REG - Directa Plus PLC - Final Results
05/05/2022 07:00
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RNS Number : 3768K Directa Plus PLC 05 May 2022
5 May 2022
Directa Plus plc
("Directa Plus" or the "Company")
Final Results for the Year to 31 December 2021
Strong 2021 performance, well-positioned for growth
Directa Plus (AIM: DCTA), a leading producer and supplier of graphene
nanoplatelets based products for use in consumer and industrial markets, today
publishes its full year results for the year ended 31 December 2021,
delivering revenue and profitability which have exceeded consensus market
expectations. The Company continues to lead in the production of
graphene-based products which support the transition to net zero.
Year to date, the Company is trading in line with FY2021, with an expected
acceleration through the second quarter and into the second half of the year.
Accordingly, the Board is confident of the Company's continued growth trend
and remains comfortable with current consensus revenue forecasts for FY2022.
The Company continues to take actions to mitigate cost increases through price
increases, expected productivity gains and cost reductions, whilst
accelerating investments in key capabilities. In addition, the Company is
waiting on the final decision on the award of a significant tender in Romania
for its Environmental Remediation services, which is expected to be
communicated shortly and, if awarded, to start in the second half of 2022.
Financial & Operational Highlights
· Product sales and service revenue increased by 33.9% to €8.62m (2020:
€6.43m), slightly above market expectations
· Total income (including grants) increased by 39.3% to €9.45m (2020:
€6.78m)
· LBITDA* improved to €1.99m (2020: €2.62m)
· Reported (basic) Loss per share was €0.06 (2020: €0.07)
· Cash and cash equivalents at year end of €11.13m (2020: €7.08m)
· Total patents granted at year end of 72 (2020: 38)
· Approximately 29k cubic meters of sludge treated and 7k metric tonnes
of hydrocarbons recovered **
· 63k metres of textile printed, dyed and laminated in 2021
* LBITDA represents loss from operating activities before tax, interest,
depreciation and amortization.
** Only with reference to the main project with OMV Petrom
Target market progress
Environmental Remediation (76% of revenue (2020: 68%))
· In March 2021, completed the draining, cleaning and washing of a first
oil storage unit for Petrotel Lukoil S.A. for c. €0.4 million of services
revenue.
· In early 2021, secured an extension and increase of the contract with
OMV Petrom for the provision of decontamination and oil recovery services
using Grafysorber® technology.
· In July 2021, won an additional tender with OMV Petrom for a four-year
contract, with a total value of more than €3.2m, to treat approximately
80,000 cubic meters of sludge and waste produced during the first upstream
separation process.
· In April 2022, received authorisation from the United States
Environment Protection Agency for the Company's Grafysorber® technology to be
used on any oil contamination on US territory.
· In April 2022, received the first order of Grafysorber® based
absorbent materials from a UK company.
· Established a pipeline of active contract tenders across Europe,
including a number of high value opportunities.
Textiles (21% of revenue (2020: 30%))
· In the first half of 2021, launched Directa Plus' own line of
performance sportswear, the Cosmic Collection, which provides a showcase for
the versatility of G+® and increases brand awareness.
· In November 2021, won a project tender from the State of Lombardy's
TECH FAST program, for a total duration of 12 months and a total value of c.
€0.3 million, of which 50 per cent. is non-refundable. The program will
support the Company in developing applications for G+® graphene in industrial
filtration, such as for air-conditioning or transportation filters.
· In December 2021, signed a Letter of Intent with Radici Group, an
Italian-based global chemicals and materials group and a major player in the
non-woven materials industry to collaborate on an exclusive basis to develop
specific products for the global air and water filtration markets.
Others
· In February 2021, signed a 3-year supply agreement and joint R&D
collaboration with NexTech for the supply and development of new grades of
G+® graphene nanoplatelets for the production of Lithium Sulphur batteries.
· In June 2021, NexTech's European subsidiary was established in Italy
with the initial objective being to evaluate the feasibility of producing
cathode active materials in Italy, using G+® graphene nanoplatelets.
· In March 2022, Oxfordshire County Council began its second trial of a
patented asphalt concrete modifier enhanced by the Company's G+® graphene.
Half of a 700-metre stretch of the road is being laid with GiPave®, while the
other half will be resurfaced using conventional asphalt, so that the two
surfaces can be compared.
Awards
· Awarded the London Stock Exchange's Green Economy Mark, which
recognises Directa Plus as contributing to the global green economy.
· The Company received a special mention as a Rising Star in the 2021
Company Excellence Awards hosted by the Italian Stock Exchange and sponsored
by Harvard Business Review Italy, the management consultants GEA and the Milan
based fund managers ARCA.
Giulio Cesareo, Founder & CEO, said: "I believe that Directa Plus is now
at an inflection point - we are successfully transitioning from a research
focused company into a commercial company with a number of exciting
opportunities in our targeted markets. The Company operates in fast changing
environment, and it is currently refining its strategic plan to prioritise the
verticals with higher potential in terms of commercialisation and financial
returns. The fundraise completed in December 2021 will allow us to accelerate
growth in the most promising of these areas, where the Group continues to
build an active pipeline of contract tenders."
For further information please visit http://www.directa-plus.com/
(http://www.directa-plus.com/) or contact:
Directa Plus plc +39 02 36714458
Giulio Cesareo, CEO / Giorgio Bonfanti, CFO
Cenkos Securities plc (Nominated Adviser and Joint Broker) +44 131 220 6939
Neil McDonald / Adam Rae
Singer Capital Markets (Joint Broker) +44 20 7496 3069
Rick Thompson / Phil Davies
Tavistock (Financial PR and IR) +44 20 7920 3150
Simon Hudson / Heather Armstrong
About Directa Plus
Directa Plus (www.directa-plus.com) is one of the largest producers and
suppliers of graphene-based products for use in consumer and industrial
markets. The Company's graphene manufacturing capability uses proprietary
patented technology based on a plasma super expansion process. Starting from
natural graphite, each step of Directa Plus' production process - expansion,
exfoliation and drying - creates graphene-based materials and hybrid graphene
materials ready for a variety of uses and available in various forms such as
powder, liquid and paste.
This proprietary production process uses a physical process, rather than a
chemical process, to process graphite into pristine graphene nanoplatelets,
which enables Directa Plus to offer a sustainable, non-toxic product, without
unwanted by-products. Directa Plus' products are made of hybrid graphene
materials and graphene nano-platelets. The products (marketed as G+®) have
multiple applications due to its properties. These G+® products can be
categorised into various families, with different products being suitable for
specific practical applications.
Directa Plus was established in 2005 and is based in Lomazzo (Como, Italy) and
has been listed on the AIM market of the London Stock Exchange since May 2016.
The Company holds the Green Economy Mark from London Stock Exchange which
recognises companies that contribute to the global green economy.
Strategic Report
Chairman's Review
The macro economic challenges of 2020 continued into 2021 and 2022 with the
Covid-19 pandemic and the war in Ukraine. However, Directa Plus has
continued to execute against its strategy and deliver growth, and continues to
take actions to mitigate cost increases through price increases, expected
productivity gains and cost reductions, whilst accelerating investments in key
capabilities. Our teams have continued to perform above expectations
throughout this prolonged period of volatility and I would like to share the
Board's appreciation for their hard work and dedication. 2021 saw further
strategic progress for the Company as new partnerships and new markets were
established, supporting our long-term growth ambitions. I am pleased with the
progress the business is making in refining the strategic plan to prioritise
the verticals with higher potential in terms of commercialisation and
financial returns.
2021 saw continued growth for the business with revenues from products and
services increased by 33.9% to €8.62m (2020: €6.43 million), and total
income by 39.3% to €9.45m (2020: €6.78 million).
In December 2021, we successfully raised £7 million from our supportive
shareholder base to accelerate our goal to commercialise our graphene-based
products with an ever increasing and diverse customer base. We enter the new
financial year well capitalised and ready to continue executing on our
strategy.
Giorgio Bonfanti joined the Company in May 2021 and we welcomed him to the
Board in November. He brings with him a wealth of experience and has already
delivered significant contributions to the Company in his first year of
service.
In recognition of our strong environmental credentials and contribution to
sustainable business practices, the London Stock Exchange awarded the Company
the Green Economy Mark in November 2021. This award is given to businesses
across all industries that make significant contributions to the transition to
a sustainable, low carbon economy.
Innovation remains at the heart of our product development and, as an example,
in December 2021 we were granted an EU-wide patent covering the use of the
Company's G+® pristine graphene nanoplatelets to boost the performance of
rubber-based shoe outsoles. Our IP portfolio now comprises 19 patent
families with 72 patents granted and 27 patents pending and we continue to
grow the portfolio.
We started the new financial year announcing that Oxfordshire County Council
had started its second trial of a patented asphalt concrete modifier developed
by Iterchimica and enhanced by the Company's G+®. This trial followed a
successful pilot scheme in Curbridge, Oxfordshire in 2019.
At the end of March 2022, we announced that Grafysorber®, our patented
decontamination technology had been granted authorization for use in the
United States by the US Environmental Protection Agency, paving the way for
entry into one of the world's largest markets for decontamination of oil
spills.
Our robust and sustainable strategy remains at the centre of our operations.
With strong foundations, laid over the last few years, we are well positioned
for further growth and increased traction in all areas. We are encouraged by
increased levels of interest in the Directa Plus offering, and we continue to
gain wider recognition for our proven innovative products. We have partnered
with a number of new organisations in the year and we are confident in our
future commercial opportunities.
I would like to take this opportunity to thank our team, customers and
shareholders for their continued support. The Board looks forward to the new
financial year and beyond with optimism, albeit tempered by the potential
economic consequences of war and commodity price spikes.
Sir Peter Middleton
Chairman
4 May 2022
Chief Executive Officer's Review
Introduction
Directa Plus continued to grow during 2021 despite the headwinds created by
the worldwide pandemic and associated lockdowns. The Company has become an
acknowledged global leader in the production of graphene and its applications
in existing and new products for consumers and industry. We expect global
graphene demand to continue to increase significantly and intend to position
Directa Plus at the forefront of development using our patented process for
the production of pristine, chemical free graphene nanoplatelets, tailored to
partners' and customers' requirements. We expect to build a substantial
business by positioning Directa Plus in the verticals where technology
capabilities, at attractive costs, meet with market opportunities and growing
customer acceptance.
The fundraise we completed at the end of the year under review will allow the
Company to undertake the next phase of growth and to take advantage of
existing and new opportunities both in Europe and further afield.
Strategy and Business Model
Our strategy is primarily to target existing products and markets that can be
significantly improved with the addition of Directa Plus products. The Company
works with key partners, benefitting from their knowledge of the market,
strong reputation and commercial channels.
Our proprietary scalable, modular manufacturing process to produce and supply
high quality engineered tunable graphene materials at low production costs and
100% chemical free puts sustainability at the heart of our operations and acts
as a powerful differentiator from competitors. We have amassed 43
certifications over the years, all reporting the absence of negative impacts
on biological systems. We consider the health and safety of all stakeholders
and environmental protection as top priorities and we have implemented a
proactive approach by continuously monitoring our production process and
products.
We currently target four key markets in which we already have cornerstone
customers and partners:
· Environmental remediation - through our successful Setcar subsidiary,
using Directa Plus' Grafysorber® technology to help the oil and gas industry
to tackle environmental issues from hydrocarbon pollution;
· Textiles - printing nanoplatelets on fabrics, and graphene enhanced
membranes for the sports, luxury, fashion, workwear and military markets;
· Composites - introducing the next generation of graphene-enhanced
asphalts that are recyclable for a lower carbon world; and
· Lithium-sulphur batteries - the development of a Lithium-Sulphur
battery using the Directa Plus' G+® pristine graphene nanoplatelets as a key
cathode component.
In addition to these key verticals, we continuously monitor other high
potential markets where we believe that for a relatively small investment we
can develop products that can generate high commercial traction and which have
a fast time to market, such as paints, consumer electronics and filtration.
The Company operates in fast changing environment, and it is currently
refining its strategic plan to prioritise the verticals with higher potential
in terms of commercialisation and financial returns.
Environmental remediation
The Group's Setcar subsidiary has again delivered strong growth. It is
leading the expansion of Directa Plus' Grafysorber® technology into new
markets and is rapidly gaining traction in the global oil & gas industry
as a step change improvement from existing water treatment products and
services. Setcar has integrated well into the Group and is now examining
opportunities to expand its service offering, based on our Grafysorber®
products, internationally.
Reusable and sustainably produced, Grafysorber® is five times more effective
at hydrocarbon clean-up than competitor products and allows for the recovery
of financially valuable oils and sludges. In addition, Grafysorber® is
sustainably produced, non-flammable and reusable, with the adsorbed
hydrocarbons recoverable.
The Group continues to build an active pipeline of contract tenders, including
high value opportunities.
In March 2021 we completed the draining, cleaning and washing of a first oil
storage unit for Petrotel Lukoil S.A. for a total amount of c. €0.4 million
of services.
In early 2021, the contract with OMV Petrom was extended and increased.
Initially awarded in July 2019, the contract was for the provision of
decontamination and oil recovery services using Grafysorber® technology.
The initial value of the contract was €150,000 and this was increased to
€410,000 for a six-month services period. In July 2021, an additional
tender with OMV Petrom was won for a four-year contract, with a total value of
more than €3.2m, to treat some 80,000 cubic meters of sludge and waste
produced during the first upstream separation process. Up to 20,000 tons of
crude oil with impurities below 1% will be recovered and sent to the refinery.
At current oil prices (c. $700-800 per ton) this is generating significant
value for the client. Directa Plus will supply a total of 700 high-performance
adsorbent devices containing Grafysorber® to OMV Petrom. As at the time of
writing, we have treated 36,000 cubic meters of sludge and recovered 8,900
tons of crude oil.
We believe that Grafysorber® has significant export potential overseas and
the Company continues to evaluate opportunities in discussion with possible
partners focused on decontamination from hydrocarbons. A vital first step in
addressing the US market was achieved in late March 2022 with the grant of
authorization by the United States Environment Protection Agency to use
Grafysorber® at any oil spill on US territory.
In April 2022, the Company signed a first order of Grafysorber® based
absorbing products with a major UK reselling company, with the aim to
initially target mainly the northern European markets.
As announced at the time of the Fundraise in December, we plan to invest in
the further development of Grafysorber® technology to broaden the number of
applications we can offer. This will involve constructing a water treatment
plant as well as providing dedicated equipment for in-house treatment of
industrial water and for the removal of hydrocarbons and other organic
pollutants. The Company also has recently located a Grafysorber® production
unit in Sectar's premises in Romania, close to existing customers, and
launched the production of absorbent materials such as Grafysorber®-made
booms, pillows, socks and pads for the oil and gas industry.
Textiles
In 2020, the Covid-19 pandemic led Directa Plus to rapidly respond to the
global crisis by developing the Co-mask™, a product to alleviate the effects
of the pandemic by helping to reduce transmission of the virus. The
development and commercialisation of the Co-mask™ accelerated studies around
the filter applications of G+® technology, which is proven to have anti-viral
properties, is non-toxic and has no negative impacts on human skin. This
work is now producing additional applications which leverage the antimicrobial
and antiviral properties of G+®and provides the basis for entry into the
large global filter market.
In March 2021, Directa Plus announced a further test result relating to the
absence of absorption of its pristine graphene nanoplatelets powder (Pure
G+®) through human skin. A total of eight in vitro test results now show that
Pure G+® has no potential negative impact on human health.
In April 2021, the new G+® graphene coating for fabrics was tested by an
independent third-party laboratory and found to be suitable for human skin
contact. The results showed zero erythema and oedema reactions across all
subjects participating in the test and the G+® coated fabric was reported to
be 'dermatologically tested' and non-irritating.
in July 2021, the peer-reviewed interdisciplinary open-access journal iScience
published a scientific paper titled "Graphene Nanoplatelet and Graphene Oxide
Functionalization of Face Mask Materials Inhibits Infectivity of Trapped
SARS-CoV-2". The paper provides scientific evidence that the Company's G+®
graphene nanomaterials and those from graphene oxide present a critical
opportunity to significantly increase face mask efficacy. In relation to the
anti-SARS CoV2 capability of Directa Plus' G+® graphene, the paper certifies
that G+® filter fabric treated with PU G+® can inactivate 97% of the virus
while G+® cotton can inactivate 99% of the virus.
The antibacterial and antiviral properties of the Company's G+® pristine
graphene nanoplatelets represent significant opportunities for Directa Plus in
textile and biomedical applications. The efficacy of G+® and its non-toxic
and sustainable production characteristics overcome the problems of the
current state-of-the-art solutions that are based on metal-ion or halogen
treatments, which could be dangerous to human health and detrimental to the
environment.
As a result of the fundraise we plan to advance the application of G+®
technology to non-woven fabrics to confer antibacterial and antiviral
properties for the industrial filtration market. In December, Directa Plus
signed a Letter of Intent with Radici Group, an Italian-based global chemicals
and materials group and a major player in the non-woven materials industry, to
collaborate on an exclusive basis for an initial period of 12 months. The
collaboration will see G+® technologies combined with those of Radici to
develop specific products for the global air and water filtration markets.
If the technical results envisaged are achieved, the two companies will
negotiate a technical and commercial partnership agreement with Directa Plus
to benefit from a revenue-sharing business model.
In July 2021 members of the Dutch and Belgian cycling teams won four medals at
the Tokyo Olympics (one gold, two silver and one bronze) in the road race
event wearing a shirt printed with Directa Plus's patented and proprietary
technology, the G+® Planar Thermal Circuit®. The shirts for the national
cycling teams at the Games were made by premium cycling brand, Bioracer, using
fabric supplied by Italian company, Taiana, with the unique and
high-performance print made using Directa Plus's sustainable graphene. This is
an additional illustration of how the Company's G+® graphene supports the
natural thermoregulation of the body, providing athletes with a competitive
advantage.
In September 2021 Directa Plus' new G+® graphene coatings have being shown in
two collections at the prestigious Milan Design Week. The Company's
revolutionary new covering material has been selected for inclusion in
collections being shown by two Italian companies. Plinio il Giovane is a
central Milan based producer of high-end furniture and upholstery and is
showcasing a collection of chairs and sofas with G+® coverings. Danese
Milano, a subsidiary of lighting company Artemide S.p.A., is an innovative
producer of interior design accessories and is showing a desk pad covered with
the G+® coating. Plinio il Giovane and Danese Milano both selected Directa's
innovative material technology as a result of its disruptive performance
compared to traditional upholstery fabrics and coatings. G+® coatings on
organic and non-organic fabrics are antibacterial and antiviral against
Sars-Cov-2; resistant to abrasion and wear and tear; resistant to UV light,
and; thermally conductive for achieving the highest thermal comfort.
In April 2022 Directa Plus has signed a non-binding Letter of Intent with a
leading worldwide supplier of automotive interiors to Tier 1 manufacturers.
The partners intend to develop a suite of new products for the automotive
industry based on the antimicrobial properties (antibacterial and antiviral),
thermal comfort and electrical conductivity properties of the Company's G+®
enhanced fabrics.
In November 2021, the Company announced that a specially developed graphene
membrane is integrated into the lining of the norda™ 001 G+® Spike high
performance trail shoes. Directa Plus was responsible for the G+® membrane
which is integrated into the Dyneema® one-piece woven upper lining in the toe
box of the shoes. This provides the runner with additional comfort due to
the thermal conductivity and abrasion resistance of the graphene G+® membrane
while adding almost zero additional weight. Gear Patrol, the influential
buying magazine, ranked norda™ 001 the most innovative trail running shoe of
2022.
We continue to strengthen our relationships with existing important customers
in the workwear and luxury segments and to promote our presence in the
textiles vertical Directa Plus launched its own line of performance
sportswear, the Cosmic Collection, in the first half of 2021. This
collection aims to offer consumers advanced technology, which is also
sustainable. The Cosmic Collection provides a showcase for the versatility
of G+® and its applications and will help to increase awareness of the
Company and our technologies.
Composites
The asphalt and bitumen applications of G+® graphene technology is generating
considerable traction, and the interest in the market for Iterchimica's
GiPave® product, developed with Directa Plus, is growing internationally.
We have signed a three-year agreement with Iterchimica for the exclusive
supply of G+® graphene products for the sector worldwide and have extended
the partnership with a significant pipeline of opportunities.
In the UK, Oxfordshire County Council has now started its second trial to
further test the benefits that GiPave® can bring. The new trial will see
two identical stretches of Marsh Lane in Oxford, which carries around 10,000
vehicles a day along a key city route, resurfaced with different materials.
Half of a 700-metre stretch of the road will be laid with GiPave®, while the
rest will be resurfaced using conventional asphalt, so that the two surfaces
can be compared. This second trial follows a successful first pilot scheme
in Curbridge, Oxfordshire in 2019. Analysis of this scheme showed GiPave®
increases the lifespan of the surface by up to 70 per cent compared to
conventional resurfacing methods.
Lithium-Sulphur Batteries
Next generation Lithium-Sulphur battery chemistry offers advantages over
Lithium-Ion as it has a superior energy density, significant cost advantages
and a superior safety profile. Our collaboration with NexTech, a leading
company in the field of Lithium-Sulphur batteries based in Nevada, USA, is
making strong progress.
In November 2020, a memorandum of understanding was signed with NexTech. In
February 2021, both parties agreed to form a stronger partnership, with a
three-year supply agreement for the provision of a specific grade of G+®
pristine graphene nanoplatelets and a joint R&D collaboration to develop
new specific grades of nanoplatelets. A joint laboratory has been established
in Lomazzo, where Directa Plus is located and both parties will dedicate
selected scientists from their respective R&D teams.
We continue to support NexTech in the development of this disruptive
technology, in which G+® will play a key role in terms of technical
properties and the supply of our product at the scale necessary to satisfy the
needs of the market. In June 2021, NexTech established its European
subsidiary in Italy ("NexTech Italia SpA"), with the initial objective being
to evaluate the feasibility of producing cathode active materials in Italy,
using our G+® graphene nanoplatelets, for the manufacture of Lithium-Sulphur
(Li-S) batteries throughout Europe.
The Company is now ready to target other Lithium-Sulphur battery producers to
accelerate the technology's commercialisation.
Other Verticals
Consumer Electronics
In December 2020, Directa Plus signed a development agreement with the soft
goods division of a major international developer and manufacturer of consumer
electronics and related services. The agreement covers the potential
application of G+® graphene as a protective covering for consumer devices,
exploiting the antiviral-antibacterial properties of G+® graphene as well as
its thermal and electrical conductivity. The partnership has delivered
exceptional results to date. In 2021 we received some promising orders for
our G+® graphene and this collaboration continues to demonstrate the
potential for significant volumes in the coming years.
Automotive
Directa Plus continues to invest in the technical and commercial agreement
with Italdesign, part of Volkswagen AG, a global leader in automotive design
and engineering. The agreement will see Directa Plus and Italdesign jointly
develop a wide range of automotive components enhanced by the Company's
graphene expertise.
Paints
In February 2021, research undertaken by scientists at the Polytechnic of
Turin was published in an article in the journal Polymers showing that the use
of water-based G+® graphene ink to coat polymeric foam confers significant
flame-retardant properties. A simple application of G+® ink to the external
faces of the foam provided good flame-retardant properties, tested in both
horizontal and vertical planes.
Using this study as a base, the Company is close to starting the
commercialisation of graphene-based paints with significant anti-flame and
anti-corrosion properties compared to normal paints. We see great potential
in this developing technology.
Intellectual Property
As at March 2022, the Group's patent portfolio comprised 72 patents granted
and 27 pending, grouped into 19 families.
In March 2021, Directa Plus was granted an EU-wide patent covering the use of
its G+® graphene in golf ball applications. The patent covers a family of
formulations and compounds containing G+® graphene nanoplatelets. Using
these compounds at different loadings provides the basis for developing a new
generation of high-performance golf balls aimed at both the professional and
recreational markets.
In May 2021, Directa Plus was granted an EU-wide patent covering the
production process for its G+® graphene nanoplatelets. The patent, titled
'Process for Preparing Graphene Nanoplatelets' covers the use of Directa Plus'
unique water-based exfoliation technology for converting super-expanded
graphite to pristine graphene nanoplatelets using no chemicals and with a very
high conversion yield.
In December 2021 the Company has been granted an EU-wide patent covering the
use of the Company's G+® pristine graphene nanoplatelets to boost the
performance of rubber-based shoe outsoles. The patent, titled "Shoe sole
comprising graphene", covers G+® graphene embedded in outsoles. The
specific formulation of G+® graphene for soles provides the ability to
balance opposite performance characteristics such as durability and grip, in
both dry and wet conditions. This ability to balance opposing performance
traits is unique to Directa Plus's G+® graphene and becomes markedly apparent
on rubber-based technical shoe soles such as those used for running, trail
running, hiking, and on motorbikes. The patent covers both the formula for
the compound and the final product outsole made with the compound.
Environmental, Social and Governance policies
Environmental sustainability is at the heart of Directa Plus's business - our
research, manufacturing, commercialisation, and purpose - and we have been ISO
14001 certified since 2016, which have been recently renovated.
From the earliest stages of our research into graphene applications we were
determined to design manufacturing processes for our pristine nanoplatelets
that would avoid the need for chemical processes and so avoid wasteful
by-products. We continue this approach now - always seeking to design the most
efficient manufacturing and proving the safety and sustainability of our
products working with recognised environmental organisations.
When deciding our commercialisation strategy, we made it a priority to work
only with environmentally responsible industrial partners, and to seek to
improve on products in existing markets. This means that we can help produce
and sell better quality products than are currently available, with better
performance and longer life for end-users.
We monitor all applicable performance indicators. In our production process we
consider raw materials supply chains, energy consumption, water and
wastewater, atmospheric emissions, the production of waste and any effect on
biodiversity. Our commitment to sustainability is also demonstrated by our
Grafysorber® based technology and products, which are environmentally
friendly solutions aimed at solving both historical pollution problems and oil
spills.
In Social and Governance, Directa Plus has held certifications ISO 9001 (for
quality management standards) and ISO 14001 (environmental management systems)
since 2016, successfully renewed annually. We are also committed to
identifying suppliers and partners who share the same sensitivity on
sustainability issues as we do. We carefully consider all aspects of employee
rights, equal opportunities, health and safety at work and training and
education.
Finally, with respect to our local community, Directa Plus is well-known and
deeply rooted in the Milan area. We promote our regional economy by
identifying local suppliers, with whom it is possible to structure lasting
partnerships. We believe it is essential to actively contribute to
initiatives that can have a positive impact on the social fabric of the area
and in 2021, through the sale of CO-Mask™ face masks, we financed the
Christmas meal for the Opera San Francesco in Milan.
Outlook
I believe that Directa Plus is now ready to enter into a new stage of
growth. We have many opportunities across different vertical markets,
diversifying our business risks. The recent fundraise will allow us to
accelerate growth in the most promising of these vertical markets and to keep
investing in high potential opportunities in other areas.
We are closely monitoring and assessing possible impacts from the war in the
Ukraine and will adjust our strategy if necessary. We do no business in
Russia or Ukraine and so we are not directly exposed to this region, and we
believe the rise in the oil prices may increase demand for our decontamination
and recovery services.
Year to date, the Company is trading in line with FY2021, with an expected
acceleration through the second quarter and into the second half of the year.
Accordingly, we are confident of the Company's continued growth trend, and we
remain comfortable with current consensus forecasts for FY2022. In addition,
we are waiting on the final decision on the award of a significant tender in
Romania for our Environmental Remediation services, which is expected to be
communicated shortly and, if awarded, to start in the second half of 2022.
In summary, despite the challenges faced by all businesses, we retain a
positive outlook for growth and our future success.
Giulio Cesareo
Chief Executive Officer
4 May 2022
Chief Financial Officer's Review
I am pleased to report the results of another important year of progress for
the Group. During 2021, the finance team has worked hard to support our
strategic decision-making and to manage efficiently our financial resources.
The successful capital raise in December 2021 will be key in accelerating our
business growth in the Group's next phase of development in 2022 and beyond.
Key Performance Indicators
The Board measures the performance of the Group through a number of important
financial and non-financial KPIs. In a young business with a number of
different vertical markets, identifying measurable data that will provide
useful insight year-on-year is not always straightforward but the KPIs below
should help shareholders understand the Group's progress. Our financial KPIs
show significant improvement compared to 2020.
The below summarises the financial KPIs with further details contained later
in this report.
· Product sales and service revenue increased by 33.9% to €8.62m (2020:
€6.43m), slightly above market expectations
· Total income (including grants) increased by 39.3% to €9.45m (2020:
€6.78m)
· LBITDA* improved to €1.99m (2020: €2.62m)
· Reported (basic) Loss per share €0.06 (2020: €0.07)
· Cash and cash equivalents at year end of €11.13m (2020: €7.08m)
* LBITDA represents loss from operating activities before tax, interest,
depreciation and amortization.
Financial review
2021 represented another year of continued growth for the business. Revenues
from products and services increased by 33.9% to €8.62m (2020: €6.43
million), and total income +39.3% to €9.45m (2020: €6.78 million).
The increase in revenues was mainly driven by growth in environmental
remediation services of 50% to €6.56m. The Group's Romanian subsidiary
Setcar, acquired in November 2019, is playing a key role in the growth of our
environmental services offering and is delivering excellent results for the
Group.
Other income increased by 140% to €0.83m. This result was positively
affected by a €0.50 million one-off income from Setcar, as a result of the
release of an undue obligation. The remainder consists of grants and R&D
expenditure credits, specific incentives and financing schemes that support
the Group in its R&D activities.
The EBITDA loss for the period was €1.99m, decreasing by 24.1% compared to
2020 (loss of €2.62 million). The Group is closely monitoring increases in
energy and transportation costs and the effects of increased inflation were
seen in the second half of 2021 and this trend is intensifying into 2022, as a
consequence of the war in the Ukraine. The Group is taking all possible
measures to avoid margin reduction and is reacting promptly to increase
product prices to reduce any impact on profitability.
Net loss for the period was reduced by 24.3% to €3.43m (2020: €4.53m).
At the end of 2021 the Group strengthened its funding position, and cash and
cash equivalents at year end were €11.13m (2020: €7.08m). In addition,
during the year, Directa Plus raised a total of €1 million of bank loans,
provided by two major Italian banks, under the Italian Government's Covid-19
Recovery Plan. The loans are 80-90% guaranteed by the Italian Government and
have allowed the Company to take advantage of the low-cost liquidity offered.
In December 2021, the Group completed a fundraising with gross proceeds of £7
million, by way of a placing and subscription. Directa Plus issued 4,666,667
new Ordinary Shares at a price of 150p each, with almost no discount to the
market price at the time of transaction.
The proceeds from the capital raise will be used for:
· funding two significant future growth opportunities in the main
existing verticals:
o development of Grafysorber® to broaden the number of applications
offered. The Group is locating a Grafysorber® production unit in Setcar's
premises in Romania to:
§ construct a water treatment plant, providing dedicated equipment for
in-house treatment of industrial water and for the removal of hydrocarbons and
other organic pollutants using its Grafysorber® technology, and
§ produce absorbent materials such as Grafysorber®- made booms, pillows,
socks and pads.
o advance the application of Directa Plus' G+® technology to non-woven
fabrics to confer antibacterial and antiviral properties. The Company has
signed a Letter of Intent with Radici Group to collaborate on an exclusive
basis to develop specific products for the global air and water filtration
markets.
· providing the financial strength necessary to fund the Company's
continued investment in exploring and developing new growth opportunities,
· providing the balance sheet strength to support the Company and its
subsidiaries in responding to significant new tenders currently in progress,
and
· providing additional liquidity for its general working capital purposes
In the short term, the Group's priorities continue to be focused on the
reduction of cash consumption and improving profitability.
A description of the principal risks and uncertainties facing the Group is set
out in the Directors' Report. The war in Ukraine in particular creates new,
unforeseen risks. In summary, the Directors believe that overall, the
conflict will not affect the going concern of the Group and although we are
seeing some inflation of costs (principally energy), the Company is keeping
the margins under control.
Giorgio Bonfanti
Chief Financial Officer
4 May 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In euro Note 31 Dec 2021 31 Dec 2020
Continuing operations
Revenue 3 8,615,098 6,434,480
Other income 3/4 831,405 345,826
Changes in inventories of finished goods and work in progress 12,960 213,229
Raw materials and consumables used 6 (3,634,311) (2,564,317)
Employee benefits expenses 7 (4,296,955) (3,769,274)
Depreciation and amortisation 11/12 (1,543,567) (1,690,872)
Other expenses 8 (3,516,424) (3,279,927)
Results from operating activities (3,531,794) (4,310,855)
Finance Income 9 221,622 1,175
Finance expenses 9 (74,681) (347,707)
Net finance costs 146,941 (346,532)
Loss before tax (3,384,853) (4,657,387)
Tax (expense)/income 10 (44,620) 124,414
Loss after tax from continuing operations (3,429,473) (4,532,973)
Loss of the year (3,429,473) (4,532,973)
Other Comprehensive income items that will not be reclassified to profit or
loss
Defined Benefit Plan re-measurement gains and losses 20 (6,457) 7,821
Other comprehensive income/(expense) for the year (net of tax) (6,457) 7,821
Total comprehensive (expense)/income for the year (3,435,930) (4,525,152)
Loss attributable to
Owner of the Parent (3,652,364) (4.195,011)
Non-controlling interests 222,891 (337,962)
(3,429,473) (4,532,973)
Total comprehensive (expense)/income
attributable to:
Owners of the Company (3,658,821) (4,187,190)
Non-controlling interests 222,891 (337,962)
(3,435,930) (4,525,152)
Loss per share
Basic loss per share 23 (0.06) (0.07)
Diluted loss per share 23 (0.06) (0.07)
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
Group Company
In euro Note 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20
Assets
Intangible assets 11 1,792,277 2,042,767 - -
Investments 13 - - 25,680,336 23,680,336
Property, plant and equipment 12 3,982,966 4,209,267 - -
Other receivables 14 185,623 140,649 - -
Non-current assets 5,960,866 6,392,683 25,680,336 23,680,336
Inventories 5 1,370,875 1,375,947 - -
Trade and other receivables 14 3,305,493 2,857,460 205,291 166,262
Cash and cash equivalent 16 11,130,468 7,080,492 9,430,364 4,283,625
Current assets 15,806,836 11,313,899 9,635,655 4,449,887
Total assets 21,767,702 17,706,582 35,315,991 28,130,223
Equity
Share capital 17 205,393 190,996 205,393 190,996
Share premium 17 39,159,027 31,395,612 39,159,027 31,395,612
Foreign Currency Translation Reserve 17
(23,109) (7,015) - -
Retained Earnings 17 (25,352,139) (21,824,229) (4,220,247) (3,573,130)
Equity attributable to owners 13,989,172 9,755,364 35,144,173 28,013,478
of Group
Non-controlling interests 17 2,041,938 906,885 - -
Total equity 16,031,110 10,662,249 35,144,173 28,013,478
Liabilities
Loans and borrowings 18 2,403,881 1,017,716 - -
Lease liabilities 19 463,047 627,138 - -
Employee benefits provision 20 500,535 444,483 - -
Other payables 21 64,357 65,397 - -
Deferred tax liabilites 15 89,497 8,423 - -
Non-current liabilities 3,521,317 2,163,157 - -
Loans and borrowings 18 65,840 981,065 - -
Lease liabilities 19 217,537 214,935 - -
Trade and other payables 21 1,931,898 3,685,176 171,818 116,745
Current liabilities 2,215,275 4,881,176 171,818 116,745
Total liabilities 5,736,592 7,044,333 171,818 116,745
Total equity and liabilities 21,767,702 17,706,582 35,315,991 28,130,223
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own statement of
comprehensive income in these financial statements. The Company loss after tax
for the year was € 956,408 (2019: € 558,846).
The financial statements were approved and authorised for issue by the board
and were signed on its behalf by Giulio Cesare, Chief Executive Officer on 5
May 2022.
The notes below form part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Foreign Currency Translation Non-controlling Total
In euro Capital premium Reserve Retained Earnings Total interests Equity
Balance at 31 December 2019 190,512 31,395,612 4,147 (17,656,325) 13,933,946 1,240,194 15,174,140
Total comprehensive (expense)/income for the year
Loss of the year - - - (4,195,011) (4,195,011) (337,962) (4,532,973)
Total other comprehensive (expense)/income - - - 7,821 7,821 - 7,821
Total comprehensive (expense)/income for the period - - - (4,187,190) (4,187,190) (337,962) (4,525,152)
Capital raised 484 - - - 484 - 484
Translation reserve - - (11,162) - (11,162) - (11,162)
Share-based payment - - - 19,286 19,286 - 19,286
Increase in share capital of Directa Textile Solutions - - - - - 4,653 4,653
Balance at 31 December 2020 190,996 31,395,612 (7,015) (21,824,229) 9,755,364 906,885 10,662,249
Total comprehensive (expense)/income for the year
Loss of the year - - - (3,652,364) (3,652,364) 222,891 (3,429,473)
Total other comprehensive (expense)/income - - - (6,457) (6,457) - (6,457)
Total comprehensive (expense)/income for the period - - - (3,658,821) (3,658,821) 222,891 (3,435,930)
Capital raised 14,397 8,306,293 .- - 8,320,690 - 8,320,690
Expenditure related to the issuance of shares - (542,878) - - (542,878) - (542,878)
Translation reserve (16,094) - (16,094) - (16,094)
Share-based payment - - - 130,910 130,910 - 130,910
Increase in share capital of Setcar - - - - - 912,162 912,162
Balance at 31 December 2021 205,393 39,159,027 (23,109) (25,352,139) 13,989,172 2,041,938 16,031,110
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Share Retained Total
In euro Capital premium Earnings equity
Balance at 31 December 2019 190,512 31,395,612 (2,616,722) 28,969,402
Loss for the year - - (956,408) (956,408)
Capital raised 484 - - 484
Expenditure related to the issuance of shares - - - -
Share-based payment - - - -
Balance at 31 December 2020 190,996 31,395,612 (3,573,130) 28,013,478
Loss for the year - - (709,825) (709,825)
Capital raised 14,397 8,306,293 - 8,320,690
Expenditure related to the issuance of shares - (542,878) - (542,878)
Share-based payment - - 62,708 62,708
Balance at 31 December 2021 205,393 39,159,027 (4,220,247) 35,144,173
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
Group Company
In euro Note 2021 2020 2021 2020
Cash flows from operating activities
Loss for the year before tax (3,384,853) (4,657,387) (709,825) (956,408)
Adjustments for:
Depreciation 12 994,021 1,020,387 - -
Amortisation of intangible assets 11 549,547 670,485 - -
Share-based payment expense 7 130,910 19,286 62,708 -
Finance income 9 (221,622) (1,175) (211,056) (867)
Finance expense 56,524 326,118 988 227,367
Interest of lease liabilities 9 18,157 21,589 - -
(1,857,316) (2,600,697) (857,185) (729,908)
Increase/Decrease in:
- inventories 5,072 (280,011) - -
- trade and other receivables 14 (493,008) 179,292 (39,029) 37,142
- trade and other payables (1,207,601) (1,398,380) 55,073 33,047
- provisions and employee benefits 37,457 24,844 - -
Net cash from operating activities (3,515,396) (4,074,952) (841,141) (659,720)
Cash flows from investing activities
Interest received 9 1,616 1,175 - 867
Investment in intangible assets (299,056) (434,898) - -
Investment in subsidiary 13 - - (2,000,000) (2,500,000)
Contingent consideration 21 (572,268) (208,097) - -
Acquisition of property, plant and equipment (767,719) (195,991) - -
Net cash used in investing activities (1,637,427) (837,811) (2,000,000) (2,499,133)
Cash flows from financing activities
Proceeds from Capital raise 17 8,320,690 484 8,320,690 484
Expenditure related to the issuance of shares 17 (542,878) - (542,878) -
Interest paid 9 (45,426) (45,647) (988) (2,148)
New Borrowings 18 1,511,719 1,874,243 - -
Repayment of borrowings 18 (81,666) (360,164) - -
Repayment of lease liabilities (179,646) (100,235) - -
Net cash from (used in) financing activities 8,982,793 1,368,681 7,776,824 (1,664)
Net increase (decrease) in cash and cash equivalent 3,829,970 (3,544,082) 4,935,683 (3,160,516)
Cash and cash equivalent at beginning of the year 7,080,492 10,906,076 4,283,625 7,669,360
Exchange (losses)/gains on cash and cash equivalents 220,006 (281,502) 211,056 (225,219)
Cash and cash equivalent at end of the year 11,130,468 7,080,492 9,430,364 4,283,625
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2021
1. Basis of preparation
a) Statement of compliance
These consolidated and parent Company financial statements have been prepared
in accordance with UK-adopted International Accounting Standards (IFRSs).The
principal accounting policies are summarised below. They have all been applied
consistently throughout the year and the preceding year, unless otherwise
stated.
All notes, except as otherwise indicated, are presented in Euros ("€").
I. Going Concern
As of 31 December 2021, the Group (including the Company) had net assets of
€16.03m (2020: €10.66m) and cash and cash equivalent of €11.13m (2020:
€7.08m).
The Directors are aware that there is an ongoing need to monitor the cash flow
requirements of the Company and Group for the upcoming months, particularly in
light of the recent developments in the markets due to the COVID-19 pandemic,
the recent war in Ukraine and inflation trends, which have had a significant,
impact on global economies and more likely will affect the upcoming months.
In this regard, the Group prepares annual budgets and forecasts in order to
ensure that they have sufficient liquidity to meet liabilities and commitments
as they fall due. The Directors regularly review updates to the scenario
planning such that the Board can put in place appropriate mitigating actions
within their control.
Considering the recent capital raise undertaken in December 2021, which
resulted in £7 million of additional gross funds, and based on the most
recent cash flow projections, the Directors believe that the Group will have
sufficient funds in place, up to a period of 12 months from the approval date
of the financial statements, to meet liabilities as and when they fall due.
Despite this, given the current global economic status, the Directors have
carried out a downward sensitivity analysis stressing the base financial
projections by applying a further material reduction in forecast revenues, and
modelling mitigation or deferral of capital and operational expenditure within
the control of Management and the Board. Based on these downward scenarios,
the Directors believe that the Company will still have the funds to support
the Group as a going concern until the end of 2023.
The Directors therefore consider it appropriate to adopt the going concern
basis of accounting in preparing the financial statements.
b) Basis of consolidation
I. Business combination
The Group accounts for business combination using the acquisition method of
accounting. The cost of the business combination is measured as the aggregate
of the fair value of the assets acquired, liabilities incurred or assumed, and
equity instruments issued. Costs attributable to the business combination are
expensed as incurred.
The acquiree's identifiable assets and liabilities which meet the recognition
conditions are recognised at the fair values at the acquisition date.
Contingent liabilities are only included in the identifiable assets and
liabilities of the acquiree where there is a present obligation at acquisition
date that arises from past events and its fair value can be measured reliably.
Any difference arising between the fair value and the tax base of the
acquiree's assets and liabilities that give rise to a taxable or deductible
difference results in the recognition of a deferred tax liability or asset.
Non-controlling interest arising from a business combination is measured at
their share of the fair value of the assets and liabilities of the acquiree.
Goodwill is not amortised, but it is tested on an annual basis for impairment.
II. Subsidiaries
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The total comprehensive income of non-wholly owned subsidiaries is attributed
to owners of the parent and to the non-controlling interests in proportion to
their relative ownership interests.
III. Transactions eliminated on consolidation
The consolidated financial statements present the results of the Company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore eliminated in
full.
IV. Non-controlling interest
Non-controlling interest in the net assets of the consolidated subsidiaries
are identified separately from the Group's equity. Non-controlling interests
consist of the amount of those interests at the date of the original business
combination and the non-controlling shareholder's share changes in equity
since the date of the combination. The non-controlling interest's share of
losses, where applicable, are attributed to the non-controlling interests
irrespective of whether the non-controlling shareholders have a binding
obligation and are able to make an additional investment to cover the
losses.
c) Functional and presentation currency
These financial statements are presented in Euro ("€") and is considered by
the Directors to be the most appropriate presentation currency to assist the
users of the financial statements. The functional currency of the Company and
of the Italian operating subsidiaries is Euro ("€"). The functional currency
of the Romanian subsidiary is RON.
d) Use of estimates and judgements
The preparation of the financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances and the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period.
Critical estimates and judgements that have the most significant effect on the
amounts recognised in the financial statements and/or have a significant risk
of resulting in a material adjustment within the next financial year are as
follows.
Estimates
I. Valuation of share based payments
The estimation related to share based payment expenses includes the selection
of an appropriate valuation option pricing model, consideration as to the
inputs necessary for the valuation model chosen, and the estimation of the
number of awards that will ultimately vest. Inputs subject to estimation
relate to the future volatility of the share price which has been estimated
based on the historical observed volatility from trading in the Company's
shares, over a historical period of time between the date of the grant and the
date of exercise. Management has used a Monte-Carlo model to calculate the
fair value of the awards which include market based performance conditions.
Further disclosure of inputs relevant to the calculations is set out in note
24 to the financial statements.
II. Carrying value of goodwill
The carrying value of goodwill, and the cash generating units (CGUs) to which
it relates, is assessed annually for impairment through comparing the
recoverable amount to the CGU's carrying value. The value in use calculations
require estimates in relation to uncertain items, including management's
expectations of future revenue growth, operating costs, profit margins,
operating cashflows and the discount rate applied. Future cash flows used in
the value in use calculations are based on our latest two-year financial
plans. Expectations about future growth reflect expectations of growth in the
markets applicable to the group. The future cashflows are discounted using a
pre-tax discount rate that reflects current market assessments of the time
value of money. The discount rate used is adjusted for the specific risk to
the group, including the countries to which cash flows will be generated.
Further disclosure of evaluations is set out in note 11 to the financial
statements.
III. Valuation of inventory
Inventories are stated at the lower of cost or net realisable value. The cost
of inventories comprises of net prices paid for materials purchased,
production labour cost and factory overhead. Net realisable value represents
the estimated selling price less all estimated costs of completion and costs
to be incurred in marketing, selling and distribution. Inventory provisions
are recognised for slow-moving, obsolete or unsalable inventory and are
reviewed on a six-monthly basis. The valuation of Inventory includes key
estimates and judgments made by Management including normal production
capacity, market demand and selling opportunities. If actual demand or usage
were to be lower than estimated, inventory provisions for excess or obsolete
inventory may be required.
2. Significant accounting policies
a) Functional currency
The financial statements of each Group company are measured using the currency
of the primary economic environment in which that company operates (the
functional currency). The consolidated financial statements record the results
and financial position of each Group company in Euro, which is the functional
currency of the Company and the presentational currency for the consolidated
financial statements.
I. Transaction and balances
Transactions in foreign currencies are converted into the respective
functional currencies at initial recognition, using the exchange rates at the
transaction date. Monetary assets and liabilities at the end of the reporting
period are translated at the rates ruling at the reporting date. Non-monetary
assets and liabilities are not retranslated. All exchange differences are
recognised in profit or loss. On consolidation, the results of overseas
operations not in Euro are translated at the rates approximating to those
ruling when the transactions took place. All assets and liabilities of
overseas operations are translated at the rate ruling at the reporting date.
Exchange differences arising on translating the opening net assets at closing
rate and the results of overseas operations at actual rate are recognised in
other comprehensive income.
b) Financial instruments
There are no other categories of financial assets other than those listed
below:
I. Trade and other receivables and amounts due from subsidiaries
Trade and other receivables and amounts due from subsidiaries are recognised
and carried at the original invoice amount less any provision for impairment.
The Group recognises a loss allowance for expected credit losses ("ECL") on
financial assets that are measured at amortised cost which comprise mainly of
trade receivables. The amount of expected credit losses is updated at each
reporting date to reflect changes in credit risk since initial recognition of
the respective financial instrument.
The Group always recognises lifetime ECL on trade receivables. The expected
credit losses on these financial assets are estimated using a provision matrix
based on the Group's historical credit loss experience, adjusted for factors
that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions
at the reporting date, including time value of money where appropriate.
II. Cash and cash equivalents
Cash and cash equivalents comprise demand deposits with an original maturity
of up to 3 months which are readily convertible to a known amount of cash and
are subject to an insignificant risk of change in value.
There are no other categories of financial liabilities other than those listed
below:
III. Trade and other payables
Trade payables are stated at their amortised cost.
IV. Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. At initial
recognition, financial liabilities are measured at their fair value, minus
transaction costs that are directly attributable, and are subsequently
measured at amortised cost.
An equity instrument is any contract that evidences a residual interest in the
asset of the Group after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of direct
issue costs.
V. Leases
On commencement of a contract which gives the Group the right to use assets
for a period of time in exchange for consideration, the Group recognises a
right-of-use asset and a lease liability. The right-of-use asset is measured
at cost, which is made up of the initial measurement of the lease liability,
any initial direct costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any lease payment
made in advance of the lease commencement date (net of any incentives
received). The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term. The Group also
assesses the right-of-use asset for impairment when such indicators exist. At
the commencement date, the Group measures the lease liability at the present
value of the lease payment unpaid at that date, discounted using the interest
rate implicit in the lease if that rate is readily available or the Group's
incremental borrowing rate. Lease payments included in the measurement of the
lease liability are made up of fixed payments, variable payments based on an
index or rate, amounts expected to be payable under a residual value guarantee
and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reducing for payment
made and increased for interest. It is remeasured to reflect any reassessment
or modification, or if there are changes in in-substance fixed payments. When
the lease liability is remeasured, the corresponding adjustment is reflected
in the right-of-use asset, or profit and loss if the right-of-use asset is
already reduced to zero.
c) Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are netted off against
share premium.
d) Property, plant and equipment
I. Recognition and measurement
Property, plant and equipment are measured at cost less accumulated
depreciation, Government grants received (where applicable) and accumulated
impairment losses.
Costs capitalised include expenditure that are directly attributable to the
acquisition of the asset.
When parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment
(calculated as the difference between the net proceeds from disposal and the
carrying amount of the item) are recognised in profit or loss.
II. Subsequent costs
Subsequent expenditure is capitalised only when it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
Ongoing repairs and maintenance are expensed as incurred.
III. Depreciation
Items of property, plant and equipment are depreciated on a straight-line
basis in the statement of comprehensive income over the estimated useful lives
of each component.
Items of property, plant and equipment are depreciated from the date that they
are installed and are ready for use, or in respect of internally constructed
assets, from the date that the asset is completed and ready for use.
The estimated useful lives of significant items of property, plant and
equipment are as follows:
· IT equipment from 3 to 5 years
· Industrial equipment, office equipment and plant and machinery from 5
to 10 years
Depreciation methods, useful lives and residual values are reviewed at each
reporting date and adjusted where appropriate.
e) Intangible assets
Intangible assets are measured at cost less accumulated amortisation and
Government grants received (where applicable). The carrying value of
intangible assets is reviewed annually for impairment.
Patent rights acquired and development expenditure are recognised at cost.
Expenditure on internally developed products is capitalised if it can be
demonstrated that:
- it is technically feasible to develop the product
- adequate resources are available to complete the development
- there is an intention to complete and sell the product
- the Group is able to sell the product
- sale of the product will generate future economic benefits, and
- expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the period the Group expects
to benefit from selling the products developed (Useful Economic Life). The
amortisation expense is included within the cost of sales in the consolidated
statement of comprehensive income.
Development expenditure not satisfying the above criteria and expenditure on
the research phase of internal projects are recognised in the consolidated
statement of comprehensive income as incurred.
Capitalised development expenditure is measured at cost less accumulated
amortisation and impairment losses.
Other intangible assets that are acquired by the Group and have finite useful
lives are measured at cost less accumulated amortisation and accumulated
impairment losses.
I. Amortisation
Intangible assets are amortised on a straight-line basis in profit or loss
over their estimated useful lives, from the date that they are available for
use. The estimated useful lives of significant intangible assets are as
follows:
· Patents concerning G+® technology generate significant value to the
Group over a period of 20 years, in line with the legal duration of the patent
and their useful lives. However, on a conservative basis, such costs are
amortised over a period of 10 years.
· Brand: 5 years
· Development costs concerning personnel capitalized: 5 years
· Others: 5 years
f) Inventories
Inventories are stated at the lower of cost or net realisable value. The cost
of inventories comprises of net prices paid for materials purchased,
production labour cost and factory overhead. Net realisable value represents
the estimated selling price less all estimated costs of completion and costs
to be incurred in marketing, selling and distribution. Inventory provisions
are recognised for slow-moving, obsolete or unsalable inventory and are
reviewed on a six months basis.
g) Goodwill
Goodwill represents the excess of the cost of a business combination over the
Group's interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed and equity
instruments issued, plus the amount of any non-controlling interests in the
acquiree plus, if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree. Contingent
consideration is included in cost at its acquisition date fair value and, in
the case of contingent consideration classified as a financial liability,
remeasured subsequently through profit or loss.
Goodwill is capitalised as an intangible asset with any impairment in carrying
value being charged to the consolidated statement of comprehensive income.
Where the fair value of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the excess is
credited in full to the consolidated statement of comprehensive income on the
acquisition date.
h) Impairment
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end.
Other non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. For the purpose of impairment testing, assets are grouped
together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other
assets or groups of assets (CGUs). The Group's CGUs generally align with each
subsidiary. The recoverable amount is then estimated. The recoverable amount
of an asset or a CGU is the greater of its net present value and its fair
value less costs to sell.
Net present value is generally computed as the present value of the future
cash flows, discounted to present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset.
An impairment loss is recognised if the carrying amount of an asset or a CGU
exceeds its estimated recoverable amount. Impairment losses are recognised in
profit or loss. Impairment losses recognised in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to the unit and
then to reduce the carrying amounts of the other assets in the unit on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, impairment losses recognised in prior years are assessed at each
reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and
amortisation, if no impairment loss had been recognised.
i) Employee benefits
Defined benefit scheme surpluses and deficits are measured at:
- The fair value of plan assets at the reporting date; less
- Plan liabilities calculated using the projected unit credit method
discounted to its present value using yields available on high quality
corporate bonds that have maturity dates approximating to the terms of the
liabilities; plus
- Unrecognised past service costs; less
- The effect of minimum funding requirements agreed with scheme
trustees.
Remeasurements of the net defined obligation are recognised directly within
equity. The remeasurements include:
- Actuarial gains and losses
- Return on plan assets (interest exclusive)
- Any asset ceiling effects (interest exclusive).
Service costs are recognised in profit or loss and include current and past
service costs as well as gains and losses on curtailments.
Net interest expense (income) is recognised in profit or loss and is
calculated by applying the discount rate used to measure the defined benefit
obligation (asset) at the beginning of the annual period to the balance of the
net defined benefit obligation (asset), considering the effects of
contributions and benefit payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailment
are recognised immediately in profit or loss.
Settlements of defined benefit schemes are recognised in the period in which
the settlement occurs.
For more information please see note 20.
j) Revenues
The Group operates diverse businesses and accordingly applies different
methods for revenue recognition, based on the principles set out in IFRS 15.
The revenue and profits recognised in any reporting period are based on the
delivery of performance obligations and an assessment of when control is
transferred to the customer. In determining the amount of revenue and profits
to record, and associated balance sheet items, management is required to
review performance obligations within individual contracts. This may involve
some judgemental areas.
Revenue is recognised either when the performance obligation in the contract
has been performed (so 'point in time' recognition) or 'over time' as control
of the performance obligation is transferred to the customer.
For each performance obligation to be recognised over time, the Group applies
a revenue recognition method that faithfully depicts the Group's performance
in transferring control of the goods or services to the customer. This
decision requires assessment of the real nature of the goods or services that
the Group has promised to transfer to the customer.
· Revenues from sale of graphene based products are typically
recognised at a point in time when goods are delivered to the customer as with
this, the customer gains the right of control over the goods. However, for
export sales, control might also be transferred when delivered either to the
port of departure or port of arrival, depending on the specific terms of the
contract with a customer.
· Revenues from sale of equipment (such as Mobile Production Units) are
typically recognised at point in time when goods are delivered to the
customers and site acceptance test is successfully performed.
· Revenues from services relates mainly to environmental services
provided by Setcar which are recognised:
o at a point in time basis when contracts include an obligation to process
waste once the process occurred according with the contract in place.
o at the point in time when the waste is delivered to our platform with no
further performance obligations.
o over time in accordance with agreed project milestones being delivered.
Where cost has been incurred to undertake a performance obligation but this
has not been realised at the year end the attributable costs are carried
forward as work in progress.
k) Government grants
Government grants are recognised when there is reasonable assurance that the
entity will comply with the relevant conditions and the grant will be
received. Grants are recognised in profit or loss on a systematic basis where
the Group has recognised the initial expenses that the grants are intended to
compensate. Where a grant has been received as a contribution for property,
plant and equipment, or capitalised development costs, the income received has
been credited against the asset in the statement of financial position.
l) Finance income and finance costs
Finance income comprises interest income on funds invested. Interest income is
recognised in the profit or loss, using the effective interest method. Finance
costs comprise interest expense on borrowings.
Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognised in profit or
loss using the effective interest method.
m) Investments in subsidiaries (Company only)
Investments are stated at their cost less any provision for impairment (for
details refer to note h).
n) Taxation
Tax expense comprises current and deferred tax. Current and deferred tax is
recognised in the profit or loss except to the extent that it relates to a
business combination, or items recognised directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax is not recognised for:
· temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss;
· temporary differences related to investments in subsidiaries and
jointly controlled entities to the extent that it is probable that they will
not reverse in the foreseeable future; and
· taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date.
A deferred tax asset is recognised for deductible temporary differences to the
extent that it is probable that future taxable profits will be available
against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Adoption of new and revised standards
New standards, interpretations and amendments effective from 1 January 2021
The IFRS financial information has been drawn up on the basis of accounting
policies consistent with those applied in the financial statements for the
year to 31 December 2020, except for the following:
· Interest Rate Benchmark Reform - Amendment to IFRS 7, IFRS 9, IFRS 16
and IAS 39.
The application of the above standards has had no impact on the disclosures or
the amounts recognised in the Group's consolidated financial statements.
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January
2022:
• Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to
IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1,
IFRS 9, IFRS 16 and IAS 41); a
• References to Conceptual Framework (Amendments to IFRS 3).
The following amendments are effective for the period beginning 1 January
2023:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax Related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12).
In January 2020, the IASB issued amendments to IAS 1, which clarify the
criteria used to determine whether liabilities are classified as current or
non-current. These amendments clarify that current or non-current
classification is based on whether an entity has a right at the end of the
reporting period to defer settlement of the liability for at least twelve
months after the reporting period. The amendments also clarify that
'settlement' includes the transfer of cash, goods, services, or equity
instruments unless the obligation to transfer equity instruments arises from a
conversion feature classified as an equity instrument separately from the
liability component of a compound financial instrument. The amendments were
originally effective for annual reporting periods beginning on or after 1
January 2022. However, in May 2020, the effective date was deferred to annual
reporting periods beginning on or after 1 January 2023. In response to
feedback and enquiries from stakeholders, in December 2020, the IFRS
Interpretations Committee (IFRIC) issued a Tentative Agenda Decision,
analysing the applicability of the amendments to three scenarios. However,
given the comments received and concerns raised on some aspects of the
amendments, in April 2021, IFRIC decided not to finalise the agenda decision
and referred the matter to the IASB. In its June 2021 meeting, the IASB
tentatively decided to amend the requirements of IAS 1 with respect to the
classification of liabilities subject to conditions and disclosure of
information about such conditions and to defer the effective date of the 2020
amendment by at least one year. The Group is currently assessing the impact of
these new UK adopted accounting standards and amendments. The Group will
assess the impact of the final amendments to IAS 1 on classification of its
liabilities once the those are issued by the IASB.
The Group does not believe that the amendments to IAS 1, in their present
form, will have a significant impact on the classification of its liabilities,
as the conversion feature in its convertible debt instruments is classified as
an equity instrument and therefore, does not affect the classification of its
convertible debt as a non-current liability.
3. Operating segments
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision makers (CEO, CFO, COO and CTO), as defined in IFRS 8, in
order to allocate resources to the segments and to assess its performance.
For management purposes, also considering the materiality the Group is
organized into the following segments:
- Textile
- Environmental
- Others
Textile and Environmental were considered by Management the strategic segments
able to sustain the growth. Management's strategic needs are constantly
monitored and an update of the segments will be provided if required. Any
further update of the segment analysis will be reflected in this section.
Segment profit/(loss) represents the profit/(loss) earned by each segment,
including all the direct costs that are directly correlated with the segment.
Overhead, assets and liabilities not directly attributable to a specific
segment have been allocated as Head Office.
As the business evolves this is an area that will be assessed on a regular
basis and additional segmental reporting will be provided at the appropriate
time.
2021
Textile Environmental Others Headoffice Consolidated
Revenue 1,843,506 6,560,771 210,821 - 8,615,098
Cost of Sales* (1,002,845) (3,030,602) (107,310) - (4,140,757)
Gross Profit 840,661 3,530,169 103,511 - 4,474,341
Other income 174,484 607,049 - 49,872 831,405
Other expenses:
R&D expense (317,422) (45,450) (25,966) - (388,838)
Advisory (50,004) (481,992) - (887,722) (1,419,718)
Operating expenses (536,615) (2,519,008) (135,782) (2,294,012) (5,485,417)
Depreciation & amortisation (331,492) (1,177,445) (34,630) - (1,543,567)
Operating Loss (220,388) (86,677) (92,867) (3,131,862) (3,531,794)
Net financial costs - - - 146,941 146,941
Tax - (44,620) - - (44,620)
Loss of the year (220,388) (131,297) (92,867) (2,984,921) (3,429,473)
Total assets 5,642,443 15,086,933 1,038,326 - 21,767,702
Total liabilities 1,746,301 3,739,745 250,546 - 5,736,592
2020
Textile Environmental Others Head Office Consolidated
Revenue 1,943,924 4,360,864 129,692 - 6,434,480
Cost of Sales* (1,221,579) (1,971,859) (74,872) - (3,268,310)
Gross Profit 722,345 2,389,005 54,820 - 3,166,170
Other income 85,980 204,450 27,206 28,189 345,826
Other expenses:
R&D expense (96,915) (25,500) - - (122,415)
Advisory (50,752) (335,248) - (905,021) (1,291,022)
Operating expenses (1,332,294) (2,214,108) (138,874) (1,033,266) (4,718,541)
Depreciation & amortisation (508,331) (1,143,250) (39,291) - (1,690,872)
Operating Loss (1,179,967) (1,124,652) (96,138) (1,910,098) (4,310,855)
Financial costs - - - (346,532) (346,532)
Tax - - - 124,414 124,414
Loss of the year (1,179,967) (1,124,652) (96,138) (2,132,216) (4,532,973)
Total assets 5,609,005 11,083,261 1,014,317 - 17,706,582
Total liabilities 2,443,527 2,680,121 1,920,685 - 7,044,333
*Includes Changes in inventories of finished goods.
2021 2020
€ €
Sale of products 2,898,224 2,137,289
Sale of services 5,716,874 4,297,191
Government grants 166,112 159,815
Other 665,293 186,011
Total Income 9,446,503 6,780,306
Geographical breakdown of revenues is:
2021 2020
€ €
Italy 1,755,329 1,555,622
Romania 6,563,839 4,495,661
Rest of the world 295,930 383,197
Total 8,615,098 6,434,480
The Group has transacted with 3 main customers in 2021, which accounted for
more than 10% of Group revenues for sales of products and services. This
largest customer accounted for 16% of revenues (€1,349,981), the second
largest to 12% (€1,006,649), whilst the third for 11% (€907,323).
Other Income of €831,405 mainly includes the release of an undue obligation
for €503,904, as the former shareholders of Setcar renounced to dividends
not paid yet, Government Grants for €166,112, and R&D Expenditure Credit
(RDEC) for €33,425. The RDEC is an Italian incentive scheme (art.3 DL
145/2013) designed to encourage companies to invest in research and
development. The credit can be used to reduce corporation tax or to offset
outstanding payables related to social security.
4. Government Grants
Information regarding government grants:
2021 2020
€ €
Innodriver 25,000 -
Inno4covid 99,889 -
Green.Tex 30,616 54,278
COVID-19 government grants - 103,536
Techfast 10,607 -
Total 166,112 157,814
During 2021, the Company took part in Inno4Covid, a European project for
fostering innovation, prevention and surveillance in response to Covid-19. The
project was 100% financed for a total amount of €99,889, of which 50% was
collected during the year.
Directa Plus keeps investing in the activities related to the Green.Tex
project, whose deadline was extended up until April 2022.
In 2021, the Company was also awarded with the inclusion in the Tech Fast
project, with an overall value of approximately €290,000, financed at 50%.
The tender, concerning eco-innovation for industrial antimicrobial and
antiviral filtration through the use of graphene, will end in 2022.
Directa Plus also obtained the Innodriver grant (€25,000) to support the
study of new products in the textile sector.
The key terms of government grants are:
Green.Tex Tech fast Inno4covid Innodriver Ecopave
Starting date 2020 2021 2021 2021 2017
Ending date 2022 2022 2021 2021 2021
Duration (months) 21 12 8 n.a. 37
Total amount 96,192 147,028 99,889 25,000 214,000
Final report submitted on-going on-going Yes Yes Yes
There are no capital commitments built into the ongoing grants. Government
grants have been recognised within other income.
5. Inventory
2021 2020
€ €
Finished products 1,141,372 1,071,173
Spare parts 76,663 110,808
Raw material 93,798 97,712
Working in progress 59,042 96,254
Total 1,370,875 1,375,947
As of 31 December 2021, total inventory value is in line with 2020; the
finished products mainly referred to Directa Plus SpA. Spare parts inventory
was required to enhance maintenance efficiency and is composed of a small
number of critical items with a material cost per unit.
6. Raw materials and consumables
2021 2020
€ €
Raw material & consumables 2,711,528 1,670,305
Textile products 922,783 894,012
Total 3,634,311 2,564,317
The increase in raw materials is in line with the business growth.
7. Employee benefits expenses
2021 2020
€ €
Wages and salaries 3,525,876 3,264,227
Social security costs 559,856 496,428
Employee benefits 111,964 89,169
Share option expense 130,910 19,286
Other costs 103,877 62,099
Total 4,432,483 3,931,208
Capitalised cost in "Intangible assets" (135,528) (161,935)
Total charged to the Income Statement 4,296,955 3,769,274
The average number of employees (excluding non-executive directors) during the
period was as follows:
2021 2020
Sales and Administration 30 27
Engineering, R&D and production 165 166
Total 195 193
The total average number of employees of the Group as at 31 December 2021 was
195 (2020: 193), of which 166 employed by Setcar.
The Directors' emoluments (including non-executive directors) are as follows:
2021 2020
Wages and salaries 773,683 836,709
Total 195 193
The aggregate emoluments (wages, salaries and social contributions) of the
highest paid Director totalled €527k (2020: €495k).
Share-base payment expenses were €130,910, of which €62,708 accounted for
in the Parent Company accounts as directly attributable to the Executive
Directors.
8. Other expenses
Other expenses include:
2021 2020
€ €
Audit of the Group and Company financial statements 81,991 79,347
Audit of the subsidiaries' financial statements 36,230 37,968
Other non-audit services provided by Group's auditor 5,978 4,422
Tool manufacturing 296,965 508,363
Analyses & tests 377,028 128,152
Travel 69,659 78,012
Technical consultancies 277,117 223,732
Shipping and logistic expenses 260,014 365,317
Insurance 165,347 112,122
Marketing 32,989 27,866
Legal, tax and administrative consultancies 915,234 962,365
Analyses & tests expenses (€377,028) and technical consultancies refer
to R&D activities outsourced to external labs and universities. Both cost
categories have increased over the last year in line with the business growth.
The increase in the insurance expenses (€165,347) was mainly driven by the
hard market conditions, which led to a general increase in premiums.
9. Net Finance expenses
Finance expenses include:
2021 2020
€ €
Interest Income (1,616) (1,175)
Interest on loans and other financial costs 45,426 45,719
Interest on lease liabilities 18,157 21,589
Interest cost for benefit plan 11,098 10,131
Foreign exchanges losses/(gains) (220,006) 270,268
Total (146,941) 346,532
Foreign exchange income of €220,006 (2020: -€270,268) includes €211,056
of Sterling to Euro movement in the Group's Sterling bank accounts.
10. Taxation
2021 2020
€ €
Current tax (expense)/income (1,727) 404
Deferred tax expense/ (recovery) (42,893) (124,818)
Total tax expenses (44,620) (124,414)
Reconciliation of tax rate
2021 2020
€ €
Loss before tax (3,384,853) (4,657,387)
Italian statutory tax rate 24% 24%
(812,365) (1,117,773)
Impact of temporary differences 4,431 155,430
Losses recognised (49,052) (31,016)
Impact of tax rate in foreign jurisdiction (35,491) 47,820
Losses not utilised 847,857 1,069,953
Total tax expenses (44,620) (124,414)
Tax losses carried forward have been recognised as a deferred tax asset up to
the point that they are recoverable against taxable temporary differences. All
other tax losses are carried forward and not recognised as a deferred tax
asset due to the uncertainty regarding generating future taxable profits. Tax
losses carried forward are €31,494,057(€27,762,446 in 2020).
11. Intangible assets
Cost Development Cost Patents Goodwill Others Brands Total
€ € € € € €
Balance at 31/12/2019 2,765,023 437,933 303,552 249,580 384,124 4,140,213
Additions 379,998 111,151 - 35,814 - 526,963
Currency translation differences (218) (3,344) (5,204) (289) (7,107) (16,162)
Balance at 31/12/2020 3,144,804 545,740 298,348 285,105 377,017 4,651,014
Additions 135,527 172,307 - (1,063) - 306,771
Currency translation differences (184) - (4,391) (3,059) (5,996) (13,630)
Balance at 31/12/2021 3,280,147 718,047 293,957 280,983 371,021 4,944,154
Amortisation
1,731,795 145,349 - 54,214 6,402 1,937,760
Balance at 31/12/2019
357,746 218,247 - 18,593 75,899 670,485
Amortisation 2020
Balance at 31/12/2020 2,089,541 363,596 - 72,807 82,301 2,608,245
Amortisation 2021 389,299 71,829 - 13,797 74,621 549,547
Currency translation differences (271) - - (3,313) (2,330) (5,914)
Balance at 31/12/2021 2,478,569 435,425 - 83,291 154,592 3,151,877
Carrying amounts
377,722
Balance 31/12/2019 1,033,228 292,584 303,552 196,811 2,202,452
Balance 31/12/2020 1,055,262 182,145 298,348 213,743 294,715 2,042,767
Balance 31/12/2021 801,578 282,623 293,957 199,137 216,428 1,792,277
As disclosed in note 1(d) development costs capitalised in the year are mainly
based on time spent by employees who are directly engaged in the development
of the G+® technology.
Management, throughout the support of external experts, carried out an
impairment test on goodwill accounted following the acquisition of Setcar S.A.
in 2019.
The CGU is represented by Setcar itself, whose carrying amount as of 31
December 2021 was estimated equal to €5.1m.
The impairment review of the CGU is based on an assessment of the CGU's value
in use ("VIU"). In calculating VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate of 10.9% that
reflects current market assessments of the time value of money and the risks
specific to the asset/CGU and a perpetual annual growth rate of 1.6%.
Based on such assumptions, the recoverable amount was estimated equal to
€27.4m. In addition, a sensitivity analysis was performed, assuming a +/-
0.5% variation in the discount rate and a +/- 0.5% variation in the perpetuity
growth rate. This led to a recoverable amount estimated in the range of €26m
and €29m.
As a conclusion, the verifications have shown that the book values can be
fully recovered and no goodwill impairment is required as of 31 December 2021.
12. Property, plant and equipment
Industrial Computer Office Plant & ROU Under Total
Cost Equipment Equipment Equipment Machinery Land Assets Costr.
€ € € € € € € €
Balance at 31/12/2019 1,235,693 56,554 179,469 4,202,028 608,395 456,819 2,445 6,741,402
Additions 52,825 17,967 9,391 171,819 - 322,309 - 574,356
Disposals - - - (23,343) - - - (23,343)
Currency translation differences (21,101) - (16,232) (53,298) (11,257) - - (101,934)
Balance at 31/12/2020 1,267,415 74,521 172,627 4,297,207 597,138 779,128 2,445 7,190,481
Additions 392,141 10,095 13,934 416,922 - - - 833,092
Disposals (6,435) - (3,143) (31,124) - - - (40,703)
Currency translation differences (32,070) - (2,228) (50,895) (9,498) - (38) (94,728)
Balance at 31/12/2021 1,621,051 84,616 181,189 4,632,110 587,640 779,128 2,407 7,888,141
Depreciation
Balance at 31/12/2019 193,331 36,113 67,587 1,637,482 - 76,136 - 2,010,649
Depreciation 2020
378,873 7,693 35,432 517,406 - 80,984 - 1,020,388
Currency translation differences (51,101)
(17,894) - (2,356) (30,851) - - -
Balance at 31/12/2020 556,309 - 157,120 -
43,807 100,663 2,123,314 2,981,213
287,741 9,312 49,791 544,774 - 102,402 - 994,021
Depreciation 2021
Currency translation differences (21,983) - (4,986) (43,089) - - -
(70,059)
Balance at 31/12/2021 - 259,522 -
822,067 53,119 145,468 2,624,999 3,905,175
Carrying
amounts
Balance 31/12/2019 1,042,362 20,440 111,882 2,564,546 608,395 380,683 2,445 4,730,752
Balance 31/12/2020 711,106 30,714 71,965 2,173,892 622,008 597,138 2,445 4,209,268
Balance 31/12/2021 798,985 31,496 35,722 2,007,110 519,606 519,606 2,407 3,982,966
Assets held under financial leases with a net book value of € 557,243 are
included in the above table within Plant & Machinery.
13. Investments in subsidiaries
Details of the Company's subsidiaries as at 31 December 2021 are as follows:
Shareholding
Subsidiaries Country Principal activity 2021 2020
Directa Plus Spa Italy Producer and supplier of graphene based materials and related products 100% 100%
Directa Textile Solutions Srl Italy Commercialise textile membranes, including graphene-based technical and 73.5% 73.5%
high-performance membranes
Setcar S.A. Romania Waste management and decontamination services business 52% 51%
Subsidiaries Place of Business Registered Office Place of Business
Directa Plus Spa Italy Via Cavour 2, Lomazzo (CO) Italy See registered office
Directa Textile Solutions Srl Italy Via Cavour 2, Lomazzo (CO) Italy See registered office
Setcar S.A. Romania Str. Gradinii Publice 6, Braila Romania See registered office
The Company's investment as capital contributions in Directa Plus Spa are as
follows:
Directa Spa
At 31 December 2019 21,180,336
Additions 2,500,000
At 31 December 2020 23,680,336
Additions 2,000,000
At 31 December 2021 25,680,336
14. Trade and other receivables
Current
Group Company
2021 2020 2021 2020
€ € € €
Account receivables 2,339,369 2,174,967 - -
Tax Receivables 465,953 443,857 49,539 23,265
Other receivables 500,171 238,636 155,752 142,997
Total 3,305,493 2,857,460 205,291 166,262
Non-Current
Group Company
2021 2020 2021 2020
€ € € €
Other receivables 185,623 140,649 - -
Total 185,623 140,649 - -
Group account receivables of €2,339,369 are mainly composed by seven major
clients, covering 60% of the total amount.
Group Tax Receivables are composed of Italian VAT receivables of €278,812,
UK VAT receivables of €49,539, Romanian VAT receivables of €50,785, RDEC
Tax Credit receivables of €73,894 and other Italian Tax receivables of
€12,923.
Other receivables are mainly composed of governments grants for €213,160 and
prepayments for €277,089.
Non-current other receivables of €185,623 refer to specific projects where
the collection of a certain amount, although due, is postponed to the end of
the project itself.
As at 31 December 2021 the ageing of account receivables was:
Days overdue 2021 2020
€ €
0-60 1,771,113 1,895,323
61-180 251,458 50,372
181-365 101,450 231,109
365 + 215,348 57,786
Total 2,339,369 2,174,967
As at 31 December 2021 the Group recognised provision for €46,892€ mainly
referred to Setcar's overdue debts.
15. Deferred tax liabilities
2021 2020
€ €
Deferred tax liabilities 174,158 138,147
Deferred tax assets - losses (84,661) (129,724)
Total 89,497 8,423
Deferred tax assets have been recognised on losses brought forward to the
extent that they can be offset against taxable temporary differences in line
with the requirements of IAS 12.
The deferred tax liabilities arise from the capitalisation of development
costs and defined benefit scheme are detailed below:
2021 2020
€ €
Deferred tax liabilities Cost Capitalized 86,313 121,504
Deferred tax liabilities Other (1,652) 8,220
Deferred tax liabilities arising from acquisition 89,497 8,423
Deferred tax assets - losses exc. Setcar (84,661) (129,724)
Total 89,497 8,423
16. Cash and cash equivalents
Group Company
2021 2020 2021 2020
€ € € €
Cash at bank 11,126,683 7,075,447 9,430,364 4,283,625
of which restricted cash 40,000 - - -
Cash in hand 3,785 5,045 - -
Total 11,130,468 7,080,492 9,430,364 4,283,625
The Company holds €40,000 of restricted cash as a guarantee for a
performance bond provided by a bank for a major contract in the Environmental
vertical.
17. Equity
2021 2020
€ €
Share Capital 205,393 190,996
Share Premium 39,159,027 31,395,612
Foreign currency translation reserve (23,109) (7,015)
Retained earnings (25,352,139) (21,824,229)
Non-controlling interests 2,041,938 906,885
Balance at 31 December 16,031,110 10,662,249
Share Capital
Number of
Ordinary Share
Shares Capital (€)
At 31 December 2019 60,998,983 190,512
Share issue on 26 June 111,980 309
Share issue on 30 June 63,624 175
At 31 December 2020 61,174,587 190,996
Share issue on 14 January * 190,872 535
Share issue on 29 December - capital raise ** 1,670,518 4,962
Share issue on 30 December - capital raise ** 2,996,149 8,900
At 31 December 2021 66,032,126 205,393
* On 14 January 2021, 190,872 ordinary shares with a nominal value of £0.0025
each were issued as effect of the exercise of options of ordinary shares for
Directors and Senior Managers.
** On 29 and 30 December 2021, 4,666,667 ordinary shares with a nominal value
of £0.0025 each were issued as effect of the Company's capital raise.
Share Premium
Share
In euro premium
€
At 31 December 2019 31,395,612
Shares issued -
Expenditure relating to the raising of shares -
At 31 December 2020 31,395,612
Shares issued 8,306,293
Expenditure relating to the raising of shares (542,878)
At 31 December 2021 39,159,027
On 29 and 30 December 2021, as a result of the Company's capital raise,
4,666,667 ordinary shares were issued at a price of £1.5 each. The Company
accounted for €8,306,293 of gross share premium reserve, net of €542,878
of expenditure directly referred to the transaction.
Share capital
Financial instruments issued by the Directa Plus Group are treated as equity
only to the extent that they do not meet the definition of a financial
liability. The Directa Plus Group's ordinary shares are classified as equity
instruments.
Share premium
To the extent that the company's ordinary shares are issued for a
consideration greater than the nominal value of those shares (in the case of
the company, £0.0025 per share), the excess is deemed Share Premium. Costs
directly associated with the issuing of those shares are deducted from the
share premium account, subject to local statutory guidelines.
Foreign currency translation reserve
Exchange differences resulting from the consolidation process of Setcar are
recognised in the translation reserve for an amount of € 7,183.
Non- controlling interest
Non-controlling interest refers to the minority shareholders of the company
who own less than 50% of the overall share capital.
As of 31 December 2021, non-controlling interest is composed by 48% of Setcar
S.A. and 26.46% of Directa Textile Solutions Srl.
18. Loans and borrowings
Group Company
2021 2020 2021 2020
€ € € €
Non-current Loans and borrowings - -
Current Loans and borrowings 2,403,881 1,017,716 - -
65,840 981,065
Total 2,469,721 1,998,781 - -
2021 Current Non current Repayment Interest rate
€ € €
BANK OF TRANSILVANIA 660,328 - 660,328 36-months Variable 4.7% ROBOR 3M + 2,5%/year
BANK OF TRANSILVANIA IMM INV 464,143 - 464,143 60-months Variable 4.11% ROBOR 3M +2.11%/year+2%
GVC INVESTMENT COMPANY LMT 16,630 16,630 - 12-months 1.5%/year
INTESA SAN PAOLO 300,000 18,393 281,607 72-months 1.5%/year + EURIBOR 3M
INTESA SAN PAOLO 25,000 3,076 21,924 72-months 1.5%/year + EURIBOR 3M
INTESA SAN PAOLO -500,000 - 500,000 72-months 1.5%/year + EURIBOR 3M
BANCA POPOLARE DI SONDIO 500,000 24,121 475,879 72-months 1.5%/year + EURIBOR 3M
Reconciliation of liabilities arising from financing activities
Cash flows Non Cash flows
Borrowings 01 January Capital Repayment Liabilities acquired Accrued Interest Loan conversion into equity 31 December 2021
2021
€ € € € € €
1,998,781 (81,666) 1,511,719 1,642 (960,755) 2,469,721
Total 1,998,781 (81,666) 1,511,719 1,642 (960,755) 2,469,721
19. Leases liabilities
The following table details the movement in the Group's lease obligations for
the period ended 31 December 2021:
2021 2020
€ €
Non-current lease liabilities 463,047 627,138
Current lease liabilities 217,537 214,935
Total 680,584 842,073
20. Employee benefits provision
2021 2020
€ €
Employee benefits 500,535 444,483
Total 500,535 444,483
Provisions for benefits upon termination of employment primarily related to
provisions accrued by Italian companies for employee retirement, determined
using actuarial techniques and regulated by Article 2120 of the Italian Civil
code. The benefit is paid upon retirement as a lump sum, the amount of which
corresponds to the total of the provisions accrued during the employees'
service period based on payroll costs as revalued until retirement.
Following the changes in the law regime, from January 1 2007 accruing benefits
have been contributing to a pension fund or a treasury fund held by the
Italian administration for post-retirement benefits (INPS). For companies
with less than 50 employees it will be possible to continue this scheme as in
previous years. Therefore, contributions of future TFR provisions to pension
funds or the INPS treasury fund determines that these amounts will be treated
in accordance to a defined contribution scheme, not subject to actuarial
evaluation. Amounts already accrued before 1 January 2007 continue to be
accounted for a defined benefit plan and to be assessed on actuarial
assumptions.
The breakdown for 2020 and 2021 is as follows:
€
Amount at 31 December 2019 406,534
Service cost 57,081
Interest cost 10,131
Actuarial gain/losses (7,821)
Past service cost -
Benefit paid (21,442)
Amount at 31 December 2020 444,483
Service cost 47,536
Interest cost 11,098
Actuarial gain/losses 6,457
Benefit paid (9,039)
Amount at 31 December 2021 500,535
Variables analysis
Detailed below are the key variables applied in the valuation of the defined
benefit plan liabilities.
2021 2020
Annual rate interest 2.30% 2.30%
Annual rate inflation 1.10% 1.10%
Annual increase TFR 7.41% 7.41%
Tax on revaluation 17.00% 17.00%
Social contribution 0.50% 0.50%
Increase salary male 1.20% 1.20%
Increase salary female 1.15% 1.15%
Rate of turnover male 1.70% 1.70%
Rate of turnover female 1.50% 1.50%
Sensitivity analysis
Detailed below are tables showing the impact of movements on key variables:
Actuarial hypothesis - 2021 Decrease 10% Increase 10%
Variation Variation
Rate DBO € Rate DBO €
Increase salary Male 1.08% (4,767) 1.32% 1,277
Female 1.04% 1.27%
Turnover Male 1.53% (4,962) 1.87% 1,325
Female 1.35% 1.65%
Interest rate 2.07% 11,788 2.53% (14,631)
Inflation rate 0.99% (6,032) 1.21% 2,546
21. Trade and Other payables
Non-current
Group Company
2021 2020 2021 2020
€ € € €
Other payables 64,357 65,397 - -
Total 64,357 65,397 - -
Current
Group Company
2021 2020 2021 2020
€ € € €
Trade payables 946,694 1,364,787 93,332 54,725
Employment costs 609,397 519,466 - -
Other payables 375,807 1,228,655 78,486 62,020
Contingent consideration at fair value through P&L - 572,268 - -
Total 1,931,898 3,685,176 171,818 116,745
In 2021 Setcar released an obligation to its former shareholders for a total
amount of €504k, accounted as other income in the Consolidated statement of
comprehensive income. As of December 2020, this amount was accounted within
other payables.
Over 2021 the Group paid the last tranches of contingent consideration to the
former shareholders of Setcar for a total amount of €572,268.
22. Financial instruments
Financial risk management
The Group's business activities expose the Group to the following financial
risks:
a) Market risk
Market risk arises from the Group's use of interest bearing, tradable and
foreign currency financial instruments. It is the risk that the fair value of
future cash flow of a financial instrument will fluctuate because of changes
in interest rates or foreign exchange rates. As at 31 December 2021 the Group
is exposed to variable interest rate risk for a short term revolving loan and
for the loans recently issued by Directa Plus SpA under the Italian Government
Covid-19 Recovery Plan. Those loans, being 90% guaranteed by the Italian
Government, bear a low interest rate (1.5% + EURIBOR) and, if the interest
rate had increased or decreased by 100 basis points during the year the
reported loss after taxation would not have been materially different to that
reported.
b) Capital Risk
The Group's objectives for managing capital are to safeguard the Group's
ability to continue as going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders and to provide an
adequate return to shareholders by pricing products and services
commensurately with the level of risk. There were no changes in the Group's
approach to capital management during the year.
c) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group's credit risk is primarily attributable to its trade
receivables that the Company consider defaulted if any instalment is unpaid
more than sixty (60) days past its original due date or where there is
evidence that identifies the debtor's state of insolvency.
The Group's cash and cash equivalents and restricted cash are held with major
financial institutions. The Group monitors credit risk by reviewing the credit
quality of the financial institutions that hold the cash and cash equivalents
and restricted cash.
The Group's trade receivables consist of receivables for revenue mainly in
Italy and Romania. Management believes that the Group's exposure to credit
risk is manageable and currently the Group's standard payment terms are 30 to
60 days from date of invoice are largely met from the clients. At the end of
the period, 74% of account receivables have an ageing less of 60 days and
refers to orders delivered close to the year end. As at 31 December 2021 the
Group recognised a cumulated bad debt provision for €46,893.
Every new customer is internally analysed for creditworthiness before the
Group's standard payment and delivery terms and conditions are offered.
Advance payment usually applies for the first order and the exposure to credit
risk is approved and monitored on an ongoing basis individually for all
significant customers. The maximum exposure to credit risk is represented by
the carrying amount of each financial asset in the statement of financial
position. The Group does not require collateral in respect of financial
assets.
d) Exposure to credit risk
Group
Note 2021 2020
€ €
Trade receivables 14 2,339,369 2,174,967
Cash and cash equivalent 16 11,130,468 7,080,492
Total 13,469,837 9,255,459
The largest customer within trade receivables account for 13% of debtors.
Management continually monitors this dependence on the largest customers and
are continuing to develop the commercial pipeline to reduce this dependence,
spreading revenues across a variety of customers.
e) Liquidity risk
It is the risk that the Group will encounter difficulty in meeting its
financial obligations as they fall due. Liquidity risk arises from the Group's
management of working capital and the finance charges and principal repayments
on its debt instruments. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities and by continuously monitoring
forecast and actual cash flows. The Board reviews regularly the cash position
to ensure there are sufficient resources for working capital requirements and
to meet the Group's financial commitments.
2021 Carrying amount Up to 1 year 1 -5 years
€ € €
Financial liabilities
Trade payables 946,694 946,694 -
Lease Liabilities 680,584 217,537 463,047
Loans 2,469,721 65,840 2,403,881
Total 4,096,999 1,230,071 2,866,928
2020 Carrying amount Up to 1 year 1 -5 years
€ € €
Financial liabilities
Trade payables 1,364,787 1,364,787 -
Lease Liabilities 842,073 214,935 627,138
Loans 1,998,781 959,520 1,064,310
Total 4,205,641 2,539,242 1,691,448
f) Currency risk
The Group usually raises money issuing shares in pounds, it follows that the
Group usually holds sterling bank accounts as result of capital raise.
Sterling bank accounts are mainly used to manage expenses of the Company (such
as UK advisors, LSE fees and costs related to the Board) in UK. The cash held
in Sterling continues to be subject to currency risk.
EUR
Cash held in GBP 9,159,734
As of January 2022, to reduce the exposure to liquidity risk, Directors
decided to translate GBP 4.5 million into EUR. As at 24(th) March 2022 the
total cash held in GBP is equal to £3.5 million. If the exchange rate EUR/GBP
increase by 10% the impact on P&L would be a loss equal to €0.4 million
(if decrease by 10% would be a profit equal to €0.4 million).
The Group holds accounts also in other currency (such as USD and RON) but just
for business purposes and for not material amount.
23. Earnings per share
Change in number of ordinary shares Total number of ordinary shares Weighted number of ordinary shares
Days
At 31 December 2020 175,604 61,174.587 365 61,087,158
Existing shares 61,174,587 13 2,178,821
Issued on 14 Jan 2021 190,872 61,365,459 349 58,675,466
Issued on 29 Dec 2021 1,670,518 63,035,977 2 345,403
Issued on 30 Dec 2021 2,996,149 66,032,126 1 180,909
At 31 December 2021 4,857,539 66,032,126 365 61,380,599
Basic Diluted
2021 2020 2021 2020
€ € € €
Loss attributable to the owners of the Parent (3,652,364) (4,195,011) (3,652,364) (4,195,011)
Weighted average number of ordinary shares in issue during the year 61,380,599 61,087,158 - -
Fully diluted average number of ordinary shares during the year - - 61,649,085 61,477,110
Loss per share (0.06) (0.07) (0.06) (0.07)
The effect of anti-dilutive potential ordinary shares is ignored in
calculating the diluted loss per share.
24. Share Schemes
The 2020 Employees' Share Scheme is administered by the Remuneration
Committee.
The Directors are entitled to grant awards over up to 10 per cent of the
Company's issued share capital from time to time.
Under the 2020 Employees' Share Scheme, in November 2020 1,801,000 options
over Ordinary Shares were granted to key employees and additional 150,000
options were granted to an Executive Director in June 2021 under the same
Scheme. As of 31 December 2021, the total number of outstanding Ordinary
Shares awards is 1,184,000, of which 517,000 vested after the first year and
250,000 were revoked.
At the date of this report, an additional 539,080 share options had vested in
2020 under the 2016 Employees' and NED Share Schemes that have not yet been
exercised.
The main terms of the 2020 Employee's Share Schemes are set out below:
Eligibility
All persons who at the date on which an award is granted under the Employees'
Share Scheme are employees (or employees who are also office-holders) of a
member of the Group and are eligible to participate. The Remuneration
Committee decides to whom awards are granted under the Employees' Share
Scheme, the number of Ordinary Shares subject to an award, the exercise
date(s) (subject to the below) and the conditions which must be achieved in
order for the award to be exercisable.
Types of Award
Awards granted under the Employees' Share Scheme have the form of market value
share options. "Market value share options" are share options with an exercise
price equal to the market value of a share at the date of grant. The right to
exercise the award is generally dependent upon the participant remaining an
officer or employee throughout the performance period. This is subject to the
good leaver provisions described below. Awards granted under the Share Schemes
will not be pensionable.
Individual Limits
The value of Ordinary Shares over which an employee or Executive Director may
be granted awards under the Employees' Share Scheme in any financial year of
the Company shall not exceed 200 per cent of his basic rate of salary at the
date of grant.
Variation of share capital
Awards granted under the Share Schemes may be adjusted to reflect variations
in the Company's share capital.
Vesting of awards
Outstanding awards will vest over three years in equal one third tranches on
each anniversary of the grant date to the extent that the market-based
performance targets have been met. Vested awards may generally be exercised
between the third and tenth anniversaries from the date of grant. 75% of
vested shares can be exercised after the third anniversary, while the
remaining 25% from the fourth.
The inputs to the Monte-Carlo simulation were as follows:
Monte-Carlo simulation
Market value shares
Share price 60p
Exercise price 66p
Expected volatility 54%
Compounded Risk-Free Interest Rate 0.10%
Expected life 6 years
Number of options issued* 1,801,000
*Number of options issued is an input of the Monte-Carlo simulation and refers
to the total options granted by the Company in November 2020. This is not
representing any option issued in the period.
Details of the number of share options outstanding are as follows:
Outstanding at start of period Granted during the period Cancelled during the period Expired during the period Vested during the period Outstanding at end of period Exercisable period option price Grant date Exercisable date
31 December 2019 1,639,877 (25,523) (733,066) (821,288) 60,000 75p 12 May 2017 12 May 2020
31 December 2020 60,000 1,801,000 - - (60,000) 1,801,000 66p 12 Nov 2020 12 Nov 2023
31 December 2021 1,801,000 150,000 (250,000) - (517,000) 1,184,000 66p - 118p 12 Nov 2020 - 15 Jun 2021 12 Nov 2023 - 15 Jun 2023
Cancelation of share options during the period relates to the resignation of
employees. Share options expired over the period refers to those performance
share options that did not meet the performance criteria on the third
anniversary of their granting. Vested share options are Market share options
that met the criteria on the third anniversary.
As of 14 January 2021, two Directors and two Senior Managers of the Company
had exercised 190,872 ordinary shares, originally vested under the 2016
Employees Share Scheme.
25. Related parties
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Remuneration of key management personnel
The below figures represent remuneration of key management personnel for the
Group, who are part of the Executive Management Team but not part of the Board
of Directa Plus PLC. The remuneration is set out below in aggregate for each
of the categories specified in IAS 24 'Related Party Disclosures'.
2021 2020
€ €
Short-term employee benefits and fees 407,451 278,619
Social security costs 102,469 68,576
509,920 347,195
The increase in 2021 is mainly explained by the fact that during the year an
employee was appointed as part of the Executive Management Team of Directa
Plus SpA.
Transactions with shareholders
The following sales with shareholder of the Group were recorded, excluding
VAT, during the year:
2021 2020
€ €
Sale of products - 3,948
Products are sold on normal commercial terms and conditions.
Other transaction Group
Other related party transactions during the year under review are shown in the
table below:
2021 2020
€ €
Sale of products 19,395 15,886
Products are sold on normal commercial terms and conditions
26. Contingent Liabilities and Commitments
The group has the following contingent liabilities relating to bank guarantees
on operating lease arrangements and government grants.
2021 2020
€ €
Bank guarantees 163,340 141,553
27. Post Balance Sheet events
At the date of this report, it is still unrealistic to properly assess the
potential impacts of the Ukrainian conflict on the Group. Directors are
monitoring the evolution of the macro-economic scenario and consequently
re-adjusting, where necessary, the Group's strategy and operational
priorities. The Group is likely to be hit by inflation trends (as a
consequence of the increase in energy and transportation costs) and,
presumably, by some contracts slowdown. However, Directors believe that
overall, the conflict will not affect the going concern of the Group, and,
under certain circumstances, it will create some potential opportunities, such
as from the price increase of oil and other materials could generate
significant outturns for the Group and its clients.
On 15 March 2022, Directa Plus S.p.A. granted its subsidiary Setcar SA a loan
of €1 million, payable in 1 year with an annual interest rate of 4.5%. Those
funds, raised in the context of the capital increase completed in December
2021, will support Setcar in responding to significant new tenders and provide
additional liquidity for its general working capital purposes.
-ends-
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