REG - Windar Photonics PLC - Final Results and Notice of AGM
30 June 2021
Windar Photonics plc
("Windar" or the "Company")
Final Results and Notice of AGM
Windar Photonics plc (AIM:WPHO), the technology group that has developed a cost efficient and innovative LiDAR wind sensor for use on electricity generating wind turbines, is pleased to announce its final audited results for the year ended 31 December 2020 ("FY20").
Notice of Annual General Meeting
The Company is pleased to confirm that its Annual General Meetings ("AGM") will be held at the offices of West Hill Corporate Finance Ltd, 85 Gresham Street, London, EC2V 7NQ at 1.00 p.m. on 26 July 2021.
In light of the Coronavirus (COVID-19) pandemic and the restrictions imposed by the UK Government, the Company will convene the AGM with the minimum necessary quorum of two shareholders (which the Company will facilitate), and further shareholders will not be permitted to attend the AGM in person. The Company will include all valid proxy votes (whether submitted electronically or in hard copy form) in its polls at the AGM and the Chair of the meeting will call for a poll on each resolution. The Company accordingly requests that shareholders submit their proxy votes in respect of the resolutions as set out in the Notice of the AGM, electronically or by post in advance, in accordance with the instructions set out in the Notice of the AGM.
Shareholders should submit their votes via proxy as early as possible, and shareholders are requested to appoint the Chairman of the meeting as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the AGM in person or cast the shareholder's vote.
Copies of the Annual Report and Accounts for the year ended 31 December 2020 and the Notice of the Annual General Meeting are available from the Company's website - www.windarphotonics.com
Copies of the Annual Report and Accounts for FY20 and the Notice of the Annual General Meeting will be posted to shareholders today and will be available from the Company's website - www.windarphotonics.com
Related Party Opinion
Jørgen Korsgaard Jensen, Chief Executive Officer of the Company, has agreed to provide a letter of support to the Company up to a value of €1,000,000 for a period of 12 months from the date of publication of the FY20 final audited results (the "Letter of Support"). If the Company requires to utilise the funds available under the Letter of Support, the funds will be provided on an interest free basis.
The provision of this letter of support to the Company is deemed to be a related party transaction for the purposes of the AIM Rules for Companies. The independent Directors consider, having consulted with the Company's nominated adviser, Cenkos Securities plc, that the terms of the letter of support are fair and reasonable insofar as the Shareholders are concernced.
For further information, please contact:
Windar Photonics plc
Tel: +45 24234930
Jørgen Korsgaard Jensen, CEO
Cenkos Securities plc (Nomad & Broker)
Neil McDonald / Pete Lynch
Tel: 0131 220 6939
About Windar:
Windar Photonics is a technology group that develops cost-efficient and innovative Light Detection and Ranging ("LiDAR") optimization systems for use on electricity generating wind turbines. LiDAR wind sensors in general are designed to remotely measure wind speed and direction.
http://investor.windarphotonics.com
Chairman's Statement
Despite a positive start the year with the receipt of the first volume order from the OEM market for the Company's LiDAR wind sensor, the onset of the COVID-19 pandemic had a significant impact on the ability of the Company to deliver orders during the year. Notwithstanding the impact of the global pandemic, the Company generated revenue of €1.3 million, an increase of 13% compared to 2019 (€1.2 million). Coupled with the implementation of cost saving initiatives throughout the Company, the EBITDA loss was reduced by 61% to €1.1 million (2019: loss of €2.8 million).
Total orders received and scheduled for delivery in 2020 amounted to €2.9 million. However, primarily due to the impact of the pandemic delivery of orders amounting to €1.6 million were postponed and rescheduled for delivery in 2021.
The retro-fit market operations were particularly adversely impacted by the onset of the pandemic due to project delays and travel restrictions. However important customer trials under our distribution agreement with Vestas were initiated and finalized in 2020 with very encouraging results Management expect to see the first volume orders and deliveries through this channel to be realised in 2021.
Our continued drive to optimize the cost base of our products has resulted in the Company successfully completing our new OneUnit platform which means the complete with electronic box has been eliminated. All optical and electronic parts now fully integrated in our optical head. With this platform now fully developed, our average production costs going into 2021 are estimated to have reduced by close to 21% compared the average costs at the beginning of 2020. Besides the cost saving the new platform enables a substantial simplification of the installation process of our products bringing additional cost savings to our end users.
Within the various other ongoing development projects good progress has been achieved in 2021. In previous years, the Company was focused on expanding our wind measurements data capabilities beyond the measurement of wind speed and wind direction to include wind turbulence and wake data which today are fully integrated in the entire project range. Going forward and based on new software developments the Company will also be integrating rain intensity data in our product range.
Financial Overview
Revenue during the year increased by 13% to €1.3 million (2019: €1.2 million). Gross profit was up 28% (2019: (47%)) to €0.7 million (2019: €0.5 million).
Net loss for the year before taxes decreased to €1.6 million from €3.3 million in 2019, which included depreciation, amortisation and warrant costs of €0.3 million (2019: €0.3 million).
The Group held cash balances at the end of the year of €0.6 million (2019: €0.8 million).
Trade receivables were €0.4 million (2019: €0.1 million), reflecting that most of the revenue recognized in 2020 was delivered during the last quarter of the year.
The Group has capitalised its continued cost of investment in technology during the year. This amounts to €0.5 million in 2020 (2019: €0.5 million) before grants of €0.2 million (2019: €0.1 million).
During the year, the Group raised €1.0 million before expenses through the issue of share capital.
Outlook
Even though there remain significant project and delivery delays in the first part of 2021 due to aftermath of the global pandemic, the Board expects to see a substantial revenue increase in 2021. This expectation is based on the orderbook at the start of the year which contained a number of orders initially scheduled for delivery in 2020. In addition, the Board expects to receive new orders and has strong expectations for initial volume orders/deliveries under our distribution agreement with Vestas.
Despite the overall encouraging developments, the Group's cash flow position is constantly being monitored with respect to eventual consequences of customer payments and project delays. However, management believe that there are a number of actions available to them in order to manage the cash position if needed.
Positively, the total order inflow in 2020 has been encouraging at €2.9 million which approximately represents the annual break even fix point in the Group. Given the order back-log carried into 2021, orders received and expected new orders the Board believes the Group is in a good position moving forward.
Finally, I would like to take the opportunity to thank the management and staff for their efforts in 2020.
BY ORDER OF THE BOARD ON June 30, 2021
Johan Blach Petersen
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020
Year ended
31 December 2020
Year ended
31 December 2019
€
€
Revenue from contracts with customers
1,333,956
1,177,897
Cost of goods sold
(632,586)
(629,560)
Gross profit
701,370
548,337
Administrative expenses
(2,183,141)
(3,680,990)
Other operating income
32,196
32,145
Loss from operations
(1,449,575)
(3,100,508)
Finance expenses
(143,110)
(190,889)
Loss before taxation
(1,592,685)
(3,291,397)
Taxation
252,517
212,488
Loss for the year attributable to the ordinary equity holders of Windar Photonics Plc
(1,340,168
(3,078,909)
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Exchange gains/(losses) arising on translation of foreign operations
22,585
(3,085)
Total comprehensive loss for the year attributable to the ordinary equity holders of Windar Photonics Plc
(1,317,583)
(3,075,824)
Loss per share attributable to the ordinary equity holders of Windar Photonics Plc
Basic and diluted, cents per share
(2.7)
(6.7)
All activities relate to continuing operations
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020
31 December 2020
31 December 2019
€
€
Assets
Non-current assets
Intangible assets
1,205,243
1,192,607
Property, plant & equipment
27,698
61,800
Deposits
25,382
24,980
Total non-current assets
1,258,323
1,279,387
Current assets
Inventory
636,785
1,019,564
Trade receivables
429,241
111,703
Other receivables
Tax credit receivables
220,047
253,030
84,305
212,428
Prepayments
14,195
44,857
Restricted cash and cash equivalents
-
-
Cash and cash equivalents
626,361
763,024
Total current assets
2,179,659
2,235,881
Total assets
3,437,982
3,515,268
Equity
Share capital
675,664
608,689
Share premium
14,502,837
13,692,119
Merger reserve
2,910,866
2,910,866
Foreign currency reserve
3,955
(18,630)
Retained earnings
(17,651,945)
(16,338,796)
Total equity
441,377
854,248
Non-current liabilities
Warranty provisions
38,493
61,170
Loans
1,719,825
5,174
Total non-current liabilities
1,758,318
66,344
Current liabilities
Trade payables
726,007
1,045,792
Other payables and accruals
274,202
211,879
Contract liabilities
215,905
69,954
Invoice discounting
-
1,992
Loans
22,173
1,265,059
Total current liabilities
1,238,287
2,594,676
Total liabilities
2,996,605
2,661,020
Total equity and liabilities
3,437,982
3,515,268
The financial statements were approved and authorised for issue by the Board of Directors on June 30 2021 and were signed below on its behalf by:
Jørgen Korsgaard Jensen, Director
Company number: 09024532
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020
31 December
31 December
2020
2019
€
€
Assets
Non-current assets
Investments in subsidiaries
142,497
519,897
Total non-current assets
142,497
519,897
Current assets
Other receivables
11,295
11,790
Prepayments
-
26,599
Intragroup receivables
2,074
43,088
Cash and cash equivalents
543,247
521,713
Total current assets
556,616
603,190
Total assets
699,113
1,123,087
Equity
Share capital
675,664
608,689
Share premium
14,502,837
13,692,119
Merger reserve
658,279
658,279
Foreign currency reserve
-
(7,746)
Retained earnings
(15,395,399)
(14,046,739)
Total equity
441,381
904,602
Current liabilities
Trade payables
233,648
198,485
Other payables and accruals
24,084
20,000
Total liabilities
257,732
218,485
Total equity and liabilities
699,113
1,123,087
The financial statements were approved and authorised for issue by the Board of Directors on June 30 2021 and were signed below on its behalf by:
Jørgen Korsgaard Jensen, Director
Company number: 09024532
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
Year ended
31 December 2020
Year ended
31 December 2019
€
€
Loss for the period before taxation
(1,592,685)
(3,291,397)
Adjustments for:
Finance expenses
143,110
190,889
Amortisation
286,903
267,317
Depreciation
38,752
52,411
Received tax credit
212,864
120,186
Foreign exchange losses
22,691
3,085
Share option and warrant costs
27,020
27,868
(861,345)
(2,629,641)
Movements in working capital
Changes in inventory
382,779
(292,565)
Changes in receivables
(453,281)
144,164
Changes in prepayments
30,663
38,905
Changes in deposits
(401)
21,305
Changes in trade payables
(319,788)
552,426
Changes in contract liabilities
145,951
(13,214)
Changes in warranty provisions
(22,677)
(17,252)
Changes in other payables and provisions
62,321
447,972
Cash flow from operations
(1,035,778)
(1,747,900)
Investing activities
Payments for intangible assets
(469,362)
(528,278)
Payments for tangible assets
(4,449)
(3,427)
Grants received
174,713
50,824
Cash flow from investing activities
(299,098)
(480,881)
Financing activities
Proceeds from issue of share capital
975,214
1,315,342
Costs associated with the issue of share capital
(97,521)
(133,827)
Proceeds from new long term loans
402,447
-
Reduction from invoice discounting
(1,992)
(8,743)
(Decrease)/Increase in restricted cash balances
-
158,138
Repayment of loans
(5,171)
(5,240)
Interest paid
(74,357)
(55,878)
Cash flow from financing activities
1,198,620
1,269,792
Net increase/(decrease) in cash and cash equivalents
(136,256)
(958,989)
Exchange differences
(407)
210
Cash and cash equivalents at the beginning of the year
763,024
1,721,803
Cash and cash equivalents at the end of the year
626,361
763,024
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
Year ended
31 December 2020
Year ended
31 December 2019
€
€
Loss for the period before taxation
(1,367,934)
(12,183,497)
Adjustments for:
Finance Income
(16,946)
(30,953)
Write down of investment in subsidiary
1,116,716
11,887,213
Share option and warrant costs
27,020
27,868
(241,144)
(299,369)
Movements in working capital
Changes in receivables
495
913
Changes in prepayments
26,599
(2,743)
Changes in loans to subsidiary entity
61,161
962,489
Changes in trade payables
35,163
130,795
Changes in other payables and provisions
4,084
-
Cash flow from operations
(113,642)
792,085
Investing activities
Additional investment in subsidiary undertaking
(739,317)
(1,673,427)
Cash flow from investing activities
(739,317)
(1,673,427)
Financing activities
Proceeds from issue of share capital
975,214
1,315,342
Costs associated with the issue of share capital
(97,521)
(133,827)
Currency losses during the year
(3,200)
-
Cash flow from financing activities
874,493
1,181,515
Net decrease in cash and cash equivalents
21,534
300,173
Cash and cash equivalents at the beginning of the year
521,713
221,540
Cash and cash equivalents at the end of the year
543,247
521,713
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020
Share
CapitalShare
PremiumMerger reserve
Foreign currency reserve
Accumulated Losses
Total
€
€
€
€
€
€
Group
At 1 January 2019
560,859
12,558,434
2,910,866
(21,715)
(13,287,758)
2,720,686
New shares issued
47,830
1,267,512
-
-
-
1,315,342
Costs associated with capital raise
-
(133,827)
-
-
-
(133,827)
Share option and warrant costs
-
-
-
-
27,870
27,870
Transaction with owners
47,830
1,133,685
-
-
27,870
1,209,385
Loss for the year
-
-
-
-
(3,078,909)
(3,078,909)
Other comprehensive gains
-
-
-
3,085
-
3,085
Total comprehensive loss
-
-
-
3,085
(3,078,909)
(3,075,824)
At 31 December 2019
608,689
13,692,119
2,910,866
(18,630)
(16,338,797)
854,247
New shares issued
66,975
908,239
-
-
-
975,214
Costs associated with capital raise
-
(97,521)
-
-
-
(97,521)
Share option and warrant costs
-
-
-
-
27,020
27,020
Transaction with owners
66,975
810,718
-
-
27,020
904,713
Loss for the year
-
-
-
-
(1,340,168)
(1,340,168)
Other comprehensive gains/(loss)
-
-
-
22,585
-
22,585
Total comprehensive loss
-
-
-
22,585
(1,340,168)
(1,317,583)
At 31 December 2020
675,664
14,502,837
2,910,866
3,955
(17,651,945)
441,377
Company
At 1 January 2019
560,859
12,558,434
658,279
(7,746)
(1,891,110)
11,878,716
New shares issued
47,830
1,267,512
-
-
-
1,315,342
Costs associated with capital raise
-
(133,827)
-
-
-
(133,827)
Share option and warrant costs
-
-
-
-
27,868
27,868
Transaction with owners
47,830
1,133,685
-
-
27,868
1,209,383
Loss for the year
-
-
-
-
(12,183,497)
(12,183,497)
Total comprehensive loss
-
-
-
-
(12,183,497)
(12,183,497)
At 31 December 2019
608,689
13,692,119
658,279
(7,746)
(14,046,739)
904,602
New shares issued
66,975
908,239
-
-
-
975,214
Costs associated with capital raise
-
(97,521)
-
-
-
(97,521)
Share option and warrant costs
-
-
-
-
27,020
27,020
Transaction with owners
66,975
810,718
-
-
27,020
904,713
Loss for the year
-
-
-
-
(1,367,934)
(1,367,934)
Total comprehensive loss
-
-
-
-
(1,367,934)
(1,367,934)
At 31 December 2020
675,664
14,502,837
658,279
(7,746)
(15,387,653)
441,381
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
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.
2. Adoption of new and revised International Financial Reporting Standards
New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year
beginning on or after 1 January 2020 that would be expected to have a material impact on the Group.
The new IFRSs adopted during the year areas as follows:
Amendments to References to the Conceptual Framework in IFRS Standards
Amendments to IFRS 3
Definition of a Business
Amendments to IFRS 9, IAS 39 and IRFS 7
Interest Rate Benchmark Reform
Amendments to IAS 1 & IAS 8
Definition of Material
IFRS 16
The adoption of the new and amendments to IFRSs did not have any significant impact on the financial
statements of the Group and the Company.
The following standards, amendments and interpretations applicable to the Group are in issue but are not
yet effective and have not been early adopted in these financial statements. They may result in
consequential changes to the accounting policies and other note disclosures. We do not expect the impact
of such changes on the financial statements to be material. These are outlined in the table below:
Effective dates for financial periods beginning on or after
IFRS 17
Insurance Contracts
1 January 2023
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
1 January 2022
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 1
Amendments to IFRS 9
Amendments to IFRS 16
Amendments to IAS 41
1 January 2022
Amendments to IFRS 3
Business Combinations - Reference to the Conceptual Framework
1 January 2022
Amendments to IAS 16
Property, Plant and Equipment - Proceeds before Intended Use
1 January 2022
Amendments to IAS 37
Onerous Contracts - Cost of Fulfilling
1 January 2022
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Deferred until further notice
The Directors anticipate that the adoption of these standards and the interpretations in future periods will
have no material impact on the financial statements of the Group.
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, the directors have considered the cash requirements of the Group. The directors are confident that based on the Group's forecasts and projections, taking account of possible changes in trading performance is appropriate to continue to adopt the going concern basis of accounting in preparing these financial statements.
However, Management has noticed the risk of non-payments from customer receivables and the potential for future projects/customer delivery schedules to be delayed due to the general COVID-19 pandemic, which could have a material impact on the outlooking cash flow forecasts.
In the event, for the reasons stated above the timing of the forecast revenue and customer payments were not to be achieved in the periods expected, the Group may need to seek additional funding to cover those periods where there might be a potential shortfall. However, in order to cover any such eventual shortfalls a major shareholder of the Company has already committed to supporting the Company if required for at least 12 months from the date that these financial statements are signed.
Due to primarily the above stated uncertainties regarding the COVID-19 situation, Management highlight the very high levels of uncertainties, which indicates the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. 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
Basis of preparation
The consolidated financial statements comprise the consolidated financial information of the Group as at 31 December 2020 and are prepared under the historic cost convention, except for the following:
· share based payments and share option and warrant costs
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRSs") issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").
The acquisition of the subsidiary 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.
5. Revenue
Revenue from contracts with customers:
Year ended
31 December 2020Year ended
31 December 2019
€
€
Sale of product and installation
1,325,951
1,129,255
Rendering of services
8,005
48,642
Revenue
1,333,956
1,177,897
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Year ended
31 December 2020Year ended
31 December 2019
€
€
WindEye™
770,531
1,070,231
WindVision™
555,420
59,018
Rendering of services
8,005
48,648
Revenue
1,333,956
1,177,897
Contract liabilities of €215,905 (2019: €69,954) relates to performance obligation under contracts that have not yet been completed and are expected to be met in 2021.
6. Loss from operations
Loss from operations is stated after:
Year ended
31 December 2020
€Year ended
31 December 2019
€Staff costs
1,263,759
1,579,160
Expensed research and development costs
489,375
488,593
Amortisation1
286,903
267,317
Depreciation
38,752
52,411
Lease payments
115,350
131,989
Other Operating Income
(32,196)
(32,145)
Remuneration received by the Group's auditor or associates of the Group's auditor:
- Audit of parent company
5.133
5,460
- Audit of consolidated financial statements
- Taxation compliance services
Other auditors:
18,120
830
19,185
7,357
- Audit of overseas subsidiaries
18,803
21,430
-Adjustment to prior year audit of consolidated financial statements
35,715
42,899
1 Amortisation charges on the Group's intangible assets are recognised in the administrative expenses line item in the consolidated statement of comprehensive income.
7. Segment information
Operation 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 2020, four customers accounted for more than 10 per cent of the revenue each (2019: three customers). The total amount of revenue from these customers amounted to €1,076,841, 81 per cent of the total revenue (2019: €1,028,380 or 88 per cent of the revenue)
Revenue by geographical location of customer:
Year
ended
31 December 2020
€Year
ended
31 December 2019
€Europe
119,340
256,501
Americas
54,218
-
China
1,128,722
919,658
Asia (excluding China)
31,676
1,738
Revenue
1,333,956
1,177,897
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 2020
As at 31 December 2019
€
€
Denmak
1,248,460
1,270,753
1,248,460
1,270,753
Non-current assets for this purpose consist of property, plant and equipment and intangible assets.
8. Directors and employees
2020
2019
Average
Year end
Average
Year end
Number of employees excluding directors
Sales and Services
7
6
8
8
Research and development
10
10
11
11
Production
2
2
3
3
Administration
3
3
3
3
22
21
25
25
Group
2020
2019
€
€
Staff costs
Wages and salaries
1,190,757
1,465,035
Social security costs
45,982
86,257
1,236,739
1,551,292
Warrant and Option costs
27,020
27,868
1,263,759
1,579,160
Company
2020
2019
€
€
Staff costs
Wages and fees
25,760
40,448
25,760
40,448
Warrant and Option costs
27,020
27,868
52,780
68,316
The Company has 3 employees (2019: 4), all being the Directors of the Company.
Key management personnel compensation
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 2020
Directors
25,760
-
-
25,760
Year ended 31 December 2019
Directors
40,448
-
-
40,448
9. Finance income and expense
Finance expense
Year
ended
31 December 2020
€Year
ended
31 December 2019
€Foreign exchange losses
(32,746)
(39,124)
Interest expense on financial liabilities measured at amortised cost
(110,364)
(151,765)
Finance expense
(143,110)
(190,889)
10. Income tax
Year ended 31 December 2020
Year ended 31 December 2019
(a)
The tax credit for the year:
€
€
UK Corporation tax
-
-
Foreign tax credit
(252,517)
(212,488)
(b)
Tax reconciliation
Loss on ordinary activities before tax
(1,592,685)
(3,291,397)
Loss on ordinary activities at the UK standard rate of corporation tax 19% (2019: 19%)
(302,610)
(625,365)
Effects of:
Expenses non-deductible for tax purposes
(35,103)
3,108
Adjustment to not recognized deferred taxes in previous periods
(137,902)
-
Unrecognised tax losses
263,464
533,772
Different tax rates applied in overseas jurisdictions
(54,860)
(125,599)
Exchange rate differences
14,494
1,596
Tax credit for the year
(252,517)
(212,488)
The tax credit is recognised as 22 per cent. (2019: 22 per cent) 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 per cent. (2019; 22 per cent) of deficits relating to research and development costs up to DKK 25 million.
(c) Deferred tax - Group
In view of the tax losses carried forward and other timing differences there is a deferred tax asset of approximately €2,829,139 (2019: €2,549,025) which has not been recognised in these Financial Statements, given uncertainty around timing and availability of sufficient taxable profits in the relevant Company.
(d) Deferred tax - Company
In view of the tax losses carried forward and other differences there is a deferred tax asset of approximately €338,140 (2019: €281,199) 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.
11. 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
31 December
2020Year ended
31 December
2019
€
€
Loss for the year
(1,317,583)
(3,078,909)
Weighted average number of ordinary shares for the purpose of basic earnings per share
49,819,356
45,614,917
Basic loss and diluted, cents per share
(2.7)
(6.7)
There is no dilutive effect of the warrants (note 25) as the dilution would reduce the loss per share.
12. Dividends
No dividends were proposed by the Group during the period under review (2019: €Nil).
13. Investment in Subsidiaries
€
Company
At 1 January 2020
519,897
Capital contribution in the year
Write down investment in subsidiary
739,316
(1,116,716)
As at 31 December 2020
142,497
The subsidiaries of Windar Photonics Plc are included in these financial statements in accordance with the merger accounting as set out in the basis of preparation and basis of consolidation in notes 4 and 5, are as follows:
Name
Country of incorporation
Ownership
Registered Office
Nature of business
Windar Photonics A/S
Denmark
100%
Helgeshoej Allé 16-18,2630 Taastrup,
Denmark
Develop and commercialise wind turbine technology
Windar Photonics (Shanghai) Co. Ltd.
China
100% indirect
Room 403-03, Building #2, No. 38 Debao Road, Pudong, Shanghai
Commercialise wind turbine technology
The Company owns 100 per cent. of the issued share capital of Windar Photonics A/S (comprising A Shares of DKK 5,737,800 of 1 DKK each and B Shares of DKK 3,642,592 of 1 DKK each) with CVR number 32157688.
Windar Photonics A/S was incorporated on 28 December 2008 in Denmark and acquired by the Company in August 2014. During the year the Company invested the funds received from the share placing into its main trading subsidiary, Windar Photonics A/S, and a total transfer of funds of €678,156 was made during the year. A further waiver of intercompany receivable due from Windar Photonics A/S of €739,317 was made during the year and treated as capital contribution.
Windar Photonics A/S owns 100 per cent. 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 capital of USD 200,000 of which USD 200,000 is paid in as per 31 December 2020.
14. Intangible assets
Group
Development projects
€
Cost
At 1 January 2019
2,989,095
Additions - internally developed
528,277
Grants received
(50,824)
Exchange differences
(1,190)
At 31 December 2019
3,465,358
Additions - internally developed
469,362
Grants received
(174,713)
Exchange differences
14,759
At 31 December 2020
3,774,766
Accumulated amortisation
At 1 January 2019
2,006,207
Charge for the year
267,317
Exchange differences
(773)
At 31 December 2019
2,272,751
Charge for the year
286,903
Exchange differences
9,869
At 31 December 2020
2,569,523
Net carrying value
At 1 January 2019
982,888
At 31 December 2019
1,192,607
At 31 December 2020
1,205,243
The Group has received public Research and Development Grants of €174,713 (2019: €50,824) in respect of the capitalised research and development. At the end of the year 3 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 €669,605 (2019: €508,722, which could be claimed in the following 3 years).
The company's development projects relate to the development of improved performance and functionality, improved components etc. in the company's products.
Measurement of the development projects are based on realization of the company's business plan and budgets,
particularly realization of expected growth in revenue.
15. Property, plant & equipment
Group
Plant and equipment
€
Cost
At 1 January 2019
218,341
Additions
3,427
Disposed
-
Exchange differences
(79)
At 31 December 2019
221,689
Additions
4,449
Disposed
-
Exchange differences
771
At 31 December 2020
226,909
Accumulated depreciation
At 1 January 2019
107,553
Charge for the year
52,411
Disposed
-
Exchange differences
(75)
At 31 December 2019
159,889
Charge for the year
38,752
Disposed
-
Exchange differences
570
At 31 December 2020
199,211
Net carrying value
At 1 January 2019
110,788
At 31 December 2019
61,800
At 31 December 2020
27,698
16. Inventory
Group
As at
31 December 2020As at
31 December 2019
€
€
Raw material
16,145
417,481
Work in progress
181,598
392,374
Finished goods
439,042
209,709
Inventory
636,785
1,019,564
The cost of inventory sold and recognised as an expense during the year was €655,086 (2019: €639,555).
17. Trade and other receivables
Group
Company
As at
31 December
2020
€As at
31 December
2019
€As at
31 December
2020
€As at
31 December
2019
€Trade receivables
1,301,858
623,458
-
-
Less; provision for impairment of trade receivables
(872,617)
(511,755)
-
-
Trade receivables - net
429,241
111,703
-
-
Receivables from related parties
-
-
2,074
43,088
Total financial assets other than cash and cash equivalents classified at amortised costs
429,241
111,703
2,074
43,088
Tax receivables
253,030
212,428
-
-
Other receivables
220,047
84,305
11,295
11,790
Total other receivables
473,077
296,733
11,295
11,790
Total trade and other receivables
902,318
408,436
13,369
54,878
Classified as follows:
Current Portion
902,318
408,436
13,369
54,878
The carrying value of trade and other receivables classified at amortised cost approximates fair value.
More than
30 days
past due
€More than
60 days
past due
€More than
120 days
past due
€Total
€Gross carrying amount 1,210 - 904,645 905,855
Loss provision - - (872,617) (872,617)
Net carrying amount 1,210 - 32,028 33,238
Trade and other receivables represent financial assets and are considered for impairment on an expected credit loss model. These assets have historically had immaterial levels of bad debt and are with credit worthy customers, and as the Group trades with a concentrated number of customers and utilises export credit facilities the Group has reviewed trade receivables on an individual basis. Additionally, the Group continues to trade with the same customers and therefore the future expected credit losses have been considered in line with the past performance of the customers in the recovery of their receivables. The implementation of IFRS 9 has therefore not resulted in a change to the impairment provision in the current or prior year.
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 including the area of operations of
those debtors and the advancing market for wind power and the Group's products. The assessment of the expected credit risk for the year has not increased, when looking at the factors affecting the risk noted above.
There is no material difference between the net book value and the fair values of trade and other receivables due to their short-term nature.
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
Of the net trade receivables €Nil (2019: €49,750) was pledged as security for the invoice discounting facility. The Group is committed to underwrite any of the debts transferred and therefore continues to recognise the debts sold within trade receivables until the debtors repay or default. Since the trade receivables continue to be recognised, the business model of the Group is not affected. The proceeds from transferring the debts of are included in other financial liabilities until the debts are collected or the Group makes good any losses incurred by the service provider.
18. 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
31 December
2020
€As at
31 December
2019
€As at
31 December
2020
€As at
31 December
2019
€
Cash at bank
626,361
763,024
543,247
521,713
The Group has restricted cash balances of €33,672 (2019: € 360,000) but a provision of the full amount was made in 2019 and carried over into 2020. The restricted cash balances relate to transactions entered into between the Group and external financial parties. When EKF has credit approved a customer EKF, issues a non-recourse payment guarantee to an external financial party typically of 80% to 90% of the face value of the transaction. Upon shipment of the products, the Group then sells the invoice to the external financial party at face value subject to depositing and pledging a cash amount equal to the difference between the face value of the invoice and the EKF guarantee. When the customer pays typically one year later, the full invoice amount to the financial party, the deposit is paid in full to the Group.
19. Notes supporting statement of cash flows
Non-current loans and borrowings
€Current loans and borrowings
€
Invoice discounting
€
Total
€As at 1 January 2019
1,135,744
5,240
10,735
1,151,719
Repayment of loans
-
(5,240)
-
(5,240)
Repayment of Invoice Discounting
(8,743)
(8,743)
Accrued interests on non-current loans
135,011
-
135,011
Loans and borrowings classified as non-current in previous period becoming current in this period
(1,265,059)
1,265,059
-
-
Foreign exchange rate differences
(522)
-
-
(522)
As at 31 December 2019
5,174
1,265,059
1,992
1,272,225
Repayment of loans
-
(5,171)
-
(5,171)
Repayment of Invoice Discounting
-
-
(1,992)
(1,992)
Loans and borrowings classified as non-current in previous period becoming current in this period
(22,128)
22,128
-
-
Accrued interests on non-current loans
68,753
-
-
68,753
Loans and borrowings classified as current in previous period becoming non-current in this period
1,262,084
(1,262,084)
-
-
New long term borrowings in the period
402,447
-
-
402,447
Foreign exchange rate differences
3,495
2,241
-
5,736
As at 31 December 2020
1,719,825
22,173
-
1,741,998
20. Trade and other payables
Group
Company
As at
31 December
2020
€As at
31 December
2019
€As at
31 December
2020
€As at
31 December
2019
€Invoice discounting
-
1,992
-
-
Trade payables
726,007
1,045,792
233,648
198,485
Other payables and accruals
274,202
211,879
24,084
20,000
Current portion of Nordea and Growth Fund loans
22,173
1,265,059
-
-
Total financial liabilities, excluding 'non-current' loans and borrowings classified as financial liabilities measured at amortised cost
1,022,382
2,524,722
257,732
218,485
Contract liabilities
215,905
69,954
-
-
Total trade and other payables
1,238,287
2,594,676
257,732
218,485
Classified as follows:
Current Portion
1,238,287
2,594,676
257,732
218,485
The invoice discounting arrangement was secured upon the trade debtors to which the arrangement relates.
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.
21. 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
2020
€As at
31 December
2019
€Growth Fund
1,736,802
1,259,499
Current portion of Growth Fund
(16,977)
(1,259,499)
Nordea Ejendomme
5,196
10,734
Current portion of Nordea Loan
(5,196)
(5, 560)
Total non-current financial liabilities measured at amortised costs
1,719,825
5,174
The Growth Fund borrowing from the Danish public institution, Vækstfonden, initially bore interest at a fixed annual rate of 12 per cent with a full bullet repayment in June 2020. As announced in 2020 terms for the borrowing was renewed during the year whereafter the interest rate was reduced to 7 percent p.a. and the loan to be repaid in quarterly instalments over the period from 1 January, 2022 until 1 October, 2026. A new Covid-19 loan was further obtained during the year from Vækstfonden which carries an interest rate of CIBOR plus 5 percent p.a. and to be repaid in quarterly instalments over the period from 1 October 2021 until 1 October 2026.
In 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.
The loan from Nordea Ejendomme is in respect of amounts included in the fitting out of the offices in Denmark. The loan is repayable over the 6 years and matures in November 2021 and carries a fixed interest rate of 6 per cent.
Both loans are denominated in Danish Kroner.
The Company had no borrowings.
22. Share capital
On 3 January and 8 January 2020 the company issued 1,166,363 ordinary shares of 1 pence each for a cash consideration at £0.275 per share. On 23 December 2020 the company issued 4,844,444 ordinary shares of 1 pence each for a cash consideration of £0.1125 per share. On 12 December 2019 the company issued 4,076,348 ordinary shares of 1 pence each for cash consideration at £0.275 per share.
Authorised
2020
€
2020
Authorised
2019
€
2019
Shares at beginning of reporting period
48,584,717
608,689
44,508,369
560,859
Issue of share capital
6,010,807
66,975
4,076,348
47,830
Shares at end of reporting period
54,595,524
675,664
48,584,717
608,689
Number of shares issued and fully paid
2020
€
2020
Number of shares issued and fully paid
2019
€
2019
Shares at 1 January 2019
48,584,717
608,689
44,508,369
560,859
Issue of shares for cash
6,010,807
66,975
4,076,348
47,830
Shares at 31 December 2019
54,595,524
675,664
48,584,717
608,689
At 31 December 2020 the share capital comprises 54,595,524 shares of 1 pence each.
Warrants and share options
Warrants and share options are granted to Directors and employees.
No new share options or warrants were granted in 2020
Share options issued in 2017 and 2019 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 £1 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 was £0.88. The risk-free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.
The average share price during the year was 22.42 pence (2019: 50.00 pence). At the year end the Company had the following warrants and options outstanding:
Number of warrants and options
At
31 December
At
31 December
Exercise price
2019
Granted
Lapsed
2020
(£ pence)
Exercise date
Warrants
1,520,956
-
-
1,520,956
39.07
31/12/19 to 31/12/21
Options
557,500
-
-
557,500
100.00
16/11/18 to 01/03/32
2,078,456
-
-
2,078,456
The number of options and warrants exercisable at 31 December 2020 is warrants 1,520,956 (2019: 1,520,956) and options 460,000 (2019: 241,666).
The weighted average remaining contractual life for the options outstanding as at 31 December 2020 is 9.76 years (2019: 10.76 years).
The warrants have a remaining life of one year (2019: 2 years).
23. 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.
24. Operating Leases
The total future value of the minimum lease payment is due as follows:
2020
2019
€
€
Not later than one year
41,879
75,967
Later than one year and not later than five years
-
-
41,879
75,967
All leasing commitments are in respect of property and cars leased by the Group. The terms of property leases vary from country to country, although they all tend to be tenant repairing with rent reviews once a year. The Company has not entered any leases in 2020 with maturity longer than 6 months.
25. Warranty provision
2020
2019
€
€
Provision at the beginning of reporting period
61,170
78,422
Provision charged to the profit and loss account
(22,500)
(9,995)
Utilised in year
-
(7,240)
Foreign exchange rate movements
(177)
(17)
38,493
61,170
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 €(22,500) (2019: (€9,995)) corresponding to a warranty cost percentage of Nil % (2019: 0.4%) 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.
26. 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 €32,196 (2019: €32,145). There were amounts outstanding at the year end to Wavetouch €(23,630) (2019: €167,527). At the end of the year there were amounts outstanding to OPDI of € Nil (2019: € nil). At the end of the year there were amounts outstanding to Directors of € 65,696 (2019: € 39,936).
Intercompany transactions
At 31 December 2020 there exist an intercompany loan between Windar Photonics PLC and its subsidiary Windar Photonics A/S.
Windar Photonics PLC has a receivable at €2,074 (2019: €43,088). Interest added during 2020 amounts to €20,147 (2019: €35,396).
The interest rate for 2020 is Bank of England base rate + 2.5% p.a. (2019: Base rate 0.75% + 2.5% p.a.).
27. Controlling Parties
There is no ultimate controlling party of the Company.
28. Post balance sheet events and outstanding lawsuits
No major post balance sheet events have happened in 2021.
At the end of 2020 the Company had one outstanding lawsuit regarding a dispute with a previous supplier. The company disputes the claim of approximately €22,000 made against the company.
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