
IMPAIRMENT
At 1 January 2018
Impairment losses
At 31 December 2018
Impairment losses
At 31 December 2019
NET BOOK VALUE
At 31December 2018
At 31 December 2019
Goodwill
£
388,641
-
388,641
357,236
31,405
388,641
388,641
-
-
53
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The carrying value
of the goodwill arose from the acquisition of Greenflex UK, and following the decision to migrate the assets from
Greenflex RSM S.r.l to Verditek Solar Italy S.r.l, and to liquidate Greenflex RSM S.r.l, the carrying value of the Goodwill
has been fully impaired.
12. Investments
Financial
assets at fair
value
through
profit or loss
-
-
-
-
-
-
-
Cost
At 1 January 2018
Additions
Share of post-tax
associate for the period
Impairment of loan
Impairment of investment
At 31 December 2018
Additions
loss of equity accounted
Investment
in associates
Loans to
associates
Total
£
£
£
591,271
-
157,044
591,271
157,044
(98,236)
-
(467,882)
25,153
-
-
(157,044)
-
-
-
Reclassification
Exchange difference
At 31 December 2019
25,153
(25,153)
(924)
24,229
-
-
-
-
-
(98,236)
(157,044)
(467,882)
25,153
-
-
(924)
24,229
The Company holds a 22.34% investment stake in Industrial Climate Solutions (ICSI), an unlisted company
registered in Canada. The directors estimated the recoverable amount of Verditek’s investment in ICSI at the
reporting date to be £24,229 (2018: £25,513).
As the directors have no seat on the board of ICSI, they consider that they do not have significant influence over
the business, and therefore that ICSI is not an associate. The investment has therefore been reclassified as a
financial asset measured at fair value through the profit or loss.
54
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Property, plant and equipment
Cost
At 1 January 2018
Additions
Disposal of assets
Exchange adjustments
At 31 December 2018
Additions
Disposal of assets
Exchange adjustments
At 31 December 2019
Depreciation
At 1 January 2018
Charge for the year
Disposal of assets
Exchange adjustments
At 31 December 2018
Charge for the year
Disposal of assets
Exchange adjustments
At 31 December 2019
Net book value
At 31 December 2018
At 31 December 2019
Plant & Machinery
Computer
equipment
Leasehold
Improvements
£
£
404,811
107,816
(42,749)
6,646
472,524
135,648
-
(25,145)
583,027
624
644
-
(20)
1,248
14,773
-
(564)
15,457
5,319
1,889
(1,260)
85
6,033
699
(3,709)
-
3,023
323
3,184
(105)
(8)
3,394
1,311
(2,589)
142
2,258
-
27,313
-
-
27,313
46,495
-
(1,459)
72,349
-
2,253
-
6
2,259
5,195
-
(261)
7,193
Total
£
410,130
137,018
(48,009)
6,731
505,870
182,842
(3,709)
(26,604)
658,399
947
6,081
(105)
(22)
6,901
21,279
(2,589)
(825)
24,908
471,766
567,570
2,149
765
25,054
65,156
498,969
633,491
55
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Subsidiary undertakings
As at 31 December 2019, the subsidiaries of Verditek plc, all of which have been included in these consolidated
financial statements, are as follows:
Name
Country of
incorporation
Parent
Proportion of
ownership
interest at 31
December 2019
Greenflex Energy Limited1
UK
Verditek plc
Greenflex RSM S.r.l 2
San Marino
Greenflex Energy Limited
Verditek Solar S.r.l
BBR Filtration Limited
BBR Filtration USA, LLC
Verditek USA, Limited
Italy
UK
USA
USA
Verdiek plc
Verditek plc
BBR Filtration Limited
Verditek plc
100%
100%
100%
51%
50.49%
100%
Nature of business
Dormant
Dormant
Solar technology services
Filtration technology services
Dormant
Dormant
1 On 17th April 2019 the Minority shareholder in Greenflex UK Limited transferred his 49% shareholding to Greenflex
UK Limited, resulting in Verditek shareholding being increased to 100%.
2 - Greenflex RSM S.r.l ceased to trade in July 2018, and an application to liquidate the company was made in
February 2019;
Name
Registered address
Greenflex Energy Limited
29 Farm Street, London, England, W1J 5RL
Greenflex RSM S.r.l
Verditek Solar S.r.l
Via L. Cibrario, 25, 47893 Cailungo, San Marino
Via Pogliano, 26, 20020 Lainate, Italy
BBR Filtration Limited
29 Farm Street, London, England, W1J 5RL
BBR Filtration USA, LLC (99%)
Verditek USA, Limited
C/o 2605, Ponce De Leon, Boulevard, Coral Gables, Florida 33134
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801
Greenflex Trading Limited
29 Farm Street, London, England, W1J 5RL
56
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Right of use asset
Cost
At 1 January 2019
Recognition of right-of-use asset on initial application of IFRS 16
Adjusted balance at 1 January 2019
Exchange
At 31 December 2019
Depreciation
At 1 January 2019
Recognition of right-of-use asset on initial application of IFRS 16
Adjusted balance at 1 January 2019
Depreciation
Unwind of discount of other receivables
Exchange
At 31 December 2019
Net book value
At 1 January 2019
At 31 December 2019
Building
£
-
347,105
347,105
(18,544)
328,561
-
27,769
27,769
49,463
4,121
(2,498)
78,855
319,336
249,706
The right-of-use asset is the present value of a lease asset on a factory in Lainate, Italy signed in 2018 for 6 years.
The lease term expires in 2024, with an option to renew for another 6 years. The rental amount is reviewed on an
annual basis, with increase in rental value linked to 75% of the consumer price index for white and blue collar
worker households established by ISTAT (a national central statistics institute).
16. Inventories
Finished goods
Work In Progress
Raw Materials
Packaging
Total Inventories
17. Trade and other receivables
Other receivables
Amounts due from related parties
VAT receivable
Prepayments
Total trade and other receivables
2019
£
6,899
14,378
12,683
1,078
35,038
2019
£
91,748
62,100
273,542
9,685
437,075
2018
£
-
-
-
-
-
2018
£
148,591
62,100
196,842
23,566
431,099
57
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Cash and cash equivalents
Cash at bank and in hand
107,243
683,885
The fair value of the cash & cash equivalent is as disclosed above. For the purpose of the cash flow statement, cash
and cash equivalents comprise of the amounts shown above.
2019
£
2018
£
19. Trade and other payables
Trade payables
Accruals
Wages payable
Pension payable
Amounts due to related parties
Financial liabilities at amortised costs other than loans and borrowings
Social security & other taxes payables
Total trade and other payables
20. Loans and borrowings
Current
Interest free related party loan
Interest bearing related party secured loan
Convertible loans
Total current loans and borrowings
Non – current
Convertible loans
Total non - current loans and borrowings
2019
£
364,632
429,102
57,235
1,750
38,542
891,261
68,099
959,360
2019
£
43,243
455,076
170,000
668,319
2019
£
2018
£
161,145
278,259
42,103
504
29,403
511,414
26,898
538,312
2018
£
43,243
-
-
43,243
2018
£
-
-
1,170,000
1,170,000
The related party loans are repayable on demand. The Interest bearing related party secured loan has a fixed
interest rate of 20%, and is repayable on demand.
On the 17 December 2018 the Company issued unsecured convertible loan notes with a total value of £1,170,000
with a conversion price of £0.10 per ordinary share. The loan notes carry a 10% fixed rate redeemable on the earliest
of
17th December 2020; or
•
• Date of change of control; or
•
If the investor majority determines following a material breach.
58
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
At the date of issue of the convertible loan notes the company’s share price was at a substantial discount to the
conversion price of 10p. The quantum of any possible equity component relating to conversion rights is therefore
considered to be immaterial to the fair value of the convertible loans, equity in the statement of financial position
and potential consequent impact on the finance charge on the instruments and therefore no equity component was
recognised.
On 2 December 2019, £1,000,000 of the unsecured convertible loan notes, plus accrued interest at that date, were
converted to ordinary shares at 8p per share, in accordance with adjusted terms of the convertible loan notes.
Cashflow - net debt analysis
Related party loan
Convertible bonds
Lease liability
21. Lease liability
01-Jan-19
Cash flow
£
43,243
1,170,000
270,868
£
455,076
-
(71,686)
Conversion to
shares
£
-
(1,000,000)
-
Non-cash
item
£
-
-
24,956
31-Dec-19
£
498,319
170,000
224,138
1,484,111
455,076
(1,000,000)
24,956
892,457
Current Lease liability
Non-Current Lease liability
Total Current loans and borrowings
Lease liabilities are payable as follows:
Less than one year
Between one and five years
2019
£
37,526
186,612
224,138
2018
£
-
-
-
Future
minimum
lease
payments
£
70,050
249,735
Interest
£
32,524
63,123
Present value
of minimum
lease
payments
£
37,526
186,612
319,785
95,647
224,138
The cash outflow on lease liability payments in the year was £71,685. The interest expense on lease liabilities
recognised in the year was £38,172.
59
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
22. Share capital and reserves
Number of
Shares
Par Value
£0.0004
Share capital
Share premium
£
£
At 31 December 2017
202,117,265
80,847
3,858,691
At 31 December 2018
Shares issued (net of expenses) October 2019
Conversion of loan notes to ordinary shares December 2019
At 31 December 2019
202,117,265
13,333,332
13,712,937
229,163,534
80,847
5,333
5,486
91,666
3,858,691
516,135
1,091,550
5,466,376
23. Share based payment reserve
The Company operates an equity-settled share-based remuneration schemes for Senior Executives, under the terms
of the Company's EMI and Non-Qualifying Share Option Plan (the "Option Plan"). The options are valid for 10 years
from the date of grant. After satisfaction of any performance condition included in the award the options will
become exercisable in equal tranches on each anniversary of the Grant Date during the first three years.
The fair value of the employee services received in exchange for the grant of the options is recognised as an expense.
The total amount to be expensed is determined by reference to the fair value of the options granted including any
market performance conditions (for example the Company's share price) but excluding the impact of any service or
non-market performance vesting conditions (for example the requirement of the grantee to remain an employee of
the Group).
Non-market vesting conditions are included in the assumptions regarding the number of options that are expected
to vest. The total expense is recognised over the vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the non-market vesting conditions. It recognises the
impact of any revision in the income statement with a corresponding adjustment to equity.
The Company uses a Black Scholes model to estimate the cost of share options. The following information is relevant
in the determination of the fair value of options granted. The assumptions inherent in the use of this model are as
follows:
• The option life is the estimated average period over which the options will be exercised.
• There are no vesting conditions remaining which apply to the share options other than that they vest at the earlier
of 3 years’ continued service with the Group.
• No variables change during the life of the option (e.g. dividend yield remains zero).
The key assumptions used in the fair value calculation are as follow:
Stock price at grant date
Volatility
Time to maturity
Risk free rate
6.5p
40%
100 months
0.7103%
1,500,000 options were granted under the scheme in April 2018 to Chairman, Lord David Willetts, with an exercise
price of 9.0p. The share based payment expense recognised during the period was £12,976. The weighted average
remaining life of the options outstanding at the end of the period was 9 years. No options were granted or
exercised during the year.
60
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
24. Non-controlling interests
In May 2019 the 49% non-controlling interest (NCI) in Greenflex Energy Limited, and the investment it holds in
Greenflex Energy RSM s.r.l., was acquired by the Company for nil consideration. The Group recognised an increase
in non-controlling interests of £215,425 and a decrease in equity attributable to owners of the parent of £217,415.
At 31 December 2019 Greenflex no longer has a NCI. BBR Filtration Limited is a 51% owned subsidiary of the
Company, and therefore has a material NCI.
Summarised financial information in relation BBR Filtration Limited, before intra-group eliminations, is presented
below together with amounts attributable to NCI:
For the period ended 31 December
Revenue
Loss after tax
Total comprehensive income allocated to NCI
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash inflows
Total assets
Total liabilities
Net Assets/(Liabilities)
Accumulated non-controlling interests
BBR
Filtration
£
-
7,436
3,644
(3,402)
(58)
-
(3,460)
62,528
(123,496)
(60,968)
(29,874)
25. Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium - Amount subscribed for share capital in excess of nominal value.
Share based payment reserve - The share based payment reserve represents equity settled share based employee
remuneration until such share options are exercised.
Foreign exchange reserves - Foreign exchange translation gains and losses on the translation of the financial
statements of subsidiary from the functional to the presentation currency.
Retained earnings - All other net gains and losses and transactions with owners (e.g. dividends) not recognised
elsewhere.
61
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
26. Related Party Transactions
The Group has related party transactions with related parties who are not members of the group.
Geoffrey John Nesbitt1
Timothy Lord2
The Rt Hon. Lord David Willetts FRS3
George Katzaros4
Gavin Mayhew5
Carrick International Holdings Limited6
Krino Partners Limited7
C2E Holdings Limited8
Envolution (Project Management)
Limited9
Jeremy Evans10
BBR Enviro Systems Pvt Ltd11
Claudio Marati12
James Buchan13
José Luis Del Valle Doblado14
Theodore Edward Chapman15
Transactions during the
year
Amounts owed by
related parties
Amounts owed to related
parties/loans
2019
£
2018
£
152,888
141,265
102,488
62,976
30,000
62,188
5,667
-
-
-
-
-
-
-
-
-
65,256
33,267
27,133
-
30,894
53,954
57
70,944
-
33,508
17,570
-
12,016
52,590
2019
2018
£
-
1,063
-
-
-
-
1,620
-
-
-
£
-
-
-
-
-
-
-
-
-
-
62,000
62,195
-
-
-
-
-
-
-
-
2019
£
2018
£
136,486
-
83,266
63,243
-
-
-
33,243
455,076
1,000,000
-
-
-
-
10,403
10,403
-
-
10,000
10,000
-
-
19,000
40,055
-
-
-
19,000
40,055
-
Notes:
1Geoffrey John
Nesbitt
2Timothy Lord
3 The Rt Hon. Lord
David Willetts FRS
4George Katzaros
5Gavin Mayhew
6 Carrick International
Holdings Limited
Mr. Geoffrey John Nesbitt, Director of Verditek plc, was entitled to Directors fee and salaries
of £152,888 during the year. At the year end, Geoff Nesbitt was owed £136,486 in relation
to his Directors fees and salary.
During the year Timothy Lord, and executive director of Verditek plc, was entitled to
£102,488 for his services as a Director. At the year end, Tim Lord owed £1,063 in relation to
an advance.
David Willetts, Chairman of the Company, was entitled to fees and services of £50,000 during
the period, all of which remains outstanding at the end of the year. David Willets was also
issued some share options in 2018, details of which are disclosed in the note 23, with which
there was an associated £12,976 charge during the year.
Mr. George Katzaros, a non-executive director of Verditek plc, was entitled to Directors fees
of £30,000 during the year. At the year-end George Katzaros was owed a Directors fee of
£30,000 and an interest free loan from the prior year of £33,243.
Gavin Mayhew is a Director of the Company. In December 2019 a £1,000,000 loan note
previously issued by the company to Gavin Mayhew was converted to 13,712,937 shares.
Gavin Mayhew also issued a secured loan note to the Company in May 2019 of US$600,000
(£455,076). The transactions in the year of £62,188 is the interest accrued on the secured
loan note.
Mr. Anthony Neil Rawlinson, a non-executive director of Verditek plc has an interest in
Carrick International Holdings Limited. His Directors fees were paid to Carrick International
Holdings Limited.
62
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
7Krino Partners
limited
8C2E Holdings
Limited
9Envolution (Project
Management)
Limited
10Jeremy Evans
11BBR Enviro Systems
Pvt Ltd
12Claudio Marati
13James Buchan
14 José Luis Del Valle
Doblado
15 Theodore Edward
Chapman
Ms. Janet Rachel Donovan, who resigned in 2018 as a director of Verditek plc has an
interest in Krino Partners Limited, which has provided financial management services
during the year to the Group.
C2E Holdings Limited(“C2E”) is a shareholder of BBR Filtration Limited. Theo Chapman and
James Buchan have an interest in C2E.
Mr. John Norris, who resigned as a director of BBR Filtration(“BBR”), is also a Director of
Envolution (Project Management) Limited, which charged £70,000 for his services during
the year. Some fixed assets were sold to Mr Norris when he left, the assets were sold at
market value. There is £10,886 outstanding due in relation to these fees at the end of the
year.
A shareholder of Verditek plc provided an interest-free loan of £10,000 which remains
outstanding at the year end.
BBR Enviro Systems Pvt Ltd who have a 10% stake in BBR Filtration, owed £62,000 in
respect of royalty advances.
Claudio Marati owned 49% of Greenflex Energy Ltd until April 2019.
A shareholder of Verditek plc provided an interest-free loan of £19,000 which remains
outstanding at the year end.
José Luis Del Valle Doblado was a non-executive director of the Company who resigned in
2018. There is £40,055 outstanding in consultancy fees at the year end.
Theodore Edward Chapman was a director of the Company who resigned in 2018.
Details of the directors’ emoluments, together with the other related information, are set out in the Directors Report
of the Remuneration Committee.
27. Events subsequent to the reporting date
The outbreak of Covid 19 creates a new and highly unpredictable challenge. We have tested our business continuity
plans which have been successfully activated. The investment in our technology over recent years has resulted in
the business being well placed to continue commercialisation with our clients without disruption and with no
increase in operational risk. Management does not consider it possible to quantify the true impact of COVID-19 on
the business at this time but remains confident that the business can adjust to the challenges it presents.
Subsequent to the year end, the Company issued 20.23million new ordinary shares at 2.5p each and 40 million new
ordinary shares at 2.5p each, raised the gross proceed of £505,750 and £1,000,000 respectively as additional
working. Capital. The Company also issued 2.5million new ordinary shares as part settlement of professional adviser
fee.
28. Ultimate controlling party
There is no ultimate controlling party of the Company.
63
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
COMPANY STATEMENT OF FINANCIAL POSITION
Non-current assets
Investments in subsidiaries
Other investments
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Net amounts due from subsidiaries
Unpaid Share Capital
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Non-current liabilities
Loans and borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Loans and borrowings
Total current liabilities
Net assets
Share capital
Share premium
Share based payment reserve
Retained losses
Total equity
31 December 2019
31 December 2018
Notes
£
£
3
4
5
6
7
6
8
10
9
10
11
12
169,454
24,229
765
194,448
57,438
1,734,197
-
73,316
1,864,951
2,059,399
169,454
25,153
1,114
195,721
199,060
949,133
-
670,343
1,818,536
2,014,257
-
-
1,170,000
1,170,000
863,181
668,319
1,531,500
461,476
43,243
504,719
527,899
339,538
91,666
5,466,376
21,703
(5,051,846)
527,899
80,847
3,858,691
8,727
(3,608,727)
339,538
The Company’s loss for the year was £1,443,119 (2018: £2,298,795) and is included within the consolidated
statement of comprehensive income.
These financial statements were approved and authorised for issue by the Board of Directors on 30 June 2020 and
were signed on its behalf by:
Rob Richards
Chief Executive Officer
Company Registration Number: 10114644
The accompanying notes are an integral part of these financial statements.
64
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
COMPANY STATEMENT OF CHANGES IN EQUITY
Share
capital
£
Share
premium
Share based
payment reserve
£
Retained losses
£
Total
£
Equity as at 1 January 2018
80,847
3,858,691
Loss for the year
Total comprehensive loss
Share based payments
-
-
-
-
-
-
Equity as at 31 December 2018
80,847
3,858,691
Loss for the year
Total comprehensive loss
-
-
-
-
Share issue (net of expenses)
10,819
1,607,685
Share based payments
-
-
Equity as at 31 December 2019
91,666
5,466,376
-
-
-
8,727
8,727
-
-
-
12,976
21,703
(1,309,932)
2,629,606
(2,298,795)
(2,298,795)
(2,298,795)
(2,298,795)
-
8,727
(3,608,727)
339,538
(1,443,119)
(1,443,119)
(1,443,119)
(1,443,119)
-
-
(5,051,846)
1,618,504
12,976
527,899
The accompanying notes are an integral part of these financial statements.
65
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1. Accounting policies
The accounting policies that are applicable, as set out in note 2 to the consolidated financial statements have been
applied together with the following accounting policies that have been consistently applied in the preparation of
these Verditek PLC (“the Company”) financial statements.
Basis of preparation
The financial statements of Verditek PLC have been prepared in accordance with Financial Reporting Standard 101,
‘Reduced Disclosure Framework’ (FRS 101). The financial statements have been prepared under the historical cost
convention, as modified and in accordance with the Companies Act 2006.
The Company has taken advantage of Section 408 of the Companies Act 2006 in not presenting its own statement
of comprehensive income.
The Company has taken advantage of the following disclosure exemptions under FRS 101, on the basis that
equivalent disclosures are, where required, are given in the consolidated financial statements of Verditek plc:
a. a Cash Flow Statement and related notes as required by IAS 7 – ‘Statement of Cashflows’;
b. the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative
information in respect of paragraph 79(a)(IV) of IAS 1 – a reconciliation of the share capital at beginning and end
of the period;
c. the requirements of paragraph 134 – 136 of IAS 1 ‘Presentation of Financial Statements’ to disclose the
management of the capital of the Company;
d. the requirements of paragraphs 30 and 31 of IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and
Errors’ to disclose the new or revised standards that have not been adopted and information about their likely
impact;
e. all of the disclosure requirements of IFRS 7 ‘Financial Instruments: Disclosures’;
f. the requirements of paragraph 17 of IAS 24, ‘Related Party Disclosures’ to disclose key management personnel;
and
g. 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 subsidiaries which is a party to the transaction is wholly
owned by such a member.
Investments in subsidiaries
The Company’s investment in its subsidiaries are carried at cost less provision for any impairment. Investments
denominated in foreign currency are recorded using the rate of exchange at the date of acquisition. The carrying
value is tested for impairment when there is an indication that the value of the investment might be impaired. When
carrying out impairment tests, the recoverable amount is based upon future cash flow forecasts and these forecasts
would be based upon management judgement. Where the carrying value is more than the recoverable amount, no
impairment provision is made.
Trade and other receivables
The Company assesses on a forward-looking basis the expected credit losses associated with its receivables,
including the amounts due from subsidiaries, carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies
the simplified approach permitted by IFRS 9, resulting in trade receivables recognised and carried at original invoice
amount less an allowance for any uncollectible amounts based on expected credit losses.
66
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS (Continued)
Critical accounting estimates and judgments
The preparation of financial information in conformity with FRS 101 requires the use of certain critical accounting
estimates. It also requires the Directors to exercise their judgement in the process of applying the accounting policies
which are detailed above. These judgements are continually evaluated by the Directors and management and are
based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are as follow:
Impairment of investments in subsidiaries
This is detailed in the accounting policy ‘Investment in subsidiaries’ above.
Impairment of the amounts due from subsidiaries
The Company is required to assess the carrying values of each of the amounts due from subsidiaries, considering the
requirements established by IFRS 9 Financial Instruments.
The IFRS 9 impairment model requiring the recognition of ‘expected credit losses’. Where conditions exist for
impairment on amounts due from subsidiaries expected credit losses assume that repayment of a loan is demanded
at the reporting date. If the subsidiary has sufficient liquid assets to repay the loan if demanded at the reporting
date, the expected credit loss is likely to be immaterial. However, if the subsidiary could not demonstrate the ability
to repay the loan, if demanded at the reporting date, the Company calculated an expected credit loss. This
calculation considers the percentage of loss of the amount due from subsidiaries, which involves judgement around
how amounts would likely be recovered, and over what time they would be recovered.
2. Staff costs
The average number of employees (including directors) during the period was made up as follows:
Directors
Administrative
Total
2019
Number
5
1
6
The cost of employees (including directors) during the period was made up as follows:
Salaries (including directors)
Share based payment
Social security costs
Pension cost
Total staff costs
2019
£
499,123
12,976
32,112
7,355
551,566
2018
Number
5
1
6
2018
£
564,617
8,727
19,612
806
593,762
67
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS (Continued)
3.
Investments in subsidiary undertakings
At 1 January 2018
Transfer from investments in associates
Additions
Write off of investments
At 31 December 2018
Transfer from investments in associates
Additions
Write off of investments
At 31 December 2019
IMPAIRMENT
At 1 January 2017
Impairment of investment in subsidiary
At 31 December 2018
Impairment of investment in subsidiary
At 31 December 2019
Net book value
At 31 December 2018
At 31 December 2019
Investment in subsidiary
£
600,001
-
8,915
-
608,916
-
-
-
608,916
439,462
-
439,462
-
439,462
169,454
169,454
The details of the subsidiaries of Verditek plc, are set out in the Note 14 to the consolidated financial statements.
4. Other investments
Financial
assets at fair
value
through
profit or loss
Investment
in associates
Loans to
associates
Total
£
£
£
-
-
591,271
-
157,044
591,271
157,044
-
-
-
-
-
25,153
(924)
24,229
(98,236)
-
(467,882)
25,153
-
(25,153)
-
-
-
(157,044)
-
-
-
-
-
-
(98,236)
(157,044)
(467,882)
25,153
-
-
(924)
24,229
loss of equity accounted
Cost
At 1 January 2018
Additions
Share of post-tax
associate for the period
Impairment of loan
Impairment of investment
At 31 December 2018
Additions
Reclassification
Exchange difference
At 31 December 2019
The Company holds a 22.34% investment stake in Industrial Climate Solutions (ICSI), an unlisted company
registered in Canada. The directors estimated the recoverable amount of Verditek’s investment in ICSI at the
reporting date to be £24,229 (2018: £25,513).
68
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS (Continued)
As the directors have no seat on the board of ICSI, they consider that they do not have significant influence over
the business, and therefore that ICSI is not an associate. The investment has therefore been reclassified as a
financial asset measured at fair value through the profit or loss.
5. Property, plant and equipment
At 1 January 2018
Additions
Disposal of asset
At 31 December 2018
Additions
At 31 December 2019
DEPRECIATION
At 1 January 2018
Charge for the year
Disposal of asset
At 31 December 2018
Charge for the year
At 31 December 2019
Net book value
At 31 December 2018
At 31 December 2019
6. Trade and other receivables
Prepayments
Other receivables
VAT receivables
Total trade and other receivables
Unpaid share Capital
Total
All amounts are due within three months.
7. Amounts due from subsidiaries
Plant and
machinery
£
1,873
1,889
(1,260)
2,502
699
3,201
624
869
(105)
1,388
1,048
2,436
1,114
765
31 December 2019
£
8,359
-
49,079
57,438
31 December 2018
£
5,011
54,582
139,467
199,060
-
57,438
-
199,060
The directors consider that the carrying amounts owed by and to group undertakings approximates their fair value.
The amounts reported under current assets have no fixed repayment terms and repayment on demand. At 31
December 2019 there was no provision held in respect of the recoverability of amounts due from subsidiaries.
69
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS (Continued)
8. Cash and cash equivalent
Cash at bank and in hand
73,316
670,343
31 December 2019
£
31 December 2018
£
9. Trade and other payables
Trade payables
Accruals and deferred income
Social security & other taxes payable
Pension cost
Loans from related parties
Total trade and other payables
10. Loans and borrowings
Current
Interest free related party loans
Convertible Loans
Interest bearing secured related party loan
Non current liabilities
Convertible Loans
Total loans and borrowings
31 December 2019
£
31 December 2018
£
326,701
436,554
119,037
1,750
9,139
893,181
135,368
263,224
62,379
504
-
461,475
31 December 2019
31 December 2018
£
43,243
170,000
455,076
-
668,319
£
43,243
-
-
1,170,000
1,213,243
The related party loans are repayable on demand. The Interest bearing related party secured loan has a fixed
interest rate of 20%.
On the 17 December 2018 the Company issued unsecured convertible loan notes with a total value of £1,170,000
with a conversion price of £0.10 per ordinary share. The loan notes carry a 10% fixed rate redeemable on the earliest
of
17th December 2020; or
•
• Date of change of control; or
•
If the investor majority determines following a material breach.
At the date of issue of the convertible loan notes the company’s share price was at a substantial discount to the
conversion price of 10p. The quantum of any possible equity component relating to conversion rights is therefore
considered to be immaterial to the fair value of the convertible loans, equity in the statement of financial position
and potential consequent impact on the finance charge on the instruments and therefore no equity component was
recognised.
On 2 December 2019, £1,000,000 of the unsecured convertible loan notes held by director Gavin Mayhew, plus
accrued interest at that date, were converted to ordinary shares at 8p per share, in accordance with adjusted terms
of the convertible loan notes.
70
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
NOTES TO THE COMPANY FINANCIAL STATEMENTS (Continued)
11. Share capital
For details of share capital see note 22 to the consolidated financial statements.
12. Share based payment reserve
For details of the share based payments see note 23 to the consolidated financial statements.
13. Related party transactions
The Group has related party transactions with entities in which directors have significant financial interests. For
details of the related party transactions see note 26 to the consolidated financial statements.
Details of the directors’ emoluments, together with the other related information, are set out in the Report of the
Directors. There are no other related party transactions.
14. Commitments
The Company has no lease or capital commitments at the end of the reporting period.
15. Contingent liabilities
The Company has no contingent liabilities, other than what has been disclosed already.
16. Ultimate controlling party
The Company does not have an ultimate controlling party.
17. Events after reporting date
For details of events after reporting date see note 27 of the consolidated financial statements.
71
Verditek PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
OFFICERS AND ADVISERS
Directors:
Company secretary
and registered
office:
Nominated Adviser
and Broker:
Bankers:
Auditors:
Solicitors:
Registrars:
Company Number:
Website:
The Rt Hon. Lord David Willetts FRS
Geoffrey John Nesbitt (resigned 7 May 2020)
George Francis Katzaros
Tim Lord
Gavin Mayhew
Robert Richards
David Wilson
Peachey & Co LLP
95 Aldwych
London, WC2B 4JF
W H Ireland Limited
24 Martin Lane,
London EC4R 0DR
Natwest Bank plc and Metro bank plc
Crowe U.K. LLP
St Bride’s House
10 Salisbury Square
London, EC4Y 8EH
Peachey & Co LLP
95 Aldwych
London, WC2B 4JF
Neville Registrars
Neville House
18 Laurel Lane
Halesowen B63 3DA
10114644
www.verditek.com
72