REG - Windar Photonics PLC - Audited Results, Trading Update and Notice of AGM
01/07/2024 07:00
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RNS Number : 4832U Windar Photonics PLC 01 July 2024
1 July 2024
Windar Photonics plc
("Windar", the "Company" or the "Group")
Audited Results for the 12 months ended 31 December 2023,
Update on current trading and sales development activity
and
Notice of AGM
Windar Photonics plc (AIM: WPHO), the technology group that has developed its
WindEye and WindTimizer LiDAR wind sensors and its related 'Nexus' software
suite designed to efficiently and cost effectively increase the power output
and reduce lifetime operating costs of electricity generating wind turbines,
today announces its audited results for the 12 months ended 31 December
2023. Following the successful, oversubscribed share placing at a premium in
April to raise £4.4m (before expenses) to support growth, the Company is
pleased to give an update on current trading and on its latest business
development activities.
Highlights
Financial:
· Revenue of €4.8m represents 157% growth on prior year revenue
of €1.9m
· EBITDA (before share based payments) of €0.2m (2022: €0.8m
loss) represents first year of positive EBITDA in Company's history
· Loss for the year narrowed to €0.2m (2022: €1.1m)
· Basic loss per share: €0.003ps (2023: €0.019ps)
· £4.4m (before expenses) raised in April 2024 through
oversubscribed equity placing issued at a premium
· EBITDA reduced from anticipated €0.4m predominantly as a result
of the non-cash reclassification of an operating lease as falling outside
IFRS16
Operational:
· Significant order in April with a gross value of US$1.27m for
delivery to the North American market
· Significant orders in February for a combined gross value of
€1.3m to the Chinese market
· Launch of Windar Nexus software suite, adding further application
and efficiencies for our customers
Current Trading & Sales Development Activity
· Revenue for 6 months ending 30 June 2024 expected to be
c.€2.3m, +70% YOY
· Further orders received for H2 of €3.8m
· Order pipeline is increasingly strong
· Following the $1.27m order in April, we are now in discussion
with several more US based operators of similar scale over orders for multiple
turbine platforms
· We are in the advanced stages of potential new orders from China,
Japan and Australia
· First 'Nexus' software platform installations expected in August
2024 with further value enhancing modules in development and testing
Outlook
With our sales and forward order book in June 2024 already reflecting over
125% of entire 2023 revenue, supported by a strong and developing order
pipeline, we have confidence in the growth of sales of WindEye and WindTimizer
hardware and, increasingly, of our Nexus software related services. To date,
our sales focus has been largely around the Vestas V82 turbine platform, where
there remains significant potential, but we are beginning to successfully test
and target sales on other turbine platforms, such as Senvion and GE, thereby
further enhancing the Company's prospects for future growth.
With a strong balance sheet, ongoing successful product development, increased
manufacturing capacity and greater supply chain resilience, the Board looks to
the future with confidence.
For further information, please contact:
Windar Photonics plc
Gavin Manson
Tel: +45 24234930
WH Ireland Limited (Nomad & Broker)
Hugh Morgan / James Bavister / Isaac Hooper
Tel: +44 20 7220 1666
Notes to Editors:
Windar Photonics plc is a technology group that has developed Light Detection
and Ranging ("LiDAR") optimisation systems for use on electricity generating
wind turbines. LiDAR wind sensors in general are designed to remotely measure
wind speed and direction.
Visit our website for further information: https://www.windarphotonics.com/
(https://www.windarphotonics.com/)
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Having delivered our second consecutive year of revenue growth of over 150%
and the first positive EBITDA in the history of the Company in 2023, and with
sales and orders for 2024 already at 125% of 2023 revenue when we raised
£4.4m through an undiscounted capital raise in April 2024, the Company is
well positioned to deliver its considerable potential.
Following the challenges in 2022 posed by the impact of the pandemic on supply
chains, 2023 proved to be an extremely positive and pivotal year for the
Company. Our second successive year of sales growth in excess of 150% allowed
the achievement of positive EBITDA generation for the first time in the
Company's history. As importantly, the sales momentum and pipeline established
in the second half of 2023 gives confidence in our ability to maintain a
similar trajectory of YOY sales growth with the resultant movement to
significant profitability at EBITDA and EPS level. This confidence allowed us
to seek and raise the £4.4m (before expenses) equity issue completed in April
2024 - providing not only the working capital and balance sheet strength
necessary to move forward unconstrained by funding but also bringing new
institutional investors onto our share register.
Our sales development and ability to raise capital has been facilitated by:
1. the continued development of our core physical LIDAR products for
deployment across turbine platforms
2. development of our Nexus range of software products providing a
platform for future development to enable data driven performance improvement
for customers across individual turbines and entire wind farms
3. increasing commercial validation of the economic benefits of
implementing our products through the now in excess of 1,000 systems deployed
globally across turbine platforms in North America, Asia and Europe.
4. manufacturing process and capacity improvements as production is
scaled up with increased quality assurance and product robustness
Our active product development now means that the proven 3-4% turbine
performance improvement from installation of our WindEye and WindTimizer
products will increasingly become an entry level benefit with our Nexus
software range providing the opportunity for significantly enhanced turbine
performance improvement, data driven maintenance planning and turbine life
extension.
In April 2024 we were pleased to announce a €1.2m order marking a new
relationship with a significant turbine operator in the North American market.
As well as providing the potential for material further orders this also
marked the first revenue from sales of software related services through our
Nexus platform.
These developments leave the Company with a very exciting opportunity to
develop scale and value and the Board are committed to delivering this value,
as evidenced both through participation in the recent equity raise and in
existing holdings.
During the year to 31 December 2023, revenue increased by over 150% from
€1.9m to €4.8m. With 67% of revenue coming in the final 5 months of the
financial year, this growth demonstrates developing sales momentum - albeit
influenced by the seasonally slower first quarter for installations /
invoicing due to weather conditions in Northern Hemisphere wind farm
locations. Gross margins remaining at c50% provide a solid base for targeted
progression as we extend our global reach and increasingly develop software
related sales.
Our first positive financial year of positive EBITDA of €0.2m (before
share-based payments) (2022: loss €0.8m) is a significant milestone, which,
combined with our current order book and strong sales pipeline, gives us
confidence for the future.
The Group exited 2023 with cash balances of €0.2m, influenced negatively by
the concentration of sales late in the year and a resultant reduction in
deferred revenue of €1m due to the timing of orders and scheduled
deliveries.
With our strong order book coming into 2024 and the breakthrough €1.2m order
from the new customer in North America in April 2024 that took our sales and
forward order book for 2024 to €5.9m, the Board sought to raise capital in
order to ensure that the company's development is unconstrained by working
capital restriction, as well as provide the balance sheet strength necessary
to develop new customer relationships and increase supply chain resilience. We
were delighted to be successful in raising £4.4m (before expenses) through an
equity placing at a premium share price of £0.35 - bringing in significant
new institutional investors as well as individuals. The pricing of the issue
demonstrated investor confidence in the Company's prospects and the Board is
committed to ensuring that we deliver on the full potential of both our
hardware and software products.
Board & Employees
Whilst the Group has developed significantly over the last 24 months, these
have not been easy years for the Group's employees and we as a Board thank
them for their resilience and dedication through, first of all, the pandemic,
and then the challenges of rapid growth.
Having joined the Board as Chairman in October 2023, I was pleased to welcome
Gavin Manson to the Board as a Non-Executive Director in February 2024. Gavin
brings broad experience as a CFO of listed and developing companies and will
bring focus on the development of robust financial and operational processes
to support our targeted growth.
The Board and employees of Windar were shocked and greatly saddened by the
sudden and unexpected passing of Johan Blach Petersen, my predecessor as
Chairman, in April 2024. Johan was instrumental in the development of Windar
over many years and his contribution was a significant factor in seeing the
company through some difficult times on the way to our successful 2023 and the
Company's current strong position. He will be greatly missed.
Outlook
With our sales and forward order book in June 2024 already reflecting over
125% of entire 2023 revenue, supported by a strong and developing order
pipeline, we have confidence in the growth of sales of WindEye and WindTimizer
hardware, and increasingly, of our Nexus software related services. To date,
our sales focus has been largely around the Vestas V82 turbine platform, where
there still remains significant potential, but we are beginning to
successfully test and target sales on other turbine platforms, such as Senvion
and GE, thereby hugely increasing the Company's prospects for future growth.
With a strong balance sheet, ongoing successful product development, increased
manufacturing capacity and greater supply chain resilience, the Board looks to
the future with confidence.
David George Lis
Chairman
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their Strategic Report and the audited financial
statements for the year ended 31 December 2023.
PRINCIPAL ACTIVITIES OF THE GROUP
Windar Photonics is a technology Group that has developed LiDAR wind sensors
and a related software suite designed to efficiently and cost effectively
increase the power output and reduce the lifetime operating costs of
electricity generating wind turbines. LiDAR wind sensors in general are
designed to remotely measure wind speed and direction.
The Group's key physical products are the WindEYE™ and WindVISION™ sensors
which measure the wind speed at different measuring points by scanning a laser
beam ahead of the wind turbine. By measuring the wind speed a variety of wind
information is derived such as wind direction, turbulence, wind shear, wind
gust and wake detection. The products and various algorithms are designed for
the general optimisation of wind turbines both in respect of increasing the
Annual Energy Production and general load reduction options.
The Group has recently developed and implemented the first phase of its Nexus
software platform to support the data driven management of the improvement of
performance of individual wind turbines and in future turbine farms.
REVIEW OF THE BUSINESS
The Chairman's Statement includes a general review of the Group's business
for the year.
FUTURE DEVELOPMENTS IN THE BUSINESS
Independent Power Producers (IPPs) and Wind Park Operators are primarily
interested in general optimisation of existing wind turbines thereby
potentially increasing power output. One method of achieving this is by
optimisation of the yaw alignment of the wind turbine, meaning that the wind
turbine is better facing the wind. This can be obtained by fitting a LiDAR
wind sensor such as the WindEYE™ sensor. Windar's sales progress in 2023
marked a breakthrough year for the Group and this has again seen
transformational development through a significant new customer relationship
in North America. In April 2024 we signed a significant €1.2m order with
this North American client as a first stage in addressing the substantial
opportunity.
As well as including the sale of a number of WindVISION sensors the North
American order also marked the first revenue from services related to our
Nexus software platform. This platform will increasingly be the foundation for
future developments in the provision of enhanced services giving clients with
our WindEYE and WindVISION products the opportunity to realise performance
improvements beyond the core wind alignment benefits from installation of our
hardware. The data and benefits from utilising current and future Nexus
software modules will optimise alignment, operating hours, planned maintenance
and operating life of individual turbines as well as incremental benefits from
the consolidation of data and response across wind farms.
GROUP RESULTS AND DIVIDENDS
In the year ended 31 December 2023, Windar Photonics achieved revenue of
€4.8 million (2022; €1.9 million) from sales of WindEYE(TM) and
WindVISION(TM) sensors and related services which represent a revenue increase
of 157% from 2022. The total gross profit for the year amounted to €2.4
million (2022; €0.9 million) representing an increase of 154% from the prior
year.
The Group loss for the year before taxation and exceptional expenses decreased
to €0.35 million (2022: €1.3 million).
No dividends are payable for the year under review (2022: No dividends
payable).
CAPITAL INCREASE
Following the period end, in April 2024, the Group raised £4.4m (before
expenses) of capital through the issue of 12,631,426 Ordinary Shares at an
undiscounted price of 35p per share. The Capital was raised in order to
provide the Group with the working capital necessary to satisfy demand for its
products and increased balance sheet strength.
PRINCIPAL RISKS AND UNCERTAINTIES
Sales cycle and product acceptance
As with many large projects the successful addition of a client and the
successful installation of the Group's product for a potential client can
entail a long sales cycle, which often also involves protracted negotiations
and meeting detailed technical specifications and requirements, the length of
which may adversely affect the Group's financial situation and cash flow and
increase project costs. Furthermore, there can be no guarantee that the
commencement of such negotiations will result in successful addition of a
client and, as such, significant time may be spent, and expense may be
incurred without return for the Group.
As the Group increases its presence in the market and is undertaking projects
with IPP, Wind Farm Operators and OEMs the sales cycle risk is reduced, as
there are more potential clients, and the non-conversion of any potential
client is less of a risk to the business. As the Group continues to grow this
risk will become a normal trading risk.
Products and services failure
Quality is critical to the Group's business solution. While the Group's
technology is complete and extensive security and scalability testing has been
carried out, a major system defect, due to design mistake or technology
failure could impact upon current and future customer demand. This may lead to
adverse press and market commentary
damaging the reputation of the Group, and require rectification costs and/or
claims against the Group. Further, all sales made by the Group are made with a
two-year warranty with the first sale having been made in the fourth quarter
of 2013. No major claims have been made under such warranties and the Group
has worked with its customers to enhance the installations on site to date but
there can be no assurance that the Group will not incur significant
liabilities in satisfying warranty claims in the future.
The Group has not had to initiate a product recall. However, it may be exposed
to product recalls if its products are faulty or if regulations are breached.
If the Group has to recall products, it may incur significant and unexpected
costs and damage to its reputation. The Group has implemented quality control
procedures to mitigate this risk.
Reliance on suppliers
The substantial part of subcomponents that are assembled into the WindEYE™
and WindVision™ sensors are manufactured and supplied by third parties. It
may be difficult to replace any of these subcomponents if there was an
interruption in the supply, consistency, quality or timely delivery or an
increase in costs above the forecast levels, which could adversely affect the
Group's operating results or harm its reputation. Any such interruption where
the Group is unable to locate and engage an alternative within a reasonable
time and at an acceptable cost may result in the Group being unable to offer
its services or products or a material interruption in the provisions of its
services or products, which in turn may have a material adverse effect on the
Group's business and prospects.
Other commercial factors
The Group is still in an early business cycle stage and now entering the next
higher growth cycle means that the Group will be exposed to a higher
concentration of single customers and/or contracts. In 2023 this was
illustrated by the fact that 2 customers accounted for 55% of the annual Group
revenue (2022: 2 customers, 64%). New orders received post the period end are
expected to significantly reduce concentration in 2024 and beyond. The Group
is aware and is paying attention to the potential commercial risk this
development brings. One of the ways to mitigate this risk going forward is to
continue to focus strongly on both ongoing, but just as important, new OEM
projects with the view over time to developing a broader customer base.
Being in an early business cycle the Group has been dependent on financing the
business through placing of shares in the market primarily to finance annual
losses generated in the Group. The Group is aware of the risks associated with
being dependent on such capital sources. The focus in the Group to mitigate
this risk is to arrive at a position where any potential future share placings
primarily will be needed for financing of working capital and not financing of
annual losses. Following the April 2024 share issue, no further issues are
anticipated.
Reliance on key personnel
The Company's future success is substantially dependent on the Group's ability
to attract, train, motivate and retain key management, commercial and
technical personnel with the necessary skills and experience. There is no
guarantee that the Group will be successful in attracting and/or retaining key
personnel. The loss of any of these key personnel for whatever reason may have
a material adverse effect on the future of the Company's business.
Confidentiality
In order to protect its proprietary technology and processes, the Group relies
on confidentiality agreements with employees, licensees, independent
contractors and other third parties. These agreements may not effectively
prevent disclosure of confidential information and may not provide an adequate
remedy in the event of disclosure of confidential information. Costly and
time-consuming litigation could be necessary to enforce and determine the
scope of the Group's proprietary rights, and failure to obtain or maintain
trade secret protection could adversely affect the Group's competitive
business position.
SECTION 172 OF THE COMPANIES ACT 2006
The Directors are well aware of their duty under Section.172 of the Companies
Act 2006 to act in the way which they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as
a whole and, in doing so, to have regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of the Company's employees;
• the need to foster the Company's business relationships with suppliers,
customers and others;
• the impact of the Company's operations on the community and the
environment;
• the desirability of the Company maintaining a reputation for high
standards of business conduct; and
• the need to act fairly between members of the Company.
The Board recognises that the long-term success of the Group requires positive
interaction with its stakeholders. Positive engagement with stakeholders will
enable our stakeholders to better understand the activities, needs and
challenges of the business and enable the Board to better understand and
address relevant stakeholder views which will assist the Board in its decision
making and to discharge its duties under Section 172 of the Companies Act
2006. The comprehensive interaction with stakeholder incorporates among others
regulatory announcements as well as direct communication between Shareholders
and the Board.
In Windar Photonics, we set an honour in building long-term corporate
relationships, with both suppliers, customers and development partnerships,
which has been an essential part, since the incorporation of the Group and is
still today a fundamental part of our progress.
One of the biggest assets in Windar Photonics PLC is our team members. Their
hard work and personal commitment are highly valued and is the cornerstone for
the continued positive future journey for the Group. We will continue to
ensure the well-being, embraced their ambitions and empower them, as an
essential part of our Group.
KEY PERFORMANCE INDICATORS
The Group considers the revenue, the EBITDA development, cash balances, levels
of debt, and employee numbers as the current key performance indicators of the
business as it has been in a start-up phase.
Revenue for the year was €4.8 million (2022: €1.9 million) representing an
increase of 157% and Gross Profit showed an increase of 154%.
EBITDA gain, representing the loss from operations and adding back the
depreciation and amortisation charges of €0.2 million (2022: €0.2
million), amounted to €0.1 million (2022 loss: €0.8 million).
At 31 December 2023 the Group had cash balances of €0.2 million (2022:
€1.4 million).
Trade receivables at the end of the year increased to €0.5 million (2022:
€0.4 million).
The Group's loans at 31 December 2023 amount to €1.8 million (2022: €1.9
million) of which €0.5 million (2022: €0.2 million) is classified as
current.
Employee numbers at 31 December 2023 were 29 (2022: 23).
BY ORDER OF THE BOARD ON JUNE 29, 2024
Jorgen Korsgaard Jensen
Director
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and the Financial Statements for the year
ended 31 December 2023.
FUTURE DEVELOPMENTS
The future developments for the Group are discussed in the Chairman's
Statement and the Strategic Report.
GROUP RESULTS AND DIVIDENDS
The Group results and dividends are shown in the Strategic Report.
DIRECTORS
The Directors of the Company during the year were:
Jørgen Korsgaard Jensen
Johan Blach Petersen (resigned on 9 April 2024)
Paul Joseph Hodges
Andrew John Richardson
David George Lis (appointed on 6 October 2023)
Gavin Maxwell Manson was appointed on 14 February 2024.
DIRECTORS' INTERESTS
As at 31 December 2023 As at 26 June 2024
Ordinary Shares Per cent Warrants Ordinary Shares Per cent Warrants
Jørgen Korsgaard Jensen (held by Pasinika Limited. see below)
David George Lis 5,649,864 8.3% - 5,649,864 7.0% -
337,500 0.5% - 1,826,071 2.2% -
Paul Joseph Hodges 2,125,318 3.1% - 3,545,318 4.4% -
Johan Blach Petersen 1,882,841 2.8% - 1,882,841 2.3% -
Andrew John Richardson - - - 50,000 0.1% -
Gavin Manson - - - 428,571 0.5% -
SIGNIFICANT SHAREHOLDERS
Shareholders who have notified the company of shareholdings in excess of 3% as
at 31 December 2023 and at 26 June 2024 are as follows:
As at 31 December 2023 As at 26 June 2024
Number of ordinary shares Percentage Number of ordinary shares Percentage
Pasinika Limited 5,649,864 8.3 5,649,864 7.0
Paul Joseph Hodges 2,125,318 3.1 3,545,318 4.4
Danmarks Tekniske Universitet 2,352,990 3.4 2,352,990 2.9
Milton Holding Horsens A/S 2,119,400 3.1 2,119,400 2.6
DIRECTORS' BIOGRAPHIES
David George Lis (Non-Executive Chairman), aged 74
David George Lis is an experienced non-executive director within investment
and fund management. David joined Norwich Union Investment Management in 1997
(later merging to form Aviva Investors), before becoming Head of Equities in
2012 and latterly Chief Investment Officer, Equities and Multi Assets, until
his retirement in March 2016. David is currently the Chairman of WildLife
Group Limited, the Senior Independent Director of Melrose Industries plc and
Hostmore Plc and a Non-Executive Director of Dowgate Capital Limited. He has
previously held the position of Senior Independent Director of Electra Private
Equity plc as well as being a non-executive director of BCA Marketplace plc
and the Multifamily Housing REIT plc.
Jørgen Korsgaard Jensen (Chief Executive Officer and Founder), aged 61
Jørgen Korsgaard Jensen is an expert in optical technology solutions and has
been involved in Research & Development projects in the field of optical
technology in collaboration with the Danish Technical University, DTU for more
than twenty years. Prior to that he held leading positions in international
companies with responsibilities for strategy, finance, purchasing and
logistics. He is the chief executive and founder of OPDI Technologies A/S,
which is a technology incubator company focused on development of
opto/electronic sensors primarily for consumer electronic products.
Further, he is chief executive of WaveTouch Group Limited, which develops and
markets optical touch screen technologies.
The businesses of Windar Photonics and WaveTouch Group Limited were both
initially created by, and are derived from businesses within OPDI Technologies
A/S.
Paul Joseph Hodges, aged 64
Paul Joseph Hodges has had a career in the City of London, spanning 40 years,
as an investment analyst, stockbroker and corporate financier. During this
period, Paul has held prominent roles at S G Warburg, James Capel, Schroder
Securities, Collins Stewart and Cenkos plc. Paul was a founding partner of
Cenkos, a main board director and a central figure in the firm's landmark
deals. He now acts as an independent consultant. Paul has a B.Sc(Economics)
degree in Econometrics from the London School of Economics and a M.Sc degree
in Management Science from Imperial College, London.
Andrew John Richardson, aged 59
Andy is a non-executive chairman, director and board advisor who helps
businesses to achieve success. Andy has a wealth of expertise across a range
of organisations at CEO, Chair and non-executive levels, including having been
Chairman of Rubicon Partners Industries, CEO of Arc Specialist Engineering
Limited and CEO of Metalrax Group Plc. He has a strong track record in
business transformation, scale-up and international development in quoted,
private equity and family office ownership structures. He has a demonstrated
history of success internationally in the manufacturing sector including
Automotive, FMCG, Medical Devices, Aerospace, Off-Highway, Engines, Consumer
Products, Safety Products, Building Products. Andy was educated at Cambridge
University holding two degrees, M.A. and M.Eng. Andy loves helping people to
succeed.
Gavin Maxwell Manson, aged 58
Gavin Manson is an experienced non-executive director and CFO. He is currently
CFO of agriculture and engineering group Carr's Group plc and is a
Non-Executive Director of healthcare group Meallmore Ltd. He was previously
Chairman of Hostmore plc and between 2016 and 2022 was Chief Financial and
Operating Officer of Electra Private Equity PLC having previously held senior
finance positions in a number of listed companies including Thomas Cook Group
plc, Premier Farnell plc and Merck KGaA.
DIRECTORS' REMUNERATION
The value of all elements of remuneration received by each Director in the
year was as follows:
Wages and salaries Fees Fair value of warrant costs Total
€ € € €
Year ended 31 December 2023
Executive Directors
Jørgen Korsgaard Jensen - - - -
Non-executive Directors
Johan Blach Petersen - - - -
David George Lis - 24,494 - 24,494
Paul Joseph Hodges - 28,350 - 28,350
Andrew John Richardson - 26,933 - 26,933
Total - 79,777 - 79,777
Year ended 31 December 2022
Executive Directors
Jørgen Korsgaard Jensen - - - -
Non-executive Directors
Johan Blach Petersen - 13,500 - 13,500
Paul Joseph Hodges - 28,350 - 28,350
Andrew John Richardson - - - -
Total - 41,850 - 41,850
QUALIFYING THIRD PARTY INDEMNITY PROVISIONS
The Company has put in place qualifying third party indemnity provisions for
all of the directors of Windar Photonics Plc.
FINANCIAL INSTRUMENTS
Currency
The Group reports its revenues and costs in €, whilst some of these revenues
and costs may arise in currencies other than this including, inter alia US
Dollars, Pounds Sterling, Chinese Yuan and Danish Krone. As a result, the
Group is exposed to risks associated with fluctuations in foreign currency
exchange rates, which may adversely affect the Group's reported profits or
make its overseas contracts relatively less valuable. In particular, customers
are invoiced in their local currency rate, which may in the future give rise
to material currency exposure risks. The Group does not currently engage in
any currency hedging although as the business expands and foreign currency
exposure increases the Group will consider options to mitigate the exposure to
foreign currency movements.
Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve this aim,
the Group finances its operations through a mix of equity and borrowings. The
Group's objective is to provide funding for future growth and achieve a
balance between continuity and flexibility through its bank facilities and
future intergroup loans.
The Board receives cash flow projections on a regular basis as well as
information regarding cash balances. At the end of the financial year these
projections indicated that the Group is expected to have sufficient liquid
resources for a period of at least twelve months from the date of signing of
these financial statements, to meet its obligations. Accordingly, the Board
has adopted the going concern basis. See note 3 for further details.
CREDIT RISK
The Group regularly reviews and assesses the trade receivables for impairment
and considers the market risk in respect of the trade receivables. As the
Group trades with a concentrated number of customers the Group has reviewed
trade receivables on an individual basis. The Group has made a provision
against overdue trade receivables of € Nil (2022: € Nil). The Group
considers the followings events as indicators of an impairment:
· default of payments of the counterparty;
· financial difficulties of the counterparty;
· it's becoming probable that the counterparty enters bankruptcy or
other financial reorganisation;
· granting to the counterparty a concession that the Group will not
otherwise consider.
EMPLOYMENT POLICIES
The Group is committed to employee involvement in the business and there are
consultative procedures available for management and other employees to
discuss matters of mutual interest.
The Group has a policy of non-discrimination in respect of sex, colour,
religion, race, nationality or ethnic origin and the recruitment of disabled
persons is only subject to any overriding consideration of access and safety.
TREASURY POLICY
The Group has adopted formal treasury policies to control its financial
instruments. It is a Group Treasury policy not to undertake transactions of a
speculative nature. Group cash flows are managed centrally and surplus cash is
invested in short-term financial instruments.
Compliance with these policies is monitored by the Board.
RESEARCH AND DEVELOPMENT
The Group continues to undertake R&D into LiDAR technology. During the
year the Group spent €1,517,237 (2022: €994,713) on R&D of which
€493,436 (2022: €311,262) has been capitalised as an intangible asset as
shown in note 17 to the financial statements.
The Group has received public Research and Development Grants of €165,223
(2022: €121,019) in respect of the capitalised research and development. At
the end of the year, 2 development projects are ongoing which are supported by
public Research and Development Grants and outstanding grants which can be
claimed in the coming two years amount to €51,127 (2022: €209,754).
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the
Director's Report, the Corporate Governance Statement and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have elected to prepare the
Group and company financial statements in accordance UK-adopted international
accounting standards ("IFRS"). Under company law the directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and company and of the
profit or loss of the Group for that period. The directors are also required
to prepare financial statements in accordance with the rules of the London
Stock Exchange for companies trading securities on the Alternative Investment
Market.
In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable
and prudent;
· state whether the Group and Parent Company financial
statements have been prepared in accordance with IFRSs as adopted by the
United Kingdom, subject to any material departures disclosed and explained in
the financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group and Company and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
WEBSITE PUBLICATION
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are
published on the Group's website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions. The maintenance and
integrity of the company's website is the responsibility of the directors.
The directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein.
AUDIT INFORMATION
The directors who were in office on the date of approval of these financial
statements have confirmed, as far as they are aware, there is no relevant
audit information of which the Group's auditor is unaware.
Each of the directors have confirmed that they have taken all the steps that
they ought to have taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Group's auditor is aware
of that information.
AUDITORS
A resolution to re-appoint Gravita Audit Limited as the Company's Auditor will
be proposed at the Annual General Meeting.
BY ORDER OF THE BOARD ON JUNE 29, 2024
Jorgen Korsgaard Jensen
Director
The Group has elected to follow the QCA guidelines in respect of Corporate
Governance, which is also published on the Company's website.
In common with other organisations of a similar size, the Executive Director
is heavily involved in the day-to-day running of the business. The Board of
Directors meets regularly and is responsible for formulating strategy, and for
the trading subsidiaries, monitoring financial performance and approving major
items of capital expenditure. All Directors have access to the advice and
services of the Company Secretary.
BOARD OF DIRECTORS
The Board includes a minimum of three Non-Executive Directors. The Board has
scheduled meetings every second month for each year and others as required.
The Board retains full responsibility for the direction and control of the
Group. No strategic powers have been delegated and for these reasons the Board
did not have, during the year, a formal schedule of matters specifically
reserved to it.
There is currently no formal agreed procedure for Directors in the furtherance
of their duties to take independent professional advice as necessary at the
Company's expense.
NON-EXECUTIVE DIRECTORS
The appointment of Non-Executive Directors is a matter for the Board as a
whole based on recommendations from the Nominations Committee. Although
recommended by the Code, there is currently no formal selection process. The
Non-Executive Directors have contracts for services for an unspecified period.
Non-Executive Directors are subject to re-election every three years.
Terms and conditions of appointment of the Non-Executive Directors are
available for inspection.
EXECUTIVE DIRECTORS
Directors are appointed by the Board of Directors but stand for election by
the shareholders at the Annual General Meeting. The Executive Directors are
subject to re-election every three years.
The Company holds board meetings regularly throughout the year. Seven
scheduled board meetings were held during the year, as well as one audit
committee meeting, one remuneration committee meeting and one nomination
committee meeting. Attendance by board members is shown below.
Board Audit Committee Remuneration Committee Nomination Committee
Number of meetings held 7 1 1 1
Executive board members
Jørgen Korsgaard Jensen 7 N/A N/A N/A
Non-executive board members
Johan Blach Petersen 7 1 1 1
Paul Joseph Hodges 7 1 1 1
Andrew John Richardson 7 1 1 1
David George Lis 1 0 0 0
In the event that Board approval is required between Board meetings, Board
members are emailed the details, including supporting information in order to
make a decision. The decision of each Board member is communicated and
recorded at the following Board meeting. Board members are aware of the time
commitment required when joining the Board.
BOARD COMMITTEES
Audit Committee
During the year to 31 December 2023, the Audit Committee comprised Johan Blach
Petersen, Paul Joseph Hodges and Andrew John Richardson and was chaired by
Johan Blach Petersen. Andrew John Richardson now chairs the Committee. The
Audit Committee meets at least once a year and is responsible for reviewing
the annual and half-yearly financial statements, the system of internal
controls and risk management, and the terms of appointment and remuneration of
the auditor. It is also the forum through which the auditor reports to the
Board. The Audit Committee is also responsible for reviewing the objectivity
of the external auditor and the terms under which the external auditor is
appointed to perform non-audit services.
The Group's auditor also attends the Audit Committee at its request and
reports on its work procedures, the quality and effectiveness of the Group's
accounting records and its findings in relation to the Group's statutory
audit. The Audit Committee will meet with the auditor at least once a year.
During the year the committee worked with the Group auditors, on the findings
of the 2022s audit as well as reviewing the company's full year results on
behalf of the Board. It considered significant accounting policies, ensured
compliance with accounting standards and considered reports from the external
auditor on accounting topics of a judgemental nature requiring attention. The
Committee, where necessary will have had separate discussions with the auditor
without management being present on the adequacy of controls and any
judgemental areas, as well as feedback on the audit.
Nomination Committee
The Nomination Committee comprises David George Lis, (Johan Blach Petersen
prior to the appointment of David George Lis), Andrew John Richardson and Paul
Joseph Hodges and is chaired by David George Lis. It meets at least once a
year and otherwise as required. The Nomination Committee considers the
composition of the Board, retirements and appointments of additional and
replacement directors and makes appropriate recommendations to the Board.
Remuneration Committee
The Remuneration Committee comprises Andrew John Richardson, Paul Joseph
Hodges and Gavin Maxwell Manson (from his appointment on 14(th) February 2024)
and is chaired by Paul Joseph Hodges. It meets at least once a year and is
responsible for reviewing the scale and structure of the executive directors'
remuneration and the terms of their service or employment contracts, including
any share options granted and other bonus arrangements. The remuneration and
terms and conditions of the Non-Executive Directors are set by the entire
Board.
The remuneration committee has decided that the Executive Director should
receive remuneration from 1(st) January 2024.
The Non-Executive Directors were awarded remuneration for their services
during the year.
During the year no granted share options lapsed and 2,256,956 new share
options were granted during the year.
PERFORMANCE EVALUATION
There is currently no formal performance evaluation of the board, its
committees, and its individual directors. A modus operandi for the evaluation
of the board is currently under consideration, but not implemented at the
current stage of the Group's development, as the Group is still a fairly young
and small business unit.
COMMUNICATION WITH SHAREHOLDERS
The Directors are available to shareholders at any time to discuss strategy
and governance matters.
In addition, all Group announcements are published on the Group's website,
together with financial results.
All shareholders have the opportunity to ask questions and express their views
at the Company's Annual General Meeting, at which all Directors are available
to take questions.
AUDIT AND INTERNAL CONTROL
The primary role of the Audit Committee is to keep under review the Group's
financial systems and controls and its financial reporting procedures. In
fulfilling this role, the Committee receive and review work carried out by the
external auditors and their findings.
The Board has overall responsibility for operating and monitoring the system
of internal control within the Group and for monitoring its effectiveness. The
system includes an on-going process for identifying, evaluating and managing
significant business risks. Although no system of internal control can provide
absolute assurance against material misstatement or loss, the Group's system
is designed to provide the directors with reasonable assurance that any
material problems are identified on a timely basis and dealt with
appropriately.
Guidance to Directors of UK Companies on internal control procedures and good
practice on risk management is provided by the Financial Reporting Council.
The Audit Committee reviews the effectiveness of the internal controls on an
annual basis on behalf of the Board and considers that they comply throughout
the year ended 31 December 2023 with those provisions of the Code which they
consider to be practicable and appropriate for a relatively small public
company.
The key elements of the system, which are designed to meet the specific needs
and business risks of the Group, include:
· clearly defined organisation structures with segregation of
duties wherever practicable;
· agreement of Group short term financial objectives and business
plans;
· quarterly review by the Board of Group management accounts and
monitoring of results against budgets;
· Board control over treasury, taxation, legal, insurance and
personnel issues;
· Board control over appraisal, review and authorisation of capital
expenditure.
In common with organisations of similar size the Executive Director is heavily
involved in the day to day running of the business. The directors believe that
although the Group's controls may be slightly less formal than those of larger
groups, the close involvement of the Executive Directors more than compensates
for this.
The Board believes that it is not currently appropriate for the Group to
maintain an internal audit function because of the small size of the Group.
The Audit Committee considers the independence and objectivity of the external
auditor on an annual basis, with particular regard to non-audit services.
The split between audit and non-audit fees for the year and information on the
nature of the non-audit fees appear in note 9 to the financial statements.
The non-audit fees are considered by the Committee not to affect the
independence or objectivity of the auditor. The Audit Committee monitors
such costs in the context of the audit fee for the year, ensuring that the
value of non-audit services does not increase to a level where it could affect
the auditor's objectivity and independence. The Audit Committee also received
an annual confirmation of independence from the auditor.
GOING CONCERN
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
For this reason, they continue to adopt the going concern basis in preparing
the financial statements. Further expansive description can be found in Note
3.
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Windar Photonics plc - QCA Code
As Chairman of the Board of Directors of Windar Photonics plc ("Windar
Photonics", "the Company" or "the Group" as the context requires), it is my
responsibility to ensure that the Company has both sound corporate governance
and an effective Board.
As Chairman, my responsibilities include leading the Board effectively,
overseeing the Company's corporate governance model, communicating with
shareholders, and ensuring that good information flows freely between the
Executive Directors and the Non-Executive Directors in a timely and efficient
manner.
In line with the AIM Rules, which require all AIM-listed companies to adopt
and comply with a corporate governance code, the Board of Windar Photonics plc
has adopted the Quoted Companies Alliance Corporate Governance Code (the "QCA
Code").
The QCA Code states that "the purpose of good corporate governance is to
ensure that the company is managed in an efficient, effective and
entrepreneurial manner for the benefit of all shareholders over the longer
term."
It is the Board's responsibility to ensure that Windar Photonics plc is
managed in the long-term interests of all shareholders and stakeholders in the
business.
The Board believes a strong and effective corporate governance culture is
critical in this respect as we endeavor to grow a resilient and sustainable
business for the benefit of our shareholders and all stakeholders.
The Board considers that the Group complies with the QCA Code so far as it is
practicable having regard to the size, nature and current stage of development
of the Company, and will disclose any areas of material non-compliance.
The QCA code is constructed around 10 broad principles and the report below
sets out how we comply with the code at this time. Compliance with the code
will be reviewed and updated annually.
David George Lis
Chairman
QCA Code Principle What we do and why
1. Establish a strategy and business model which promotes long- term value for Windar Photonics' primary vision is to be, and remain, the leading global
shareholders supplier of nacelle LiDAR equipment for both the wind turbine OEM and retrofit
markets.
The board must be able to express a shared view of the company's purpose,
business model and strategy. It should go beyond the simple description of Windar's core strategy for achieving the vision is focused on the following
products and corporate structures and set out how the company intends to core components:
deliver shareholder value in the medium to long-term. It should demonstrate
that the delivery of long-term growth is underpinned by a clear set of values · Competitiveness
aimed at protecting the company from unnecessary risk and securing its
long-term future. · Innovative technology
· Cost-effective operation of the company
· Power enhancement and cost reduction for the end user.
The OEM market is serviced directly by Windar Photonics, whereas the retrofit
market is serviced through an external global dealership that provides Windar
Photonics products to local Independent Power Producers (IPPs) and wind farm
operators.
The company's strategy and key challenges are detailed on pp. 5-6 and pp.
10-15 of the Report of the Directors and Consolidated Financial Statements
(For the year ended 31 December 2023).
2. Seek to understand and meet shareholder needs and expectations The Board is committed to clearly navigating the company towards substantial
growth and to ensure that the shareholder's expectations are met in this
regard.
Directors must develop a good understanding of the needs and expectations of
all elements of the company's shareholder base.
Windar Photonics encourages two-way communication with both its institutional
The board must manage shareholders' expectations and should seek to understand and private investors. Windar Photonics endeavors to respond swiftly to all
the motivations behind shareholder voting decisions. queries received from its investors. The company's CEO is regularly in contact
with the Group's institutional and retail shareholders and ensures that their
views and concerns are communicated clearly to the Board. The Company also
seeks to manage shareholder expectations through its regulatory disclosures.
The Board recognises the AGM as an important opportunity to meet private
shareholders, and the Directors are available to listen to the views expressed
by the company's shareholders in an informal context immediately following the
AGM.
The AGM invariably includes an update by the Chief Executive Officer and
others on developments which have occurred since the Annual Report went to
press.
Where voting decisions are not in line with the company's
expectations, the Board will engage with those shareholders to understand and
address any issues.
The key point of contact for all shareholders is Chief Executive Officer,
Jørgen Korsgaard Jensen, who can be contacted at jk@windarphotonics.com
(mailto:jk@windarphotonics.com)
3. Take into account wider stakeholder and social responsibilities and their Windar Photonics is committed to sustainability and progress in all aspects of
implications for long-term success our business - for the environment, customers, suppliers and the communities
we operate in.
Long-term success relies upon good relations with a range of different
stakeholder groups both internal (workforce) and external (suppliers, This is evidenced and underpinned by our vision and values:
customers, regulators and others). The board needs to identify the company's
stakeholders and understand their needs, interests and expectations.
1. Customers - Grow profitable sales
Where matters that relate to the company's impact on society, the communities 2. Quality - Operational excellence
within which it operates or the environment have the potential to affect the
company's ability to deliver shareholder value over the medium to long-term, 3. Environment - Community impact
then those matters must be integrated into
4. Innovation - Excellent product design
the company's strategy and
5. Team Work - Engage our people
business model.
Sustainability is essentially the foundation of Windar Photonics, as the
Feedback is an essential part of all control mechanisms. Systems need to be in company's overall business is to provide the market a commercially viable
place to solicit, consider and act on feedback from all stakeholder groups. means of enhancing the production and effectiveness of renewable wind energy
assets, which in turn contributes to increasing the economic viability and
sustainability of the renewable energy sector. Windar Photonics via its global
dealership, contributes to increasing the competitiveness of the emerging wind
energy sector.
Windar Photonics is based in United Kingdom and Denmark, and the company
conforms to the local laws and standards for social responsibilities in
relation to the company's employees. Windar Photonics encourages an open
dialogue with its employees and conduct individual employee consultations, to
attain feedback on all aspects of employment with Windar Photonics.
Furthermore, employee representatives meet in forums to discuss business
related issues.
Windar Photonics encourages customers feedback through trade account managers
and direct engagement with individual customers via customer service teams and
social media communication, such as LinkedIn.
4. Embed effective risk management, considering both opportunities and A detailed analysis of the risks faced by the company, and the measures taken
threats, throughout the organization to minimise the identified risks, are detailed on pp. 6-7 of the Strategic
Report and Report of the Directors (for the year ended 31 December 2023),
along with an assessment of any changes to the potential risks during the
previous reporting period. The Company formally reviews and documents the
The board needs to ensure that the company's risk management framework principal risks to the business at least annually. Likewise, the executive
identifies and addresses all relevant risks in order to execute and deliver directors have agreed to act with risk- prevention in mind during the daily
strategy; the company needs to operation of the company.
consider its extended business, including the supply chain, from key suppliers
to end- customers.
The board is responsible for evaluating potential risks and meets regularly to
Setting strategy includes determining the extent of exposure to the identified identify and review risks in relation to the ongoing trading, and the
risks that the company is able to bear and willing to take (risk tolerance and company's budgets and forecasts. Likewise, the Board considers risk to the
risk appetite). business at every board meeting, and both current and future potential risks
are registered and assessed during each meeting.
5. Maintain the board as a well- functioning, balanced team led by the chair The Board consists of Directors with a varied set of skills and substantial
experience within their respective fields, which complements each other well
in relation to directing the company and making informed decisions for
encouraging the growth of the company.
The board members have a collective responsibility and legal obligation to
promote the interests of the company, and are collectively responsible for The Company is controlled by the Board of Directors. Johan Blach Petersen,
defining corporate governance arrangements. Non- executive Chairman (until October 6, 2023, (David George Lis, appointed
October 6, 2023)), Andrew Richardson, Non- executive Director and Paul Hodges,
Ultimate responsibility for the quality of, and approach to, corporate Non-executive Director is responsible for the running of the Board, and
governance lies with the chair of the board. Jørgen Korsgaard, the company's Chief Executive Officer, has the executive
responsibility for running the company's business and implementing the
The board (and any committees) should be provided with high quality company's strategy.
information in a timely manner to facilitate proper assessment of the matters
requiring a decision or insight.
The Board is comprised of one Executive Director and a number of Non-
Executive Directors. The Board considers that all Non-executive Directors
The board should have an appropriate balance between executive and non- bring an independent judgement to bear notwithstanding the varying lengths of
executive directors and should have at least two independent non-executive service:
directors. Independence is a board judgement.
• Johan Blach Petersen (Non-Executive Chairman, until October 6
2023, ceased to be a Director 9(th) April 2024)
The board should be supported by committees (e.g. audit, remuneration,
nomination) that have the necessary skills and knowledge to discharge their • David George Lis (Non-Executive Chairman, Appointed October 6,
duties and responsibilities effectively. 2023)
Directors must commit the time necessary to fulfill their roles. • Jørgen Korsgaard Jensen (Chief Executive Officer and Founder)
• Paul Hodges (Non-Executive Director)
• Andrew Richardson (Non-Executive Director)
• Gavin Manson (Non-Executive Director) (Appointed 14(th) February
2024)
Detailed profiles for the Directors on the Board are available on
p. 9 of the Report of the Directors and Consolidated Financial
Statements (for the year ended 31 December, 2023)
All Directors receive regular and timely information concerning the Group's
operational and financial performance. Relevant information is circulated to
the Directors in advance of meetings. In addition, minutes of the meetings are
circulated to the Company's Board of Directors.
The Board has a formal schedule of matters reserved to it and is supported by
the Audit, Remuneration and Nomination Committee. The Schedule of Matters
Reserved and Committee Terms of Reference are available on the Company's
website and can be accessed on the "Corporate governance" page of the website.
The Board meets at least six times per annum. The Audit Committee will meet at
least twice a year, The Nomination Committee will meet at least once a year
and otherwise as required and finally the Remuneration Committee meets at
least once a year.
6. Ensure that between them the directors have the necessary up- to-date The Nomination Committee of the Board oversees the process and makes
experience, skills and capabilities recommendations to the Board regarding all new Board appointments. Where new
appointments for the Board are considered, the search for candidates is
The board must have an appropriate balance of sector, financial and public conducted, and appointments are made, on merit, against objective criteria and
markets skills and experience, as well as an appropriate balance of personal with due regard for the benefits of diversity on the Board, including gender.
qualities and capabilities. The board should understand and challenge its own The Nomination Committee also considers succession planning as part of their
diversity, including gender balance, as part of its composition. responsibility to ensure the consistency of the Boards activities.
The current board is comprised of directors with expertise within their
respective fields, thus providing the company the benefits of a broad spectrum
The board should not be dominated by one person or a group of people. Strong of knowledge and experience:
personal bonds can be important but can also divide a board.
David George Lis (Non-Executive Chairman, appointed October 6, 2023)
As companies evolve, the mix of skills and experience required on the board Experienced non-executive director with investment and fund management
will change, and board composition will need to evolve to reflect this change. background.
Jørgen Korsgaard Jensen (Chief Executive Officer and Founder) Highly skilled
innovator with in an in- depth understanding of international business and
developing new technological solutions for the market.
Paul Hodges (Non-Executive Director)
Comprehensive corporate finance and investment experience.
Andrew Richardson (Non-Executive Director)
Strong track record in business transformation, scale-up and international
development.
Gavin Manson (Non-Executive Director, appointed 14(th) February 2024)
Experienced listed company CFO.
Detailed profiles for the Directors on the Board are available on
p. 8 of the Report of the Directors and Consolidated Financial Statements (for
the year ended 31 December, 2023).
7. Evaluate board performance based on clear and relevant objectives, seeking A modus operandi for the evaluation of the board is currently under
continuous improvement consideration, but not implemented at the current stage of the company's
development, as the company is still a fairly young and small business unit.
The board should regularly review the effectiveness of its performance as a
unit, as well as that of its committees and the individual directors. All directors are subject to re-election by the shareholders by rotation.
The board performance review may be carried out internally or, ideally, The company has not adopted a specific policy on succession planning but the
externally facilitated from time to time. The review should identify board has a regular focus and discussion on this subject. The Non-executive
development or mentoring needs of individual directors or the wider senior Directors are, however, required to give three months' notice under their
management team. employment contracts if they wish to leave the company and the Executive
Directors are required to give nine months' notice.
It is healthy for membership of the board to be periodically refreshed.
Succession planning is a vital task for boards. No member of the board should The Board is confident that the Company's middle management team has the
become indispensable. strength to ensure the Company's business is not adversely impacted in the
period between an Executive Director leaving and a replacement being
recruited.
The Nomination Committee is required to recommend and review nominees as new
directors to the Board where there are vacancies or where it is felt that
additional directors should be appointed.
For new appointments, the search for candidates is conducted and appointments
made on merit against objective criteria and with due regard for the benefits
of diversity on the board. Any senior management appointments are also
required to be approved by the Nomination Committee.
8. Promote a corporate culture that is based on ethical values and behaviours Windar Photonics is a fairly small and young company, and the corporate
ethical values have not yet been formally described. A description of the
ethical values that underpin the company will be formulated and made public
during 2023.
The board should embody and promote a corporate culture that is based on sound
ethical values and behaviours and use it as an asset and a source of Nonetheless, the company is operated on a sound foundation of ethical
competitive advantage. principles:
The policy set by the board should be visible in the actions and decisions of
the chief executive and the rest of the management team. Corporate values
should guide the objectives and strategy of the company. · A high degree of transparency and non-hierarchical communication
between the various positions in the company
The culture should be visible in every aspect of the business, including
recruitment, nominations, training and engagement. The performance and reward · Entrepreneurial spirit and a high degree of
system should endorse the desired ethical behaviours across all levels of the
company. o employee influence
· A diverse work-place with a wide representation of different
cultures, which is considered a boon for the company.
The corporate culture should be recognizable throughout the disclosures in the
annual report, website and any other statements issued by the company.
Furthermore, the company has provided training and information concerning
anti- bribery and work-place safety to its employees.
· The company is also committed to providing a safe and secure
environment for its employees, with its policies and procedures enshrined in
its health and safety guidance to employees.
9. Maintain governance structures and processes that are fit for purpose and The company's governance structure is described in detail in the Report of the
support good decision- making by the board Directors and Consolidated Financial Statements (for the year ended 31
December 2023) in the section Corporate Governance Statement on pp. 16-22.
The company should maintain governance structures and processes in line with
its corporate culture and appropriate to its: It is also included under the biographies of the directors and committees of
the Board on our website.
A description of the matters of the board, titled "25 Board reserved matters",
• size and complexity; and is made public on the website, and is available on the
• capacity, appetite and tolerance for risk. page "Corporate governance".
The governance structures should evolve over time in parallel with its
objectives, strategy and business model to reflect the development of the
company.
10.Communicate how the company is governed and is performing by maintaining a Windar Photonics encourages two- way communication with both its institutional
dialogue with shareholders and other relevant stakeholders. and private investors. Likewise, Windar Photonics endeavors to respond swiftly
to all queries received from its investors. The company's CEO is regularly in
A healthy dialogue should exist between the board and all of its stakeholders, contact with the Group's main shareholders and ensures that their views and
including shareholders, to enable all interested parties to come to informed concerns are communicated clearly to the Board.
decisions about the company.
The Board recognises the AGM as an important opportunity to meet private
In particular, appropriate communication and reporting structure should exist shareholders, and the Directors are available to listen to the views expressed
between the board and all constituent parts of its shareholder base. by the company's shareholders in an informal context immediately following the
AGM.
This will assist:
the communication of shareholders' views to the board; and the shareholders'
understanding of the unique circumstances and constraints faced by the
company.
It should be clear where these communication practices are described (annual
report or website).
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Independent auditor's report to the members of Windar Photonics Plc
OPINION
We have audited the financial statements of Windar Photonics Plc (the 'Parent
Company') and its subsidiaries (the 'Group') for the year ended 31 December
2023 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated and Company Statements of Financial Position, the Consolidated
and Company Statements of Cash Flows, the Consolidated and Company Statements
of Changes in Equity and the related notes to the financial statements,
including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and UK adopted international accounting standards (IFRSs) and as regards
the Parent Company Financial Statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
· the Group and Parent Company financial statements give a true and
fair view of the state of the Group's and of the Parent Company's affairs as
at 31 December 2023 and of the Group's loss for the year then ended;
· the Group and Parent Company's financial statements have been
properly prepared in accordance with IFRSs as adopted by United Kingdom;
· the Group and Parent Company's financial statements have been
prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group and Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
CONCLUSIONS TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
The directors set out their basis of using the going concern basis in note 3.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the Financial Statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
· Carrying value of intangible assets
· Carrying value of inter-company receivable (parent company only)
· Revenue recognition
· Going concern
These are explained in more detail below.
Key Audit Matter How the scope of our audit responded to the key audit matter
Carrying value of intangibles
The Group holds material intangible assets. These intangibles comprise We have performed the following audit procedures:
development costs and research and development.
· our audit procedures included a consideration of whether the
capitalisation criteria were met for the capitalised project;
As set out in note 4, the group recognises an internally generated intangible · costs capitalised consist of payroll costs and other costs. Other
asset arising from development (or from the development phase of an internal costs have been agreed to external documentation. Payroll costs have been
project) if all of the criteria per accounting standards can be demonstrated. agreed to a schedule prepared by the directors splitting payroll costs between
This includes the ability to measure reliably the expenditure attributable to the capitalised project and other projects, and this split has been tested by
the intangible assets during its development. Costs are allocated between the confirmation with the employees working on the capitalised project;
capitalised project and other projects based on directors' judgement.
· obtained and reviewed management's assessment of impairment of the
intangibles held;
Once capitalised, the directors make an assessment of the recoverability of · we have also reviewed the projected revenue and income streams
these costs. against the capitalised projects to evaluate management's judgement that the
carrying value is recoverable;
· where indicators of impairment were identified, we challenged
The Directors have a duty to confirm that all intangibles, are correctly management's assessment of any future income from the intangibles;
recognised and appropriately considered for any impairment at the year end.
· where no indicators of impairment were highlighted by management,
we challenged the judgements made in management's assessment by identifying
contradictory signs of any potential indicators of impairment;
Furthermore, should impairment indicators be identified, there is a level of
judgement exercised by management in estimating fair value of intangibles, · based on our work we consider that the costs capitalised satisfy
which may result in inaccurate valuation of balances. the criteria of the relevant accounting standards and did not identify
indications that an impairment was required; and
· considered the appropriateness of the Group's disclosures in the
We have determined this to be a key audit matter due to the level of judgement financial statements.
involved in this area.
Based on the audit work performed, we are satisfied that management have
appropriately valued intangibles in line with their accounting policy and in
accordance with the requirements of IFRS. We are also satisfied that all
necessary disclosure have been made in the consolidated financial statements.
Carrying value of inter-company receivable (parent company only)
We identified a risk that the inter-company receivables of the parent company We have performed the following audit procedures:
(Windar Photonics Plc) in its subsidiaries (subsidiaries are listed within
note 16) may be impaired. · reviewed management's assessment of future operating cashflows and
indicators of impairment;
· compared the carrying value of the inter-company receivables at the
At the end of each reporting period, the directors are required to assess year end to the net assets and expected future profits of each subsidiary;
whether there is any indication that the amounts receivable from subsidiary
undertakings as shown in the parent company may be impaired. · assessed the reasonableness of the key assumptions used in
management's estimates of recoverable value, in line with the economic and
industry statistics relevant to the business;
Management's assessment of the recoverable amount of inter-company receivables · challenged cash inflows from revenue generating activities and the
with subsidiaries requires estimation and judgement around assumptions used, key assumptions applied in arriving at these;
including the cash flows to be generated from continuing operations. Changes
to assumptions could lead to material changes in the estimated recoverable · assessed the reasonability of cash outflows, including contracted
amount, impacting the value of the amounts receivable from subsidiaries and delivery costs, and research and capital spend;
impairment charges.
· considered the appropriateness of the Parent Company's disclosures
in relation to any impairment in the Company only financial statements; and
The directors have not identified an indicator of impairment in relation to · ensured that disclosures of the key judgements and assumptions, and
the inter-company receivable from the subsidiary undertakings and as a result sensitivity of the impairment loss recognised was appropriately disclosed.
carried out an impairment review. This area was significant to our audit
because the directors' exercised judgement in determining the underlying Based on the audit work performed, we are satisfied that the management have
assumptions used in this calculation. assessed and considered if impairment is required in respect of the
inter-company receivable from subsidiary undertakings in the Parent Company
financial statements.
Revenue recognition
The Group had a total turnover of €4.8m (2022: €1.9m) for the year ended
31 December 2023.
Revenue is the principal measure used by stakeholders to determine the
performance of the group. Revenue recognition and in particular cut-off are
presumed to be significant risk areas of the audit.
We have performed the following audit procedures:
The directors disclose the basis of recognition of revenue in the accounting
policies in note 4. · Assessed the appropriateness of the Group's revenue
recognition accounting policies.
· Reviewed a sample of contracts with customers and
tested that the Group has correctly accounted for the
revenue arising from these contracts in accordance with
the accounting policies and reviewed management's
judgement on the contract price and the allocation to
performance obligations.
· Sales listing in the year were reconciled to the contracts and
nominal ledgers. Detailed testing of a sample of transactions were performed
Going concern and cut-off checked. Walkthroughs of revenue were performed to check that
controls were working appropriately.
The group is dependent upon its ability to generate sufficient cash flows to
meet continued operational costs and hence, continue trading. · We performed detailed testing of a sample of deferred income to
ensure that income was posted to the correct period.
· We agreed a sample of contracts and vouched income through to bank
The key assumptions that impact the conclusions are the levels of future statements.
revenue, and the ability to control the operating costs. There are, therefore,
inherent risks that the forecasts may overstate future revenue due to the
timing of closure of future contracts, or understate future costs, and that
the Group will not be able to operate within its cash resources and continue Based on the audit work performed, we are satisfied that management has
to operate as a going concern. appropriately recognised revenue and all necessary disclosures have been made
in the consolidated financial statements.
The going concern assumptions are dependent on the future growth of the
current business.
Management's going concern forecasts include a number of assumptions related
to the future cash flow and associated risks. Our audit work focused on
evaluating and challenging the reasonableness of these assumptions and their
impact on the forecast period.
Specifically, we obtained, challenged and assessed management's going concern
forecasts and performed procedures including:
· Verifying consistency of key inputs relating to the future costs
and revenues to other financial and operational information obtained during
audit.
· Performing sensitivity analysis on management's "worst case"
scenario assumptions.
Further, we have noted that in April 2024, the group successfully raised
capital funding amounting to £4.3m, net of costs, which has put the group in
a better position post year end.
Based on the audit work performed, we are satisfied with the management's use
of going concern assumptions in preparing the financial statements of the
group.
OUR APPLICATION OF MATERIALITY
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the Group
financial statements as follows:
Financial statements
Overall materiality €71,000 (2022: €105,200).
How we determined it Based on 1.5% of revenue (2022: Based on 10% of net loss)
Rationale for We believe that revenue is the primary measure used by the shareholders in
assessing the performance of the group. This benchmark is considered the most
benchmark applied appropriate because the group is a trading group.
We agreed with the Directors that we would report to them misstatements
identified during our audit above €3,550 (2022: €5,260) as well as
misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
Based on our professional judgment, we determined materiality for the Company
financial statements as follows:
Financial statements
Overall materiality €25,000 (2022: €24,500).
How we determined it Based on of 2.5% of gross assets (2022: Based on of 2.5% of gross assets)
Rationale for We believe that gross assets is the primary measure used by the shareholders
in assessing the performance of the Company. This benchmark is considered the
benchmark applied most appropriate as the Company is a holding company.
We set performance materiality at a level lower than materiality to reduce the
probability that, in aggregate, uncorrected and undetected misstatements
exceed the materiality for the financial statements as a whole. Performance
materiality has been set at 75% of overall materiality. The Performance
materiality was set at €53,550 for the Consolidated Group and €18,825 for
the Parent company. We determined performance materiality with reference to
factors such as our understanding of the Group and its complexity, the quality
of the control environment and ability to rely on controls and the low level
of uncorrected misstatements in the prior year audit.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
As part of designing our audit we determined materiality, as above, and
assessed the risk of material misstatement in the financial statements. In
particular, we looked at areas requiring the Directors to make significant
judgements and estimates, for example in respect of the valuation of
investment in subsidiaries, intangibles and inventory and considered future
events that are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
The UK operations and consolidation are accounted for from the UK. We
conducted a full scope audit of the Group and key components whilst carrying
out targeted audit procedures on non-significant components.
The Group financial statements are a consolidation of four companies made up
of the parent company, an intermediate holding company and two trading
companies. The principal trading company is located in Denmark and the other
trading company is in Shanghai. The head office and main accounting location
is located in Denmark. Our Group audit scope focused on the group's principal
trading company and based on our risk assessment we determined this company to
be the only component within the group which, in our view, required an audit
of their complete financial information due to their size. This audit was
performed by BDO Denmark. The other trading company and the intermediate
holding company were subject to analytical review and audit testing on
specific areas which were material or related to significant risks. This work
was performed by Jeffreys Henry LLP together with additional procedures
performed at Group level in respect of the audit of the parent company, the
consolidation and going concern. These reviews gave us the evidence we needed
to form our opinion on the Group financial statements as a whole.
Audits of the subsidiary companies were performed at lower levels materiality
compared to group materiality and determined by us to be appropriate to the
relative size of the company concerned. As part of our audit strategy
detailed group audit instructions were issued to the component auditor and the
Group audit team reviewed the complete audit file for the main trading
company. Virtual communications were used to verify certain aspects of our
audit.
We have audited all components within the Group, and no unaudited components
remain.
OTHER INFORMATION
The other information comprises the information included in the Annual Report,
other than the financial statements and our auditor's report thereon. The
Directors are responsible for the other information. Our opinion on the Group
and Parent Company financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic report and the Directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the Strategic report and the Directors' report have been prepared
in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic report or the Directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the Parent Company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we
require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors' responsibilities statement, the
Directors are responsible for the preparation of the Group and Parent Company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group and Parent Company financial statements, the Directors
are responsible for assessing the Group's and the Parent Company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The extent to which the audit was considered capable of detecting
irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
· the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and skills to
identify or recognise non-compliance with applicable laws and regulations.
· we identified the laws and regulations applicable to the group
through discussions with directors and other management.
· we focused on specific laws and regulations which we considered may
have a direct material effect on the financial statements or the operations of
the company, including taxation legislation, data protection, anti-bribery,
employment, environmental, health and safety legislation and anti-money
laundering regulations.
· we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and inspecting legal
correspondence.
· identified laws and regulations were communicated within the audit
team regularly and the team remained alert to instances of non-compliance
throughout the audit; and
· we assessed the susceptibility of the group's financial statements
to material misstatement, including obtaining an understanding of how fraud
might occur, by:
o making enquiries of management as to where they considered there was
susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud; and
o considering the internal controls in place to mitigate risks of fraud and
non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
· performed analytical procedures to identify any unusual or
unexpected relationships;
· tested journal entries to identify unusual transactions;
· assessed whether judgements and assumptions made in determining the
accounting estimates set out in note 6 of the Group financial statements were
indicative of potential bias;
· investigated the rationale behind significant or unusual
transactions; and
· in response to the risk of irregularities and non-compliance with
laws and regulations, we designed procedures which included, but were not
limited to:
o agreeing financial statement disclosures to underlying supporting
documentation;
o reading the minutes of meetings of those charged with governance;
o enquiring of management as to actual and potential litigation and claims;
and
o reviewing correspondence with HMRC and the group's legal advisors.
There are inherent limitations in our audit procedures described above. The
more removed that laws and regulations are from financial transactions, the
less likely it is that we would become aware of noncompliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
http://www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
USE OF THIS REPORT
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Jan Charlesworth (Senior Statutory Auditor)
For and on behalf of Gravita Audit Limited, Statutory Auditor
Aldgate Tower
2 Leman Street
London E1 8FA
…………………………
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended Year ended
31 December 2023 31 December 2022
€ €
Note
Revenue from contracts with customers 8 4,766,484 1,853,249
Cost of goods sold (2,361,386) (906,638)
Gross profit 2,405,098 946,611
Administrative expenses (2,548,366) (1,953,607)
Other operating income 32,210 32,260
Exceptional expenses − (89,038)
Loss from operations 9 (111,058) (1,063,774)
Finance expense 12 (240,033) (230,734)
Loss before taxation (351,091) (1,294,508)
Taxation 13 168,571 218,837
Loss for the year attributable to the ordinary equity holders of Windar (182,520) (1,075,671)
Photonics Plc
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Exchange gains arising on translation of foreign 7,089 22,817
operations
Total comprehensive loss for the year attributable to the ordinary equity (175,431) (1,052,854)
holders of Windar Photonics Plc
Loss per share attributable to the ordinary equity holders of Windar Photonics
Plc
Basic and diluted, cents per share 14 (0.3) (1.9)
All activities relate to continuing operations.
The notes on pages 39-62 form part of these financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023 31 December 2022
€ €
Note
Assets
Non-current assets
Intangible assets 17 1,343,361 1,196,996
Property, plant & equipment 18 330,799 106,983
Right of use assets 19 56,005 −
Deposits 38,262 28,994
Total non-current assets 1,768,427 1,332,973
Current assets
Inventory 20 718,983 699,236
Trade receivables 21 546,273 389,652
Other receivables 21 135,088 197,496
Tax credit receivables 21 151,015 218,928
Prepayments 129,551 47,860
Cash and cash equivalents 22 152,180 1,404,073
Total current assets 1,833,090 2,957,245
Total assets 3,601,517 4,290,218
Equity
Share capital 27 834,771 834,771
Share premium 28 16,479,150 16,479,150
Merger reserve 28 2,910,866 2,910,866
Foreign currency reserve 28 (58,488) (65,577)
Retained earnings 28 (19,901,376) (19,818,092)
Total equity 264,923 341,118
Non-current liabilities
Warranty provisions 30 25,493 45,774
Holiday Allowance provisions 31 138,538 134,734
Lease liabilities 26 31,711 -
Loans 25 1,287,697 1,690,462
Total non-current liabilities 1,483,439 1,870,970
Current liabilities
Trade payables 24 572,234 264,083
Other payables and accruals 24 472,810 451,402
Contract liabilities 24 251,678 1,205,531
Lease liabilities 26 25,648 −
Loans 24 530,785 157,114
Total current liabilities 1,853,155 2,078,130
Total liabilities 3,336,594 3,949,100
Total equity and liabilities 3,601,517 4,290,218
The financial statements were approved and authorised for issue by the Board
of Directors on 29 June 2024 and were signed below on its behalf by:
Jørgen Korsgaard Jensen, Director
The notes on pages 39 to 62 form part of these financial statements.
31 December 31 December
2023 2022
€ €
Note
Assets
Non-current assets
Investments in subsidiaries 16 − −
Total non-current assets − −
Current assets
Other receivables 21 12,512 21,300
Intragroup receivables 21 1,091,896 183,579
Cash and cash equivalents 22 − 960,237
Total current assets 1,104,408 1,165,116
Total assets 1,104,408 1,165,116
Equity
Share capital 27 834,771 834,771
Share premium 28 16,479,150 16,479,150
Merger reserve 28 658,279 658,279
Foreign exchange reserve 28 − (7,746)
Retained earnings 28 (17,088,471) (16,977,909)
Total equity 883,729 986,545
Current liabilities
Trade payables 24 43,627 108,452
Bank overdrafts 22 426 −
Other payables and accruals 24 176,626 70,119
Total liabilities 220,679 178,571
Total equity and liabilities 1,104,408 1,165,116
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own Statement of
comprehensive income in these financial statements. The loss after tax of the
parent Company for the year was €202,052 (2022 - loss €889,697).
The financial statements were approved and authorised for issue by the Board
of Directors on June 29 2024, and were signed below on its behalf by:
Jørgen Korsgaard Jensen, Director
The notes on pages 39 to 62 form part of these financial statements.
Company number: 09024532
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Year ended Year ended
31 December 2023 31 December 2022
Note € €
Loss for the period before taxation (351,091) (1,294,508)
Adjustments for:
Finance expense/(income) 12 240,033 230,734
Amortisation 17 179,134 174,792
Depreciation - property, plant and equipment 18 30,165 2,992
Depreciation - right of use assets 28,738 −
Received tax credit 237,389 265,510
Taxes paid (1,369) −
Foreign exchange gain/(losses) 7,089 22,817
Share option and warrant costs 99,236 15,927
469,324 (581,736)
Movements in working capital
Changes in inventory (19,747) (4,268)
Changes in receivables (94,213) 562,504
Changes in prepayments (81,691) (13,906)
Changes in deposits (9,268) (2,596)
Changes in trade payables 308,149 (280,247)
Changes in contract liabilities (953,853) 253,926
Changes in warranty provisions 28 (20,285) 9,620
Changes in other payables and provisions 21,402 (306,832)
Cash flow from operations (380,182) (363,535)
Investing activities
Payments for intangible assets 17 (493,436) (297,540)
Payments for tangible assets 18 (254,796) (107,456)
Grants received 17 165,265 121,019
Cash flow from investing activities (582,967) (283,977)
Financing activities
Proceeds from issue of share capital − 2,393,686
Costs associated with the issue of share capital − (258,266)
Proceeds from new long-term loans − 373,055
Lease payments (27,348) -
Net repayment of loans (52,249) (372,934)
Interest received / (paid) (208,757) (124,630)
Cash flow from financing activities (288,354) 2,010,911
Net increase/(decrease) in cash and cash equivalents (1,251,503) 1,363,399
Exchange differences (390) 126
Cash and cash equivalents at the beginning of the year 1,404,073 40,548
Cash and cash equivalents at the end of the year 22 152,180 1,404,073
The notes on pages 39 to 62 form part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Note Year ended Year ended
31 December 2023 31 December2022
€ €
Loss for the period before taxation (202,052) (889,699)
Adjustments for:
Finance Expenses and currency losses / (Income) (49,352) 17,313
(251,404) (195,010)
Movements in working capital
Changes in receivables 8,788 (8,402)
Changes in loans to subsidiary entity − (92,069)
Changes in trade payables (64,825) (77,819)
Changes in other payables and provisions 106,506 (108,512)
Cash flow from operations (200,935) (481,812)
Investing activities
Loans to subsidiary (761,664) −
Additional investment in subsidiary undertaking 16 − (677,376)
Cash flow from investing activities (761,664) (677,376)
Financing activities
Proceeds from issue of share capital − 2,393,686
Cost associated with the issue of share capital − (258,266)
Interest expenses and currency losses during the year / (Income) 1,936 (20,449)
Cash flow from financing activities 1,936 2,114,971
Net Increase/(decrease) in cash and cash equivalents (960,663) 955,783
Cash and cash equivalents at the beginning of the year 960,237 4,454
Cash and cash equivalents at the end of the year 22 (426) 960,237
The notes on pages 39 to 62 form part of these financial statements.
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share Share Merger reserve Foreign currency reserve Accumulated Losses Total
Capital
Premium
€ € € € € €
Group
At 1 January 2022 675,664 14,502,837 2,910,866 (88,394) (18,758,348) (757,375)
New shares issued 159,107 2,234,579 - - - 2,393,686
Costs associated with capital raise - (258,266) - - - (258,266)
Share option and warrant costs - - - - 15,927 15,927
Transaction with owners 159,107 1,976,313 - - 15,927 2,151,347
Loss for the year
- - - - (1,075,671) (1,075,671)
Exchange gains/(losses) arising on translation of foreign - - - 22,817 - 22,817
operations
Total comprehensive loss - - - 22,817 (1,075,671) (1,052,854)
At 31 December 2022 834,771 16,479,150 2,910,866 (65,577) (19,818,092) 341,118
Share option and warrant costs - - - - - -
Transaction with owners - - - - - -
Loss for the year - - - - (182,520) (182,520)
Warrants reserve - - - 99,236 99,236
Exchange gains/(losses) arising on translation of foreign - - - 7,089 - 7,089
operations
Total comprehensive loss - - - 7,089 (83,284) (76,195)
At 31 December 2023 834,771 16,479,150 2,910,866 (58,488) (19,901,376) 264,923
Company
Share Share Merger reserve Foreign currency reserve Accumulated Losses Total
Capital
Premium
At 1 January 2022 675,664 14,502,837 658,279 (7,746) (16,088,210) (259,176)
New shares issued 159,107 2,234,579 - - - 2,393,686
Costs associated with capital raise - (258,266) - - - (258,266)
Transactions with owners 159,107 1,976,313 - - - 2,135,420
Loss for the year
- - - - (889,699) (889,699)
Total comprehensive loss - - - - (889,699) (889,699)
At 31 December 2022 834,771 16,479,150 658,279 (7,746) (16,977,909) 986,545
Loss for the year - - - - (202,052)
Warrant reserve - - - 99,236 (202,052)
Exchange gains/(losses) arising on translation of foreign 99,236
operations
- - 7,746 (7,746)
-
Total comprehensive loss - - - 7,746 (110,562) (102,816)
At 31 December 2023 834,771 16,479,150 658,279 - (17,088,471 883,729
The notes on pages 39 to 62 form part of these financial statement.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. General information
The Company is a public limited company domiciled in the United Kingdom and
incorporated under registered number 09024532 in England and Wales. The
Company's registered office is 3 More London Riverside, London, SE1 2AQ.
The Group was formed when the Company acquired on 29 August 2014 the entire
share capital of Windar Photonics A/S, a company registered in Denmark through
the issue of ordinary shares.
Basis of preparation
The consolidated financial statements comprise the consolidated financial
information of the Group as at 31 December 2023 and are prepared under the
historic cost convention, except for the following:
· Share-based payments and share option and warrant costs
The principal accounting policies adopted in the preparation of the financial
information are set out below.
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards ("IFRSs").
2. Adoption of new and revised International Financial Reporting Standards
New and amended standards adopted by the Group and Company.
Several amendments and interpretations apply for the first time in 2023.
New standards and interpretations
From 1 January 2023 the following became effective and were adopted by the
Group and Company:
· Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of
Accounting Policies (effective 1 January 2023)
· Amendments to IAS 8 - Definition of Accounting Estimates
(effective 1 January 2023)
· Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction (effective 1 January 2023)
· Amendments to IAS 12 - International tax reform - pillar two
model rules (effective 1 January 2023)
· IFRS 17 - Insurance Contracts, as amended in December 2021
(effective 1 January 2023)
Their adoption did not have a material effect on the Group or Company's loss
for the year or equity.
New standards, amendments and interpretations issued but not yet effective and
not early adopted
· Amendments to IAS 1 - Classification of Liabilities as Current or
Non-current (effective 1 January 2024)
· Amendments to IAS 1 - Non-current Liabilities with Covenants
(effective 1 January 2024)
· Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback
(effective 1 January 2024)
It is not considered that the above standards and amendments will have a
significant effect on the results or net assets of the Group or Company.
There are no other IFRSs or IFRIC interpretations that are not yet effective
that would be expected to have a material impact on the Group and Company.
3. Going Concern
The consolidated financial statements have been prepared assuming the Group
will continue as a going concern. Under the going concern assumption, an
entity is anticipated to continue in business for the foreseeable future with
neither the intention nor the necessity of liquidation, ceasing trading or
seeking protection from creditors pursuant to laws or regulations.
Based on the Group's latest trading expectations and associated cash flow
forecasts, taking into account the £4.3m capital increase in April 2024 (see
note 34) the directors have considered the cash requirements of the Group on
which basis the board is convinced the Company has sufficient cash flows for
operations for the coming 12 months period.
As such the financial statements do not include the adjustments that would
result if the Group was unable to continue as a going concern.
4. Accounting policies
Investment in subsidiaries
Investments in subsidiaries are stated at cost less provision for any
permanent diminution in value. The cost of Windar Photonics A/S was measured
at the carrying amount of the Company's share of the equity in Windar
Photonics A/S at 30 June 2014. In 2022, the Company established a new 100%
owned Danish holding company which holds all outstanding shares in Windar
Photonics A/S.
Capital contribution
Amounts forwarded to subsidiary entities which are not due to be repaid are
treated as a capital contribution and an increase to the cost of the
investment.
Functional and presentation currency
Items included in the Financial Statements are measured using the currency of
the primary economic environment in which each entity operates ("the
functional currency") which is considered by the Directors to be Euro for the
Parent Company, Danish Kroner DKK for Windar Photonics A/S and Windar Denmark
ApS, and Renminbi RNB for Windar Photonics Shanghai Co. Ltd. The Group
Financial Statements have been presented in Euro's which represent the
dominant economic environment in which the Group operates.
Foreign currency
Transactions entered into by Group entities in a currency other than the
currency of the primary economic environment in which they operate (their
"functional currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised
immediately in profit or loss. Exchange rates apply for the annual accounts
2023:
Year end 2023 Average 2023 Year end 2022 Average 2022
Euro/DKK 7,4529 7,4510 7,4365 7,4393
Euro/RMB 7,8509 7,6500 7,3585 7,0751
On consolidation, the results of overseas operations are translated into Euros
at rates approximating to those ruling when the transactions took place. All
assets and liabilities of overseas operations are translated at the rate
ruling at the reporting date. Exchange differences arising on translating the
opening net assets at opening rate and the results of overseas operations at
actual rate are recognised in other comprehensive income and accumulated in
the foreign exchange reserve.
Revenue
Revenue arises from the sale of the WindEYE(TM), and WindVISION(TM) products
and related services that measures remote wind speed measurements. Revenue is
recognised exclusive of VAT and other taxes and when the Group has performed
the specific obligations under the contract with customers.
Revenue arises from three areas of the business and is recognised as follows:
· Product sale. Revenue is recognised when the obligation of
delivery of the product to the customer is complete at full contract value.
· Installation. Revenue is recognised when the obligation of
acceptance of installation is complete at full contract value.
· Sale under performance obligation. Where there is a requirement
to prove performance of product within the contract in respect of the increase
in output from the turbines, revenue is recognised at a point in time when
each of the distinct performance obligations are satisfied which varies from
customer to customer but is broadly 60% on delivery of product, 30% on
installation and 10% when the performance obligation in terms of generated
output is met.
Where payment for installation and other performance services is received
before the installation and other
services have been completed, revenue is deferred and included within
creditors and released on completion of
the installation and service obligations.
No adjustment is made to the revenue recognised in respect of any financing
component of the contract.
Where products are sold with warranties revenue is recognised in the period
where the products are shipped and an appropriate provision for claims under
warranty is based on past experience is accounted for in accordance to IAS 37.
This is shown as an expense in the Consolidated Statement of Profit and Loss
and Other Comprehensive Income.
Other Operating Income includes sales of other services and rental income
originating from outside the core business of the Group and is recognised
exclusive of VAT and other taxes.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the board of directors.
Financial assets and liabilities
Financial instruments
The Group classifies all its financial instruments into the amortised cost
category. The Group's accounting policy for each category is as follows:
· Trade and loan receivables: Trade receivables are initially
recognised by the Group and carried at original invoice amount less an
allowance for any uncollectible or impaired amounts. An impairment provision
is calculated by considering the trade receivables and expected credit losses.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
The expected loss rates are based on the Group's historical credit losses
experienced over the three-year period prior to the period end. The historical
loss rates are then adjusted for current and forward-looking information on
factors affecting the Group's customers. An estimate for doubtful debts is
also made when collection of the full amount is no longer probable. Debts are
written off when they are identified as being uncollectible. Trade receivables
and other receivables are recognised at fair value. Loan receivables are
non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They arise principally through the
intercompany loans; Impairment of loan receivables is calculated utilising the
lifetime expected credit losses of these loans and the changes in the credit
risk of the counterparty.
· Cash and cash equivalents in the statement of financial position
comprise cash at bank, cash in hand.
· Financial liabilities. The Group treats its financial liabilities
in accordance with the following accounting policies:
Trade payables and other short-term monetary liabilities are recognised at
fair value and subsequently at amortised cost
· Loans are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the instrument. Such
interest-bearing liabilities are subsequently measured at amortised cost using
the effective interest rate method, which ensures that any interest expense
over the period to repayment is at a constant rate on the balance of the
liability carried in the statement of financial position. "Interest expense"
in this context includes initial transaction costs and premiums payable on
redemption, as well as any interest payable while the liability is
outstanding.
Share capital
Financial instruments issued by the Company are classified as equity only to
the extent that they do not meet the definition of a financial liability.
The Company's ordinary shares are classified as equity instruments.
Borrowing costs
Borrowing costs are recognised in the Statement of Comprehensive Income in the
period in which they are incurred.
Current taxation
The current tax is based upon the taxable profit for the period together with
adjustments, where necessary, in respect of prior periods. The Group's asset
or liability for current tax is calculated using tax rates that have been
enacted or substantively enacted at the financial period end date.
Current tax is recognised in the Statement of Comprehensive Income, except to
the extent that it relates to items recognised in other comprehensive income
or directly in equity.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the Statement of Financial Position differs from
its tax base.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Dividends
Dividends are recognised when they become legally payable. In the case of
interim dividends to equity shareholders, this is when declared by the
directors and paid. In the case of final dividends, this is when approved by
the shareholders at the annual general meeting.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost and
subsequently stated at cost less accumulated depreciation and, where
appropriate, provision for impairment in value or estimated loss on disposal.
The cost includes the acquisition price and costs incurred directly in
connection with the acquisition until the time when the asset is ready to be
used.
Depreciation is provided on all items of property, plant and equipment so as
to write off their carrying value, less its residual value, over their
expected useful economic lives. It is provided at the following rates:
Plant and
equipment over 3 - 5
years
The assets residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
Intangible assets - Development projects
Expenditure on research activities is recognised as an expense in the period
in which it is incurred.
An internally generated intangible asset arising from development (or from the
development phase of an internal project) is recognised if, and only if, all
of the following have been demonstrated:
· Technical feasibility of completing the intangible asset so that
it will be available for use or sale
· The intention to complete the intangible asset and use or sell it
· The ability to use or sell the intangible asset
· How the intangible asset will generate probable future economic
benefits
· The availability of adequate technical, financial and other
resources to complete the development and to use or sell the intangible asset
· The ability to measure reliably the expenditure attributable to
the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is
the sum of the expenditure incurred from the date when the intangible asset
first meets the recognition criteria listed above. Where no internally
generated intangible asset can be recognised, development expenditure is
recognised in Statement of Comprehensive Income in the period in which it is
incurred. Capitalised development costs comprise costs, including wages and
salaries. Amortisation or other finance expenses are not recognized.
Subsequent to initial recognition, internally generated intangible assets are
reported at cost less accumulated amortisation and accumulated impairment
losses.
Depreciation is provided on the basis of the assets' residual value and an
assessment of the assets' expected useful lives, however, no more than 5 years
from finishing the technology or receival of the first milestone-payment.
Impairment of non-financial assets
Assets that are subject to depreciation or amortisation are assessed at each
reporting date to determine whether there is any indication that the assets
are impaired. Where there is any indication that an asset may be impaired,
the carrying value of the asset (or cash-generating unit to which the asset
has been allocated) is tested for impairment. An impairment loss is recognised
for the amount by which the asset's carrying amount exceeds its recoverable
amount.
The recoverable amount is the higher of an asset's (or CGU's) fair value less
costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash flows (CGUs). Non-financial assets that have been previously
impaired are reviewed at each reporting date to assess whether there is any
indication that the impairment losses recognised in prior periods may no
longer exist or may have decreased.
Deposits
Deposits in respect of property rentals are recorded as separately
identifiable assets and recognised at historical cost.
Inventory
Cost of raw materials and con-sumables consists of purchase price. Cost of
manufactured goods and work in progress consists of costs of raw materials,
con-sumables and direct labour costs.
Inventories are initially recognised at cost and subsequently at the lower of
cost and the net realisable value of inventories where the net realisable
value is calculated as the estimated selling price less completion costs and
costs incurred to execute sale.
Provisions
Provisions are recognised for liabilities of uncertain timing or amounts that
have arisen as a result of past transactions and are discounted at a pre-tax
rate reflecting current market assessments of the time value of money and the
risks specific to the liability. Product warranty provisions are based on 4%
of the total products delivered, using an average repair cost per product.
Grants
Grants are not recognised until there is reasonable assurance that the Group
will comply with the conditions attaching to them and that the grants will be
received.
Grants are recognised either in Statement of Comprehensive Income on a
systematic basis over the periods in which the Group recognises as expenses
the related costs for which the grants are intended to compensate or where
they related directly to capitalised costs, they are netted off the cost of
the assets.
Grants that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Group
with no future related costs are recognised in Statement of Comprehensive
Income in the period in which they become receivable.
Share based payments
The Group operates an equity-settled share-based compensation plan under which
the entity receives services from employees as consideration for equity
instruments of the Group. The fair value of the employee services received in
exchange for the grant of the equity instruments is recognised as an expense.
The total amount to be expensed is determined by reference to the fair value
of the instruments granted. At the end of each reporting period, the Group
revises its estimates of the number of instruments that are expected to vest
based on the non-market vesting conditions and service conditions. It
recognises the impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
Employee benefits
Employees in the Group typically have variating holiday benefits. At the end
of each reporting period the Group accrue these holiday liabilities.
Leases
At the commencement date of the lease, the Group recognises a right-of-use
asset and a corresponding lease liability which is measured at the present
value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period on which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest rate
implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of machinery and equipment (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value (i.e., below
$5,000. Lease payments on short-term leases and leases of low-value assets are
recognised as expense on a straight-line basis over the lease term.
5. Basis of consolidation
The consolidated financial statements incorporate the results of Windar
Photonics plc and all of its subsidiary undertakings as at 31 December 2023
using the acquisition or merger method of accounting as required. Where the
acquisition method is used, the results of subsidiary undertakings are
included from the date of acquisition.
Where the company has control over an investee, it is classified as a
subsidiary. The company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the company has the practical
ability to direct the relevant activities of the investee without holding the
majority of the voting rights. In determining whether de-facto control exists
the company considers all relevant facts and circumstances, including:
· The size of the company's voting rights relative to both the size
and dispersion of other parties who hold voting rights.
· Substantive potential voting rights held by the company and by
other parties.
· Other contractual arrangements.
· Historic patterns in voting attendance.
The consolidated financial statements present the results of the company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between group companies are therefore eliminated in
full.
The acquisition of the subsidiary Windar Photonics A/S in 2014 was deemed to
be a business combination under common control as the ultimate control before
and after the acquisition was the same. As a result, the transaction is
outside the scope of IFRS 3 and has been included under the principles of
merger accounting by reference to UK GAAP. In 2022, the direct ownership of
the subsidiary was changed whereafter the 100% owned subsidiary Windar Denmark
ApS holds the 100% direct ownership of Windar Photonics A/S.
Under the merger method, the income, expense, assets and liabilities of Windar
Photonics A/S and Windar Denmark ApS have been included in the consolidated
financial statements of Windar Photonics plc as if it had always been a member
of the Group, taking into account the original acquisition date of the wider
Group. The amounts attributed to the assets (including goodwill) and
liabilities of Windar Photonics A/S therefore reflect their book values as at
1 January 2013. Any difference between the consideration paid for the
acquisition of Windar Photonics A/S by the Company and the net book value of
the assets (including attributed goodwill) and liabilities acquired of €1.5m
has been treated as an adjustment in the merger reserve.
6. Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future.
Estimates and assumptions are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The Group has made no
significant judgements other than described below. In the future, actual
experience may differ from these estimates and assumptions. The estimates
and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial
period are discussed below. The Group considers that these risks relate to the
next financial period and those in the future by the nature of those
judgements.
(a) Useful lives of intangible assets
Intangible assets with finite useful life are amortised or depreciated over
their useful lives. Useful lives are based on the management's estimates of
the period that the assets will generate revenue, which are periodically
reviewed for continued appropriateness. Changes to estimates can result in
significant variations in the carrying value and amounts charged to the
Statement of Comprehensive Income in specific periods. The useful life of all
development projects has been estimated at five years from the date of
capitalisation. The carrying value at the end of the period
was €1,343,361 and a change in the estimate of useful life from 5 to 3 years
would reduce this amount by €100,343 and the amortisation charged to the
Statement of Comprehensive income for the year would have decreased by
€86,138. More details are included in note 17.
(b) Impairment of intangible assets
In assessing impairment, Management estimates the recoverable amount of cash
generating units based on expected future cash flows and uses the weighted
average cost of capital to discount them. At the end of each reporting period
Management reviews a four year forward looking financial projection including
a terminal value for the Group. The Management has further evaluated the
terminal growth expectations and the applied discount rate applicable to
derive a Net Present Valuation (NPV) of the Group. If the NPV of the Group
shows a lower valuation than the net assets or the company cost of investment
in subsidiary an impairment will be made. Based on this evaluation including
Managements estimates and assumption no impairment was made during the
reporting period. Estimation uncertainty relates to assumptions about future
operating results in particular sales volumes and the determination of a
suitable discount rate.
(c) Impairment of investment in subsidiaries
In assessing impairment of investments in subsidiaries, management estimates
the recoverable amount of each asset. Management has estimated the impairment
for the carrying value of the investment in reference to the net asset value
of the subsidiaries. Estimation uncertainty relates to assumptions about
future operating results. Also see note 16 for details in relation to
investments.
(d) Estimation of the expected credit losses or trade receivables
In assessing the expected credit losses, in respect of the trade receivables
under IFRS 9, the Group considers the past performance of the receivable book
along with future factors, that may affect the credit worthiness of the entire
trade receivables. Estimations have therefore been made within these
assumptions which could affect the carrying value of the trade receivables.
(e) Warranty provision
In the current financial year, the Group revised its estimate for the warranty
provision related to its product sales. Previously, the provision was based on
4% of the amortised cost of the products delivered within the prior two years.
The new estimate is based on 4% of the total products delivered, with an
average repair cost per product. This change reflects an updated understanding
of the costs associated with potential warranty claims, based on historical
data and industry trends.
The adjustment to the estimate was made to more accurately reflect the Group's
anticipated warranty obligations. Under the previous methodology, the
provision was limited to a percentage of sales over the last two years.
However, as the Group has gathered more data on warranty claims, it became
evident that a more comprehensive approach, considering all delivered
products, would provide a better estimate of potential future warranty costs.
This change aligns the warranty provision with the actual experiences and
expectations regarding product repairs and replacements. Management is
satisfied that the current provision is appropriate and will review the
percentage used on an annual basis as more information becomes available on
the warranty position.
7. Financial instruments - Risk Management
The Group is exposed through its operations to the following financial risks:
· Credit risk
· Fair value or cash flow interest rate risk
· Foreign exchange risk
· Liquidity risk
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
The principal financial instruments used by the Group, from which financial
instrument risk arises, include Trade and other receivables, Cash and cash
equivalents, loans and Trade and other payables.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receive quarterly
reports from the finance function through which it reviews the effectiveness
of the processes put in place and the appropriateness of the objectives and
policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or a
counterparty to a financial instrument
fails to meet its contractual obligations. In 2016 the Group restricted its
policy in respect of credit risks related to customers. Prior to any major
sales of products or services to new customers the Group seeks to either
· receive prepayments or
· obtain full credit risk insurance
or a combination of the above, hence the Group's exposure to credit risk from
trade and other receivables is considered insignificant.
Credit risk also arises from cash and cash equivalents and deposits with banks
and financial institutions. For banks and financial institutions, only major
independently rated parties with minimum rating "A" are accepted.
The Group does not enter into derivatives to manage credit risk.
Fair value and cash flow interest rate risk
The Growth Fund borrowing from the Danish public institution, Vækstfonden,
initially bore interest at a fixed annual rate of 12%. In prior years, the
terms for the borrowing was renewed whereafter the interest rate was reduced
to 7% p.a. and the loan to be repaid on a quarterly basis instalment over the
period from 1 January, 2022 until 1 October, 2026.
In 2020, the Group obtained an additional Covid-19 loan the Growth Fund
borrowing from the Danish public institution, Vækstfonden carrying an
interest rate of CIBOR plus 5% and the loan to be repaid on a quarterly basis
instalment over the period from 1 October 2021 until 1 October 2026. In the
event the CIBOR rate changes by 5% p.a. the interest expenses charged to the
Profit and Loss statement would change by €12,110 p.a.
Foreign exchange risk
Foreign exchange risk also arises when the Group enters into transactions
denominated in a currency other than their functional currency (€). Given
the volume and magnitude of such transactions it is not considered sufficient
to warrant hedging the risk exposure.
The Group's main foreign currency risk will be the short-term risk associated
with accounts receivable and payable denominated in currencies that were not
the subsidiary's functional currency. The risk will arise on the difference
in the exchange rate between the time invoices were raised/received and the
time invoices were settled/paid.
The Group's policy is, where possible, to settle liabilities denominated in
their functional currency with the cash generated from their own operations in
that currency.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of
a financial instrument will fluctuate because of changes in foreign exchange
rates. The Group's exposure to the risk of changes in foreign exchange rates
relates primarily to the Group's operating activities (when revenue or expense
is denominated in a different currency from the Group's presentation currency)
and the Group's net investments in foreign subsidiaries (translation risk).
The Group is aware of its non-Euro exposures but does not consider that at
present a hedging program be required. Raw materials and capital expenditure
are primarily in Euro (€) and US Dollars whilst the target revenue market is
Asia, Europe and the USA. Any divergence from this would be considered by
management with a view to putting cover in place.
The Group has significant operations in the following currencies: Euro (€),
Danish Kroner (DKK) and Chinese Yuan (RMB).
Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group's policy is to ensure that it will
always have sufficient cash to allow it to meet its liabilities when they
become due.
The Board receives cash flow projections on a regular basis as well as
information regarding cash balances. At the end of the financial year, these
projections indicated that the Group expected to have sufficient liquid
resources to meet its obligations.
The following table sets out the contractual maturities (representing
undiscounted contractual cash-flows) of financial liabilities:
Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years
€ € € € €
At 31 December 2023
Trade payables 572,234 − − − −
Other payables and accruals 472,810 − − − −
Loans 235,741 294,575 940,985 319,752 −
Total financial liabilities 1,280,785 294,575 940,985 319,752 −
264,083 − − −
At 31 December 2022 − 451,402 − − −
−
Trade payables
Other payables and accruals
Loans 18,030 139,084 426,944 1,263,518 −
Total financial liabilities 282,113 590,486 426,944 1,263,518 −
More details in regard to the line items are included in note 24 and 25.
Capital Disclosures
The Group monitors capital, which comprises all components of equity (i.e.
share capital, share premium, merger reserve and accumulated retained
earnings).
The Group's objectives when maintaining capital are:
· to safeguard the entity's ability to continue as a going concern,
so that it can continue to provide returns for shareholders and benefits for
other stakeholders; and
· to provide an adequate return to shareholders by pricing products
and services commensurately with the level of risk.
The Group sets the amount of capital it requires in proportion to risk. The
Group manages its capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the number of dividends paid to shareholders, return capital
to shareholders, issue new shares, or sell assets to reduce debt.
8. Revenue
Revenue from contracts with customers: Year ended Year ended
31 December 2023
31 December 2022
€ €
Sale of products and installation 4,614,696 1,820,762
Rendering of services 151,788 32,487
Revenue 4,766,484 1,853,249
Revenue from contracts with customers is split of products as follows:
Year ended Year ended
31 December 2023
31 December 2022
€ €
WindEye™ 2,769,206 1,250,834
WindVision™ 1,845,490 569,928
Rendering of services 151,788 32,487
Revenue 4,766,484 1,853,249
Contract liabilities of €251,678 (2022: €1,205,531) relates to performance
obligation under contracts that have not yet been completed and are expected
to be met in 2024.
9. Loss from operations
Loss from operations is stated after:
Year ended Year ended
31 December 2023
31 December 2022
€
€
Staff costs (note 11) 1,476,189 1,253,715
Expensed research and development costs 1,023,801 633,451
Amortisation(1) 179,134 174,792
Depreciation - property, plant and equipment 29,407 2,474
Depreciation - right of use assets 28,738 −
Lease payments 27,348 105,066
Other operating income (32,210) (32,260)
Remuneration received by the Group's auditor or associates of the Group's
auditor:
- Audit of parent company 11,839 8,760
- Audit of consolidated financial statements 26,112 20,678
- Taxation compliance services 1,175 1,128
Other auditors:
- Audit of overseas subsidiaries 34,991 16,233
(1) Amortisation charges on the Group's intangible assets are recognised in
the administrative expenses line item in the consolidated statement of
comprehensive income.
10. Segment information
Operating segments are reported as reported to the chief operation decision
maker.
The Group has one reportable segment being the sale of LiDAR Wind Measurement
and therefore segmental results and assets are disclosed in the consolidated
income statement and consolidated statement of financial position.
In 2023, 3 customers each accounted for more than 19% of the revenue (2022:
one customers). The total amount of revenue from these customers amounted to
€3,538,099 or 74% of the total revenue (2022: €752,893 or 41% of the
revenue).
Revenue by geographical location of customer:
Year ended Year ended
31 December 2023
31 December 2022
€
€
Europe 151,788 18,737
Americas 1,008,800 870,817
Australia 81,900 −
China 3,523,996 899,573
Asia (excluding China) − 64,122
Revenue 4,766,484 1,853,249
Geographical information
The parent company is based in the United Kingdom. The information for the
geographical area of non-current assets is presented for the most significant
area where the Group has operations being Denmark.
As at 31 December As at 31 December 2022
2023
€ €
Denmark 1,648,426 1,327,449
Non-current assets for this purpose consist of property, plant and equipment
and intangible assets, long term deposits and Right of Use assets.
11. Directors and employees
2023 2022
Average Year end Average Year end
Number of employees
excluding directors
Sales and Services 4 3 4 4
Research and development 14 15 12 11
Production 5 6 5 5
Administration 4 5 3 3
27 29 24 23
Group 2023 2022
€ €
Staff costs
Wages and salaries 1,271,999 1,114,985
Social security costs 104,954 122,803
1,376,953 1,237,788
Warrant and Option costs 99,236 15,927
1,476,189 1,253,715
2023 2022
Company
€ €
Staff costs
Wages and fees 79,777 41,850
79,777 41,850
The Company has 5 employees (2022: 4), all being the Directors of the Company.
Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of Group, and are
considered to be directors of the company.
The value of all elements of remuneration received by key management in the
year was as follows:
Wages and salaries and fees Fair value of warrant costs Pension contributions Total
€ € € €
Year ended 31 December 2023
Directors 79,777 - - 79,777
Year ended 31 December 2022
Directors 41,850 - - 41,850
12. Finance expense
Year Year
ended
ended
31 December 2023
31 December 2022
€
€
Foreign exchange losses (59,791) (82,086)
Interest expense on financial liabilities measured at amortised cost and lease (180,242) (148,648)
interest
Finance expense (240,033) (230,734)
13. Income tax
Year ended 31 December 2023 Year ended 31 December 2022
€ €
(a) The tax credit for the year:
UK Corporation tax - -
Foreign Research and Development tax credit 168,571 218,837
(b) Tax reconciliation
Loss on ordinary activities before tax (351,091) (1,294,508)
Loss on ordinary activities at the UK standard rate of corporation tax 23.5%
(2022: 19%)
(82,506 (245,956)
Effects of:
Expenses non-deductible for tax purposes 48,212 8,838
Research and Development tax allowance (76,805) (56,699)
Adjustment to not recognized deferred taxes in previous periods (15,292) (33,979)
Unrecognised tax losses 56,429 137,165
Different tax rates applied in overseas jurisdictions 16,392 (55,918)
Change in tax rate
Exchange rate differences (129,459) -
14,458 27,712
Research and Development Tax credit for the year (168,571) (218,837)
The tax credit is recognised as 22%. (2022: 22%) of the company's deficit that
relates to research and development costs. Companies in Denmark, who conduct
research and development and accordingly experience deficits can apply to the
Danish tax authorities for a payment equal to 22%. (2022: 22%) of deficits
relating to research and development costs up to DKK 25 million.
(a) Deferred tax - Group
In view of the tax losses carried forward and other timing differences, there
is a deferred tax asset of approximately €3,215,754(2022: €3,085,177)
which has not been recognised in these Financial Statements, given uncertainty
around timing and availability of sufficient taxable profits in the relevant
Company.
(b) Deferred tax - Company
In view of the tax losses carried forward and other differences there is a
deferred tax asset of approximately €600,688 (2022: €409,952) which has
not been recognised in these Financial Statements, given uncertainty around
timing and availability of future profit against which the losses will be able
to be used.
All taxes recognized in the statement of Comprehensive income are denominated
in DKK.
14. Loss per share
The loss and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Year ended Year ended
31 December
31 December
2023
2022
€ €
Loss for the year (175,431) (1,075,671)
Weighted average number of ordinary shares 68,361,444 55,963,110
for the purpose of basic earnings per share
Basic loss and diluted, cents per share (0.3) (1.9)
There is no dilutive effect of the outstanding share options (note 27) as the
dilution would reduce the loss per share.
15. Dividends
No dividends were proposed by the Group during the period under review (2022:
€Nil).
16. Investment in Subsidiaries
Company €
At 1 January 2023 −
Capital contribution in the year −
Write down investment in subsidiary −
As at 31 December 2023 −
The subsidiaries of Windar Photonics Plc are as follows:
Name Country of incorporation Ownership Registered Office Nature of business
Windar Denmark ApS Denmark 100% Helgeshoej Allé 16-18 Holding company
DK-2630 Taastrup
Windar Photonics A/S Denmark 100% indirect Helgeshoej Allé 16-18 Develop and commercialise wind turbine technology
DK-2630 Taastrup,
Windar Photonics (Shanghai) Co. Ltd. China 100% indirect Room 403-03, Building #2 No. 38 Debao Road, Pudong, Shanghai Commercialise wind turbine technology
In 2022, the Company established Windar Denmark ApS and owns 100% of the
issued share capital of Windar Denmark ApS (comprising shares of DKK 40,000 of
1 DKK each) with CVR number 43615947.
In November 2022, the Company transferred all outstanding shares in Windar
Photonics A/S (CVR number 32157688) to Windar Denmark ApS. Following the
transaction, the existing share capital in Windar Photonics A/S of DKK
9,380,392 (comprising A Shares of DKK 5,737,800 of 1 DKK each and B Shares of
DKK 3,642,592 of 1 DKK each) were reduced to DKK 400,000 without any
difference in share classes.
Windar Photonics A/S was incorporated on 28 December 2008 in Denmark and
acquired by the Company in August 2014.
Windar Photonics A/S owns 100% of the issued common stock of Windar Photonics
(Shanghai) Co.Ltd. Windar Photonics (Shanghai) Co. Ltd. was incorporated on 18
May 2016 in China with a registered fully paid capital of USD 200,000 of which
USD 200,000 is paid in as per 31 December 2023. (prior year registered and
fully paid capital of USD 200,000)
17. Intangible assets
Group Development projects
€
Cost
At 1 January 2022 4,020,113
Additions 297,540
Grants received (121,019)
Exchange differences 74
At 31 December 2022 4,196,708
Additions - internally developed 493,436
Grants received (165,265)
Exchange differences (9,318)
At 31 December 2023 4,515,561
Development projects
€
Accumulated amortisation
At 1 January 2022 2,824,846
Charge for the year 174,792
Exchange differences 74
At 31 December 2022 2,999,712
Charge for the year 179,134
Exchange differences (6,646)
At 31 December 2023 3,172,200
Net carrying value
At 1 January 2022 1,195,267
At 31 December 2022 1,196,996
At 31 December 2023 1,343,361
The Group has received public Research and Development Grants of €165,223
(2022: €121,019) in respect of the capitalised research and development. At
the end of the year 2 development projects are ongoing which are
supported by public Research and Development Grants and outstanding grants
which can be claimed in the coming two years amount to €51,127 (2022:
€209,754).
The development projects relate to the development of improved performance and
functionality of the Group's product offerings. Measurement of the development
projects are based on expected contributions to forward looking business plans
and budgets.
18. Property, plant & equipment
Group Property, plant and equipment
€
Cost
At 1 January 2022 228,222
Additions 107,456
Disposed -
Exchange differences 45
At 31 December 2022 335,723
Additions 254,796
Disposed -
Exchange differences -
At 31 December 2023 590,289
Accumulated depreciation
At 1 January 2022 225,799
Charge for the year 2,992
Disposed -
Exchange differences (51)
At 31 December 2022 228,740
Charge for the year 30,165
Disposed -
Exchange differences 585
At 31 December 2023 259,490
Net carrying value
At 1 January 2022 2,423
At 31 December 2022 106,983
At 31 December 2023 330,799
19. Right of use assets
Group Right of use assets
€
Cost
At 1 January 2022 −
Additions −
At 31 December 2022 −
Additions 84,743
At 31 December 2023 84,743
Accumulated depreciation
At 1 January 2022 −
Charge for the year −
At 31 December 2022 −
Charge for the year 28,738
At 31 December 2023 28,738
Net carrying value
At 1 January 2022 −
At 31 December 2022 −
At 31 December 2023 56,005
20. Inventory
Group
As at As at
31 December 2023
31 December 2022
€ €
Raw material 414,160 382,027
Work in progress 63,355 294,852
Finished goods 241,468 22,357
Inventory 718,983 699,236
The cost of inventory sold and recognised as an expense during the year was
€2,381,571 (2022: €897,017)
21. Trade and other receivables
Group Company
As at As at As at As at
31 December
31 December
31 December
31 December
2023
2022
2023
2022
€
€
€
€
Trade receivables 546,273 389,652 - -
Receivables from related parties - - 1,091,896 183,579
Tax receivables 151,015 218,928 - -
Other receivables 135,088 197,496 12,512 21,300
Total trade and other receivables 832,376 806,076 1,104,408 204,879
Classified as follows:
Current Portion 832,376 806,076 1,104,408 204,879
22. Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise
the following balances with original maturity less than 90 days:
Group Company
As at As at As at As at
31 December
31 December
31 December
31 December
2023
2022
2023
2022
€
€
€
€
Cash at bank 152,180 1,404,073 - 960,237
As at year end, the Company had bank overdrafts of €426 (2022: €Nil) which
is presented in the liabilities section of the Company Statement of Financial
Position.
23. Notes supporting statement of cash flows
Non-current loans and borrowings Current loans and borrowings Total
€
€
€
As at 1 January 2022 1,371,076 372,934 1,744,010
Repayment of loans − (93,686) (93,686)
Loans and borrowings classified as non-current in previous period becoming (157,114) 157,114 −
current in this period
Accrued interests on non-current loans 103,247 − 103,247
Loans and borrowings classified as current in previous period becoming − − −
non-current in this period
New long-term borrowings in the period 373,055 (279,248) 93,807
Foreign exchange rate differences 198 - 198
As at 31 December 2022 1,690,462 157,114 1,847,576
Repayment of loans − (73,415) (73,415)
Loans and borrowings classified as non-current in previous period becoming (530,785) 530,785 −
current in this period
Accrued interests on non-current loans 128,020 − 128,020
Loans not paid on schedule − (83,699) (83,699)
As at 31 December 2023 1,287,697 530,785 1,818,482
The Company does not have any long- or short-term loans or borrowings.
24. Trade and other payables
Group Company
As at As at As at As at
31 December
31 December
31 December
31 December
2023
2022
2023
2022
€
€
€
€
Trade payables 572,234 264,083 43,627 108,452
Bank overdrafts − − 426 −
Other payables and accruals 368,607 410,600 72,423 29,317
Payables to Directors 104,203 40,802 104,203 40,802
Current portion of Growth Fund and Covid-19 loans 530,785 157,114 − −
Lease liabilities 25,648 − − −
Contract liabilities 251,678 1,205,531 − −
Total trade and other payables 1,853,155 2,078,130 220,679 178,571
Classified as follows:
Current Portion 1,853,155 2,078,130 220,679 178,571
There is no material difference between the net book value and the fair values
of current trade and other payables due to their short-term nature.
25. Borrowings
The carrying value and fair value of the Group's borrowings are as follows:
Group
Carrying and Fair value
Loans As at 31 December As at 31 December
2023
2022
€
€
Growth Fund and COVID-19 loans 1,818,482 1,847,576
Current portion of Growth Fund and COVID-19 loans
(530,785) (157,114)
Total non-current financial liabilities measured at amortised costs 1,287,697 1,690,462
As announced in 2020, terms for the borrowing was renewed during the year
whereafter the interest rate was reduced to 7% p.a. and the loan to be repaid
in quarterly instalments over the period from 1 January, 2022 until 1 October,
2026. The loan agreement was further amended in 2022 whereby interests payable
until September 2022 were further accrued to the loan principal hereafter the
loan principal to be repaid in quarterly instalments over the period from 1
October 2023 until 1 July 2027. In November 2022 the loan was transferred to
Windar Denmark ApS.
A new Covid-19 loan was further obtained during 2020 from Vækstfonden which
carries an interest rate of CIBOR plus 5% p.a. and to be repaid in quarterly
instalments over the period from 1 October 2021 until 1 October 2026.
In 2020, relation with the changes to the existing Growth Fund borrowing and
the new offered loan, the lender now has security of the assets of Windar
Photonics A/S, subsidiary undertaking, to an amount of DKK12.6m. In relation
to the additional Covid-19 loan the following terms and conditions are in
place:
· There is an early exit fee set at a maximum DKK600k
· No dividends or corporate bond interest will be paid. Dividend
distributions from Windar Photonics A/S to Windar Photonics PLC has been
restricted until full repayment of the borrowing to the Growth Fund.
· No payment of inter-company debts from Windar Photonics A/S.
Windar Photonics PLC has entered into an agreement to resign from repayments
of any outstanding amounts owned by Windar Photonics A/S to Windar Photonics
PLC until full repayment of the borrowing to the Growth Fund.
· The loan is secured up to a value of DKK12.6M on certain assets
of Windar Photonics A/S, subsidiary undertaking.
Both loans are denominated in Danish Kroner.
The Company had no borrowings.
26. Lease liabilities
Group
As at As at
31 December 2023
31 December 2022
€ €
Lease liabilities - current portion 25,648 −
Lease liabilities - non-current portion 31,711 −
Lease liabilities 57,359 −
The total cash outflow in respect of lease liabilities was €99,903 s(2022;
€Nil) while the related interest expenses recognised in the year was
€2,868 (2022; €Nil).
Future lease payments are due as follows:
Lease payments Present value
2023 Interest 2023
2023
€ € €
Within one year 30,848 (2,868) 27,980
Within two to five years 46,272 (4,337) 41,935
More than five years - - -
Total lease payments 77,120 (7,205) 69,915
27. Share capital
Authorised € Authorised €
2023 2023 2022 2022
Shares at beginning of reporting period 68,361,444 834,771 54,595,524 675,664
Issue of share capital − − 13,765,920 159,107
Shares at end of reporting period 68,361,444 834,771 68,361,444 834,771
Number of shares issued and fully paid € Number of shares issued and fully paid €
2023 2023 2022 2022
Shares at 1 January 2022 68,361,444 834,771 54,595,524 675,664
Issue of shares for cash − − 13,765,920 159,107
Shares at 31 December 2023 68,361,444 834,771 68,361,444 834,771
At 31 December 2023 the share capital comprises 68,361,444 shares of 1 pence
each.
Share options
Share options are granted to employees.
During the year no share options lapsed, and 2,256,956 new share options were
granted during the year.
Share options issued in 2017, 2019, 2021 and 2023 are valued using the
Black-Scholes pricing model and no performance conditions are included in the
fair value calculations. The options were issued at a strike price of 100p in
respect of share options granted in 2017 and 2019 and a strike price of 40p
for options granted in 2021. In 2023 1,056,956 option were issued at a strike
price of 21.85p and 1,200,000 at 30.0p. All share options granted with a third
vesting on each anniversary for the first three years whereafter the options
have a 10-year life. The price of the share at the time of issue used equals
the actual market price of the share at issue. The risk-free rate was 4%. The
expected volatility is based on historical volatility of the AIM market over
the last three years and is estimated to be 90%.
The average share price during the year was 33.48 pence (2022: 12.67 pence).
At the year end the Company had the following options outstanding:
Number of options
At 31 December 2022 Granted Lapsed At 31 December 2023 Exercise price (£ pence) Exercise date
Options 1,021,667 2,256,596 - 3,278,263 40.50 16/11/18 to 15/06/36
1,021,667 2,256,596 - 3,278,263
The number of share options exercisable at 31 December 2023 are 1,448,750
(2022: 803,287).
The weighted average remaining contractual life for the share options
outstanding as at 31 December 2023 is 10.99 years (2022: 8.92 years).
28. Reserves
The following describes the nature and purpose of each reserve within equity
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Merger reserve - Group Represents the difference between the consideration paid for the acquisition
of Windar Photonics A/S by the Company and the net book value of the assets
and liabilities acquired.
Merger reserve - Company Represents the difference between the fair value and the nominal value of the
shares issued for the acquisition of Windar Photonics A/S.
Foreign currency reserve Gains and losses on the retranslating the net assets from the functional
currencies to the reporting currency of €.
Retained earnings All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
29. Short term leases
The Company has one leasing commitment with maturity under 3 years. The
commitment has a value of €60,761.
30. Warranty provision
2023 2022
€ €
Provision at the beginning of reporting period 45,774 36,150
Provision charged to the profit and loss account (20,185) 9,620
Utilised in year − −
Foreign exchange rate movements (96) 4
25,493 45,774
The Group typically provides a two-year warranty period to customers on
products sold. Warranty expenses/(income) charged to the Statement of
Comprehensive Income amounted to €(20,185) (2022: 9,620) corresponding to a
warranty cost percentage of Nil % (2022: Nil%) relative to the prior two years
revenue. However, due to the early business stage of the Group and the
uncertainty following this the Group has adopted a policy to accrue a 4%
provision based on the prior two years deliveries calculated with the cost of
goods sold at the end of the period.
31. Holiday allowance provision
2023 2022
€ €
Provision at the beginning of reporting period 134,734 131,877
Increase holiday allowance provision in year − −
Accrued interest 3,804 2,857
138,538 134,734
32. Related Party Transactions
Jørgen Korsgaard Jensen and Johan Blach Petersen are directors and
shareholders of Wavetouch Denmark A/S (Wavetouch) and OPDI Technologies A/S
(OPDI). Wavetouch has during the year rented office space from Windar
Photonics A/S, the amount payable during the year to Windar was €32,210
(2022: €32,261). At the end of the year, receivable amounts were outstanding
from Wavetouch €9,581 (2022: €81,628). At the end of the year, there were
amounts outstanding to the directors as follows: Jorgen Korsgaard Jensen
€nil (2022: €416), Johan Blach Petersen €6,850 (2022: € 6,850), David
George Lis €24,354 (2022: €nil), Andrew Richardson €11,275 (2022:
€nil), Paul Hodges €28,188 (2022: €nil) and Søren Høffner €33,536
(2022: €33,536).
Intercompany transactions
At 31 December 2023, there exist an intercompany loan between Windar Photonics
PLC and its directly or indirectly held subsidiaries Windar Denmark ApS and
Windar Photonics A/S.
Windar Photonics PLC has a receivable at €1,091,896 (2022: €183,579) and
interest added during 2023 amounts to €47,417 (2022: €3,136) with Windar
Photonics A/S and Windar Denmark ApS.
The interest rate for 2023 is Bank of England base rate + 2.5% p.a. (2022:
Base rate + 2.5% p.a.).
33. Financial Instruments
a) Assets
Group Group Company Company
2023 2022 2023 2022
€ € € €
Trade & Other Receivables 546,273 389,652 1,104,408 183,579
Cash & Cash Equivalents 152,180 1,404,073 - 960,237
Total 698,453 1,793,725 1,104,408 1,143,816
Assets in the analysis above are all categorised as 'other financial assets at
amortised cost' for the Group and Company
b) Liabilities
Group Group Company Company
2023 2022 2023 2022
€ € € €
Trade & Other Payables 783,901 470,928 220,679 178,571
Loans 1,818,483 1,847,576 - -
Lease liability 57,359 - - -
Total 2,659,743 2,318,504 220,679 178,571
Liabilities in the analysis above are all categorised as 'other financial
liabilities at amortised cost' for the Group and Company
24. Controlling Parties
There is no ultimate controlling party of the Company.
34. Post balance sheet events and outstanding lawsuits
On 2(nd) January 2024, the Group issued 465,000 shares at an average
subscription price of 22p per share in satisfaction of fees due to
Non-Executive Directors in respect of 2023.
On 8 April 2024, the Group completed a Placing to issue 12,631,426 new
ordinary shares at a price of 35p price per share raising £4.42 million
pre-costs. The purpose of the share issue was to provide working capital to
support anticipated growth, continued new product development and increase
balance sheet strength to support strengthening of the supplier and customer
bases.
There are no outstanding lawsuits.
WINDAR PHOTONICS PLC
NOTICE OF ANNUAL GENERAL MEETING
This document is important and requires your immediate attention. If you are
in any doubt as to any aspect of the proposals referred to in this document or
as to the action you should take, you should seek your own advice from your
stockbroker, solicitor, accountant or other professional adviser. If you have
sold or otherwise transferred all your shares in Windar Photonics plc, please
forward this document, together with any accompanying documents, to the
purchaser or transferee or to the person who arranged the sale or transfer so
they can pass these documents to the person who how holds the shares.
NOTICE IS HEREBY GIVEN that the Annual General Meeting (the "AGM") of Windar
Photonics Plc (the "Company") will be held at The Heron, 5 Moor Lane, London,
EC2Y 9AP at 10.00 a.m. on 5(th) August 2024 for the purpose of considering
and, if thought fit, passing the resolutions below.
The Annual Report and Accounts for the year ended 31 December 2023, Notice of
AGM and a form of Proxy will be posted to shareholders and shortly available
on the Company's website at https://www.windarphotonics.com/
Resolution 7 will be proposed as a special resolution. All other resolutions
will be proposed as ordinary resolutions.
As Ordinary Resolutions:
To receive and adopt the Company's annual accounts for the financial year
ended 31 December 2023 together with the Directors' report and the auditors'
report on those accounts.
To re-elect David George Lis, who retires by rotation pursuant to the articles
of association of the Company and who, being eligible, offers himself for
re-election as a Director
To re-elect Gavin Manson, who retires by rotation pursuant to the articles of
association of the Company and who, being eligible, offers himself for
re-election as a Director
To appoint Gravita Audit Limited, as auditors of the Company to hold office
from the conclusion of this meeting until the conclusion of the next general
meeting at which the accounts are laid before the meeting
To authorise the Directors to fix the remuneration of the auditors.
6. That, in substitution for all subsisting authorities to the extent
unused, the Directors be generally and unconditionally authorised for the
purpose of section 551 of the Companies Act 2006 to exercise all the powers of
the Company to allot ordinary shares in the Company and grant rights to
subscribe for, or to convert any security into such ordinary shares (such
ordinary shares and rights to subscribe for or to convert any security into
ordinary shares being relevant securities) up to an aggregate nominal amount
of £243,864, with such authorisation to expire upon the earlier of the
conclusion of the next annual general meeting and 30 June 2025 (unless
renewed, varied or revoked by the Company prior to or on that date) after the
date of this resolution (save that the Company may before such expiry make an
offer or agreement which would or might require relevant securities allotted,
or rights to be granted, after such expiry and the directors may allot
relevant securities, in pursuance of such offer or agreement as if the
authorisation conferred hereby had not expired).
As a Special Resolution
7. That, subject to the passing of resolution 6 above and in
substitution for all subsisting authorities to the extent unused, the
Directors be generally empowered pursuant to sections 570 and 573 of the
Companies Act 2006 (the 'CA 2006') to allot equity securities (as defined in
section 560 CA 2006) pursuant to the authority referred to in resolution 5, as
if section 561(1) CA 2006 did not apply to any such allotment, provided that
the power was:
1. limited to the allotment of equity securities in connection with an
offer of equity securities:
a. to ordinary shareholders in proportion (as nearly as may be
practicable) to their existing holdings; and
b. to holders of other equity securities as required by the rights of
those securities or as the directors otherwise consider necessary.
2. limited to the allotment of equity securities up to an aggregate
nominal amount of 243,864, and shall expire on the earlier of the conclusion
of the next annual general meeting and 30 June 2025 (unless renewed, varied or
revoked by the Company prior to or on that date), save that the Company, may
before such expiry make an offer or agreement which would or might require
equity securities to be allotted after such expiry and the Directors may allot
equity securities in pursuance of such offer or agreement as if the power
hereby conferred had not expired.
Dated June 29, 2024
By Order of the Board
Jørgen Korsgaard Jensen
Director
Registered Address: 3 More London Riverside, London SE1 2AQ Registered Number: 09024532
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