REG - Hydrogen Utopia Intl - Final Results
28/04/2023 14:45
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RNS Number : 9250X Hydrogen Utopia International PLC 28 April 2023
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28 April 2023
Hydrogen Utopia International PLC
(the "Company" or "HUI")
Final Results for the period ended 31 December 2022
Hydrogen Utopia International PLC, a company specialising in turning
non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels,
new materials or distributed renewable heat, is pleased to announce its
results for the period ended 31 December 2022.
HIGHLIGHTS OF 2022
Business Development:
• Admission to trading on the standard segment of the Official List of the
Financial Conduct Authority and to trading on the main market of the London
Stock Exchange finalised - trading became effective on 9 January 2023
• Agreement of an option for a long lease of a greenfield site in Longford,
Ireland which is expected to become HUI's first operational full-scale waste
plastic to hydrogen facility in Europe
• Further development of project pipeline in Poland
• Partnership with Powerhouse Energy Group PLC (AIM: PHE) in Konin, Poland and
in Longford, Ireland - our two flagship projects - to increase the pace of our
progress
Organisation and Growth:
• Recruitment and appointment of Howard White as an additional Director to the
Board
• James Nicholls-May recruited as full-time CFO
• Duncan Snelling engaged as an Engineering Consultant
Financial Highlights:
• Net assets at period end of £3.355 million, including just under £2.9
million of cash after payment of or provision for the full costs of the main
market listing
• In line with expectations, as HUI's business is still developing, the group
did not generate any revenue for the reporting period and the loss amounted to
£1.492 million after a £272k share based payments charge in relation to
share options for Directors, employees and consultants
• Borrowings of £570,175 comprise a convertible loan provided by a significant
shareholder, the final repayment or conversion date of which is 31 December
2025
• Positive cash outflow from operating activities of £281,625 after a very
significant working capital credit in relation to shares issued in the
fundraising undertaken in connection with the Company's January 2022 IPO
• Net increase in cash for the period of close to £300,000 after cash outflow
from investing activities of £555,452 and cash inflow from financing
activities, comprising the convertible loan mentioned above
Guy Peters, Executive Chairman of HUI commented:
"In the course of the last year we have moved our listing to the Main Market
of the London Stock Exchange, after initially conducting an IPO on AQSE,
against a backdrop of very challenging geopolitical and economic
circumstances. We have built our project pipeline further, agreed an option to
lease a site which is expected to become HUI's first operational full-scale
waste plastic to hydrogen facility in Europe and agreed partnerships for both
our flagship projects.
This moves us far closer to helping to tackle the worldwide plastic waste
issue and to accelerating a circular and net zero economy, recovering energy
from that waste and turning it into clean fuel. Without the help and support
of our shareholders none of that would have been possible and we would like to
thank them for all of their support."
Aleksandra Binkowska, Chief Executive Officer of HUI commented:
"We are progressing with our technology, and we are extending our project
pipeline at lightning speed under very difficult market conditions. We
continue to believe that our shareholders will reap the benefits of HUI's
investments in the future. It's our firm view that science never fails once
it's given enough time and patience to prove itself."
For more information about the Company, please refer to our website:
www.hydrogenutopia.eu (http://www.hydrogenutopia.eu)
For further information please contact:
Hydrogen Utopia International PLC
Aleksandra Binkowska/Guy Peters
+44 20 3811 8770
Alfred Henry Corporate Finance Limited (LSE Corporate Adviser)
Nick
Michaels
+44 20 7309 2203
Novum Securities Limited (Broker)
Jon Belliss/Colin
Rowbury
+44 20 7399 9400
Chairman's statement
Overview
This is the second set of Annual Report and Accounts for Hydrogen Utopia
International PLC ("HUI" or the "Company") and it covers the period
immediately prior to and following the Company's IPO on the AQSE Growth
Market, which took place on 6 January 2022. Post year end, on 9 January 2023,
the Company's ordinary shares were admitted to trading on the standard segment
of the Official List of the Financial Conduct Authority and to trading on the
main market of the London Stock Exchange.
HUI's primary mission is to accelerate the development of a circular and net
zero carbon economy in Europe and contribute to achieving the EU's 2030 and
2050 environmental goals for targeted European countries. HUI is pioneering
the use of technology using non-recyclable mixed waste plastic to produce
hydrogen and/or other alternative energy sources with significantly lower
carbon emissions than existing processes, with a view to achieving net zero
climate impact.
We believe that the Covid-19 pandemic has led to an increase in demand for
single-use plastics, intensifying an already out-of-control global waste
plastic problem. Vast quantities of plastic with a huge variety of industrial,
consumer and healthcare uses continue to be produced worldwide. We believe
that attempts to limit or substitute plastic use are unlikely to make any
significant difference to the quantities of waste plastic generated by our
society in the foreseeable future - plastics are too useful. It currently
appears impossible, impractical or uneconomic to recycle about 90% of
plastics, which therefore leads to landfilling or incineration of such
plastic. HUI's plants will provide an alternative use for that waste plastic
without the need for incineration or landfill.
Pressure is increasing on countries to deal with their own waste plastic: on
1st January 2021 the EU banned the shipment of non-recyclable mixed waste
plastic to countries outside the OECD and tightened controls on exports to
OECD countries and within Europe. Some poorer countries outside Europe, which
are growing in affluence, are also slowly restricting the import of unwanted
plastic.
During the unprecedented crisis caused by the Covid-19 pandemic, the EU
unleashed the largest funding package in its history: EUR 2.018 trillion which
is currently being allocated to regions across Europe most impacted by the
transition from fossil fuels to alternative energy sources. As a consequence
of the war in Ukraine, current sanctions against Russia, and an increasing
reluctance to place any significant dependence upon Russian gas and oil
supplies, Western, Central and Eastern European countries are moving even
faster to seek alternative sources of energy.
It is HUI's intention to become one of the leading new European companies
specialising in turning non-recyclable mixed waste plastic into carbon-free
fuels, new materials or distributed renewable heat. The pressing need to deal
with growing amounts of waste plastic, combined with a real momentum in demand
for and the use of hydrogen from renewable sources, pave the way for a rapid
deployment of and investment in HUI facilities.
HUI facilities are anticipated to have the flexibility to switch between
different outputs and their modularity and flexibility should enable HUI to
build bespoke units to satisfy local demand. HUI facilities will produce a
synthesis gas (syngas) that could be used as a fuel in its own right, as a gas
engine fuel to produce electrical power or to produce methane or hydrogen.
Heat produced as a by-product of the process can be sold and fed into district
heating systems, for example, which in Eastern Europe are used extensively.
HUI believes that building new HUI waste plastic to energy plants could be
significant in allowing local communities across Europe to ameliorate the
effects of the resultant gas and energy supply crisis and the anticipated
market changes brought about by ongoing sanctions against Russia and the
reluctance to rely upon it as an energy supplier in the future.
HUI's ambition is to create a substantial project pipeline of systems across
Europe, particularly where coal mining has to be phased out, where
unemployment is very high and where there is an urgent need to create new
employment opportunities to preserve local communities.
We are continuing our efforts to build a pipeline of HUI facilities in Europe,
with the intention of establishing a first plant as soon as practicable. The
CEO's report contains further details of progress to date in building this
pipeline.
Financial
The financial statements presented are those for the HUI group, including the
Company and its subsidiaries.
In line with expectations, the HUI group did not generate any revenue in the
reporting period. The total loss for the period amounted to £1,492,293, after
a charge for the period of £272,078 for share-based payments related to share
options granted to Directors, employees and consultants. The Group has not
recognised a deferred tax asset in respect of the losses incurred to date -
which should nevertheless be available to offset against profits in the
future.
Net assets at the period end amounted to £3.355 million. Cash assets and
receivables amounted to £2.99 million at that date. To the extent that
listing costs were not already paid at period end in relation to the Company's
listing on the main market of the London Stock Exchange on 9 January 2023,
full provision has been made for the costs of the listing. Borrowings of
£570,175 comprise a convertible loan provided by Conrad Griffiths, a
significant shareholder, which was interest free until the period end and
thereafter accrues interest at 5% per annum until converted into ordinary
shares at a price of 20p per ordinary share or until repaid. The loan was
provided in EUR, comprised a principal amount of EUR650,000 and the conversion
or repayment terms fix the exchange rate at €1.14 to £1. The final
repayment or conversion date is 31 December 2025.
Cashflow from operating activities was a positive inflow for the period of
£281,625 after a very significant working capital credit in relation to
shares issued in the fundraising undertaken in connection with the Company's
January 2022 IPO, as detailed in note 28 to the Accounts. Cash outflow from
investing activities amounted to some £555,452. Cash inflow in the year from
financing activities comprised the convertible loan mentioned above, giving
rise to a net increase in cash for the period of close to £300,000.
Climate Change
HUI is dedicated to helping to deliver climate change by creating a cleaner,
more sustainable future for our planet through utilising technology to replace
fossil fuels where possible.
Our vision is to accelerate a circular and net zero, clean economy through:
• tackling the worldwide plastic waste issue by utilising waste plastic that
is not recycled/cannot be recycled/cannot be recycled economically as a
feedstock for HUI facilities;
• deploying innovative clean technologies that recover energy from
non-recyclable plastics and turn it into clean fuel; and
• becoming the leader in monetising the conversion of non-recyclable plastic
waste into new products and energy.
G R Peters
Executive Chairman
28 April 2023
Chief Executive Officer's statement
Dear Shareholders,
As the Founder & the CEO of Hydrogen Utopia International I want to thank
you for your continuous support and belief in our world changing project. I am
proud to report that 2022 was a successful year in terms of the development of
our business and in securing new partners who are excited about helping to
deploy our ground-breaking technology to fix the plastic pollution problem.
Plastic pollution refers to the accumulation of plastic waste in the
environment, particularly in oceans, rivers, and landfills, and its negative
impacts on wildlife, ecosystems, and human health. Plastic pollution is a
global issue that has become increasingly prominent in recent years as the
production and consumption of single-use plastics have skyrocketed. The
problem of plastic pollution stems from the fact that plastic does not
biodegrade like organic materials. Instead, it breaks down into smaller and
smaller pieces called microplastics which can persist in the environment for
hundreds of years. Nano plastics are now found in the air we breathe, the
water we drink, and the food we eat, and they have been linked to a range of
health problems. Plastic pollution has a profound impact on wildlife and
ecosystems, as animals can become entangled in plastic waste or ingest it,
mistaking it for food. This can cause suffocation, strangulation, and
digestive problems, among other issues. Plastic pollution can also harm marine
ecosystems, as microplastics can enter the food chain, affecting the health of
fish and other aquatic animals. Addressing plastic pollution requires a
concerted effort from individuals, governments, and businesses such as ours.
Against a backdrop of challenging geopolitical and economic circumstances, we
must not forget about the bigger picture. Alarming abundance of waste plastic
and its deleterious impact upon us and our environment is a burning issue, as
is the increasing need for development of a hydrogen economy in order to phase
out fossil fuels. Our small, but extremely motivated team has been working
tirelessly to develop our waste plastic to hydrogen projects that will not
only benefit the environment but also local and national economies. In this
context, whilst we are working in immensely challenging times to implement
extremely ambitious projects, the words of Viktor Frankl - a famous Austrian
psychiatrist - come to mind:"For the world is in a bad state, but everything
will become still worse unless each of us does his best."
We began the year by joining the AQSE Growth Market and raising £3 million
gross for HUI through a successful subscription and placing by Novum
Securities at 7.5p per share. Subsequently, in order to attract investors
overseas, we entered the U.S. market through arranging for our shares to be
traded on the OTCQB Venture Market in the US, under the ticker HUIPF. We also
joined the Frankfurt and Stuttgart Stock Exchanges to facilitate trading for
EU investors. As we grew, we decided to move our principal listing from AQSE
to the main market of the London Stock Exchange and since 9th January 2023 we
are proud to be a part of one of the most prestigious stock exchanges in the
world.
On 20th February 2022 the world was thrown into turmoil when Russia invaded
Ukraine. As a Polish citizen, I witnessed millions of Ukrainians crossing the
Polish Border in search of asylum. The war in Ukraine and the subsequent
sanctions against Russia have resulted in Western and Central European
countries seeking alternative energy sources to reduce dependence on Russian
oil and gas supplies. HUI's waste plastic to energy plants offers a viable
solution, generating syngas from which hydrogen can be extracted or which can
be used as a fuel in its own right or as a gas engine fuel for producing
electricity. The heat generated from this process can also be sold and fed
into district heating systems, particularly in Eastern Europe where such
systems are widely used.
In the midst of this terrible human tragedy, HUI nevertheless sees an
opportunity to build new waste plastic to energy plants to help local
communities in Europe mitigate the impact of the energy supply crisis and the
changes brought about by sanctions against Russia. The modularity and
flexibility of HUI plants allow for customisation to satisfy local demand,
enabling them to switch between different outputs as needed We live in a world
of flux, but it is difficult to foresee a time when cheap Russian gas will
once again be available to use in the West. During the winter I travelled to
Ukraine to try and understand the magnitude of the problem and explore how
this epochal event might transform energy markets in Ukraine. Ukrainians have
displayed extraordinary bravery and fortitude. Despite the devastating damage
done to the country and its people, they remain committed to rebuilding their
nation and their economy. As part of this effort, I would like to see a new
Ukraine powered, in part, by HUI plants.
HUI stands on two pillars: building the first of a kind plastic waste to
hydrogen plant and creating a substantial project pipeline for future
projects. Due to high interest in our business in Poland, in January our
Polish subsidiary, Hydropolis United, assisted by SWECO, signed a letter of
intent with RZZO, a municipal waste management company in Ostrów
Wielkopolski, Greater Poland. RZZO has agreed that it will provide land and
utilities to operate a plant, assist with permits, source waste plastic
feedstock and help secure funding.
One of the most significant events later in the year was the completion in
October of a memorandum of understanding ("MOU") with Elkard sp. Z o.o. Sp.K.
("Elkard"), a company based in Torun, Poland. The MOU pertains to the
development of a plastic waste processing plant that will produce hydrogen,
electricity, and heat. Under the MOU, Elkard and Hydropolis will begin
planning and creating an HUI Plant by identifying a suitable site, seeking
grants or subsidies for the project, and preparing the necessary environmental
reports and documentation. The two companies will share the costs of this
work, and it is expected that a special purpose vehicle will be established
for financing and operating the HUI plant in the future. Elkard is one of the
companies owned by one of the wealthiest families in Poland.
Our long-term plan is to expand HUI across all European Union countries and
Ireland was always a priority for us because of its proud history as an
entrepreneurial and business-friendly nation. Ireland is currently our most
important project and we had been searching for the right site for some time.
In November HUI announced it had signed an agreement with Fisherstown Property
Holdings Limited (FPH) for the lease of a 2.5 acre greenfield site in the
78-acre Fisherstown Energy Park at Fisherstown in County Longford, Ireland.
This is the initial step in building HUI's first operational full- scale waste
plastic to hydrogen facility in Europe. The Longford site has its own
electrical grid connection, an electrical sub-station and the potential to use
the existing wastewater treatment facilities, as well as potential power
sources from a planned solar farm and other energy facilities. The site also
has excellent road access and is within easy reach of major motorways. This
has subsequently led to us entering into an option to take a 25 year lease of
the site. The decision to focus on the Longford project in Ireland means that
HUI will not be progressing the construction of an HUI facility on the
previously identified Tipperary site with Trifol Resources Limited (TRL).
However, HUI remains fully supportive of TRL and its investment in TRL. As a
result of the decision to focus on Longford, HUI's working capital position
will be substantially better than previously anticipated.
In order to increase the pace of our progress, during the year we agreed to
partner with Powerhouse Energy Group PLC (AIM: PHE) in Konin, Poland and in
Ireland - our two flagship projects.
As HUI grew we have also expanded our team. We appointed Mr Howard White as an
executive director in April. Howard is an accomplished entrepreneur with a
diverse skillset and a focus on low carbon energy. He began his career in
mainframe computing systems in 1973 and has successfully transformed a number
of distressed businesses acquired from public limited companies. Howard became
a director and major shareholder of Christy Hunt Plc in 1987 and oversaw the
acquisition of Deritend Stamping PLC. He later became a director and major
shareholder of Stanelco PLC before founding AFC Energy in 2006. In 2008, he
founded Waste2tricity Ltd, a technology company that was eventually sold to
Powerhouse Energy PLC for £55 million. Howard supported HUI in its IPO as a
cornerstone investor with a £1 million subscription. On July 26th, 2022, it
was announced that he had bought 55,500 Ordinary Shares at a price of 9 pence
per share and he is currently the fourth largest shareholder in HUI.
HUI is very fortunate to benefit from the enormous generosity of its
shareholders, especially Conrad Griffiths, KC, who provided significant
financial support to the company by advancing a Convertible Loan Facility of
EUR 650,000 in October. The loan was interest-free until 31 December 2022,
after which interest accrues at a rate of 5% per annum, and is repayable on 31
December 2025. The loan may be converted into fully paid HUI ordinary
shares at a conversion price of 20p per share. The funds will be used for
working capital and investment capital requirements.
We also appointed James Nicholls-May as our Chief Financial Officer in April.
James, a graduate of Management and Mathematics from the University of
Sheffield, brings extensive finance experience to his new role. He was
previously Head of Finance at ASL Global, a global marketing services group,
and European Finance Manager for Airways Aviation Academy Limited. James has
operated in 55 markets, and he will play a crucial role in our future
expansion. He is an incredible asset to the Company.
To provide additional technical expertise, we appointed Duncan Snelling as an
Engineering Consultant. Duncan is a Chartered Engineer with over 25 years of
experience in project development and management, specialising in industrial
gases, hydrogen generation, carbon capture, and renewable energy. He has
worked on engineering projects across various regions, including the UK,
Europe, the Middle East, Africa, and Asia, primarily with Air Products, where
he spent most of his career as part of the global engineering business. Duncan
obtained his Electrical Engineering degree from the University of Queensland,
Australia, and his Master of Science from Imperial College, London. He has
extensive knowledge of project management tools and techniques, as well as
business process analysis. Thanks to Duncan we have made huge progress on the
technical part of the business.
Many of you are already aware of our accomplishments so far in 2023. We are
investing in marketing and outreach initiatives to raise awareness of our
projects and their potential benefits, as well as engaging with policymakers
and other stakeholders to advocate for supportive policies and regulations.
But my excitement about the future is tempered by anxiety about the scale of
the environmental catastrophe our planet faces. Plastic pollution is a global
problem and it is imperative that we work together to solve it . I cited
Viktor Frankl earlier and I make no apologies for ending by quoting him again.
"Everyone has his own specific vocation or mission in life; everyone must
carry out a concrete assignment that demands fulfillment. Therein he cannot be
replaced, nor can his life be repeated, thus, everyone's task is unique as his
specific opportunity to implement it."
My vocation is to create value for our shareholders, who have believed in HUI
from the beginning and continue to do so. I sincerely hope our shareholder
base will grow. It is only with your support that we can complete our mission
to build the first plastic to hydrogen facility in the world.
Yours faithfully,
A Binkowska
Chief Executive Officer
28 April 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022
Year ended Period ended
31 December 31 December
2022 2021
Notes £ £
Administrative expenses (1,492,297) (1,036,645)
Operating loss 5 (1,492,297) (1,036,645)
Investment revenues 6 4 184
Loss before taxation Income tax expense (1,492,293) (1,036,461)
7 - -
Loss for the year (1,492,293) (1,036,461)
(Loss)/Profit for the financial year is all attributable to the owners of the
parent company.
Total comprehensive income for the year is all attributable to the owners of
the parent company.
Earnings per share 8
Basic (pence) (0.48) (0.40)
Earnings per share from continuing operations
Basic (pence) (0.48) (0.40)
The income statement has been prepared on the basis that all operations are
continuing operations.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
2022 2021
Notes £ £
Non-current assets
Property, plant and equipment 9 516,308 386,533
Investments 10 425,315 -
941,623 386,533
Current assets
Trade and other receivables 12 97,855 1,995,864
Cash and cash equivalents 2,993,960 2,697,612
3,091,815 4,693,476
Current liabilities
Trade and other payables 13 108,540 505,071
Borrowings 14 570,175 -
678,715 505,071
Net current assets 2,413,100 4,188,405
Net assets 3,354,723 4,574,938
Equity
Called up share capital 18 384,320 344,320
Share premium account 19 5,174,684 2,214,684
Other reserves 21 324,473 3,052,395
Retained earnings (2,528,754) (1,036,461)
Total equity 3,354,723 4,574,938
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share premium account
Share capital £ Other reserves Retained earnings Total
Notes £ £ £ £
Balance at 1 October 2020 - - - - -
Period ended 31 December 2021:
Loss and total comprehensive income for the period
- - - (1,036,461) (1,036,461)
Issue of share capital 18 344,320 2,214,684 - - 2,559,004
Recognition of shares to be issued - - 3,000,000 - 3,000,000
Share based payment expense - - 52,395 - 52,395
Balance at 31 December 2021 344,320 2,214,684 3,052,395 (1,036,461) 4,574,938
Year ended 31 December 2022:
Loss and total comprehensive
income for the year - - - (1,492,293) (1,492,293)
Issue of share capital 18 40,000 2,960,000 (3,000,000) - -
Share based payment expense 21 - - 272,078 - 272,078
Balance at 31 December 2022 384,320 5,174,684 324,473 (2,528,754) 3,354,723
GROUP STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2022
2022
2021
Notes £
£
£ £
Cash flows from operating activities
Cash generated from/(absorbed by)
operations 28 281,625 (594,920)
Net cash inflow/(outflow) from
operating activities 281,625 (594,920)
Investing activities
Purchase of unincorporated business (89) -
Purchase of property, plant and equipment (130,052) (386,556)
Purchase of investments (425,315) -
Interest received 4 184
Net cash used in investing activities (555,452) (386,372)
Financing activities
Proceeds from issue of shares - 3,678,904
Proceeds from borrowings 570,175 -
Net cash generated from financing activities 570,175 3,678,904
Net increase in cash and cash equivalents 296,348 2,697,612
Cash and cash equivalents at beginning of year 2,697,612 -
Cash and cash equivalents at end of year 2,993,960 2,697,612
NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
1 Accounting policies
Company information
Hydrogen Utopia International PLC ("the company") is a public company limited
by shares incorporated in England and Wales. The registered office is C/O
Laytons Llp, 3rd Floor Pinners Hall, 105-108 Old Broad Street, London, United
Kingdom, EC2N 1ER. The company's principal activities and nature of its
operations are disclosed in the directors' report.
The group consists of Hydrogen Utopia International PLC and all of its
subsidiaries.
1.1 Accounting convention
The financial statements have been prepared in accordance with UK adopted
international accounting standards (IFRSs) and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS, except as
otherwise stated.
The financial statements are prepared in sterling, which is the functional
currency of the group. Monetary amounts in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost
convention. The principal accounting policies adopted are set out below.
Changes in accounting policies and disclosures
The Group has applied, where applicable, the following new and revised IFRS
standards and interpretations for the first time for their annual reporting
period commencing 1 January 2022:
• IFRS 3 Business Combinations - Amendments to IFRS 3
• IFRS 1 First-time Adoption of IFRS, IFRS 9 Financial Instruments, IFRS 16
Leases -annual improvements 2018-2020 cycle
• IAS 16 Property, Plant and Equipment - proceeds before intended use
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets
• Onerous contracts-Cost of Fulfilling a contract (Amendment to IAS 37)
None of these new standards, amendments or interpretations, effective for the
first time for the period beginning on or after 1 January 2022, have had a
material impact on the Group.
Standards and interpretations not yet applicable
The following standards and interpretations (and amendments thereto), have
been issued by the IASB and IFRIC which are not yet effective and have not
been applied in these financial statements, many of which are either not
relevant to the Group or have no impact on the financial statements of the
Group:
Effective Dates*
• FRS 17 Insurance Contracts and Amendments to IFRS 17 1 January 2023
• IAS 1 - Classification of liabilities 1 January 2023
• Disclosure of accounting policies(Amendments to IAS 1 and IFRS Practice 1 January 2023
Statement 2)
• Definition of accounting estimates (Amendments to IAS 8) 1 January 2023
• Deferred Tax Related to Assets and Liabilities Arising from a Single 1 January 2023
Transaction - Amendments to IAS 12 Income
Taxes
• Initial Application of IFRS 17 and IFRS 9 - Comparative Information 1 January 2023
(Amendments to IFRS 17)
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16-Leases) 1 January 2024
* The effective dates stated above are those given in the original IASB/IFRIC
standards and interpretations. As the Group prepares its financial statements
in accordance with IFRS that have been adopted by the UK to 31 December 2022,
the application of new standards and interpretations will be subject to them
having been endorsed for use in the UK from 1 January 2023. In the majority of
cases this will result in an effective date consistent with that given in the
original standard or interpretation but the need for endorsement restricts the
Group discretion to early adopt standards.
1.2 Business Combinations
The cost of a business combination is the fair value at the acquisition date
of the assets given, equity instruments issued and liabilities incurred or
assumed, plus costs directly attributable to the business combination. The
excess of the cost of a business combination over the fair value of the
identifiable assets, liabilities and contingent liabilities acquired is
recognised as goodwill.
The cost of the combination includes the estimated amount of contingent
consideration that is probable and can be measured reliably, and is adjusted
for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous
periods are adjusted retrospectively for final fair values determined in the
12 months following the acquisition date.
1.3 Basis of consolidation
The consolidated group financial statements consist of the financial
statements of the parent company Hydrogen Utopia International PLC together
with all entities controlled by the parent company (its subsidiaries) and the
group's share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2022. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Subsidiaries are consolidated in the group's financial statements from the
date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled
by the group and one or more other venturers under a contractual arrangement
are treated as joint ventures. Entities other than subsidiary undertakings or
joint ventures, in which the group has a participating interest and over whose
operating and financial policies the group exercises a significant influence,
are treated as associates.
Investments in joint ventures and associates are carried in the group
statement of financial position at cost plus post-acquisition changes in the
group's share of the net assets of the entity, less any impairment in value.
The carrying values of investments in joint ventures and associates include
acquired goodwill.
If the group's share of losses in a joint venture or associate equals or
exceeds its investment in the joint venture or associate, the group does not
recognise further losses unless it has incurred obligations to do so or has
made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates
are eliminated to the extent of the group's interest in the entity.
The Company acquired its 100% interest in HU2021 International UK Ltd (2021),
Hydropolis United (2021), Plastic Gold (2021) and Alister Future Technologies
by way of a share for share exchange. This is a business combination involving
entities under common control and the consolidated financial statements are
issued in the name of the Group, but they are a continuance of those of HU2021
International UK Ltd, Hydropolis United, Plastic Gold and Alister Future
Technologies. Therefore, the assets and liabilities of HU2021 International UK
Ltd, Hydropolis United, Plastic Gold and Alister Future Technologies have been
recognised and measured in these consolidated financial statements at their
pre combination carrying values. The retained earnings and other equity
balances recognised in these consolidated financial statements are the
retained earnings and other equity balances of the Company, HU2021
International UK Ltd, Hydropolis United, Plastic Gold and Alister Future
Technologies. The equity structure appearing in these consolidated financial
statements (the number and the type of equity instruments issued) reflect the
equity structure of the Company
including equity instruments issued by the Company to affect the
consolidation. Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated during the consolidation
process.
1.4 Going concern
The directors have at the time of approving the financial statements, a
reasonable expectation that the group has adequate resources to continue in
operational existence for the foreseeable future. In coming to this
conclusion, the directors have reviewed the group's working capital
requirements over the next 18 months, taking into account the net proceeds
from the share issue in January 2022. Reasonable downside sensitivities have
been considered under differing scenarios in the working capital model all of
which show the group has available financial resources to meet all commitments
as they fall due. The cash position at the year-end was £3m. The directors
continue to monitor cash forecasts closely and are involved in the day to day
running of the business.
Thus the directors continue to adopt the going concern basis of accounting in
preparing the financial statements.
The nature, timing of satisfaction of performance obligations and significant
payment terms of the group's major sources of revenue are as follows:
1.5 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently
measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Computers 20% Straight line
Assets Under Construction 5% Straight line (once in use)
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset, and
is recognised in the income statement.
1.6 Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are
initially measured at cost and subsequently measured at cost less any
accumulated impairment losses. The investments are assessed for impairment at
each reporting date and any impairment losses or reversals of impairment
losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the
power to govern the financial and operating policies of the entity so as to
obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in
which the group holds a long-term interest and has significant influence. The
group considers that it has significant influence where it has the power to
participate in the financial and operating decisions of the associate.
Entities in which the group has a long term interest and shares control under
a contractual arrangement are classified as jointly controlled entities.
1.7 Impairment of tangible and intangible assets
At each reporting end date, the group reviews the carrying amounts of its
tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
1.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities.
1.9 Financial assets
Financial assets are recognised in the group's statement of financial position
when the group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories, depending on the
nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through
profit and loss are measured at fair value and any transaction costs are
recognised in profit or loss. Financial assets not classified as fair value
through profit and loss are initially measured at fair value plus transaction
costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial
assets is not met, a financial asset is classified as measured at fair value
through profit or loss. Financial assets measured at fair value through profit
or loss are recognized initially at fair value and any transaction costs are
recognised in profit or loss when incurred. A gain or loss on a financial
asset measured at fair value through profit or loss is recognised in profit or
loss, and is included within finance income or finance costs in the statement
of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised
cost where the objective is to hold these assets in order to collect
contractual cash flows, and the contractual cash flows are solely payments of
principal and interest. They arise principally from the provision of goods and
services to customers (eg trade receivables). They are initially recognised at
fair value plus transaction costs directly attributable to their acquisition
or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value
through other comprehensive income where the financial assets are held within
the group's business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and the contractual terms
of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is
recognised initially at fair value plus transaction costs directly
attributable to the asset. After initial recognition, each asset is measured
at fair value, with changes in fair value included in other comprehensive
income. Accumulated gains or losses recognised through other comprehensive
income are directly transferred to profit or loss when the debt instrument is
derecognised.
The parent company has made an irrevocable election to recognize changes in
fair value of investments in equity instruments through other comprehensive
income, not through profit or loss. A gain or loss from fair value changes
will be shown in other comprehensive income and will not be reclassified
subsequently to profit or loss. Equity instruments measured at fair value
through other comprehensive income are recognized initially at fair value plus
transaction cost directly attributable to the asset. After initial
recognition, each asset is measured at fair value, with changes in fair value
included in other comprehensive income. Accumulated gains or losses recognized
through other comprehensive income are directly transferred to retained
earnings when the equity instrument is derecognized or its fair value
substantially decreased. Dividends are recognized as finance income in profit
or loss.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or
loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of
the financial asset, the estimated future cash flows of the investment have
been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.10 Financial liabilities
The group recognises financial debt when the group becomes a party to the
contractual provisions of the instruments. Financial liabilities are
classified as either 'financial liabilities at fair value through profit or
loss' or 'other financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at fair value through profit
or loss when the financial liability is held for trading. A financial
liability is classified as held for trading if:
• it has been incurred principally for the purpose of selling or repurchasing it
in the near term, or
• on initial recognition it is part of a portfolio of identified financial
instruments that are managed together and has a recent actual pattern of
short-term profit taking, or
• it is a derivative that is not a financial guarantee contract or a designated
and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair
value with any gains or losses arising on remeasurement recognised in profit
or loss.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other
short-term monetary liabilities, are initially measured at fair value net of
transaction costs directly attributable to the issuance of the financial
liability. They are subsequently measured at amortised cost using the
effective interest method. For the purposes of each financial liability,
interest expense includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the liability is
outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the group's
obligations are discharged, cancelled, or they expire.
1.11 Equity instruments
Equity instruments issued by the parent company are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity instruments
are recognised as liabilities once they are no longer payable at the
discretion of the company.
1.12 Derivatives
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to fair value at each
reporting end date. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in profit or loss
depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset,
whereas a derivative with a negative fair value is recognised as a financial
liability. A derivative is presented as a non-current asset or liability if
the remaining maturity of the instrument is more than 12 months and it is not
expected to be realised or settled within 12 months. Other derivatives are
classified as current.
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the group has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense, unless those costs are required to be recognised as part of the cost
of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the group
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
1.15 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.16 Share-based payments
Equity-settled share-based payments are measured at fair value at the date of
grant by reference to the fair value of the equity instruments granted using
the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is
made to equity.
When the terms and conditions of equity-settled share-based payments at the
time they were granted are subsequently modified, the fair value of the
share-based payment under the original terms and conditions and under the
modified terms and conditions are both determined at the date of the
modification. Any excess of the modified fair value over the original fair
value is recognised over the remaining vesting period in addition to the grant
date fair value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the original
fair value.
Cancellations or settlements (including those resulting from employee
redundancies) are treated as an acceleration of vesting and the amount that
would have been recognised over the remaining vesting period is recognised
immediately.
In the case of options granted, fair value is measured by a Black-Scholes
pricing model.
1.17 Leases
At inception, the group assesses whether a contract is, or contains, a lease
within the scope of IFRS 16. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Where a tangible asset is
acquired through a lease, the group recognises a right- of-use asset and a
lease liability at the lease commencement date. Right-of-use assets are
included within property, plant and equipment, apart from those that meet the
definition of investment property.
The group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of machinery that have a lease term of 12
months or less, or for leases of low-value assets including IT equipment. The
payments associated with these leases are recognised in profit or loss on a
straight-line basis over the lease term.
1.18 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing at the dates of the transactions. At each
reporting end date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
end date. Gains and losses arising on translation in the period are included
in profit or loss.
2 Critical accounting estimates and judgements
In the application of the company's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
The estimates and assumptions which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities are
outlined below.
Critical judgements
Estimation of share-based payment costs
Where appropriate, the Group estimates the fair value of share-based payments
using the Black-Scholes model taking into account the terms and conditions
upon which the share-based payment was granted.
3 Auditor's remuneration
Fees payable to the company's auditor and associates:
2022 2021
£ £
For audit services
Audit of the financial statements of the group and company 30,000 15,000
Audit of the financial statements of the company's subsidiaries 4,000 5,000
34,000 20,000
Gerald Edelman LLP also received £33,500 for non-audit work in relation to
reporting accountant services for the LSE main market listing.
4 Employees
2022 2021
Number Number
Directors 6 2
Employees 1 -
Total 7 2
The aggregate remuneration comprised:
2022 2021
£ £
Wages and salaries 339,865 63,334
Share based payments 272,078 52,395
Social security costs 36,471 1,653
Pension costs 3,801 305
652,215 117,687
The average monthly number of persons (including directors) employed by the
group during the year was:
The highest paid director received £60,000 (2021 - £15,000) during the
period with the company average remuneration of £48,552 (2021 - £15,000).
5 Operating profit/(loss)
2022 2021
£ £
Operating loss for the year is stated after charging/(crediting):
Exchange (gains)/losses (3,676) 8,289
Fees payable to the company's auditor for the audit of the company's financial
statements
30,000 20,000
Depreciation of property, plant and equipment 277 23
Share-based payments 272,078 52,395
6 Investment income
2022 2021
£ £
Interest income
Financial instruments measured at amortised cost:
Bank deposits 4 184
7 Taxation
The charge for the year can be reconciled to the profit/(loss) per the income
statement as follows:
2022 2021
£ £
Profit/(loss) before taxation (1,492,293) (1,036,461)
Expected tax credit based on a corporation tax rate of 19.00% (2021: 19.00%) (283,536) (196,928)
Unutilised tax losses carried forward 283,536 196,928
Taxation charge for the year - -
As at 31 December 2022 the Group had unrelieved tax losses of approximately
£2,475,627 (2021 - £1,036,461). A deferred tax asset of £469,458 (2021
- £196,928) has not been recognised in respect of these losses. From 1 April
2023, the corporation tax rate is due to rise to 25%; given the directors do
not expect to realise a profit before this date the deferred tax asset would
increase to £611,478.
8 Earnings per share
2022 2021
£ £
Number of shares
Weighted average number of ordinary shares for basic earnings per share 312,852,798 256,298,031
Earnings (all attributable to equity shareholders of the company)
Continuing operations
Loss for the period from continued operations (1,492,293) (1,036,461)
Earnings per share for continuing operations
Basic earnings per share (pence) (0.48) 0.40
Basic earnings per share
From continuing operations (pence) (0.48) (0.40)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares outstanding
during the year.
9 Property, plant and equipment
Assets under
construction Computers Total
£ £ £
Cost
At 1 October 2020 - - -
Additions 384,862 1,694 386,556
At 31 December 2021 384,862 1,694 386,556
Additions 128,975 1,077 130,052
At 31 December 2022 513,837 2,771 516,608
Accumulated depreciation and impairment
At 1 October 2020 - - -
Charge for the year - 23 23
At 31 December 2021 - 23 23
Charge for the year - 277 277
At 31 December 2022 - 300 300
Carrying amount
At 31 December 2022 513,837 2,471 516,308
At 31 December 2021 384,862 1,671 386,533
The assets under construction are chemical conversion chambers for the HUI
plant, which are being developed to shortly be installed in one of our
facilities. The useful life of such an asset is expected to be 20 years and
will be depreciated on a straight line basis once in use. The chamber is
expected to be operational in January 2025.
10 Investments
Current Non-current
2022 2021 2022 2021
£ £ £ £
Investments held at amortised cost - - 425,315 -
Fair value of financial assets carried at amortised cost
Except as detailed below, the directors believe that the carrying amounts of
financial assets carried at amortised cost in the financial statements
approximate to their fair values.
11 Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Class of % Held
Name of undertaking Registered office shares held Direct Voting
HU2021 International UK Ltd United Kingdom Ordinary 100.00 100.00
Hydropolis United Poland Ordinary 100.00 100.00
Plastic Gold Greece Ordinary 100.00 100.00
Alister Future Technologies (AFT) Limited Ireland Ordinary 100.00 100.00
Eranova Longford Ltd Ireland Ordinary 100.00 100.00
The investments in subsidiaries are all stated at cost. Plastic Gold is a
wholly controlled subsidiary by way of its shareholders giving full control to
the directors of HUI PLC. Eranova Longford Ltd is a subsidiary of Alister
Future Technologies (AFT) Ltd.
12 Trade and other receivables
2022 2021
£ £
VAT recoverable 53,781 76,226
Other receivables 652 1,904,203
Prepayments 43,422 15,435
97,855 1,995,864
Included within other receivables above is £nil (2021 - £1,880,000) in
respect of shares to be issued not yet paid.
13 Trade and other payables
2022 2021
£ £
Trade payables 17,830 137,686
Accruals 89,934 342,231
Social security and other taxation - 9,873
Other payables 776 15,281
108,540 505,071
2022 2021
£ £
Borrowings held at amortised cost:
Loans from shareholder 570,175 -
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 12 days. For most suppliers no interest is charged on amounts
payable for the first 30 days after the date of the invoice. Thereafter,
interest is charged at various rates. The company has financial risk
management policies in place to ensure that all payables are paid within the
pre-agreed credit terms.
The directors consider that the carrying amount of trade payables approximates
to their fair value.
14 Borrowings
2022 2021
£ £
Borrowings held at amortised cost:
Loans from shareholder 570,175 -
15 Liquidity risk
The following table details the remaining contractual maturity for the group's
financial liabilities with agreed repayment periods. The contractual maturity
is based on the earliest date on which the group may be required to pay.
Less than 1 month
£
At 31 December 2021
Trade and other payables 184,453
At 31 December 2022
Trade and other payables 108,540
Liquidity risk management
Responsibility for liquidity risk management rests with the board of
directors, which has established an appropriate liquidity risk management
framework for the management of the company's funding and liquidity management
requirements. The company manages liquidity risk by maintaining adequate
reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities. In line with Note 13, the
Company always pays its suppliers within contractual terms and per the
cashflow and going concern note 1.4 the company has no liquidity issues as
current assets, predominantly held in cash, far outweigh current liabilities.
16 Market risk
Market risk management
Foreign exchange risk
The carrying amounts of the group's foreign currency denominated monetary
assets and liabilities at the reporting date are as follows:
Assets Liabilities
2022 2021 2022 2021
£ £ £ £
947,934 41,688 133,793 86,146
Whilst the company takes steps to minimise its exposure to foreign exchange
risk, changes in foreign exchange rates will have an impact on profit or loss.
The main currencies in which the Group operates are the Pound Sterling, Polish
Złoty and the Euro.
The group's principal foreign currency exposures arise from trading with
overseas companies. Group policy permits but does not demand that these
exposures may be hedged in order to fix the cost in sterling.
Interest rate risk
Whilst the company takes steps to minimise its exposure to cash flow interest
rate risk, changes in interest rates will have an impact on profit.
The group currently has minimal exposure to fair value interest rate risk due
to lack of borrowings through bank overdrafts and loans.
17 Retirement benefit schemes
2022 2021
£ £
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes 3,801 305
The group operates a defined contribution retirement benefit scheme for all
qualifying employees. The assets of the scheme are held separately from those
of the group. The company contributes a specified percentage of payroll costs
to the retirement benefit scheme to fund the benefits. The only obligation of
the group with respect to the scheme is to make the specified contributions.
18 Share capital
2022 2021 2022 2021
Ordinary share capital Number Number £ £
Issued and fully paid
Ordinary shares of 0.1p each 384,320,000 344,320,000 384,320 344,320
On 6 January 2022, the Company issued 40,000,000 shares of £0.001 each for a
total consideration of
£3,000,000.
19 Share premium account
2022 2021
£ £
At the beginning of the year 2,214,684 -
Issue of new shares 2,960,000 2,471,800
Transaction costs - (257,116)
At the end of the year 5,174,684 2,214,684
20 Share-based payment transactions
The company has a share option scheme for some employees. Options are
exercisable at price equal to the average quoted market price of the company's
shares on the date of grant. The vesting period is one year. If options remain
unexercised after a period of ten years from the date of grant the options
expire. Options are forfeited if the employee leaves the company before the
options vest.
Number of share options Weighted average exercise price
2022 2021 2022 2021
£ £
Outstanding at 1 January 2022 25,226,666 - 1,288,000 -
Granted in the period 2,329,730 25,226,666 218,350 1,288,000
Forfeited in the period (1,066,666) - (80,000) -
Outstanding at 31 December 2022 26,489,730 25,226,666 1,426,350 1,288,000
Exercisable at 31 December 2022 - 24,160,000 - 1,208,000
The options outstanding at 31 December 2022 had an exercise price ranging from
£0.05 to £0.09725, and a remaining contractual life of about 8.79 years.
During the period ended 31 December 2022, options were granted on 9 August
2022 and 10 August 2022. The weighted average fair value of the options on the
measurement dates was £30,314. Fair value was measured using the
Black-Scholes model.
Inputs were as follows:
2022 2021
Weighted average share price 0.054 0.051
Weighted average exercise price 0.054 0.051
Expected volatility 66% 66%
Expected life 1 1
Risk free rate 2.093% 0.483%
Due to a lack of historical data, volatility was based on data from similar
companies.
2022 2021
£ £
Expenses
Related to equity settled share based payments 272,078 52,395
21 Other reserves
Shares to be issued reserve Share based payments reserve
Total
£ £ £
Balance at 1 October 2020 - - -
Additions 3,000,000 52,395 3,052,395
Balance at 31 December 2021 3,000,000 52,395 3,052,395
Additions - 272,078 272,078
Other movements (3,000,000) - (3,000,000)
Balance at 31 December 2022 - 324,473 324,473
Shares to be issued reserve consisted of funds received in advance of
Admission in January 2022.
22 Acquisitions of a business
On 9 June 2022 the group incorporated in Ireland Alister Future Techologies
(AFT) Limited, which is a wholly owned subsidiary of HUI.
On 29th July 2022 the group incorporated in Ireland Eranova Tipperary Limited,
renamed as Eranova Longford Limited, a wholly owned subsidiary of AFT.
Book Value Adjustments Fair Value
Net assets of business acquired £ £ £
Trade and other receivables 89 - 89
Non-controlling interests Goodwill -
-
Total consideration 89
The consideration was satisfied by: £
Cash 89
Net cash outflow arising on acquisition £
Cash consideration 89
Less: Cash and cash equivalents acquired -
89
Contribution by the acquired business for the reporting period included in the
group statement of comprehensive income since acquisition:
£
Revenue -
Loss after tax (21,066)
Loss after tax
(21,066)
23 Capital risk management
The group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance,
The capital structure of the group consists of debt and equity comprising
share capital, reserves and retained earnings. The group reviews the capital
structure annually and as part of this review considers that cost of capital
and the risks associated with each class of capital.
The group is not subject to any externally imposed capital requirements.
Currently the group will fund much of its first plant from shareholder equity
raised funds. However, going forward the group has a high target gearing ratio
as the group plans to raise debt against each plant to leverage relatively
cheap debt costs in the current market.
24 Events after the reporting date
On 9 January 2023 the Company's Ordinary shares commences trading on the main
market of the London Stock Exchange under symbol HUI.
On 11 January 2023, Executive Director, Howard White, purchased an additional
350,000 Ordinary Shares at an average price of 16.1277p per Ordinary Share,
bringing his total interest in Ordinary Shares to 15,310,834.
On 23 January 2023 Novum Securities Limited exercised all of their warrants to
subscribe for 1,200,000 new Ordinary Shares of 0.1p bringing the total number
of Ordinary Shares/voting rights in the Company to 385,520,000.
On 14 February 2023 the Company's Ordinary Shares ceased to be traded on the
AQSE main market.
On 21 March 2023 Heads of Terms were signed between HUI and Powerhouse Energy
PLC (PHE) in relation to a joint venture (JV) at Longford, Ireland.
On 22 March 2023 the board of directors agreed to a corporate restructure of
expenses incurred under HU2021 during 2020 and 2021 to be recharged to HUI as
group expenses. Additionally the board agreed to transfer the ownership of the
Assets under construction to HUI.
On 3 April 2023 Harold Tillman CBE was granted options over up to 6,666,666
HUI ordinary shares at an exercise price of 15p per share exercisable over
different periods of time in the 4 years following his appointment.
On 7 April 2023 a company called HU Future B.V., incorporated in the
Netherlands, was set up which is a wholly owned subsidiary of HUI.
25 Directors' transactions
As at 31 December 2022 the group owed £nil (2021 - £60) to A Binkowska and
£nil (2021 - £40) to S Giles, directors of the company, in respect of
interest free loans that are repayable on demand.
26 Ultimate controlling party
There is no controlling party of the group.
27 Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including directors, is set out
below in aggregate for each of the categories specified in IAS 24 Related
Party Disclosures.
2022 2021
£ £
Share-based payments 272,078 52,395
Other transactions with related parties
During the year the group paid expenses of £nil (2021 - £250) for Plastic
Power Limited (A Binkowska) and
£63 (2021 - £340) for The Plastic Neutrality Pledge (A Binkowska).
The following amounts were outstanding at the reporting end date:
As at 31 December 2022 the group was owed £250 (2021 - £250) by Plastic
Power Limited (A Binkowska) and £403 (2021 - £340) by The Plastic Neutrality
Pledge (A Binkowska) and owed £nil (2021 - £2,000) to Orison-IO Limited (H
White).
28 Cash generated from/(absorbed by) operations
2022 2021
£ £
Loss for the year after tax (1,492,293) (1,036,461)
Adjustments for:
Investment income (4) (184)
Depreciation and impairment of property, plant and equipment 277 23
Equity settled share based payment expense 272,078 52,395
Movements in working capital:
Decrease/(increase) in trade and other receivables 1,898,098 (1,995,764)
(Decrease)/increase in trade and other payables (396,531) 505,071
Recognition of shares to be issued - 1,880,000
Cash generated from/(absorbed by) operations 281,625 (594,920)
The funds received from the initial IPO on the AQSE Growth market on 6 January
2022 were included in the 2021 accounts as other receivables. This has given
rise to the movement in other receivables during 2022 leading to the positive
cash generated from operations in 2022.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
2022 2021
Notes £ £ £ £
Non-current assets
Property, plant and equipment 30 1,433 664
Investments 31 426,331 4,100
427,764 4,764
Current assets
Trade and other receivables 32 1,339,646 2,983,537
Cash and cash equivalents 2,986,727 2,665,942
4,326,373 5,649,479
Current liabilities (672,045) (429,622)
Net current assets 3,654,328 5,219,857
Total assets less current liabilities 4,082,092 5,224,621
Equity
Called up share capital 38 384,320 344,320
Share premium account 5,174,684 2,214,684
Other reserves 324,473 3,052,395
Retained earnings (1,801,385) (386,778)
Total equity 4,082,092 5,224,621
As permitted by s408 Companies Act 2006, the company has not presented its own
income statement and related notes. The company's loss for the year was
£1,414,607 (2021 - £386,778).
COMPANY STATEMENT FOR CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share premium account
Share capital £ Other reserves Retained earnings Total
Notes £ £ £ £
Balance at 1 October 2020 - - - - -
Period ended 31 December 2021:
Loss and total comprehensive income for the period
- - - (386,778) (386,778)
Recognition of shares to be issued - - 3,000,000 - 3,000,000
Share based payment expense - - 52,395 - 52,395
Issue of share capital 38 344,320 2,214,684 - - 2,559,004
Balance at 31 December 2021 344,320 2,214,684 3,052,395 (386,778) 5,224,621
Year ended 31 December 2022:
Loss and total comprehensive
income for the year - - - (1,414,607) (1,414,607)
Share based payment expense - - 272,078 - 272,078
Issue of share capital 38 40,000 2,960,000 (3,000,000) - -
Balance at 31 December 2022 384,320 5,174,684 324,473 (1,801,385) 4,082,092
29 Accounting policies
Company information
Hydrogen Utopia International PLC is a public company limited by shares
incorporated in England and Wales. The registered office is Pinners Hall,
105-108 Old Broad Street, London EC2N 1ER. The company's principal activities
and nature of its operations are disclosed in the directors' report.
29.1 Accounting convention
The 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, as
modified and in accordance with the Companies Act 2006.
The Company has taken advantage of the following disclosure exemptions under
FRS 101:
• The requirements of IFRS 7 Financial Instruments: Disclosures;
• The requirements of IAS 1 Presentation of Financial Statements to disclose
information regarding the management of capital;
• The requirements of IAS 7 Statement of Cash Flows and related notes;
• The requirements of IAS 24 Related Party Disclosures to disclose key
management personnel compensation and to disclose related party transactions
entered into between members of a group, provided that any subsidiary which is
a party to the transaction is wholly owned;
• Certain disclosures of IAS 36 Impairment of Assets relating assumptions and
valuation techniques used in impairment calculations;
• The requirements of IFRS 2 Share Based Payments to disclose narrative
information concerning share-based payment arrangements;
• The requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors in respect of the impact standards in issue but not yet effective.
The financial statements are prepared in sterling, which is the functional
currency of the company. Monetary amounts in these financial statements are
rounded to the nearest £.
The company applies accounting policies consistent with those applied by the
group. To the extent that an accounting policy is relevant to both group and
parent company financial statements, please refer to the group financial
statements for disclosure of the relevant accounting policy.
29.2 Going concern
Refer to note 1.4 of the group financial statements.
29.3 Investments in subsidiaries
The Company's investment in its subsidiaries is carried at cost less provision
for any impairment. Investments denominated in foreign currency are recorded
using the rate of exchange at the date of acquisition. The carrying value is
tested for impairment when there is an indication that the value of the
investment might be impaired. When carrying out impairment tests these would
be based upon future cash flow forecasts and these forecasts would be based
upon management judgement.
30 Property, plant and equipment
Computers
£
Cost
At 1 January 2022 687
Additions 1,046
At 31 December 2022 1,733
Accumulated depreciation and impairment
At 1 January 2022 23
Charge for the year 277
At 31 December 2022 300
Carrying amount
At 31 December 2022 1,433
At 31 December 2021 664
31 Investments
Current Non-current
2022 2021 2022 2021
£ £ £ £
Investments held at amortised cost - - 425,315 -
Investments in subsidiaries - - 1,016 4,100
- - 426,331 4,100
Fair value of financial assets carried at amortised cost
Except as detailed below the directors believe that the carrying amounts of
financial assets carried at amortised cost in the financial statements
approximate to their fair values.
Investment in subsidiary undertakings
32 Trade and other receivables
2022 2021
£ £
VAT recoverable 35,978 42,931
Amounts owed by subsidiary undertakings 1,260,040 1,039,448
Other receivables 402 1,885,908
Prepayments 43,226 15,250
1,339,646 2,983,537
Details of the company's principal operating subsidiaries are included in note
10.
Movements in non-current investments
Shares in
subsidiaries Investments Total
£ £ £
Cost or valuation
At 1 January 2022 4,100 - 4,100
Additions - 425,315 425,315
Other movements (3,084) - (3,084)
At 31 December 2022 1,016 425,315 426,331
Carrying amount
At 31 December 2022 1,016 425,315 426,331
At 31 December 2021 4,100 - 4,100
Included within other receivables above is £nil (2021 - £1,880,000) in
respect of shares to be issued not yet paid.
33 Trade and other payables
2022 2021
£ £
Trade payables 16,595 73,737
Accruals 84,500 332,731
Social security and other taxation - 9,873
Other payables 775 13,281
101,870 429,622
34 Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including directors, is set out
below in aggregate for each of the categories specified in IAS 24 Related
Party Disclosures.
2022 2021
£ £
Share-based payments 272,078 52,395
272,078 52,395
Other transactions with related parties
The following amounts were outstanding at the reporting end date:
As at 31 December 2022 the company owed £nil (2021 - £2,000) to Orison-IO
Limited (H White).
35 Events after the reporting date
Refer to note 24 of the group financial statements.
36 Ultimate controlling party
Refer to note 26 of the group financial statements.
37 Share-based payments
The company information for share-based payments is the same as the group
information and is shown in note 20.
38 Share capital
Refer to note 18 of the group financial statements.
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