REG - Gelion PLC - Final results to 30 June 2022
09/11/2022 07:16
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221109:nRSI7604Fa&default-theme=true
RNS Number : 7604F Gelion PLC 09 November 2022
9 November 2022
Gelion plc
("Gelion" or the "Company")
Final results to 30 June 2022
Successfully transitioned battery manufacturing from laboratory to first
industrial production
Gelion plc (AIM: GELN), the Anglo-Australian energy storage innovator, is
pleased to announce its audited final results for the year ended 30 June 2022.
FY22 Financial and operational highlights
- Admitted to trading on AIM on 30 November 2021, following an oversubscribed
placing to new and existing shareholders raising £16m
- Funds raised at IPO have enabled the acceleration of investment into strategic
recruitment and transition of battery manufacturing from the laboratory to
first industrial production
- Continue to invest in technology and process development with focus towards
establishing performance optimization, validation, and cost reduction
- Signed a contract with Acciona Energía ('Acciona') to test and supply Gelion
batteries for potential commercial deployment
- Received the LSE Green Economy Mark
- The Company is well capitalised with cash and cash equivalents and term
deposits on the balance sheet of £17.0 million as at 30 June 2022
Post period highlights
- Achieved significant milestone with commissioning of the manufacturing plant
at Battery Energy Power Solutions ('Battery Energy') in Western Sydney,
Australia
- First industrial production of Gelion's non-lithium zinc-bromide battery
- Continue to progress discussions with key customers in the energy resource
mining as well as oil & gas sector for trials offtakes and partnerships
Board update
- Hannah McCaughey completed her tenure as interim CEO and resigned as Director
from 28 October 2022
- John Wood, a battery, clean-tech and innovation specialist, appointed as CEO
and commences his role on 21 November, bringing over 30 years of significant
commercial and manufacturing expertise and C-Suite experience
Rescheduling of IMC presentation
The Company would also like to notify shareholders that due to the announced
board changes the Investor Meets Company presentation, originally scheduled
for 9am GMT on 15 November 2022 has been rescheduled to 9am GMT on 8 December
2022. Those investors who follow the company will be invited to the new
meeting.
Should you have any questions, please contact
investorhelp@investormeetcompany.com
(mailto:investorhelp@investormeetcompany.com) .
Dr Steve Mahon, Chairman, commented: "Gelion's first year as a PLC was one of
strategic evolution, one in which the Group has accelerated the delivery of
its battery technology, underpinned by the recent first industrial production
of Gelion's zinc-bromide battery. Gelion's battery technology and industrial
partnerships provide the foundation for effective scaling of product to the
market at a time when customers are seeking energy storage solutions to meet
their rapid decarbonisation targets. The Group is well positioned to become a
significant supplier into the growing market for renewable energy storage and
grid resilience over the coming years.
"Part of our evolution over the past year has also involved changes in
management and I am delighted to welcome John Wood to Gelion as CEO, who
brings a wealth of commercial, scaling and manufacturing experience."
For further information please visit www.gelion.com (http://www.gelion.com) or
contact:
Gelion plc via Alma PR
Steve Mahon, Chairman
Amit Gupta, CFO
Thomas Maschmeyer, Founder and Principal Technology Advisor
finnCap Ltd (Nominated Adviser and Sole Broker) +44 207 220 0500
Corporate Finance
Christopher Raggett
Seamus Fricker
Fergus Sullivan
ECM
Barney Hayward
Alma PR (Financial PR Adviser) +44 20 3405 0205
Justine James gelion@almapr.co.uk (mailto:gelion@almapr.co.uk)
Josh Royston
Hannah Campbell
Will Ellis Hancock
Chairman's Statement
The year to 30 June 2022 was one of strategic evolution for Gelion following
its IPO in November 2021 with funds raised to facilitate investment into
recruitment and building production ahead of commercialisation.
The IPO has provided a platform to enable us to accelerate the delivery of our
battery technology to market such that we are well positioned to become a
significant supplier into the growing market for renewable energy storage and
grid resilience over the coming years. The global stationary energy storage
market is poised to grow over the next decade, with BloombergNEF recently
forecasting investment worth $US262bn by the end of 2030.
We have a steely focus on delivering on our objective to become a provider of
safe, robust and scalable renewable energy storage solutions to the world
market.
The global climate crisis will need bold policy, alongside technical and
commercial solutions to ensure we maintain our planet as a prosperous,
healthy, and viable place to live. Gelion is clearly committed to playing our
part in positively impacting global decarbonisation.
Non lithium solution
Our technology is focused on and capable of reducing global reliance on the
use of lithium-ion batteries, which play an ever-greater role in the global
energy battery market. Their 86% use for electric vehicle (EV) applications
mean that this low-weight technology is crucial to the decarbonisation of the
global automotive market. Therefore, the stationary energy storage market -
such as on-grid and off-grid storage applications - needs to evolve beyond
lithium-ion technologies due to several key concerns and issues, including
shortage in supply of raw materials, pressure to supply the EV market and
their greater suitability for shorter duration compared to the growing demand
for longer-duration energy storage.
As a result, there is expected to be limited availability of lithium-ion
batteries for stationary energy storage applications. Gelion's zinc-bromide
batteries promise to offer a safer, greener, and equally effective alternative
to lithium-ion batteries for long-duration electricity storage. Combined with
the abundance of zinc around the world and multiple sources of raw material
supply, Gelion's zinc- bromide batteries are well placed to provide a viable
alternative to lithium-ion batteries.
At the half year, we stated clearly that our focus was on the delivery of a
commercial product. We have recently reached a major milestone, transitioning
from R&D by delivering on a key objective of production, having
successfully commissioned the manufacturing plant at the lead-acid factory of
Battery Energy Power Solutions, one of our partners in Western Sydney,
Australia. We see the value in our clear strategy to deliver a manufacturing
pathway for Gelion's zinc-bromide battery as this is our most mature and
differentiated technology.
Macroeconomic and geopolitical impacts
To set the backdrop of our first year as a listed entity, within weeks of
listing, we were hit by a second and then third wave of COVID-19. This caused
disruption to supply chains globally, upward pressure on equipment and
materials costs, and greater complexity to cross-border transactions and
movements. The Group has dealt with these pressures well and proven its
ability to mitigate such issues by having a clarity of vision to deliver a
marketable product.
The invasion of Ukraine has precipitated a change in the geopolitics of global
energy with unprecedented increases in energy costs. Along with the widely
reported cost increases of electricity, we have all become acutely aware of
the need for energy independence, to prevent our basic societal need for
energy being controlled by any unstable/unreliable state.
With volatile and challenging markets comes reflection on the best route for
the Group to achieve its objective of delivering on its manufacturing plan and
delivering value for shareholders. We note, in particular, that investor
sentiment has also evolved to reflect the greater volatility in the global
financial and energy markets, with the need being to demonstrate commercial
viability sooner.
Drive for commercialisation
Following our IPO there was a gear change taking the development out of the
laboratory of the University of Sydney and delivering a product. The IPO was a
strong platform to raise our profile resulting in a clear demand to accelerate
commercialisation. This combined with the challenging macroeconomic and
geopolitical conditions led the Board to make management changes early in the
year to reposition the business, ensuring it would be more focused on driving
commercial production of its leading technology, the zinc-bromide battery, and
to do so locally in Australia in response to increasing costs, timelines and
uncertainties associated with off-shore manufacturing. Greater control of the
manufacturing implementation of the initial 'first-of-a-kind' line is viewed
to reduce risk and increase agility.
Hannah McCaughey was appointed interim CEO in March 2022 to review and drive
the commercialisation plan. Since then, the Company and the Board have
reviewed each aspect of the business and have formulated a plan to deliver
production capacity and customer traction. There is no better demonstration of
a breakthrough technology than having a credible paying customer and this is a
key objective for the next year ahead. Hannah has now completed her interim
engagement with the Group and resigned as Director with effect from 28 October
2022. I would like to thank Hannah for her hard work in supporting the Company
in executing its production plans.
The recent announcement of the commissioning of the manufacturing plant was a
major milestone for Gelion. We can now start to build field experience and
establish presence with the current generation of product from this plant
while continuing in parallel to invest in our technology and process
development further. These initiatives are geared towards establishing
performance optimisation and validation, and the cost reductions that will
underpin the global competitive foundation for our next stage of scaling.
With the above objectives to be achieved, I am pleased to announce that we
have appointed John Wood as the new Group Chief Executive Officer to take
Gelion through to the next phase.
John is an experienced and successful CEO of private and public companies who
has led businesses both in the technology and energy industry over a 30-year
career. He is also a proven sector specialist with significant commercial,
scaling and manufacturing experience and under his leadership, we firmly
believe we can take Gelion to the next level of growth. Importantly for
Gelion, John has a deep experience in the lead-acid sector having established
Ecoult which gained recognition as one of the 100 Global Cleantech in 2013 and
he implemented many seminal projects after its acquisition by East Penn
Manufacturing.
ESG
We take our responsibilities to successfully transitioning to a sustainable
economy seriously and we expect to be playing a key role in powering this
global transition.
Gelion is committed to driving real-world impacts. Our battery technology
supports this global energy transition by offering a readily scalable solution
to the current renewable energy storage dilemma. We were delighted to receive
the London Stock Exchange's Green Economy Mark, for our contribution to the
global green economy.
We have adopted the Quoted Companies Alliance Corporate Governance Code (QCA
Code) and have an experienced Board of Directors who govern the business and
all its key risk elements. Talented people are core to our business, and we
seek to hire and maintain the best people regardless of their background. Our
diverse team of 50 people is currently made up of 18 nationalities, speaking
15 languages.
Our core market is represented by installations in combination with renewable
energy to enable greater penetration of clean power. Our operational
robustness means that we are a great fit in harsh locations, allowing us to
power remote or poorly served communities. Our product is unequivocally
enabling the decarbonisation of electricity networks. In addition, we have
reviewed the impacts of our own operations and are shown to be significantly
less resource intensive than other technologies, such as lead-acid,
lithium-ion or vanadium redox flow.
Future development and outlook
The decisions taken by the Board in the last year have been geared towards
demonstrating Gelion's path to scale. The key development during the year has
been the transition to production.
We are already seeing strong interest from potential customers around the
world in our batteries. Following the initial manufacturing deal with Battery
Energy, and the appointment of a new CEO, experienced in global manufacturing,
those customers now have a clear view of our route to commerciality as well as
a manufacturing path to scale up and we expect further strengthening of their
interest in our technologies.
Dr Steve Mahon
Chairman
8 November 2022
Operational update
The Gelion Board is pleased to be presenting the first financial results
following the IPO in November 2021.
Gelion's core strategy remains focused on developing the Company to be a
leading provider of safe, robust and scalable renewable energy storage
solutions to the global market and we are focused on commercial solutions for
the successful transition to a sustainable economy through the storage of
renewable energy. The delivery of Gelion's innovative battery technology will
play a pivotal role in enabling that transition while providing value for both
our customers and investors.
Given the geopolitical and macroeconomic environment not only during this
period, but also expected going forward, the Board conducted a comprehensive
review of the business including strategy around the product offering,
business model, development plan and efficient deployment of funds to ensure
we are able to capitalise on the opportunities presented to us.
The focus since the IPO has been clear - to deliver a commercial product.
Since year end, we have achieved a significant milestone in September 2022
with the first industrial production of Gelion's zinc-bromide battery at
Battery Energy Power Solutions.
Having now successfully transitioned the battery manufacturing from laboratory
to industrial production, it is time for the business to bring in a highly
experienced CEO who brings over a decade of experience across cleantech and
battery technology including manufacturing. John Wood will help Gelion plan
for scale and at the same time exploit the ever-increasing commercial
opportunities that continue to rapidly emerge in the energy storage sector.
Market opportunity / Supply and demand
Customers are actively seeking longer-duration storage and Gelion has
undertaken a significant amount of work in planning for the scaled-up
production of its zinc-bromide battery to ensure it is well placed to meet
growing customer demand for renewable energy storage technologies. By way of
background, while lithium-ion batteries currently dominate much of the
stationary energy battery market. Market commentators such as Bloomberg
indicate that there are several key concerns and issues around the limited
availability and supply of lithium-ion batteries for stationary energy storage
application.
Gelion recently conducted a review of the current energy storage market, with
the purpose to understand and strengthen Gelion's position in a highly
competitive market. The key findings of this in-depth critical analysis were:
· The underlying technology of Gelion's battery is clearly
differentiated from other products in the market and provides a distinct
competitive advantage. Gelion's battery encompasses our proprietary gel
technology coupled to an inherently lower fire risk, a wide temperature
operating range, and an ability to be completely charged or discharged without
loss in lifetime or performance.
· Gelion's zinc-bromide battery is ideally suited to fill the gap in
the stationary energy storage long-duration storage market. The modular
design, which makes use of 70% of existing lead- acid production processes,
ensures that industrial production of the product is highly scalable by
simplifying manufacturing processes and use of standard industrial equipment.
· Gelion will focus on three core customer applications. Gelion's
revised strategy is to initially develop a single standardised storage system
to drive commercial efficiencies. There is often a debate on the merits of
optimisation or standardisation. For us, and with several use cases we have
rightly chosen standardisation. The system has been designed to provide access
to three core application markets: utility-scale grid-connected applications;
commercial and industrial (C&I) behind-the-meter; and green mining.
Following first industrial production, Gelion is seeing significant interest
from companies in the energy, resource, mining as well as oil & gas
sectors resulting in advanced discussions with various global players for
trials, off-take and partnerships.
Commercialisation and manufacturing strategy
Scale is key, and Gelion has developed strong relationships with industrial
partners and has made substantial progress towards commercialisation of the
Gelion zinc-bromide battery, including:
Delivering industrial production at an industrial site
Gelion has now developed a 2 MWh capacity manufacturing line at our commercial
partner Battery Energy. This partnership was the manufacturing proof-point
with the commissioning of the plant in Western Sydney being completed ahead of
schedule.
The Battery Energy facility is an end-to-end line with a repeatable
manufacturing process, reusing more than 70% of the standard lead-acid battery
production processes, providing a proven basis for the commercial scale-up of
Gelion's manufacturing capacity. The production of cells on the manufacturing
line at Battery Energy is an important achievement as it will inform our
studies both toward scaling production and toward cost reduction of design,
materials and manufacturing process of our products.
This manufacturing plant is designed to optimise unit operations and, while
currently quite manual in operations to enable quick adaptation of improved
operations, it will enable the design of a much more automated set-up as
quickly and as effectively as possible.
This is a significant step for Gelion, as it demonstrates that our batteries
can be built in a pre-existing industrial environment with established
industrial processes. This is a major factor in being able to prove how
production can be scaled up at locations around the world using existing
battery manufacturing infrastructure. The battery is robust and through our
partnership with Battery Energy we have proven we can both integrate our
technology with brownfield infrastructure and partner with lead-acid
manufacturers; the next step then for the Group is to deliver at scale.
The first industrially manufactured cells rolled off the line in September
2022 and will be used in the Acciona trials, including the Phase 1 simulation
and Phase 2 onsite testing, and will be exported to Spain as part of the trial
contract with Acciona Energia, one of Europe's largest sustainable energy
companies.
Balancing battery performance and cost competitiveness
During the process of commissioning of the manufacturing plant at Battery
Energy, it became apparent that we must retain the benefits of close
association between our technology / process engineering development
activities and the preparation for our next stage of scaling.
The challenges with transferring technology to large scale production across
different continents proved less efficient than we expected. After careful
analysis of the costs and benefits, including the ability to protect our IP,
we decided that our resources are better allocated to continue to first
utilize the availability of the manufacturing plant in Australia. The
proximity of the manufacturing plant to our development team, to progress both
performance optimization and cost reduction, in the most efficient way is more
valuable than reaching for immediate scale. As such, we are not currently
progressing discussions with HBL in India.
The launch of the manufacturing plant has benefitted us immensely and another
outcome has been the recognition of the high overlap in the production
processes and equipment for Gelion's zinc-bromide batteries and the production
processes and equipment used by lead-acid manufacturers across the industry.
Alongside our work on technology and process with the experience we are now
gaining at the manufacturing plant, we can now also commence relationship
outreach to the process automation equipment leaders that supply that industry
to consult together on optimal ways to introduce Gelion products into and/or
alongside their manufacturing solutions. While this is very subjective until
achieved, we anticipate that paths exist to make beneficial use of this
commonality in process automation in effective ways to scale very quickly once
the foundation is set. We believe this strategy will strongly contribute to
establishing industry manufacturing partnerships at scale.
Securing manufacturing capabilities is clearly a core part of Gelion's growth
strategy. The foundation for that strategy lies in commercialising the
patented technology contained within the Gelion zinc-bromide battery. At the
time of our IPO, we set ourselves ambitious targets to further develop and
refine that technology with a view that our product would be competitive with
lithium-ion technologies on a Levelised Cost of Energy within two years. The
process of enhancing our technology has taken longer than we had anticipated
12 months ago, albeit we have taken strong steps forward.
Gelion has now identified the appropriate trade-offs required to balance
battery performance with cost competitiveness to ensure that the technology
performance meets customer expectations.
Clear cost reduction pathways have been identified for manufacturing that will
enable Gelion's technology to become competitive with relevant energy storage
applications in the time window that customers need to ramp up to meet
decarbonisation targets.
Performance additives
There is a push to develop new materials with higher energy densities to
continue to drive down the price, weight and size of lithium-based battery
packs.
At IPO, Gelion was in discussions to co-develop low-cost technology for the
manufacture of silicon nanoparticles. However, the lithium-silicon market is
now highly competitive with multiple companies competing to develop
silicon-based anodes. Gelion has concluded that it can effectively purchase
nanoparticulate silicon at an attractive price rather than develop this
technology itself. Gelion will instead focus solely on the development of a
lithium-silicon-sulfur (LiSiS) battery.
Gelion has been granted exclusive licence to a sulfur additive technology that
can be incorporated into the cathode. Sulfur-based materials are one potential
alternative to more traditional cathode materials.
Sulfur-based cathodes provide several advantages over traditional materials
including utilising an abundant and low-cost raw material, higher energy
densities and improved safety. However, there is a need to trap the sulfur to
prevent rapid cell death. Gelion's sulfur additive has been proven to be
capable of reversibly trapping the sulfur, enhancing lifetimes substantially.
Gelion believes that our sulfur-based additive technology will provide a
competitive advantage over current technologies.
In a breakthrough, Gelion has demonstrated that with graphite-free
lithium-silicon anodes it is possible to employ a sulfur cathode compatible
electrolyte that enables the design of a high energy density LiSiS battery.
This development accelerates milestones in the IPO timetable and represents a
major upside.
Outlook
There is no question the demand for energy storage continues to accelerate.
The increasing penetration of renewable energy has led to growing demand for
long-duration energy storage systems (>6 hours), which is less cost
effective for lithium-ion storage systems. With six-hour blackouts being
predicted in parts of Europe this winter, long-duration battery storage such
as Gelion's zinc-bromide battery will play an important part of grid
stabilisation and energy security. Gelion's battery technology and industrial
partnerships provide the foundation for effective scaling of product to the
market at a time where customers are seeking energy storage solutions to meet
the rapid decarbonisation target. With our strong ESG credentials, Gelion can
provide a meaningful battery energy solution to meet the three demands of the
energy transition - security, cost effectiveness and sustainability.
CFO Statement
This CFO review should be read in conjunction with the consolidated financial
statements of the Company and Gelion Technologies Pty Ltd (together the
'Group') and the notes thereto. The consolidated financial statements are
presented under international accounting standards. The financial statements
of the Company continue to be prepared in accordance with UK-adopted
International Accounting Reporting Standards and International Accounting
Standards as issued by the International Accounting Standards Board (IASB) and
Interpretations in conformity with the requirements of the Companies Act 2006.
Overview
FY22 has been a transformational year for the Group due to the successful
fundraising and IPO on the AIM in November 2021. We enter the new fiscal year
with an exciting platform from which to continue to drive organic growth and a
strong balance sheet which will enable the Group to continue to deploy our
capital allocation strategy.
In FY22, we raised a total of £22.0m, £6.0m from the Pre IPO round and gross
proceeds of £16.0m from the IPO enabling the Group to fund development
programmes, commission the manufacturing plant and strengthen the team to
prepare for future growth.
At year end, our cash position (cash & cash equivalents and term deposits)
was £17.0m (2021: £1.9m) which renders the Group well capitalised to fund
future growth. Funds raised in the IPO have been used to invest in our people
primarily for development of chemistry (scientists and chemical engineers),
manufacturing expertise (mechanical engineers), and the executive team.
Despite the significant challenges due to COVID-19 impacting businesses
globally, we have managed to continue with product development and managed the
cost base. However, these challenges continue and have resulted in delayed
deliveries and increased lead time in securing materials and equipment,
increased labour, material, and logistical costs such as freight.
In September 2022, we reached a significant milestone in our development
process as we announced the opening of our manufacturing plant in Western
Sydney, Australia. This is an important achievement as this will assist us in
planning towards scaling production and reducing costs.
Trading performance
Total income for the year ended 30 June 2022 was £1.75m (2021: £1.6m)
primarily from R&D tax incentives from the Australian Taxation Office
which supports the ongoing development programmes of the business. In FY21,
Gelion generated revenue of c. £0.3m from supply and installation of mobile
lights and solar photovoltaic building battery systems. This revenue stream
was not expected to be repeated.
Operating losses increased to £9.1m (2021: (£1.8m)) as a result of both
non-recurring items £4.7m (2021: nil) and increase in operating costs.
Operating losses before listing and other associated costs (non-recurring
items) increased to £4.4m (2021: £1.8m) primarily due to:
· £1.0m increase in research and development spend, a significant proportion of
which relates to staff costs due to the number of staff (average FTE) being
employed by the Group increasing from 15 in FY21 to 26 in FY22;
· £1.7m increase in administrative costs reflecting the additional costs of
being a public company and an increase in staff costs due to the number of
staff (average FTE) being employed by the Group increasing from 4 in FY21 to
11 in FY22; and
· partially offset by an increase in other income.
Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax,
Depreciation, Amortisation, listing & other associated costs) increased to
£4.1m (2021: £1.5m).
The Company reported non-recurring items of £4.7m in FY22 which represent
one-off expenses in relation to the IPO.
There was no corporate tax payable on earnings as the business is currently
loss making. The basic and diluted loss per share for the year to 30 June 2022
was 9.20 pence (2021: 2.0 pence). The increase in loss per share was due to
the increased operating costs of the business primarily driven by the
non-recurring costs.
Statement of financial position and cash flows
At 30 June 2022, current assets amounted to £19.2m (2021: £3.2m), including
cash & cash equivalents and term deposits of £17.0m (2021: £1.9m). The
principal contributors to the increase in cash & cash equivalents and term
deposits of £15.1m were:
· fundraise of £19.7m (net including pre-IPO fund raise) in the year;
· operating cash outflow of £4.5m (2021: £1.3m); and
· capital expenditure on intangible development costs, property, plant and
equipment of £0.8m (2021: £0.4m) which largely relates to the commissioning
of the new manufacturing plant and other lab equipment.
Prior to the IPO, on 3 September 2021, the Group decided to undertake a
capital reduction and £11.2m has been recognised in distributable reserves
(more details in note 19).
Research and development
Development formed a material part of the Group's activities this year, with a
significant portion relating to the development of the main product of the
Group being, the zinc-bromide battery. The Group expensed most of its
development costs of £3.0m for the year (2021: £1.9m) in relation to its
products. The Group had qualifying research and development costs of £3.9m
(2021: £2.8m) against which it expects to receive the R&D tax incentives
of £1.7m from the Australian Taxation Office.
Foreign currency exposure
The Group currently faces relatively modest currency exposure on its foreign
currency transactions; however, it does expect this to increase in the future
as exposure to both foreign currency translation risk and transaction risk
increases resulting from plans to scale. A large majority of the Group
operating overheads are in Australian dollars whereas procurement of materials
and equipment in other foreign currencies. The Group expects to maintain a
natural hedge to transactional exposure by invoicing in foreign currencies
where appropriate to minimise the difference between cash inflows and outflows
in the respective currencies.
Outlook
Despite the ongoing disruptions due to COVID-19, there are increasing signs of
a return to global normality albeit at a cost. Global inflation is approaching
its ten-years' highest level followed by increased interest rates, labour
shortages and supply chain disruptions causing significant delays in sourcing,
delivery timeframes, increased freight costs resulting in an increase in
overall cost of doing business. These macroeconomic and operational factors
have increased the complexity of running a business. Return to any level of
normalcy will take time however to manage cash burn, we are being very prudent
in decisions around efficient capital deployment. We are therefore well
capitalised to continue to deliver on our strategy.
The world has changed significantly since becoming a public company in
November 2021 with the top agenda item for most countries being energy
security and targets to net zero driven by geopolitical events. These energy
challenges have resulted in a search for alternative non-lithium technologies,
which are safe, long duration and highly recyclable such as the Gelion
zinc-bromide batteries. We believe that a combination of these factors will
assist in reducing the gap between expected sale price and production costs as
we scale in time and generate the corresponding revenue growth at a suitable
margin.
Amit Gupta
CFO
8 November 2022
Consolidated Statement of Comprehensive Income
Notes 30 June 2022 30 June 2021
£'000 £'000
Revenue from contracts with customers 4 - 351
Other income 5 1,745 1,280
Total income 1,745 1,631
Administrative expenses (3,204) (1,503)
Research and development expenditure (2,970) (1,926)
Operating loss before listing and other associated costs 6 (4,429) (1,798)
Listing and other associated costs 7 (4,658) -
Operating loss (9,087) (1,798)
Finance costs (73) (8)
Finance income 3 8
Loss on ordinary activities before taxation (9,157) (1,798)
Tax on loss on ordinary activities 9 - -
Loss on ordinary activities after taxation (9,157) (1,798)
Total loss for the year attributable to equity holders of the parent
Other comprehensive income:
Items that may be reclassified to profit or loss
- Exchange gains/(losses) arising on translation of foreign 10 713 (106)
operations
Total comprehensive loss for the year attributable to equity holders of the (8,444) (1,904)
parent
Loss per share (basic and diluted) attributable to the equity holders (pence) 12 (9.20) (2.00)
The above results relate entirely to continuing activities.
There were no acquisitions or disposals of businesses in the period.
The accompanying notes form part of this financial information.
Consolidated Balance Sheet
Notes 30 June 2022 30 June 2021
£'000 £'000
Assets
Non-current assets
Intangible assets 13 362 313
Property, plant and equipment 14 1,050 553
Current assets
Cash and cash equivalents 16 16,024 1,913
Short-term investments 17 1,017 -
Other receivables 17 2,153 1,250
Total Assets 20,606 4,029
Liabilities
Current liabilities
Trade and other payables 15, 18 854 435
Non-current liabilities
Trade and other payables 15, 18 31 7
Total liabilities 885 442
Net assets 19,721 3,587
Equity
Issued capital 19 107 33
Share premium account 19 20,662 11,251
Other non-distributable reserves 19 5,148 691
Capital reduction reserve 19 11,194 -
Accumulated losses (17,390) (8,389)
Total equity 19,721 3,587
The financial statements of Gelion Plc, company registration number 09796512,
were approved by the Directors and authorised for issue on 8 November 2022.
Consolidated Statement of Cash Flows
Notes 30 June 2022 30 June 2021
£'000 £'000
Cash flow from operating activities
Loss for the year before exchange losses (9,157) (1,798)
Adjustments for:
- depreciation 296 220
- amortisation 12 41
- finance costs 6 8
- finance income (2) (8)
- loss on disposal of intangible assets - 55
- loss on disposal of property, plant and equipment 8 -
- share-based payments expense 3,902 75
- lease interest paid (4) (8)
- transaction costs of issue of shares 805 -
Changes in operating assets/liabilities
- Decrease / (increase) in receivables (740) 75
- Decrease / (increase) in prepayments (162) 36
- Increase / (decrease) in payables 507 31
Net cash used in operating activities (4,529) (1,273)
Cash flows from investing activities
Purchase of intangible assets (48) (100)
Purchase of tangible property, plant and equipment (733) (288)
Short-term investments (term deposits) (1,017) -
Interest received 2 8
Net cash used in investing activities (1,796) (380)
Cash flows from financing activities
Proceeds from issue of shares 16,222 -
Proceeds on issue of convertible loan notes that were subsequently converted 5,999 -
Transaction costs of issue of shares (2,346) -
Repayment of leasing liabilities (126) (126)
Net cash used in financing activities 19,749 (126)
Net increase/(decrease) in cash held 13,424 (1,779)
Cash and cash equivalents at beginning of financial year 1,913 3,778
Effect of exchange rate changes 687 (86)
Cash and cash equivalents at end of financial year 16 16,024 1,913
Consolidated Statement of Changes in Equity
Share capital Share premium Accumulated losses Capital reduction reserve Other non-distributable reserves Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2020 33 11,251 (6,593) - 723 5,415
Loss on ordinary activities after taxation - - (1,796) - - (1,796)
Other comprehensive income - - - - (107) (107)
Total comprehensive loss for the year - - (1,796) - (107) (1,903)
Contributions by and distributions to owners:
Share-based payments charge - - - - 75 75
Total contributions by and distributions to owners: - - - - 75 75
Balance at 30 June 2021 33 11,251 (8,389) - 691 3,587
Balance at 1 July 2021 33 11,251 (8,389) - 691 3,587
Loss on ordinary activities after taxation - - (9,157) - - (9,157)
Other comprehensive income - - - - 713 713
Total comprehensive loss for the year - - (9,157) - 713 (8,444)
Contributions by and distributions to owners:
Bonus issue 57 (57) - - - -
Capital reduction - (11,194) - 11,194 - -
Share-based payment charge - - - - 3,902 3,902
Shares issued during the period 11 16,032 - - - 16,043
Shares issued during the period through a convertible loan 6 5,993 - - - 5,999
Costs of shares issued - (1,541) - - - (1,541)
Exercise of share options - 178 158 - (158) 178
Total contributions by and distributions to owners: 74 9,411 158 11,194 3,744 24,581
Balance at 30 June 2022 107 20,662 (17,390) 11,194 5,148 19,721
The accompanying notes part of this financial information.
Notes to The Consolidated Financial Statements
1. General Information
Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian
subsidiary that conducts research and development in respect of an innovative
battery system and associated industrial design and manufacturing.
Gelion is a public limited company, limited by shares, incorporated and
domiciled in England and Wales. The Company was incorporated on 26 September
2015. The registered office of the Company is at 3(rd) Floor, 141-145 Curtain
Road, London, EC2A 3BX. The registered company number is 09796512.
Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company
was re-registered as a public limited company under the Companies Act and its
name was changed to Gelion plc.
The Board, Directors and management referred to in this document refers to the
Board, Directors and management of Gelion.
2. Accounting Policies
2.1 Basis of preparation
The principal accounting policies applied in the preparation of the Group
financial statements are set out below. These policies have been consistently
applied to the period presented, unless otherwise stated.
These financial statements have been prepared in accordance with UK-adopted
International Accounting Reporting Standards and International Accounting
Standards as issued by the International Accounting Standards Board (IASB) and
Interpretations.
The preparation of financial statements in compliance with UK-adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires Group management to exercise judgement
in applying the Group's accounting policies. The areas where significant
judgements and estimates have been made in preparing the financial statements
and their effect are disclosed in note 2.20.
These financial statements are presented in Great British Pounds (GBP) unless
otherwise stated, which is the Company's presentational currency and the
parent company's functional currency. Amounts are rounded to the nearest
thousand, unless otherwise stated. The functional currency of the subsidiary
is Australian Dollars (AUD). Some numerical figures included in this Annual
Report have been subject to rounding adjustments. Any discrepancies between
totals and sums of components in tables contained in this Annual Report are
due to rounding. The policies adopted for translation of the subsidiary's
assets, liabilities, income and expenses are set out in note 2.17.
2.2 Basis of consolidation
The consolidated financial statements consolidate the financial statements of
Gelion Plc and of its subsidiary undertaking drawn up to each reporting date.
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 the elements of control.
Profit or loss and each component of other comprehensive income are attributed
to the equity holders of the parent of the Group. When necessary, adjustments
are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group's accounting policies. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
The following was a subsidiary undertaking of the Group:
Name Registered office Class of shares Holding
Gelion Technologies Pty Limited Australia Ordinary A 100%
The shareholding is held directly.
The registered office of Gelion Technologies Pty Limited is Level 16, 101
Miller Street, North Sydney, NSW 2060.
2.3 First-time adoption of IFRS
The financial information for the year ended 30 June 2019 disclosed in the
Admission Document represented the first time that the Group has prepared
consolidated financial information under IFRS. A Consolidated Statement of
Financial Position as at 1 July 2018, the date of transition to IFRS, was
disclosed in that Admission Document. The Directors considered that the
Consolidated Statement of Financial Position at that date would be the same if
prepared under previous GAAP as prepared under IFRS and that transition to
IFRS does not require adjustment to any of the figures stated in the
Consolidated Statement of Comprehensive Income. On this basis a full
reconciliation of Group equity at the transition date was not prepared.
The parent company had transitioned to adoption of IFRS as of July 2020. The
subsidiary undertaking prepares statutory accounts under Australian Accounting
Standards which have no differences from IFRS, therefore no adjustments are
required in the consolidation of this entity. IFRS 1 allows first-time
adopters certain exemptions from the retrospective application of certain
requirements under IFRS.
2.4 Going concern
The Directors have prepared a cash flow forecast for the period ending 31
December 2023. This forecast indicates that the Group and parent company would
expect to remain cash positive without the requirement for further fund
raising based on delivering the existing pipeline, for a period of at least 12
months from the date of approval of these financial statements. The Group
meets its day-to-day working capital requirements through existing cash
resources (cash and cash equivalents including term deposits) which, at 30
June 2022, amounted to £17.0m (2021: £1.9m). By the end of the period
analysed, the Group will still hold a reasonable proportion of the monies from
the fund raise in the year. This should give the business sufficient funds to
operate in a similar way beyond the forecast period.
With the uncertainty created for the economy by various events (COVID-19,
Ukraine war, inflation and supply chain issues), this cash flow forecast has
also been sensitised. As a worst-case scenario, if all committed payments had
to continue as forecast while receipts were not received at all, the business
would still have cash for the full 12 months from the date of approval of
these financial statements. The accounts have therefore been prepared on a
going concern basis.
The Directors have considered all of the above factors and believe that as the
potential opportunities are announced to the market including the scale and
prospects, the Group will be able to raise any funds required to enable it to
continue to trade and grow towards self-sufficiency.
2.5 Revenue recognition
The Group recognises revenue as follows:
Revenue from Contracts with Customers (IFRS 15)
Revenue is recognised at an amount that reflects the consideration to which
the Group is expected to be entitled in exchange for transferring goods or
services to a customer. For each contract with a customer, the Group:
identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into
account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
The Group's revenue from contracts with customers comprises revenue from
supply and installation of mobile lights and solar photovoltaic building
battery systems pursuant to a contract with the University of Sydney and has
been recognised under IFRS 15.
Rendering of services
Revenue from a contract to provide services is recognised over time as the
services are rendered based on either a fixed price or an hourly rate.
2.6 Other income
Grants and other benefits received from the government are recognised in the
Statement of Comprehensive Income at the fair value of the cash received.
Government grants are primarily research and development incentives. This
represents a refundable tax offset that is available on eligible research and
development expenditure incurred by the Group.
Government grants are not recognised until there is reasonable assurance that
the Group will comply with the conditions attaching to them and that the
grants will be received. Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose of giving immediate
financial support to the Group with no future related costs are recognised in
profit or loss in the period in which they become receivable.
2.7 Taxation
The income tax expense or benefit for the period is the tax payable on the
current periods taxable income based on the national income tax rate for each
jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and adjustments
recognised for prior periods where applicable.
Deferred tax assets relating to temporary differences and unused tax losses
are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset
can be utilised. Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
2.8 Earnings per share
Basic earnings/loss per share
Basic earnings/loss per share is calculated by dividing:
• the profit or loss attributable to owners of Gelion Plc,
excluding any costs of servicing equity other than Ordinary Shares; by
• the weighted average number of Ordinary Shares outstanding
during the financial year, adjusted for bonus elements in Ordinary Shares
issued during the financial year.
Diluted earnings/loss per share
Diluted earnings/loss per share adjusts the figures used in the determination
of basic earnings/loss per share to take into account:
• the after-income tax effect of interest and other financing
costs associated with dilutive potential Ordinary Shares; and
• the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential Ordinary Shares.
2.9 Cash and cash equivalents and short-term investments
Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts. Term deposits that are held for a period of less
than three months form a part of cash and cash equivalents.
Short-term investments
Short-term investments comprise of term deposits held by UK licensed banks for
a period greater than three months, over which it can be converted to known
amounts of cash with insignificant risk of change in value. The amounts are
measured at amortised cost using the effective interest method in line with
IFRS 9.
2.10 Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation
and impairment. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost
of each item of property, plant and equipment (excluding land) over their
expected useful lives as follows:
Plant and
equipment
3-7 years
Office furniture and equipment 3
years
Leasehold improvements are depreciated over the unexpired period of the lease
or the estimated useful life of the assets, whichever is shorter.
The residual values, useful lives and depreciation methods are reviewed, and
adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when
there is no future economic benefit to the Group. Gains and losses between the
carrying amount and the disposal proceeds are taken to profit or loss.
2.11 Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of
inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is calculated over
its estimated useful life. Right-of-use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding
lease liability for short-term leases with terms of 12 months or less. Lease
payments on these assets are expensed to profit or loss as incurred.
2.12 Intangible assets
Research and development
Research and development expenditure is recognised as an expense as incurred.
No research and development costs have been capitalised to date given the
stage of the business.
Development expenditure is recognised as an expense except those costs
incurred on development projects can be capitalised as intangible assets to
the extent that such expenditure is expected to generate future economic
benefits.
Patents and trademarks
Separately acquired trademarks and patents are recognised at historical cost.
Patents have a finite life and are subsequently carried at cost less
accumulated amortisation. Separately acquired trademarks are shown at
historical cost. They are considered to have infinite lives and are assessed
for impairment at each year end. The Group amortises intangible assets with a
limited useful life using the straight-line method over their expected useful
lives as follows:
Patents 15-20 years
2.13 Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
To date all impairments that have been recognised have been due to patent
costs capitalised in respect of patent applications that have subsequently
lapsed or been rejected. When this occurs, the Group fully impairs the
carrying amount of the patent at that date.
2.14 Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of the financial year and which are unpaid. Due to
their short-term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of
recognition.
2.15 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
The Group classifies financial assets as at amortised cost only if both of the
following criteria are met:
• the asset is held within a business model whose objective is to
collect contractual cash flows; and
• the contractual terms give rise to cash flows that are solely
payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Group commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group
has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
d) Tax receivables
Management has assessed that tax receivables arising from a refundable tax
offset from Australian Taxation Office, for eligible R&D expenditure, are
recognised at its par value. These receivables are expected to be collected in
a short-term period and the Directors have assessed there is no need for
impairment of these receivables. This is based on Australian government credit
rating (AAA) and successful historical collection of tax receivables.
2.16 Share-based payments
The Group provides benefits to its employees in the form of share-based
payments, whereby employees render services in exchange for shares or rights
over shares (equity-settled transactions) in the parent entity.
The cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value is determined using a Black- Scholes model.
This calculation is completed by the parent entity.
The cost of these equity-settled transactions is recognised as an expense,
with a corresponding increase in equity, over the period in which the service
conditions are fulfilled (the vesting period), ending on the date on which the
relevant employees become fully entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to
profit and loss is the product of:
• the grant date fair value of the award;
• the current best estimate of the number of awards that will
vest;
• the expired portion of the vesting period; and
• the removal of any fair value attributable to share options that
have contractually lapsed or expired.
The charge to profit and loss for the period is the cumulative amount as
calculated above less the amounts already charged in previous periods. There
is a corresponding entry to the share-based payment reserve in equity.
If a share-based payment arrangement is modified, the minimum expense
recognised over the vesting period is the original fair value. If the
modification increases fair value, the additional fair value is recognised
over the remaining vesting period.
Share-based payments deemed non-recurring
The Group operated a share option plan whereby employees and key service
providers were granted options over shares in Gelion UK Limited. Due to the
Company's admission to trading on AIM which took place on 30 November 2021 all
unvested options were vested triggering an accelerated share-based payment
expense.
In addition to the existing share option plan the Group agreed to grant
options over Ordinary Shares pursuant to obligations under the service
agreements with the relevant individuals. These service agreement obligations
were triggered by admission to trading on AIM. The service condition was to be
employed with a company in the Group at vesting.
Both the acceleration of option vesting and additional options granted
pursuant to service agreement obligations are triggered by the Company's
admission to AIM and therefore can be considered as part of the same
non-recurring event.
2.17 Foreign currency translation
The functional currency of each company in the Group is that of the primary
economic environment in which the entity operates. Monetary assets and
liabilities denominated in foreign currencies are translated into GBP at the
rates of exchange ruling at the period end. Transactions in foreign currencies
are recorded at the rate ruling at the date of the transaction.
All differences are taken to the Statement of Comprehensive Income. On
consolidation, the assets and liabilities of the Group entities that have a
functional currency different to the presentational currency are translated
into GBP at the closing rate at the date of the Statement of Financial
Position. Income and expenses for each statement of profit or loss are
translated at average exchange rates for the period. Exchange differences are
recognised in other comprehensive income and accumulated in a foreign exchange
translation reserve.
2.18 Contributed equity
Ordinary Shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are deducted from the share premium
account.
When the Group issues a hybrid instrument consisting of a debt host liability
and a non-closely related embedded derivative (the conversion feature) and the
Group accounts for the debt host at amortised cost and the embedded derivative
at FVTPL, when conversion takes place, no gain or loss on conversion is
recognised. The equity issued is measured by reference to the sum of the
carrying amount of the host debt liability plus the carrying amount of the
embedded derivative at the date of conversion, rather than the fair value of
the shares issued. This approach is in line with the policy followed for
conversion of compound instruments.
Retained losses includes all current and prior period results.
2.19 Sales taxes
Revenues, expenses and assets are recognised net of the amount of associated
goods and services tax (GST) in Australia or value added tax (VAT) in the UK,
unless the sales tax incurred is not recoverable from the taxation authority.
In this case it is recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of the amount of sales tax
receivable or payable. The net amount of sales tax recoverable from, or
payable to, the taxation authority is included with other receivables or
payables in the balance sheet.
Cash flows are presented on a net basis. The sales tax components of cash
flows arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash
flows.
2.20 Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the financial information requires the use of accounting
estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in the process of applying the
Group's accounting policies. The areas involving a high degree of judgement or
complexity, or areas of assumptions and estimates are:
Critical accounting judgements
- R&D tax incentives
From 1 July 2011 the Australian Taxation Office has provided a tax incentive,
in the form of a refundable tax offset of 43.5%, for eligible research and
development expenditure. Management has assessed its research and development
activities and expenditure and applied judgement in determining which expenses
are likely to be eligible under the scheme. For the period ended 30 June 2022
the Group has recorded other income of £1,719,000 (2021: £1,210,000) based
on expected tax refunds to be received from the government (recognised under
Other receivables at 30 June 2022).
- Recognition of a deferred tax asset
The Group has incurred tax losses in both Australia and the UK in each of the
periods reported in these financial statements. No deferred tax asset has been
recognised in respect of these losses, as the Directors believe that there is
not sufficient certainty over future profits that would utilise them.
Key sources of estimation uncertainty
- Estimation of useful lives of property, plant and equipment and
intangible assets
The Group determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life of
intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation
charge will increase where the useful lives are less than previously estimated
lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
Patents are recognised at cost. Management believes this is the best estimate
at the current time, during the research and development phase. The key
assumption for amortisation is the useful life which is determined by the life
of the patent (grant to expiration date - usually 15-20 years). The Directors
do not believe that a future change in the useful life of patents is probable
in the foreseeable future.
Trademarks are recognised at cost. Management believes this is the best
estimate at the current time. The key assumption for trademarks is they have
an infinite life as they do not have an expiration date.
- Impairment of patents and trademarks
The Group assesses impairment of patents and trademarks at each reporting date
by evaluating conditions specific to the Group and to the particular asset
that may lead to impairment. If an impairment trigger exists, the recoverable
amount of the asset is determined. To date the only impairments recognised
have been due to patent costs capitalised in respect of patent applications
that have subsequently lapsed or been rejected. In these instances the Group
fully impairs the carrying amount of patent at that date.
- Derecognition of intangible assets (patents and trademarks)
An intangible asset is derecognised on disposal, or when no future economic
benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in
profit or loss when the asset is derecognised.
- Recognition of equity-settled share-based payments
The cost of equity-settled share-based payment transactions with employees is
measured by reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined using a Black-Scholes
model. The Group applies a straight-line vesting approach, whereby the
instruments are split into tranches according to the vesting conditions
applied. Please refer to note 20 for the key assumptions and inputs used in
the model to determine the fair values at each measurement date.
2.21 Standards, amendments and interpretations to existing
standards that are effective for the first time in the financial year
During the year ended 30 June 2022, Gelion has adopted the following new IFRSs
(including amendments thereto) and IFRIC interpretations that became effective
for the first time.
Standard Effective date, annual period beginning on or after
Amendments to IFRS 4, IFRS 9, IFRS 16, IAS 39 and IFRS 7 - 1 July 2021
Interest Rate Benchmark Reform
IFRS 16 Leases: Covid-19-Related 1 April 2021
Rent Concessions beyond 30 June 2021
Their adoption has not had any material impact on the disclosures or amounts
reported in the financial information.
Standards issued but 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.
Standard Effective date, annual period beginning on or after
Annual Improvements to IFRSs - 1 January 2022
2018-2020 cycle
IAS 16 Property, Plant and Equipment 1 January 2022
(Amendment - Proceeds before Intended Use)
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1 January 2022
(Amendment - Onerous Contracts - Cost of Fulfilling a Contract)
IFRS 3 Business Combinations 1 January 2022
(Amendment - Reference to the Conceptual Framework)
All of the above standards issued but not yet effective have been endorsed by
the UK Endorsement Board.
The Directors are evaluating the impact that these standards will have on the
financial information of Gelion.
3. Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board as a whole.
In the opinion of the Directors, during each of the three-years ended 30 June,
Gelion operated in the single business segment of battery production and
development.
UK Australia 30 June 2022 UK Australia 30 June 2021
£'000 £'000
Non-current assets
Intangible assets - 362 362 - 313 313
Property, plant and equipment - 1,050 1,050 - 553 553
Total income
Revenue from contracts with customers - - - - 351 351
Other income 26 1,719 1,745 - 1,280 1,280
Depreciation and amortisation - (308) (308) - (261) (261)
Finance income (interest) - 2 2 - 8 8
Operating loss
Operating loss (574) (8,513) (9,087) (63) (1,735) (1,798)
4. Revenue
2022 2021
£'000
£'000
Revenue from contracts with customers - 351
5. Other Income
2022 2021
£'000
£'000
R&D tax concessions 1,719 1,210
Recovery of VAT 26 -
Government grants - 70
1,745 1,280
The subsidiary incurs R&D expenditure which qualifies for relief under a
tax incentive scheme provided by the Australian Taxation Office. Management
estimates the expenditure each year relevant to approved R&D activities in
respect of which a claim can be made at each reporting date. The accounting
policy in respect of recognition of this income is detailed in note 2.6 and
the key accounting judgements applied are detailed in note 2.20.
Government grants reported in the year to June 2021 relate to non-repeatable
COVID-19 stimulus funding from the Australian government.
6. Operating Loss Before Listing and Other Associated Items
Operating loss is stated after the following specific income and expenses:
Note 2022 2021
£'000
£'000
R&D tax concessions 5 1,719 1,210
Depreciation and amortisation 13, 14 (308) (261)
Employee benefits 11 (3,212) (1,621)
R&D expenses (1,391) (863)
Out of which:
External R&D services (669) (476)
R&D materials and consumables (681) (356)
Administration and other expenses (1,263) (692)
7. Listing and Other Associated Items
2022 2021
£'000
£'000
Non-recurring items - listing costs 411 -
Non-recurring items - share-based payments accelerated due to listing 3,853 -
Non-recurring items - key management bonus due to listing 394 -
Total non-recurring items - listing and other associated costs 4,658 -
Certain costs were incurred in the period relating to the Company converting
from a private to public limited company, its subsequent admission to AIM,
issuance and sale of shares and associated professional costs.
As set out in the Admission Document, 11,063,679 new Ordinary Shares were
issued and 2,068,966 existing shares were sold. The Company's conversion and
subsequent admission to AIM is a one-off event and therefore considered
'non-recurring'.
These listing and other associated costs include:
• transaction costs representing the expensed portion of the
listing costs;
• share-based payments which were accelerated due to listing.
Details are outlined in note 20; and
• key management bonuses representing a one off payment made to
senior management for successfully completing the Company's listing and
fundraising. This is not reflective of standard management incentive
arrangements and was fully contingent upon the successful admission of the
Company to AIM and subsequent fundraising.
For these reasons these costs are considered 'non-recurring' and separately
disclosed to assist the user of the financial information to understand and
compare the underlying results of the Company.
8. Auditors' Remuneration
2022 2021
£'000
£'000
Fees payable to the Company's auditors for the statutory audit of the 52 15
Company's annual financial statements
Fees payable to the Company's auditors and its associates for the audits of 24 11
the Company's subsidiaries
Non-audit services
Reporting accountant services 278 -
Taxation and other services 31 -
385 26
9. Taxation
2022 2021
£'000
£'000
The charge/credit for the year is made up as follows:
Corporation taxation on the results for the year - -
Taxation (charge)/credit for the year - -
Numerical reconciliation of income tax expense to accounting loss:
Profit/(loss) for the year before income tax (9,158) (1,797)
Prima facie tax benefit on loss from ordinary activities before income tax at (2,290) (467)
25% (2021: 26%)
Add/(less) tax effect of:
Non-deductible expenditure 2,200 1,046
Non-assessable income - (322)
R&D tax offsets (430) (315)
Tax losses incurred but not recognised 506 53
Difference in tax rates applied 14 5
Income tax expense - -
Non-deductible expenses includes share based payments and expenditure subject
to R&D tax incentive.
Estimated tax losses of £4,138,000 (2021: £1,929,000) are available for
relief against future profits. No deferred tax asset has been provided for in
the accounts based on the estimated tax losses. The estimated tax losses per
jurisdiction is as follows and don't have an expiry date in each of these
jurisdictions:
2022 2021
£'000 £'000
Estimated tax losses arising in the UK 793 437
Estimated tax losses arising in Australia 3,345 1,492
Total tax losses available to carry forward 4,138 1,929
The standard rate of corporation tax in Australia, where the subsidiary is
based, is 25% (2021: 26%).
As per note 2.7, deferred tax assets have not been recognised on the basis the
Company is not forecasted to make a profit for the foreseeable future.
10. Exchange Gains and Losses Arising on Translation of Foreign Operations
Gelion Technologies Pty Limited, a battery manufacturing business incorporated
in Australia, was merged into Gelion UK Limited in 2016 so as to maximise
operational synergies and generate further cost savings.
A gain or loss through other comprehensive income arises on translation of the
subsidiary's assets and liabilities from Australian Dollars to Great British
Pounds at each year end.
11. Employee Benefit Expenses and Numbers
Employee benefit expenses (including Directors) comprise:
2022 2021
£'000
£'000
Recurring costs:
Salaries and wages including taxes 2,957 1,429
Defined contribution pension cost 206 117
Share-based payment expense - recurring 49 75
Total employee benefits expense (note 6) - recurring 3,212 1,621
Non-recurring costs:
Salaries and wages including taxes 394 -
Defined contribution pension cost - -
Share-based payment expense 3,853 -
Total employee benefits expense (note 7) - non-recurring 4,247 -
Refer to note 20 for details of classification of share-based payments expense
between recurring and non-recurring costs.
2022 2021
number
number
R&D 26 15
Administration 11 4
Average number of employees 37 19
Key management personnel
Directors and key management personnel compensation
The total remuneration paid (including bonus accruals) to the Directors and
key management personnel of the Group during the year are as follows:
2022 2021
£'000
£'000
Recurring costs:
Salaries and wages including taxes 1,059 434
Defined contribution pension cost 48 33
Share-based payment expense 10 2
Total key management personnel costs - recurring 1,117 469
Non-recurring costs:
Salaries and wages including taxes 394 -
Defined contribution pension cost - -
Share-based payment expense 3,378 -
Total key management personnel costs - non-recurring 3,772 -
Total key management personnel costs 4,889 469
The Directors and senior management represent key management personnel.
Further details of Directors' remunerations are given in the Directors'
Remuneration Report. The highest paid Director during the year received total
remuneration (recurring and non-recurring) of £584,900 (2021: £94,153).
Refer to note 20 for details of classification of share-based payments expense
between recurring and non-recurring costs.
12. Loss Per Share
2022 2021
Loss after tax £9,157,000 £1,798,000
Weighted average number of shares (number) 99,888,579 89,883,920
Loss per share (pence) 9.2p 2.0p
The calculation of the loss per share is based on the loss for the financial
period after taxation of £9,157,000 (2021: £1,798,000) and on the weighted
average of 99,888,579 (2021: 89,883,920) Ordinary Shares in issue during the
period.
In September 2021, the parent company carried out a bonus issue and share
reorganisation with the aggregate effect of increasing the number of shares in
issue by 85,389,724. This increase in the number of Ordinary Shares has been
applied retrospectively to the prior period presented in these financial
statements by increasing the weighted average number of shares in the year to
June 2021 by 85,389,724.
There were 7,554,360 share options outstanding at 30 June 2022 (2021:
5,100,000). The impact of these options would be to reduce the diluted loss
per share and therefore they are antidilutive. Hence, the diluted loss per
share reported for the periods under review is the same as the earnings per
share.
13. Intangible Assets
Patents Trademarks Total
£'000 £'000 £'000
At 30 June 2020 300 18 318
Cost
Additions 100 - 100
Disposals (55) - (55)
Difference on foreign exchange (11) 1 (10)
At 30 June 2021 334 19 353
Additions 39 9 48
Disposals - - -
Difference on foreign exchange 14 1 15
At 30 June 2022 387 29 416
Amortisation
At 30 June 2020
Amortisation 41 - 41
Difference on foreign exchange (1) - (1)
At 30 June 2021 40 - 40
Amortisation 12 - 12
Difference on foreign exchange 2 - 2
At 30 June 2022 54 - 54
Carrying amount
At 30 June 2021 294 19 313
At 30 June 2022 333 29 362
The Company is party to an agreement whereby it licences intellectual property
in respect of an experimental mobile additive technology from a third party.
Upon achieving certain financial performance measures in respect of this
technology, the Company is due to pay a milestone fee by issuing Ordinary
Shares. At this stage, it is uncertain if this financial performance will be
achieved.
14. Property, Plant and Equipment
Office furniture and equipment Plant and equipment Right-of-use assets Leasehold improvements Total
£'000 £'000 £'000 £'000 £'000
Cost
At 30 June 2020 30 303 298 - 631
Additions 10 227 52 51 340
Difference on foreign exchange (2) (13) (9) (1) (25)
At 30 June 2021 38 517 341 50 946
Additions 34 649 54 50 787
Disposals - (11) - - (11)
Difference on foreign exchange 3 22 15 2 42
At 30 June 2022 75 1,177 410 102 1,764
Depreciation
At 30 June 2020 22 59 102 - 183
Charge for the year 8 67 120 25 220
Difference on foreign exchange (2) (3) (5) 0 (10)
At 30 June 2021 28 123 217 25 393
Charge for the year 11 131 124 30 296
Accumulated depreciation on disposal - (3) - - (3)
Difference on foreign exchange 1 10 15 2 28
At 30 June 2022 40 261 356 57 714
Carrying amount
At 30 June 2021 10 394 124 25 553
At 30 June 2022 35 916 54 45 1,050
15. Leases
The Group has lease contracts in respect of leasehold property used in its
operations. These leases have lease terms of between two and three years.
There is no leasehold property recognised by the Group in the two years ended
30 June presented in these financial statements other than those recognised as
right-of-use assets. Therefore, for the carrying amount of right-of-use assets
at each reporting date and movements in each year ended refer to note 14.
Set out below are the carrying amounts of lease liabilities (included under
trade and other payables) and the movements during each year ended 30 June:
2022 2021
£'000
£'000
Balance as at 1 July 122 200
Additions 54 52
Interest 4 8
Payments (130) (134)
Difference on foreign exchange 6 (4)
Balance as at 30 June 56 122
The maturity analysis of lease liabilities is disclosed in note 21.
The following are the amounts recognised in profit or loss:
2022 2021
£'000
£'000
Depreciation expense of right-of-use assets 124 120
Interest expense on lease liabilities 4 8
Total amount recognised in profit or loss 128 128
16. Cash and Cash Equivalents
2022 2021
£'000
£'000
Cash at bank 16,024 1,913
16,024 1,913
Cash at bank comprises balances held by Gelion Plc and Gelion Technologies Pty
Limited current bank accounts. Cash deposits greater than three months are
recorded within short-term investments as per note 17. The carrying value of
these approximates to their fair value. See note 21 for further discussion of
these balances.
17. Short-term Investments and Other Receivables
2022 2021
£'000
£'000
Short-term investments:
Term deposits 1,017 -
Total short-term investments 1,017 -
Other receivables:
Government grants receivable 1,784 1,183
Prepayments 187 25
Other debtors 182 42
Total other receivables 2,153 1,250
Term deposits comprise cash deposits held by UK licensed banks for a period of
greater than three months, over which there is no recall during the term of
the deposit. The amounts are measured at amortised cost using the effective
interest method in line with IFRS 9.
Government grants receivable are made up of R&D tax concessions granted by
the Australian Taxation Office in the form of tax offsets. Also, Gelion
received 'cash boosts' for COVID-19 from the Australian Taxation Office and
payroll tax rebate income. The key judgements applied in the recognition of
this receivable are detailed in note 2.20.
The Directors consider that the carrying value of short-term investments and
other receivables approximates to their fair value.
18. Trade and Other Payables
Due within one year
2022 2021
£'000
£'000
Trade payables 312 179
Accruals 360 66
Employee liabilities including employment taxes 157 75
Lease liabilities 25 115
854 435
Due in more than one year
2022 2021
£'000
£'000
Lease liabilities 31 7
31 7
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and continuing costs. The Directors consider that the carrying value
amount of trade and other payables approximates to their fair value. Please
refer to note 21 for further details.
19. Issued Capital and Reserves
Share capital and premium
Number of shares Share
on issue
capital Share
premium
£'000 £'000
Balance as at 1 July 2020 4,494,196 33 11,251
Shares issued during the period - - -
Balance as at 30 June 2021 a 4,494,196 33 11,251
Bonus issues and reorganisation b 85,389,724 57 (57)
Capital reduction c - - (11,195)
Shares issued during the period d 11,063,679 11 16,032
Loan notes converted to equity e 5,516,240 6 5,993
Cost of shares issued f - - (1,541)
Exercise of share options 671,000 - 178
Balance as at 30 June 2022 107,134,839 107 20,662
a) Gelion had two classes of share at 1 July 2021 - A Ordinary and B Ordinary
which ranked pari passu.
At 30 June 2021 there were 3,335,196 A Ordinary Shares of £0.01 each.
At 30 June 2021 there were 1,159,000 B Ordinary Shares of £0.0000086 each.
b) On 2 September 2021, the Company consolidated the 1,159,000 B Ordinary
Shares of £0.0000086 each into 1,000 B Ordinary Shares of £0.01 each, on the
basis of one B Ordinary Share of £0.01 for every 1,159 B Ordinary Shares of
£0.0000086 held on the record date (the 'B Share Consolidation').
On 2 September 2021, following the B Share Consolidation, the Company issued
1,158,000 new B Ordinary Shares of £0.01 each by way of a bonus issue to the
holders of such shares on the basis of 1,158 B Ordinary Shares for each one B
Ordinary Share held on the record date (the 'First Bonus Issue').
On 3 September 2021, following completion of the First Bonus Issue, the
Company issued 3,335,196 A Ordinary Shares of £0.01 each and 1,159,000 B
Ordinary Shares of £0.01 each pursuant to a bonus issue of such shareholders
on the basis of one A Ordinary Share for each A Ordinary Share held and one B
Ordinary Share for each B Ordinary Share held, in each case on the record date
(the 'Second Bonus Issue').
c) Immediately following the Second Bonus Issue, a capital reduction was
undertaken and the balance standing to the credit of the share premium account
was cancelled and the amount so cancelled was credited to a distributable
reserve.
On 12 November 2021, the A Ordinary Shares of £0.01 each in the capital of
the Company and the B Ordinary Shares of £0.01 each in the capital of the
Company then in issue were redesignated as Ordinary Shares of £0.01 each in
the capital of the Company carrying the rights and subject to the restrictions
attaching to the Ordinary Shares of the Company as set out in the Articles
(the 'Re-designation')
On 13 November 2021, the Company sub-divided each Ordinary Share of £0.01
each arising from the Re-designation into ten new Ordinary Shares of £0.001
each.
d) Immediately prior to admission to AIM the Company had 89,883,920 shares in
issue. 11,063,679 new Ordinary Shares of £0.001 each were issued in the
fundraising following admission to AIM.
e) On 30 November 2021, a convertible debt instrument was fully converted into
5,516,240 Ordinary Shares of £0.001 each.
f) Transaction costs incurred in the issuing of shares in the period ended 30
June 2022 of £2,346,000 (2021: £nil) of which £1,541,000 have been offset
against share premium and £805,000 have been expensed.
Nature and purpose of other reserves
Other reserves
- Share-based payments reserve
The share-based payments reserve is used to recognise the value of
equity-settled share-based payments provided to employees, including key
management personnel, as part of their remuneration. Refer to note 20 for
further details of these plans.
- Foreign currency translation reserve
The subsidiary's functional currency is AUD and therefore on consolidation a
foreign exchange gain or loss on translation of net assets is recognised
through other comprehensive income at each reporting date. These gains or
losses are accumulated in a foreign currency translation reserve.
- Capital reduction reserve
Immediately following the Second Bonus Issue, the balance standing to the
credit of the share premium account was cancelled and the amount so cancelled
was credited to a distributable reserve called the 'capital reduction
reserve'.
Other non-distributable reserves:
Share-based payment reserve Foreign currency translation reserve Total other reserves
£'000 £'000 £'000
Balance at 1 July 2020 817 (94) 723
Foreign currency translation reserve movement - (107) (107)
Share-based payment charge 75 - 75
Balance at 30 June 2021 892 (201) 691
Balance at 1 July 2021 892 (201) 691
Foreign currency translation reserve movement - 713 713
Share-based payment charge 3,902 - 3,902
Exercise of options (158) - (158)
Balance at 30 June 2022 4,636 512 5,148
20. Share-Based Payments
The Directors recognise the role of the Group's staff in contributing to its
overall success and the importance of the Group's ability to incentivise and
motivate its employees. Therefore, the Directors believe that certain
employees should be given the opportunity to participate and take a financial
interest in the success of the Company.
The Group therefore operated a share option plan whereby employees and key
service providers were granted options over shares in Gelion UK Limited. Due
to the Company's admission to trading on AIM which took place on 30 November
2021 all unvested options were vested triggering an accelerated share-based
payment expense.
In addition to the existing share option plan the Group agreed to grant
options over Ordinary Shares pursuant to obligations under the service
agreements with the relevant individuals. These service agreement obligations
were triggered by admission to trading on AIM. The service condition is to be
employed with a company in the Group at vesting.
In the year to 30 June 2022, 3,600,000 options were granted of which 3,290,000
were pursuant to obligations under the service agreements with the relevant
individuals.
All options were granted with the exercise price equalling the market value of
the shares at the time of grant.
Both the acceleration of option vesting and additional options granted
pursuant to service agreement obligations are triggered by the Company's
admission to AIM and therefore can be considered as part of the same
non-recurring event.
To incentivise and motivate the Group's executives and employees, the Board
introduced a new bonus and share-based incentive scheme applicable for the
year ending 30 June 2023 (FY23). They are designed to motivate and incentivise
key talent to assist the Group in achieving its strategic aims whilst
remaining consistent with its tolerance for risk, all set within delegated
limits set out during the recent IPO.
2022 2021
£'000
£'000
Recurring share-based payment expense recognised 49 75
Non-recurring share-based payment expense recognised 3,853 -
Total share-based payment expense 3,902 75
The below tables have been prepared after revising original share option
numbers and values to account for the share reorganisation and subsequent
share option modifications that took place in September 2021. These
modifications to the share options were made so that there was no impact upon
share option scheme fair value. A comparison of the previously reported share
options and the equivalent values following the share reorganisation is shown
below.
Absolute value previously reported Equivalent values following share reorganisation and option scheme
modifications
2021 2021 2021 2021
Number previously reported Weighted average exercise price Number Weighted average exercise price
'000s £ '000s £
Outstanding at 1 July 254 5.09 5,080 0.25
Granted 14 6.63 280 0.33
Forfeited (13) 5.45 (260) 0.27
Exercised - - - -
Expired - - - -
Outstanding at 30 June 255 5.15 5,100 0.26
Exercisable at 30 June 239 5.06 4,780 0.25
2022 2022 2021 2021
Number Weighted average exercise price Number Weighted average exercise price
'000s £ '000s £
Outstanding at 1 July 5,100 0.26 5,080 0.25
Granted 3,600 0.39 280 0.33
Forfeited (466) 0.33 (260) 0.27
Exercised (671) 0.25 - -
Expired - - - -
Outstanding at 30 June 7,563 0.32 5,100 0.26
Exercisable at 30 June 7,402 0.34 4,780 0.25
The range of exercise prices for options outstanding at the end of the year
was £0.22 to £1.45 (2021: £0.22 to £0.33).
The weighted average remaining contractual life for the share options
outstanding as at 30 June 2022 was 0.92 years (2021: 1.97 years).
Of the total number of options outstanding at 30 June 2022, 7,402,000 (2021:
4,780,000) had vested and were exercisable. The remaining options will vest
over the 18 months following the Company's admission to AIM subject to
employees' continued service.
The weighted average fair value of the options granted in the year was £1.23
(2021: £0.25).
The Black-Scholes option pricing model was used to value the share-based
payment awards granted in the year as it was considered that this approach
would result in materially accurate estimate of the fair value of options
granted. The following table lists the inputs to the models used for share
option plans:
2022 2021
Weighted average fair values at the measurement date £1.23 £0.25
Weighted average share price £1.45 £0.33
Dividend yield (%) - -
Expected volatility (%) 62.8 100
Risk-free interest rate (%) 1.3 2.2
Expected life of share options (years) 10 5
The Company has revised its estimation of the risk-free interest rate and
expected volatility in the period to reflect changing market circumstances and
revised volatility to benchmark with the historic volatilities of comparable
entities listed on AIM.
In the year ended 30 June 2022 3,600,000 options (2021: 275,000) were granted
at an exercise price of £0.39 (2021: £0.33). The total share-based payment
expense for the year was £3,902,000 (2021: £75,000).
21. Financial Instruments and Risk Management
Capital risk management
The Group manages its capital to ensure it will be able to continue as a going
concern while maximising the return to stakeholders. The overall strategy of
the Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, and retained earnings
as disclosed in the Consolidated Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are credit, currency and liquidity risks. The
management of these risks is vested to the Board of Directors.
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 and arises principally from the Group's receivables from
customers. Indicators that there is no reasonable expectation of recovery
include, amongst others, failure to make contractual payments for a period of
greater than 120 days past due. There were no receivables from customers as at
end of June 2022.
The carrying amount of financial assets represents the maximum credit
exposure.
The principal financial assets of the Group are bank balances including
short-term deposits. The Group deposits surplus liquid funds with counterparty
banks that have high credit ratings and the Directors consider the credit risk
to be minimal.
The Group's maximum exposure to credit by class of individual financial
instrument is shown in the table below:
2022 2022 2021 2021
Carrying value
Maximum exposure
Carrying value
Maximum exposure
£'000 £'000 £'000 £'000
Cash and cash equivalents 16,024 16,024 1,913 1,913
Short-term deposits - term deposits 1,017 1,017 - -
17,041 17,041 1,913 1,913
2022 2022 2022 2021 2021 2021
Rating
Cash at bank
Term deposits
Rating
Cash at bank
Short-term deposits
£'000 £'000 £'000 £'000
Royal Bank of Scotland A+ 6,899 1,017 A+ 123 -
Commonwealth Bank of Australia A+ 9,125 - A+ 1,790 -
16,024 1,017 1,913 -
The Group monitors the credit ratings of counterparties regularly and at the
reporting date does not expect any losses from non-performance by the
counterparties. For all financial assets to which the impairment requirements
have not been applied, the carrying amount represents the maximum exposure to
credit loss.
Currency risk
The Group operates in a global market with income and costs possibly arising
in a number of currencies (USD, EUR) and is exposed to foreign currency risk
arising from commercial transactions, acquiring fixed assets and raw
materials, as well as translation of net investment in foreign subsidiaries.
Exposure to commercial transactions arise from sales or purchases by operating
companies in currencies other than the companies' functional currency.
Currency exposures are reviewed regularly. The Group has signed an agreement
with financial institution post end of FY22, to set forward exchange rate
contracts to provide certainty in terms of cash flow forecasts.
The Group has a limited level of exposure to foreign exchange risk through
their foreign currency denominated cash balances and a portion of the Group's
costs being incurred in Australian Dollar. Accordingly, movements in the Great
British Pounds exchange rate against these currencies could have a detrimental
effect on the Group's results primarily for reporting purposes.
Currency risk is managed by maintaining some cash deposits in currencies other
than Great British Pounds, particularly those currencies where future
expenditure is forecast. The table below shows the currency profiles of cash
and cash equivalents:
2022 2021
£'000
£'000
Cash, cash equivalents and term deposits
Great British Pounds 2,471 123
Australian Dollars 14,570 1,790
17,041 1,913
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow
budgets and forecasts to ensure that sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably. The Group
deems there is sufficient liquidity for the foreseeable future.
The Group had cash and cash equivalents at period end as below:
2022 2021
£'000
£'000
Cash and cash equivalents 16,024 1,913
16,024 1,193
The table below sets out the maturity profile of the Group's financial
liabilities at each year end:
Year ended 30 June 2022
Due in less than one month Due between one and three months Due between three months and one year Due between one year and five years Total
£'000 £'000 £'000 £'000 £'000
Trade and other payables 829 - - - 829
Lease liabilities 4 10 11 31 56
833 10 11 31 885
Year ended 30 June 2021
Due in less than one month Due between one and three months Due between three months and one year Due between one year and five years Total
£'000 £'000 £'000 £'000 £'000
Trade and other payables 320 - - - 320
Lease liabilities 10 21 84 7 122
330 21 84 7 442
22. Capital Commitments
There were no capital commitments as at 30 June 2022 and 30 June 2021.
23. Related Party Transactions
Other than the remuneration to key management personnel outlined in note 11 of
these financial statements, there are the following related party
transactions:
Management fees of £89,089 (2021: £146,850) and arrangement fees of £39,821
(2021: nil) were paid to Armstrong Energy Limited, a company with a common
director (Steve Mahon).
Arrangement fees, representing fees paid to related parties for raising
capital pre-IPO and the IPO, of £79,643 (2021: nil), were paid to Progressive
Strategic Solutions LLP, a limited liability partnership with a common
director (Robin Chamberlayne) for part of the year.
Management and R&D service fees of £104,848 (2021: £107,395) were paid
to Perinato Pty. Ltd, a company with a common director (Prof Thomas
Maschmeyer).
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the
Group, is set out in aggregate in note 11 for each of the categories specified
in IAS 24.
24. Events Subsequent to Year End
Post 30 June 2022, 1,026,515 Ordinary Shares of 0.1 pence were issued in the
Company to Andrew Grimes, ex-CEO of the Company in exchange for Andrew Grimes
relinquishing 1,830,000 options over Ordinary Shares that had vested in
accordance with the disclosures made at the time of the Company's IPO.
25. Control
In the opinion of the Directors there is no single ultimate controlling
party.
Parent Company Balance Sheet
Notes 30 June 2022 30 June 2021
£'000 £'000
Assets
Non-current assets
Investment in subsidiary 4 28,233 11,424
Current assets
Cash and cash equivalents 6,899 123
Other receivables 5 1,145 110
Total assets 36,277 11,657
Liabilities
Current liabilities
Trade and other payables 6 616 15
Total liabilities 616 15
Net assets 35,661 11,642
Equity
Issued capital 7 107 33
Share premium account 7 20,662 11,251
Share-based payment reserve 7 4,635 892
Capital reduction reserve 7 11,194 -
Accumulated losses (937) (534)
Total equity 35,661 11,642
As permitted by Section 408 of the Companies Act 2006, no income statement or
statement of comprehensive income is presented for the Company.
The financial statements of Gelion Plc, company registration number 09796512,
were approved by the Directors and authorised for issue on 8 November 2022.
Parent Company Statement of Changes in Equity
Share Share premium Accumulated Losses Capital reduction reserve Share-based payment reserve Total
capital
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2020 33 11,251 (472) - 892 11,704
Total comprehensive loss for the period - - (62) - - (62)
Contributions by and distributions to owners:
Share-based payments charge - - - - - -
Total contributions by and distributions to owners: - - - - - -
Balance at 30 June 2021 33 11,251 (534) - 892 11,642
Balance at 1 July 2021 33 11,251 (534) - 892 11,642
Total comprehensive loss for the period - - (561) - - (561)
Contributions by and distributions to owners:
Bonus issue 57 (57) - - - -
Capital reduction - (11,194) - 11,194 - -
Share-based payment charge - - - - 3,902 3,902
Shares issued during the period 11 16,032 - - - 16,043
Shares issued during the period through a convertible loan 6 5,993 - - - 5,999
Costs of shares issued - (1,541) - - - (1,541)
Exercise of share options - 178 158 - (158) 178
Total contributions by and distributions to owners: 74 9,411 158 11,194 3,744 24,581
Balance at 30 June 2022 107 20,662 (937) 11,194 4,635 35,661
1. General Information
Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian
subsidiary that conducts research and development in respect of an innovative
battery system and associated industrial design and manufacturing.
Gelion is a public limited company, limited by shares, incorporated and
domiciled in England and Wales. The Company was incorporated on 26 September
2015. The registered office of the Company is at 3rd Floor, 141-145 Curtain
Road, London, EC2A 3BX. The registered company number is 09796512.
Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company
was re-registered as a public limited company under the Companies Act and its
name was changed to Gelion plc.
The Board, Directors and management referred to in this document refers to the
Board, Directors and management of Gelion.
2. Accounting Policies
2.1. Basis of preparation
These separate financial statements have been prepared in accordance with
Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101).
The financial statements have been prepared under the historical cost
convention and in accordance with the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires
the use of certain critical accounting estimates. It also requires Group
management to exercise judgement in applying the Group's accounting policies.
The areas where significant judgements and estimates have been made in
preparing the financial statements and their effect are disclosed in note 2.20
of the consolidated financial statements.
The parent company previously prepared statutory accounts under Section 1A of
FRS 102. The Directors considered that the Statement of Financial Position at
that date would be the same if prepared under previous GAAP as prepared under
FRS 101 and that transition to FRS 101 does not require adjustment to any of
the figures stated in the Statement of Comprehensive Income. On this basis a
full reconciliation of Company equity at the transition date was not prepared.
The following exemptions from the requirements of IFRS have been applied in
the preparation of these financial statements, in accordance with FRS 101:
• Paragraphs 45(b) and 46 to 52 of IFRS 2 - Share Based Payment
• IFRS 7 - Financial Instruments (Disclosures)
• Paragraphs 91 to 99 of IFRS 13 - Fair Value Measurement
• The following paragraphs of IAS 1 - Presentation of Financial
Statements
· 10(d) - Statement of cash flows
· 16 - Statement of compliance with all IFRS
· 38A - Requirement for minimum of two primary statements,
including cash flow statements
· 38B-D - Additional comparative information
· 111 - Statement of cash flows information
· 134-136 - Capital management disclosures
• IAS 7 - Statement of cash flows
• Paragraph 17 of IAS 24 - Related party disclosures relating to
key management personnel
• The requirement of IAS 24 - Related party transactions relating
to transactions between group members
These financial statements are presented in Great British Pounds (GBP) unless
otherwise stated, which is the Company's presentational and functional
currency. Amounts are rounded to the nearest thousand, unless otherwise
stated.
2.2. Significant accounting policies
The accounting policies of the Company are the same as those of the Group
which are set out in the relevant Notes to the Consolidated Financial
Statements, except that it has no policy in respect of consolidation and
investments in subsidiaries are carried at historical cost, less any
provisions for impairment.
2.3. Critical judgements and key sources of estimation uncertainty
As noted in note 2.20 to the consolidated financial statements the preparation
of the financial statements requires management to make estimates and
assumptions that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities. Company specific
critical judgements are as follows:
- Impairment of investments in subsidiaries.
The Company is making a significant investment into Gelion Technologies Pty to
assist with the development and deployment of its technologies. The Directors
have considered the long-term expectation of positive future cash flows once
the development stage is complete and have not impaired the carrying amount of
the investment and is carried on the balance sheet at cost.
2.4. Share-based payments
The Group provides benefits to its employees in the form of share-based
payments, whereby employees render services in exchange for shares or rights
over shares (equity-settled transactions) in the parent entity as per note
2.16 of the consolidated financial statements. The only difference to that
policy is that the costs relating to share-based payments is capitalised in
the parent as part of the investment in the Group's subsidiary.
Share-based payments deemed non-recurring
The Group operated a share option plan whereby employees and key service
providers were granted options over shares in Gelion UK Limited. Due to the
Company's admission to trading on AIM which took place on 30 November 2021 all
unvested options were vested triggering an accelerated share-based payment
expense.
In addition to the existing share option plan the Group agreed to grant
options over Ordinary Shares pursuant to obligations under the service
agreements with the relevant individuals. These service agreement obligations
were triggered by admission to trading on AIM.
Both the acceleration of option vesting and additional options granted
pursuant to service agreement obligations are triggered by the Company's
admission to AIM and therefore can be considered as part of the same
non-recurring event.
3. Profit for the Year
The Company recorded a loss for the financial year ended 30 June 2022 of
£560,000 (2021: £63,000). The auditors' remuneration for audit and other
services is disclosed in note 8 to the consolidated financial statements.
4. Investment in Subsidiary
The following was a subsidiary undertaking of the Group:
Name Registered office Class of shares Holding
Gelion Technologies Pty Limited Australia Ordinary A 100%
The shareholding is held directly.
The registered office of Gelion Technologies Pty Limited is Level 16, 101
Miller Street, North Sydney, NSW 2060.
2022 2021
£'000
£'000
Balance as at 1 July 11,424 11,376
Additions - equity subscription 12,907 -
Additions - share-based payment charge 3,902 48
Balance as at 30 June 28,233 11,424
Share-based payment charges capitalised relate to the share-based payment
charges incurred by the parent company for options granted by the parent to
the employees of the subsidiary.
5. Trade and Other Receivables
2022 2021
£'000
£'000
Short term deposits 1,017 -
Prepayments 63 -
Other debtors 65 -
Amounts owed by group undertaking - 110
1,145 110
6. Trade and Other Payables
Due within one year
2022 2021
£'000
£'000
Trade payables 19 2
Amounts owed to Group companies 342 -
Accruals 255 13
616 15
7. Share Capital
Details of the Company's share capital are as set out in note 19 to the
consolidated financial statements.
Details of the Company's share premium account and other reserves are as set
out in note 19 to the consolidated financial statements.
Details of the movements in retained earnings are set out in the parent
company Statement of Changes in Equity.
8. Related Party Transactions
2022 2021
£'000
£'000
Management fees 89,089 146,850
Arrangement fees 119,464 -
208,553 146,850
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EADFPESXAFAARecent news on Gelion
See all newsREG - Gelion PLC - Director/PDMR Shareholding - Grant of Options
AnnouncementREG - Gelion PLC - Notice of Presentation
AnnouncementREG - Gelion PLC - Result of Retail Offer
AnnouncementREG - Gelion PLC - Execution of Materials Testing Agreement
AnnouncementREG - Gelion PLC - Result of Placing and Subscription
Announcement