REG - Hydrogen Utopia Intl - Final Results
30/04/2024 14:45
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RNS Number : 6575M Hydrogen Utopia International PLC 30 April 2024
The information contained within this announcement is deemed by the
Company to constitute inside information stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement via the Regulatory Information Service,
this inside information is now considered to be in the public domain.
30 April 2024
Hydrogen Utopia International PLC
(the "Company" or "HUI")
Final Results for the period ended 31 December 2023
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 2023.
HIGHLIGHTS OF 2023
Business Development, Organisation and Growth:
• Joint venture with Powerhouse Energy Group PLC in Longford, Ireland - our
flagship project in Europe
• Further building of a project pipeline in Poland
• Award of a grant permitting the reimbursement of 75% of expenditure of up to
EURO 450,000 to be incurred in Ireland
• Exercise of an option to acquire a substantial minority interest in a medical
cannabis facility with the prospects of substantial cashflows and a potential
opportunity for a rollout of a proof of concept outside Europe namely in North
Macedonia
• Heads of terms with a multinational biofuels group for the potential reverse
acquisition of the group by reverse takeover - providing opportunities for a
rollout of a waste plastic to hydrogen facility
• Appointment of Simon Mann as Non-Executive Chairman
• Incorporation of a Dutch subsidiary to aid expansion into Europe
Financial Highlights:
• Other income generated of £100,000
• R&D related activity, excluding CAPEX, of £179,446
• Reduction in administrative expenses by 9% to £1,358,657
• R&D tax refund of £123,099 relating to prior periods
• Reduction in group net assets to £1,857,614 due to operating expenses and an
impairment charge on investments
Simon Mann, Non-Executive Chairman of HUI commented:
"We are pleased with our achievements in Europe during the period. We entered
into a joint venture with Powerhouse Energy Group PLC (AIM:PHE) for the
development of a waste plastic to hydrogen plant in Ireland. We also obtained
a grant for the reimbursement of expenditure up to EUR450,000 in Ireland.
Outside Europe, we are now exploring two avenues to fund, in whole or in part,
a waste plastic to hydrogen project. Either through the acquisition of a
substantial minority stake in a medical cannabis cultivator in North Macedonia
expected to generate substantial cashflows, or by virtue of the potential
acquisition by reverse takeover of a substantial and profitable international
bio-energy company.
We continue to see strong support for the energy transition from governments
around the world which should lead to an increase in the size and scale of
hydrogen projects and further exciting opportunities for HUI."
Aleksandra Binkowska, Chief Executive Officer of HUI commented:
"To quote Francis Bacon, 'Fortitude is the marshal of thought, the armor of
the will, and the fort of reason.' This sentiment resonated deeply with us in
2023, as we navigated HUI through challenging times. Now, as we look
forward, I am optimistic that calmer waters await, steering us
towards smoother sailing. I express my gratitude to all the shareholders
for being our pillar of fortitude in the past years."
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
+44 20 3811 8770
Alfred Henry Corporate Finance Limited (LSE Corporate Adviser)
Nick Michaels/Maya Klein
Wassink
+44 20 7309 2203
Novum Securities Limited (Broker)
Jon Belliss/Colin
Rowbury
+44 20 7399 9400
Non-Executive Chairman's statement
This is the third published Annual Report and Accounts for Hydrogen Utopia
International PLC. This report marks a significant milestone for our company
as we embark on a new chapter. HUI is now trading on the London Stock Exchange
following our strategic decision to transition from the Aquis Stock Exchange
at the beginning of 2023.
HUI is poised to emerge as a leading European entity dedicated to addressing
pressing environmental challenges. Our core mission revolves around the
transformation of non-recyclable mixed waste plastic into carbon-free fuels,
innovative materials, and distributed renewable heat solutions. In a world
grappling with the urgent need to confront escalating volumes of waste
plastic, coupled with a growing demand for hydrogen derived from renewable
sources, HUI stands at the forefront of sustainable innovation.
As we witness the alarming consequences of climate change, exemplified by the
recent unprecedented floods in Dubai, the highest annual temperature recorded,
the urgency to take decisive action has never been more evident. Yet, it is
disheartening to acknowledge the formidable challenges faced by companies like
ours in securing funding for inaugural facilities. From my perspective, such
funding should be forthcoming, given the anticipated profitability of HUI's
facility for stakeholders. It is unfortunate that HUI has had to navigate such
inhospitable terrain from its inception, particularly when other entities with
similar missions are grappling with substantial hurdles.
The current political landscape is undeniably unsettling, with the Russian
invasion in Ukraine and ongoing conflicts in the Middle East as well as the
high interest rates over 2023 are casting a shadow of instability over the
small-cap market. Despite these turbulent circumstances, we are steadfastly
navigating through them, cherishing every victory along the way. Notably, we
have forged substantial connections in Ukraine, endeavoring to bolster their
hydrogen strategy as well as their recently declared cannabis strategy which
HUI could also support.
Securing the much-needed £40 million investment remains our foremost concern,
compounded by the challenge of locating suitable land free from governmental
red tape. Upon assuming joint stewardship of the company with the CEO, we
devised a strategic vision for HUI aimed at expanding our reach beyond the
confines of the established European market. Our focus has shifted towards
uncharted territories, where I have done my utmost to introduce the Company to
high-ranking representatives. We have been talking to the representatives of
British - Kazach Society and the members of the Kazakh energy ministry in
order to establish possibilities for funding and placing a first of a kind
there. We have been making introductions in South Africa via my various
connections in Washington, U.S. We have searched as far as in Somalia to find
governments willing to support our cause, as weird as it may look at first
glance.
Undoubtedly, one of the most intriguing opportunities we've encountered is the
partnership proposal from Essential Energy Holdings, a prominent bio-energy
company headquartered in Argentina. The groundwork for this collaboration
began in 2023, culminating in the signing of Heads of Terms between HUI and
EEH at the end of February 2024. I firmly believe that this venture could
serve as a significant opportunity for our company to expand its horizons.
One of the bravest decisions that the Board has made was the loan and
collaboration in a medical cannabis facility. As announced on 29 December
2023, the board voted to exercise its option to acquire a substantial minority
stake in a medical cannabis cultivator in North Macedonia expected to generate
substantial cashflows. As mentioned above, an alternative is the potential
acquisition by reverse takeover of a substantial and profitable international
bio-energy company as announced on 27 February 2024. The development of waste
plastic to hydrogen projects could be funded, in whole or in part, through
either avenue. Either option could allow a roll out of a waste to hydrogen
facility within a relatively short timeframe.
We have been busy on the home front as well. As announced on 26 April 2022,
HUI made an investment in an Irish company, Trifol Resources Limited (TRIFOL)
with a view to gaining access to local waste companies and the energy industry
in Ireland. This investment allowed HUI to apply for a grant permitting the
reimbursement of 75% of expenditure of up to EUR450,000 to be incurred in
Ireland. HUI was successful in its application. HUI have impaired the
investment in TRIFOL, please see note 13 and 16 for accounting treatment,
because of timeframe delays although ultimately, we believe the venture will
be a success. Instead, HUI entered into a joint venture with Powerhouse Energy
Group PLC (AIM:PHE) for the development of a greenfield site and building of a
waste plastic to hydrogen plant at Fisherstown Energy Park in County Longford,
Ireland. This project is an opportunity to progress a project within a
European Union Just Transition Fund area, which brings with it the potential
of further grant funding for the development. The parties are currently
developing the application for planning and permitting on the site.
Looking ahead, the coming months will be important for HUI. Whilst we haven't
yet reached the revenue generating stage, we have made tremendous strides in
building solid foundations for future success. On that note I extend my
sincere gratitude to the CEO, the Board and the shareholders for bestowing
upon me their trust and appointing me as the Chairman. I am committed to
exerting my utmost efforts to maximise opportunities for the Company,
recognising this as one of the most significant endeavors I've ever
undertaken. Thank you for your continued support.
Simon Mann
Non-Executive Chairman
30 April 2024
Chief Executive Officer's statement
Dear Shareholders,
In 1966, at the University of Cape Town, J.F. Kennedy delivered a speech in
which he stated; ''There is a Chinese curse which says "May he live in
interesting times." Like it or not, we live in interesting times. They are
times of danger and uncertainty; but they are also the most creative of any
time in the history of mankind. And everyone here will ultimately be judged -
will ultimately judge himself - on the effort he has contributed to building a
new world society and the extent to which his ideals and goals have shaped
that effort".
Decades later, echoing Kennedy's sentiment, we find ourselves in a world of
heightened uncertainty. We are facing two fundamental issues. Our biggest
challenge is funding a full-scale facility, as it becomes evident that the
environmental issues are not as interesting to the investors community as they
were just a few years ago. Observing small cap companies in our sector, nobody
is doing particularly well, which is a fundamental hurdle.
The other one is permitting. Despite the widespread desire to minimise the
impact of fossil fuels and transition to more sustainable alternatives,
governments have struggled to expedite the adoption of novel technologies.
Throughout the EU and the US, numerous projects have faced roadblocks from
local authorities, hindering progress. It often feels as though we inhabit a
parallel universe, where lofty slogans about change contrast sharply with the
growing number of illegal landfills. Last year, Poland was rocked by a scandal
uncovered by Euro News: a massive illegal landfill on the border of Greater
Poland caught fire, dangerously close to a major city, prompting evacuations.
Sadly, disposing of trash illegally remains cheaper than utilising proper
plastic waste management methods, particularly for plastic waste. Even when
viable solutions are presented, bureaucratic red tape and permitting issues
frequently impede progress. It often seems to be a chicken and egg situation:
we will provide you with permitting, but show us a working plant.
Consequently, we're actively seeking countries, cities, and regions where our
technology will be embraced and encouraged rather than met with bureaucratic
obstacles. Our search has led us to explore opportunities in countries like
Kazakhstan, Albania, Kosovo, Montenegro, and, notably, North Macedonia, where
we're making significant headway with local authorities. We have promised to
build a strong project pipeline and we believe we need only one successful
full-scale plant in order to catch the attention of the whole world, as
plastic solution is a threat to all of us.
The challenges associated with the green transformation extend beyond local
boundaries and are intricately tied to international politics. Recent farmer
protests in the EU prompted the bloc to delay certain aspects of its ambitious
green deal, which is central to the burgeoning hydrogen economy. Conversely,
major automobile manufacturers are unmistakably shifting their focus to
hydrogen. Volvo, once staunch supporters of Battery Electric Vehicles (BEVs),
have pivoted towards hydrogen, conducting trials for their first hydrogen
truck in 2023. Similarly, BMW has introduced a hydrogen-powered model, the iX5
SUV, as a pilot available for public testing. Even in nations ravaged by
conflict like Ukraine, hydrogen is a focal point of discussion, with the
country considering adopting a hydrogen strategy in its post-war
reconstruction efforts.
Facing the financial, political and permitting issues has allowed creativity
to reign in HUI in order to sail through the rough times. Whilst many are
fighting for survival, we want to strive and flourish. In order to accomplish
that I have come up with a couple of unorthodox undertakings.
Firstly - HUI decided to exercise an option to acquire 49 % of Ohrid Organics
Ltd (OOL) - a medical cannabis facility located in North Macedonia. Due to the
lack of external funding, we have decided to find a profitable business which
will help us build our facility. This was possible thanks to monumental
generosity of our executive director Mr Howard White and his family. Ohrid
Organics stands as a prominent player in the burgeoning medical cannabis
market, boasting the largest granted license in North Macedonia. With an
estimated annual growth rate of around 14.7%, the industry's value stands at a
substantial €14.5 billion. OOL forecasts an estimated operating margin of
approximately 85%, facilitated by the notably low growing costs in comparison
to other markets like the UK, Germany, and Portugal. The prospects for Ohrid
Organics within the medical cannabis industry appear exceedingly promising,
poised for substantial growth and profitability in the years ahead.
Bureaucracy poses a significant obstacle to progress across various domains,
including the hydrogen and medical cannabis sectors. Despite our eagerness to
advance swiftly, hurdles impede our path. The process of gathering a
substantial volume of documentation is necessary but time-consuming.
Thankfully, the deadline for exercising the option has been extended to
December 2024, allowing us more time to navigate through these challenges.
This endeavour will provide us with capital for HUI's operating and for
building the first proof of concept possibly in North Macedonia. This very
action has turned HUI into a hybrid company, where our main objective - the
HUI facility is fuelled by another business in a different field. I must
underline that both of the businesses are centred around helping the society
and the environment. We are cleaning up the world from plastic, providing it
with clean energy, supported by producing sustainable medical cannabis which
helps humanity all across the globe helping patients with immense pain,
depression and epilepsy. I can say we are doing good on all fronts.
The second pivotal decision was appointing Mr Simon Mann as the Chairman of
HUI. This action was driven by the need of expanding HUI's horizons, finding
new funding opportunities and interest at high political places. Effectively
the Company needs a real General to help us through the uncertain times. I
believe both of my decisions have reshaped the Company into a completely new
entity.
Aside from the extraordinary course that the Company has taken, we have been
very diligent in following our traditional path by expanding markets in Poland
and the EU obtaining EU grants and forming alliances. I am particularly very
proud of working with Paul Emmitt, the CEO of Powerhouse Energy Group (AIM:
PHE) in Longford, Ireland. Thanks to his stewardship PHE and HUI have never
been closer. I am extremely pleased that Alister Future Technologies (AFT)
Limited, HUI's Irish subsidiary received its first EU grant which will
undoubtedly lead to more grant funding.
Without a doubt Ireland is our most important project where we are working
hard to secure feedstock at the best price possible and an off-take partner
for our synthetic gas and hydrogen. Nonetheless I am very proud of small steps
to build a project pipeline in Poland despite all the political challenges. In
2023 we have gained partners in the city of Walbrzych and with the Romgos
Group and a strong interest from the government of Estonia.
It's imperative to highlight a significant post-balance sheet development that
holds immense promise for HUI and its stakeholders. Essential Energy Holdings,
a prominent multinational biofuel company, has taken notice of our diligent
efforts. We've entered into non-binding Heads of Terms to initiate discussions
for the acquisition of the company via a Reverse Takeover process. This marks
a pivotal moment, as we engage with a respected entity in the energy sector.
We're proud to align with a partner who shares our core values of
environmental preservation.
I extend my heartfelt gratitude to all the shareholders for their unwavering
support. It's with a heavy heart that I acknowledge HUI's delay in showcasing
the technology. However, my dedication and unwavering belief in its potential
remain steadfast. It is very easy to be disheartened operating in such a
difficult market, trying to implement a world changing technology, but only
good spirit and optimism combined with hard work can get us there. Many
companies in our sector lack the privilege that we possess.
To quote our Chairman "HUI must work, because it's right"
A Binkowska
Chief Executive Officer
30 April 2024
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Notes 31 December 2023 31 December 2022
£ £
Administrative expenses (1,358,657) (1,492,297)
Exceptional items 5 (241,417) -
Operating loss 6 (1,600,074) (1,492,297)
Other income 100,000 -
Investment income 9 372 4
Finance costs 10 (28,506) -
Loss before taxation (1,528,208) (1,492,293)
Income tax income 11 123,099 -
Loss for the year (1,405,109) (1,492,293)
(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 12
Basic and diluted (0.36) (0.48)
The income statement has been prepared on the basis that all operations are
continuing operations
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023 31 December 2022 (restated) 1 January 2022 (restated)
Notes £ £ £
Non-current assets
Intangible assets 14 606,125 513,837 384,862
Property, plant and equipment 15 1,418 2,471 1,671
Investments 16 183,898 425,315 -
791,441 941,623 386,533
Current assets
Trade and other receivables 18 605,317 97,855 1,995,864
Cash and cash equivalents 1,287,189 2,993,960 2,697,612
1,892,506 3,091,815 4,693,476
Current liabilities
Trade and other payables 19 227,652 108,540 505,071
Borrowings 20 598,681 570,175 -
826,333 678,715 505,071
Net current assets 1,066,173 2,413,100 4,188,405
Net assets 1,857,614 3,354,723 4,574,938
384,320
Equity
Called up share capital 25 385,520 344,320
Share premium account 26 5,248,679 5,174,684 2,214,684
Other reserves 27 157,278 324,473 3,052,395
Retained earnings (3,933,863) (2,528,754) (1,036,461)
Total equity 1,857,614 3.354.723 4,574,938
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Share capital £ Other reserves Retained earnings Total
Notes £ £ £ £
Balance at 1 January 2022 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 period - - - (1,492,293) (1,492,293)
Issue of share capital 25 40,000 2,960,000 (3,000,000) - -
Share based payment expense - - 272,078 - 272,078
Balance at 31 December 2022 384,320 5,174,684 324,473 (2,528,754) 3,354,723
Year ended 31 December 2023:
Loss and total comprehensive income for the year - - - (1,405,109) (1,405,109)
Issue of share capital 25 1,200 73,995 - - 75,195
Share based payment reversal - - (167,195) - (167,195)
Balance at 31 December 2023 385,520 5,248,679 157,278 (3,933,863) 1,857,614
GROUP STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
2023 2022
Notes £ £ £ £
Cash flows from operating activities
Cash (absorbed by)/generated from operations 34 (1,384,798) 281,625
R&D tax credit received 123,099 -
Net cash (outflow)/inflow from operating activities (1,261,699) 281,625
Investing activities
Purchase of unincorporated business - (89)
Purchase of intangible assets (92,288) -
Purchase of property, plant and equipment 156 (130,052)
Receipts from agreements 100,000 -
Investment deposits (500,000) -
Purchase of investments - (425,315)
Interest received/(paid) 372 4
Net cash used in investing activities (491,760) (555,452)
Financing activities
Proceeds from issue of shares 75,195 -
Proceeds from borrowings - 570,175
Interest paid (28,507) -
Net cash generated from financing activities 46,688 570,175
Net (decrease)/increase in cash and cash equivalents (1,706,771) 296,348
Cash and cash equivalents at beginning of year 2,993,960 2,697,612
Cash and cash equivalents at end of year 1,287,189 2,993,960
Relating to:
Bank balances and short term deposits 1,287,189 2,993,960
NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
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 and with those parts of the Companies Act
2006 applicable to companies reporting under this standard, 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.
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 2023. 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.
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. 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 £1.3m. 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.
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
Intangible IP - Indefinite *
* Refer to note 1.7
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.
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.
The intangible assets noted in the financial statements are recognised at cost
and predominantly the knowledge gained from the continued technological
development of the HUI chemical conversion chamber and the full- scale system
to be implemented into a HUI plant. These intangibles have been assessed to
have indefinite useful life as there is no limit to the period over which the
asset is expected to generate net cash inflows once implemented into HUI power
plants. Many intangible assets are susceptible to technological obsolescence.
Therefore, intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment annually, and
whenever there is an indication that the asset may be impaired.
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 New accounting standards and interpretations Changes in accounting
policies and disclosures
From 1 July 2022, the group has adopted the following standards and
interpretations, mandatory for annual periods beginning on or after 1 January
2022:
Standard Description Effective date
Amendment to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies- Amendments to IAS 1 and IFRS Practice 1 January 2023
Statement 2
Amendment to IAS 8 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2023
(Amendment - Definition of Accounting Estimates)
Amendment to IAS 12 IAS 12 Income Taxes (Amendment - Deferred Tax related to Assets and 1 January 2023
Liabilities arising from a Single Transaction)
IFRS 17 IFRS 17 Insurance Contracts 1 January 2023
The application of these standards has not had a material impact on the
financial statements.
Accounting standards and interpretations issued but not yet effective
The group has elected not to early adopt the following revised and amended
standards:
Standard Description Effective date
Amendments to IAS 1 Classification of Liabilities as Current or Non-current - Amendments to IAS 1 1 January 2024
Management has reviewed and considered these new standards and interpretations
and none of these are expected to have a material effect on the reported
results or financial position of the group.
3 Prior Period Error
During the prior period the intangible assets were incorrectly classified as
tangible assets under construction due to the development of the chemical
conversion chamber which is key to HUI's unique and revolutionary technology.
Subsequently, the majority of the capital expenditure is in relation to the
knowledge gained in developing the technology and as such has been
reclassified as an intangible asset. Please refer to the group statement of
financial position, the property, plant and equipment note 15 and intangible
assets note 14 for further information.
4 Critical accounting judgements and key sources of estimation
uncertainty
In applying the group's accounting policies, management continually evaluates
judgements, estimates and assumptions based on experience and other factors,
including expectations of future events that may have an impact on the group.
All judgements, estimates and assumptions made are believed to be reasonable
based on the most current set of circumstances available to management. Actual
results may differ from the judgements, estimates and assumptions. Significant
judgements, estimates and assumptions made by management in the preparation of
these financial statements are outlined below.
Critical judgements
Impairment assessment of intangibles (note 14)
The ultimate recovery of the value of the group's intangibles as at 31
December 2023 is dependent on the successful development and commercial
exploitation, or alternatively, the sale of the chemical conversion facility.
Judgement was exercised in assessing the extent to which impairment existed as
at 31 December 2023 in respect of the Hydrogen chemical conversion project and
associated balances. In forming this assessment, internal and external factors
were evaluated, including those that applied last year. Management determined
that no impairment existed having considered the company's market
capitalisation relative to the group's net asset value, the progression of the
Hydrogen conversion Project and the feasibility study equivalent assessment.
The underlying financial model involves estimates regarding commodity prices,
operating costs and capital development together with discount rates and
demonstrates significant headroom.
Impairment of assessment of the Group's investments (note 16)
The ultimate recovery of the value of the company's investment in Trifol is
dependent on the successful development and commercial exploitation, or
alternatively, the sale of the TRIFOL investment back to the company at an
already agreed value. In assessing the impairment of investment, the directors
exercised judgement over the reasonableness of projections and considered the
status of the project, together with the implied economic value of the assets,
and concluded that the impairment provision made was appropriate.
Recoverability of loan receivable (note 18)
Management have reviewed the recoverability and performed an ECL assessment of
the loan receivable balance owed from Ohrid Organics Limited (OOL) and
consider it fully recoverable. Management have obtained personal guarantees
from the controlling director of OOL and considered the likelihood of recovery
of this balance due to the future economic outlook of OOL and the guarantee on
the loan.
Recognition of R&D tax credits (note 11)
R&D tax credits are recognised when reliable estimates of the future
benefits have been made and when it is reasonably certain that the tax credit
will be received. Management have considered the nature of the tax claims, the
limited history of successful tax claims and receipt thereof. Management also
do not recognise any tax credits before submissions have been made to the
relevant tax authority.
Significant accounting estimates and assumptions Share-based payment
transactions (note 24)
The group measures the cost of equity-settled transactions with directors and
others 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
valuation model for awards that are not subject to market-based performance
conditions. These models require estimates for inputs such as share price
volatility and risk-free rate. The share-based payment arrangements are
expensed on a straight-line basis over the vesting period, based on the
group's estimate of shares that will eventually vest. At each reporting date,
vesting assumptions are reviewed to ensure they reflect current expectations
and immediately recognise any impact of the revision to original estimates. If
fully vested share options are not exercised and expire, then the accumulated
expense in respect of these is reclassified to accumulated losses.
5 Exceptional items
2023 2022
£ £
Expenditure
Investments written off 241,417 -
6 Operating (loss)/profit
2023 2022
Operating loss for the year is stated after charging/(crediting): £ £
Exchange losses/(gains) 12,994 (3,677)
Depreciation of property, plant and equipment 510 277
Share-based payments (167,195) 272,078
7 Auditor's remuneration
2023 2022
Fees payable to the company's auditor and associates: £ £
For audit services
Audit of the financial statements of the group and company 42,000 30,000
Audit of the financial statements of the company's subsidiaries 5,000 4,000
47,000 34,000
Fees payable to the company's auditor and associates for non-audit related
services for 2023: nil (2022:
£33,500 in relation to reporting accountant services for the LSE main market
listing)
8 Employees
The average monthly number of persons (including directors) employed by the
group during the year was:
2023 2022
Directors 6 6
Employees 1 1
Total 7 7
2023 2022
Their aggregate remuneration comprised:
£ £
Wages and salaries 412,627 339,865
Share based payments (167,195) 272,078
Social security costs 40,274 36,471
Pension costs 3,963 3,801
289,669 652,215
The highest paid director received £80,705 (2022 - £60,000) during the
period with the company average remuneration of £50,386 (2022 - £48,552).
9 Investment income
2023 2022
£ £
Interest income
Bank deposits 372 4
10 Finance costs 2023 2022
£ £
Interest 28,506 -
11 Taxation
2023 2022
£ £
Current tax
UK corporation tax on profits for the current period (123,099) -
The charge for the year can be reconciled to the (loss)/profit per the income
statement as follows:
2023 2022
£ £
Loss before taxation (1,528,208) (1,492,293)
Expected tax credit based on a corporation tax rate of 19.00% (2022: 19.00%) (290,360) (283,536)
Unutilised tax losses carried forward 206,647 283,536
Research and development tax credit (39,386) -
Taxation credit for the year (123,099) -
12 Earnings per share
Number of shares 2023 2022
Weighted average number of ordinary shares for basic earnings per share 385,520,000 312,852,798
2023 2022
Earnings £ £
Continuing operations (1,405,109) (1,492,293)
Loss for the period from continued operations
2023 2022
Pence per Pence per
share share
Basic and diluted earnings per share
From continuing operations (0.36) (0.48)
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.
13 Impairments
Impairment tests have been carried out where appropriate and the following
impairment losses have been recognised in profit or loss:
2023 2022
£ £
In respect of:
Investments 241,417 -
Recognised in: 241,417
Exceptional items
14 Intangible assets
Cost Intangibles
£
At 1 January 2022 384,862
Additions 128,975
At 31 December 2022 513,837
Additions 92,288
At 31 December 2023 606,125
Carrying amount
At 31 December 2023 606,125
At 31 December 2022 513,837
15 Property, plant and equipment
Computers
£
Cost
At 1 January 2022 1,694
Additions 1,077
At 31 December 2022 2,771
Disposals (843)
At 31 December 2023 1,928
Accumulated depreciation and impairment
At 1 January 2022 23
Charge for the year 277
At 31 December 2022 300
Charge for the year 510
Eliminated on disposal (300)
At 31 December 2023 510
Carrying amount
At 31 December 2023 1,418
At 31 December 2022 2,471
16 Investments
Current Non-current
2023 2022 2023 2022
£ £ £ £
At 1 January - - 425,315 -
Additions - - - 425,315
Impairment - - (241,417) -
- - 183,898 425,315
All impairment as noted in the table above relates to the Trifol investment.
For more detail please see the Chairman's Statement and Audit Committee
report.
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.
17 Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking Registered office Class of shares held % Held Direct
HU2021 International UK Ltd United Kingdom Ordinary 100.00
Hydropolis United Poland Ordinary 100.00
Plastic Gold Greece Ordinary 100.00
Alister Future Technologies (AFT) Limited Ireland Ordinary 100.00
Eranova Longford Ltd Ireland Ordinary 100.00
HU Future B.V. The Netherlands Ordinary 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.
18 Trade and other receivables
2023 2022
£ £
VAT recoverable 30,091 53,781
Other receivables 500,659 652
Prepayments 74,567 43,422
605,317 97,855
19 Trade and other payables
2023 2022
£ £
Trade payables 174,557 17,830
Accruals 53,000 89,934
Other payables 95 776
227,652 108,540
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The average credit period taken for trade
purchases is 29 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.
20 Borrowings
2023 2022
£ £
Borrowings held at amortised cost:
Loans from shareholders 598,681 570,175
The loan is interest bearing at 5% and repayable by December 2026.
21 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.
At 31 December 2022 Less than 1
month
£
Trade and other payables 108,540
At 31 December 2023
Trade and other payables 219,652
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 19, the
Company always pay their 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 out way current liabilities.
22 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
2023 2022 2023 2022
£ £ £ £
Assets and liabilities in foreign currencies 163,291 522,619 52,060 133,793
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.
23 Retirement benefit schemes
2023 2022
£ £
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes 3,963 3,801
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.
24 Share-based payments
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 Average exercise price
2023 2022 2023 2022
£ £
Outstanding at 1 January 2023 26,489,730 25,226,666 1,426,350 1,288,000
Granted in the period 7,666,666 2,329,730 1,050,000 218,350
Forfeited in the period (19,000,000) (1,066,666) (950,000) 80,000
Outstanding at 31 December 2023 15,156,396 26,489,730 1,526,350 1,426,350
Exercisable at 31 December 2023 11,156,396 25,130,721 993,017 1,298,979
Options granted during the year
Options granted in the year are set out below. Fair value was measured using
Black Scholes.
2023 2022
Grant date - -
Weighted average fair value - -
Inputs for model:
- 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%
- Expected dividends yields - -
Due to a lack of historical data, volatility was based on data from similar
companies.
Options outstanding
The options outstanding at 31 December 2023 had an exercise price ranging from
£0.05 to £0.15, and a remaining contractual life of about 5 years.
During the period ended 31 December 2023, options were granted on 3 April 2023
and 21 August 2023. The weighted average fair value of the options on the
measurement date was £32,444. Fair value was measured using the Black-Scholes
model.
Direct measurement
Expenses
Related to equity settled share based payments (167,195) 272,078
25 Share capital
2023 2022 2023 2022
Ordinary share capital Number Number £ £
Issued and fully paid
Ordinary shares of 0.1p each 385,520,000 384,320,000 385,520 384,320
On 16 January 2023, the Company received notice of the exercise of warrants
and therefore issued 1,200,000 ordinary shares of £0.001 each for a total
consideration of £90,000
26 Share premium account
2023 2022
£ £
At the beginning of the year 5,174,684 2,214,684
Issue of new shares 73,995 2,960,000
At the end of the year 5,248,679 5,174,684
27 Other reserves
Shares to be Share based payments reserve Total
issued reserve
£ £ £
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
Other movements - (167,195) (167,195)
Balance at 31 December 2023 - 157,278 157,278
28 Incorporation of a business
On 7 April 2023 the group incorporated in The Netherlands HU Future B.V.,
which is a wholly owned subsidiary of HUI.
Book Value Adjustments Fair Value
Net assets of business incorporated £ £ £
Cash and cash equivalents 87 - 87
Non-controlling interests Goodwill -
-
Total consideration 87
The consideration was satisfied by: £
Cash 87
Net cash outflow arising on acquisition £
Cash consideration 87
Less: Cash and cash equivalents acquired (87)
-
Contribution by the incorporated business for the reporting period included in
the group statement of comprehensive income since incorporation:
£
Revenue -
Loss after tax (4,620)
28 Contingent liability
The Directors are aware of an employment dispute with a former director of the
Company. Whilst the Directors do not believe there is any merit to this claim
as required under IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, the Company is disclosing this matter. At this time a reliable
estimate of the claim cannot be made and there is no probable settlement. The
Company will continue to assess the situation as the matter develops.
29 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 plan to raise debt against each plant to leverage relatively
cheap debt costs in the current market.
30 Events after the reporting date
On 2 January 2024 it was announced that the board had agreed to exercise the
option to acquire 49% of Ohrid Organics Limited (OOL) a company with a
subsidiary, King Fild DOO (King Fild) that own a facility in North Macedonia
with a licence, for 37 greenhouses with currently 4 operational, to grow and
sell medicinal cannabis. The Board expects the dividends which will follow
this acquisition to provide HUI with the necessary cashflow in 2024 and beyond
for working capital purposes and to fund the development of HUI's first waste
plastic to hydrogen facility.
On 22 January 2024 James Nicholls-May, CFO was granted £25,000 worth of share
options in the Company at an exercise price of 3.875p per share exercisable
for a period of 10 years from 22 January 2025 for his work on, amongst other
things, the due diligence and exercising of the OOL option.
On 26-27 February 2024 through a number of RNS's the Company announced the
potential acquisition, by way of reverse take-over, of Helmond Holding Group
Corp (HHG), who are due to be renamed Essential Energy Holding Group Corp
(EEH), a substantial and profitable international bio-energy company involved
in the production and business of bio-fuels and its bi-products, with revenue
in excess of EUR 365m and profits before taxes in excess of EUR 40m.
On 5 March 2024 the Company updated it's shareholders on the first commercial
medicinal cannabis harvest from OOL's subsidiary King Fild. Where a harvest of
200kg of product had occurred, with 50kg of this being used for testing.
Subsequently a purchase order for an initial 10kg at EURO 2.50/g was received
from an English distributor.
On 29 April 2024 the Company signed an addendum to the OOL option agreement
which extended the exercise period until 31 December 2024. Allowing the
Company to finalise the exercising of the option at any point during this
period.
31 Related party transactions
2023 2022
£ £
Shareholder Loan 598,681 570,175
Ohrid Loan 500,000 -
Other transactions with related parties
During the year the group paid expenses of £nil (2022 - £nil) for Plastic
Power Limited (A Binkowska) and £nil (2022 - £63) for The Plastic Neutrality
Pledge (A Binkowska).
The following amounts were outstanding at the reporting end date:
As at 31 December 2023 the group was owed £250 (2022 - £250) by Plastic
Power Limited (A Binkowska) and
£403 (2022 - £403) by The Plastic Neutrality Pledge (A Binkowska).
32 Controlling party
There is no controlling party of the group.
33 Cash (absorbed by)/generated from operations
2023 2022
£ £
Loss for the year before income tax (1,528,208) (1,492,293)
Adjustments for:
Other income (100,000) -
Finance costs 28,506 -
Investment income (372) (4)
Loss on disposal of property, plant and equipment 388 -
Depreciation and impairment of property, plant and equipment 510 277
Equity settled share based payment expense (167,195) 272,078
Impairment of Intangibles 241,417 -
Movements in working capital:
(Increase)/decrease in trade and other receivables (7,463) 1,898,098
Increase/(decrease) in trade and other payables 147,619 (396,531)
Cash (absorbed by)/generated from operations (1,384,798) 281,625
2023 2022
Notes £ £
Non-current assets
Intangible 606,125 -
assets
36
Property, plant and 1,418 1,433
equipment
37
Investments 184,914 426,331
38
792,457 427,764
Current assets
Trade and other 994,820 1,339,646
receivables
39
Cash and cash equivalents 1,175,041 2,986,727
2,169,861 4,326,373
Current liabilities
Trade and other 170,592 101,870
payables
40
Borrowings 598,681 570,175
769,273 672,045
Net current assets 1,400,588 3,654,328
Net assets 2,193,045 4,082,092
Equity
Called up share 385,520 384,320
capital
45
Share premium account 5,248,679 5,174,684
Own shares 157,278 324,473
Retained earnings (3,598,432) (1,801,385)
Total equity 2,193,045 4,082,092
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
£1,797,047 (2022 - £1,414,607 loss).
The financial statements were approved by the board of directors and authorised for issue on 30 April 2024 and are signed on its behalf by:
Director
Company registration number 13421937 (England and Wales)
Share capital Share premium account Other reserves Retained earnings Total
£
£ £ £
Notes £
Balance at 1 January 2022 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 272,078 - 272,078
expense
-
Issue of share capital 45 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
Year ended 31 December 2023:
Loss and total comprehensive income for the year
- (1,797,047) (1,797,047)
-
Other (167,195) - (167,195)
movements
-
Issue of share capital 45 1,200 73,995 - - 75,195
Balance at 31 December 2023 385,520 5,248,679 157,278 2,193,045
(3,598,432)
34 Accounting policies Company information
Hydrogen Utopia International PLC 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.
34.1 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.
34.2 Going concern
Refer to note 1.4 of the group financial statements.
34.3 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
35 Intangible assets
Intangibles
£
At 1 January 2023 -
Additions 606,125
At 31 December 2023 606,125
36 Property, plant and equipment
Computers
£
Cost
At 1 January 2022 687
Additions 1,046
At 31 December 2022 1,733
Additions 1,928
Disposals (1,733)
At 31 December 2023 1,928
Accumulated depreciation and impairment
At 1 January 2022 23
Charge for the year 277
At 31 December 2022 300
Charge for the year 510
Eliminated on disposal (300)
At 31 December 2023 510
Carrying amount
At 31 December 2023 1,418
At 31 December 2022 1,433
37 Investments
Current Non-current
2023 2022 2023 2022
£ £ £ £
At 1 January - - 426,331 -
Additions - - - 426,331
Impairment - - (241,417) -
-
- 184,914 426,331
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried
at amortised cost in the financial statements approximate to their fair
values.
Movements in non-current investments
Shares in subsidiaries Other investments Total
£ £ £
Cost or valuation
At 1 January 2023 & 31 December 2023 1,016 425,315 426,331
Impairment
At 1 January 2023 - - -
Impairment losses - (241,417) (241,417)
At 31 December 2023 - (241,417) (241,417)
Carrying amount
At 31 December 2023 1,016 183,898 184,914
At 31 December 2022 1,016 425,315 426,331
39 Trade and other receivables
2023 2022
£ £
VAT recoverable 14,773 35,978
Amounts owed by subsidiary undertakings 438,246 1,260,040
Other receivables 500,401 402
Prepayments 41,400 43,226
994,820 1,339,646
40 Trade and other payables
2023 2022
£ £
Trade payables 122,497 16,595
Accruals 48,000 84,500
Other payables 95 775
170,592 101,870
41 Related party transactions
2023 2022
£ £
Shareholder Loan 598,681 570,175
Ohrid Loan 500,000 -
42 Events after the reporting date
Refer to note 31 of the group financial statements.
43 Ultimate controlling party
Refer to note 33 of the group financial statements.
44 Share-based payments
The company information for share-based payments is the same as the group
information and is shown in note 24.
45 Share capital
Refer to note 25 of the group financial statements.
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