TIDMPPS
RNS Number : 5473O
Proton Motor Power Systems PLC
13 June 2022
13 June 2022
Proton Motor Power Systems plc
("Proton", the "Company" or the "Group")
Final Results
Proton Motor Power Systems plc (AIM: PPS), the designer,
developer and producer of fuel cells and fuel cell electric hybrid
systems with a zero carbon footprint, announces its audited results
for the year ended 31 December 2021 (the "Financial Year").
Highlights:
-- Total order intake in 2021 of GBP2,800k (2020: GBP7,300k,
including a single large multi-year framework agreement announced
in Q1 2020 amounting to GBP4,500k, which was not repeated in
2021)
-- 49% of the order intake in 2021 (2020: 76%) was derived from
the stationary segment with other orders being spread across the
mobile, maritime, rail and engineering segments. Notable orders
announced throughout the Financial Year included:
o Multiple orders from GKN Hydrogen for our S8 Fuel Cell
System
o An MoU signed with E lectra Commercial Vehicles Limited to act
as system integrator to integrate Proton Motor fuel cells into the
Electra truck portfolio followed by an initial order
o Further order from E-Trucks Europe for seven HyRange 43
hydrogen fuel cell systems
o Agreement with Torqeedo GmbH ("Torqeedo") for the Marine
segment
-- Sales in 2021 were GBP2,771k (2020: GBP1,893k), representing an annual increase of 46%
-- Gross Profit of GBP425k in 2021 (2020: gross loss of GBP83k)
-- Excluding the impact of the embedded derivative together with
exchange losses, the operating loss in 2021 was GBP9,121k vs.
GBP7,128k in 2020 which is in line with our budgeted expectations.
The increased loss resulted principally from further investment in
the technical development area, in Group support staff and
infrastructure
-- The embedded derivative is a non-operating, non-cash item,
required by IFRS, which is based on gauging the potential effects
of partial convertible interest on loan financing. Due to the
waiver of convertible interest on loan financing announced in
December 2021 the source of the embedded derivative no longer
exists, so that the entire liability relating to the derivative has
been reversed, resulting in a substantial one off non-operating
gain of GBP609,200k in 2021
-- Cash burn from operating activities has increased during the
period from GBP4,700k in 2020 to GBP8,700k in line with increased
investment in staff and technology development. Cash flow is the
Group's key financial performance target and our objective is to
achieve positive cash flow in the shortest time possible. Current
contracts are quoted with up-front payments reducing reliance on
working capital as we continue to invest in our manufacturing
capability. The cash position as of 31 December 2021 was GBP2,152k
(31 December 2020: GBP2,739k)
Post year end
-- Q1 2022 order intake of GBP1,100k
-- At the end of April 2022, the production backlog had a sales
value of GBP3,200k. The fulfilment of this backlog will result in
deliveries of varying configurations of fuel cell systems and also
service maintenance charges to customers both in 2022 and 2023
Following the year end, existing loan facilities have been
increased by a further EUR12,500k to ensure operational and
investment financing into 2023 with a view to accelerating the
investment programme in the face of increasing demand.
Outlook
In the year ahead we are focused on progressing the maturity of
the group technology offer, ramping up production capacity and
exploiting the current potential sales pipeline. The current
outlook at the end of 2021 looking into 2022 is more optimistic
than that at the end of 2020.
The Board would like to thank all our customers who believe in
us, our team of committed employees and our shareholders who have
the vision to invest in our mission.
Dr. Nahab, CEO of Proton, commented: "Although faced with highly
challenging trading conditions in 2021, the Company has made
significant progress. In the year ahead, we are focused on further
progressing the maturity of the Group's technology offer, ramping
up production capacity and exploiting the current potential order
intake and sales pipeline.
"Furthermore, it is anticipated that the significant
strengthening of political commitment to hydrogen, as evident in
2021, will contribute to further accentuating the demand for
hydrogen related products, such as the fuel cell."
Posting of accounts and notice of AGM
Notice of the Company's annual general meeting, to be held on 29
June 2022 at 9.30 a.m. BST/10.30 a.m. CET at Proton Motor Fuel Cell
GmbH, 7, Benz Street, 82178 Puchheim, Germany, has been sent to
shareholders. The Company's audited annual report for the year
ended 31 December 2021 will be posted to shareholders shortly and a
downloadable version of the annual report and AGM notice will be
available on the Company's website,
www.protonmotor-powersystems.com .
- Ends -
For further information:
Proton Motor Power Systems Plc
Dr Faiz Nahab, CEO
Helmut Gierse, Chairman
Roman Kotlarzewski, CFO +49 (0) 173 189 0923
Antonio Bossi, Non-Executive Director
Investor relations: www.protonpowersystems.com
investor-relations@proton-motor.de
Allenby Capital Limited
Nominated Adviser & Broker +44 (0) 20 3328 5656
James Reeve / Vivek Bhardwaj
Chairman's statement and strategic report
We are pleased to report our results for the year ended 31
December 2021.
Overview:
Proton Motor Power Systems plc ("Proton Motor") has made further
progress this year in proving its technology, building up capacity
and sales pipeline. We have strengthened our organisation to be
able to deliver complete power supply solutions. In spite of the
COVID-19 backdrop, a further strengthening of industry and consumer
demand for alternative sources of energy continues to be evident in
the period under review. Proton Motor's technology offer continues
to mature to remain aligned with this growing demand and supports
the continuing commercialisation process of the group. This is
evidenced by the order intake in Q1 2022, which amounted to 39% of
the total order intake for the year 2021. The potential sales order
and production pipeline remains strong as at the date of this
report.
Having implemented from the onset all recommended protective
measures at its factory in Puchheim, to date Proton Motor has not
been affected by COVID-19. However, there have been several
isolated cases of COVID-19 amongst the Company staff as at the date
of the report. Whilst our staff have had to maintain social
distancing and other recommended measures to protect themselves
against the virus, our factory in Puchheim remained and remains
fully operational and our production capacity has been unaffected.
As a result, our factory in Puchheim has been able to focus on
manufacturing and delivering the above mentioned order intake.
View to the future
The world is committed to protecting the environment. European
cities and governments, supported by various European Commission
initiatives, must reduce inner-city pollution drastically. China
fights against smog in its big cities. After Dieselgate in the US
and Europe, battery electric vehicles ("BEV") are being widely
adopted. All this is generating a market for clean transport and
energy. As a consequence, the world market for fuel cell products
and solutions is more active than ever.
Beside pure battery solutions, hydrogen fuel cells offer an
alternative solution more suitable to a number of stationary and
off- and on-highway applications. Corporations such as Toyota,
Hyundai, and Daimler are pushing the technology forward. Fuel cells
provide benefits such as fast refuelling and long range of
operation. Hydrogen can be produced cleanly and can make use of
surplus energy from wind and solar power. Europe has put major
funding programmes in place to set up a hydrogen infrastructure.
The same is now happening in Japan, Korea and China. The Chinese
government is fully committed to fuel cell technology with major
regulatory and funding support.
Proton Motor has profound experience in applications in heavy
duty vehicles such as buses and trucks, stationary power solutions,
ships, rail machines and material handling applications. Proton
Motor, with just over 100 staff members, is relatively small but,
with our strong IP and experience, a powerful company. Proton Motor
has developed and continues to develop its own fuel cell stacks.
Systems are designed from first simulation, prototype up to final
solution for volume manufacturing. Proton Motor is cooperating with
German and European based companies in the field of fuel cell
technology.
The industry is now benefitting from ever increasing commitment
at the political level. For example, the EU originated European
Clean Hydrogen Alliance (ECH2A) was announced as part of the New
Industrial Strategy for Europe, which was launched on 8 July 2020
within the context of the hydrogen strategy for a climate-neutral
Europe .
The European Clean Hydrogen Alliance aims at an ambitious
deployment of hydrogen technologies by 2030, bringing together
renewable and low-carbon hydrogen production, demand in industry,
mobility and other sectors, and hydrogen transmission and
distribution. With the alliance, the EU wants to build its global
leadership in this domain, to support the EU's commitment to reach
carbon neutrality by 2050. https://www.ech2a.eu/
Proton Motor has been participating in the ECH2A founding
process.
Proton Motor is already participating in the EU REVIVE project.
REVIVE stands for 'Refuse Vehicle Innovation and Validation in
Europe'. The project has been running from the beginning of 2018
and will continue for 4 years until the end of 2021. The objective
of REVIVE is to significantly advance the state of development of
fuel cell refuse trucks, by integrating fuel cell powertrains into
15 vehicles and deploying them across 8 sites in Europe. It aims to
deliver substantial technical progress by integrating fuel cell
systems from three suppliers into a mainstream DAF chassis, and
developing effective hardware and control strategies to meet highly
demanding refuse truck duty cycles.
There is also the EU JIVE project. The JIVE (Joint Initiative
for hydrogen Vehicles across Europe) project seeks to deploy 139
new zero emission fuel cell buses and associated refuelling
infrastructure across five countries. JIVE is running for six years
from January 2017 and is co-funded by a EUR32 million grant from
the FCH JU (Fuel Cells and Hydrogen Joint Undertaking) under the
European Union Horizon 2020 framework programme for research and
innovation. The project consortium comprises 22 partners from seven
countries.
Germany is a prime market for the Proton Group. On 3 June 2020
Germany's coalition government presented a EUR130 billion (GBP114
billion) fiscal stimulus package. This package includes the
following elements with regard to the role of hydrogen:
-- The 'national fuel cell strategy' will support the hydrogen
industry with EUR7 billion. The goal is to make Germany a global
champion in the hydrogen industry and to export it on a global
basis. By 2030, Germany plans to install 30 Gigawatt of
electrolysers to produce green hydrogen from offshore and onshore
alternative energy. Additionally, the German government is seeking
to support the shift from fossil energy to hydrogen in all types of
industrial processes.
-- The automotive supplier industry received a bonus programme
worth EUR2 billion in the years 2020 and 2021 to invest into
R&D for new technology.
-- Subsidies worth EUR1.2 billion for public and private
operators of buses and commercial vehicles with alternative power
units.
Proton Stationary
This market includes back up power for critical infrastructure,
telecoms and data centre installations. Buildings and the storage
of renewable energy in hydrogen are also becoming an interesting
growing market as evidenced by the installation of an autonomous
ecosystem in Switzerland which included one of our fuel cells.
Stationary fuel cell units can replace diesel generators in
telecoms, data centres and ecological houses. The benefits for the
end user are that fuel cell units require less maintenance than the
old polluting generators that are prone to algae build-up in the
diesel tank, which causes high maintenance cost. It is also
possible to monitor the Proton Motor system remotely, which again
saves time and manpower.
Proton Mobility/Rail
This market includes city buses, airport vehicles, trucks,
off-road vehicles, rail and other heavy duty vehicles and fork lift
trucks. The mobility sector sees many future challenges with
emission free to automated driving with the vehicle becoming a
power source itself.
In addition to the EU REVIVE and EU JIVE projects mentioned
above, Proton Motor is also participating in the EU Standard-Sized
Heavy-Duty Hydrogen Project ("StasHH"). The consortium comprises 11
fuel cell module suppliers, nine original equipment manufacturers
and five research, test, engineering and/or knowledge institutes
and will standardise physical dimensions, flow and digital
interfaces, test protocols and safety requirements of the fuel cell
modules that can be stacked and integrated in heavy duty
applications like forklifts, buses, trucks, trains, ships, and
construction equipment. The consortium receives EUR7.5 million
funding from the European Union, through the "Fuel Cells and
Hydrogen Joint Undertaking" (FCH JU), in order to kickstart the
adoption of fuel cells in the heavy duty sector. The total budget
for the StasHH mission is EUR15.2 million.
Further mobile applications of the Proton Motor technology will
be seen in the public transport and logistics arena. Proton Motor
was the first company to develop a hybrid range extender
battery/fuel cell system. This technology permits the usage of both
systems in an optimised way with long lifetime expectation. In the
meantime, the range extender concept is being adopted by the
industry especially for heavy duty vehicle applications.
Proton Maritime
Building on the success with our tourist ship in Hamburg, Proton
Motor sells the know-how capability to partners to evolve this
market. The Group delivered the first feasibility study for an
underwater vessel. Proton Motor, again, clearly demonstrates
capability within the technology.
Proton Motor is participating in a Bavarian funded project
Ma-Hy-Hy, together with the main partner Torqeedo. Torqeedo, part
of the Deutz Group, is a leader in electric mobility on water
offering electric and hybrid drives from 0.5 to 100kW for
commercial and recreational use. The project has the target to
develop a marine hydrogen hybrid system building kit, which will be
able to deliver fuel cell powers between 30 and 120 kW and variable
hydrogen storage capacity. The project will complement Torqeedo's
existing Deep Blue Hybrid portfolio of marine drive systems.
Group activities
Following the successful completion of the production lines for
the fourth generation Stack Modules and the PM Module S8 systems,
the group has been focusing on selling fuel cell systems with an
electrical power output from 8 kW up to 150 kW for mobile,
stationary, maritime and rail applications. Especially the number
of produced PM Module S8 units is increasing, because of regular
order income of several customers like GKN Hydrogen.
With these fourth-generation fuel cell stacks and systems the
Group has set up strategic partnerships with electrical drive train
manufacturers and industrial partners. The systems can be used in
combination with a battery to a hybrid drive train for electric
driven light duty vehicles, trucks, inner city buses or industrial
power supply solutions. We also expect growing demand in the near
future from truck manufacturers for municipality maintenance
vehicles. Also, the fourth-generation fuel cell stacks will be used
for rail and maritime applications.
As part of the EU funded project REVIVE, in which Proton Motor
has been a member of the project consortium since 2019, a fuel cell
system for integration into a garbage truck has been designed. A
Stack Module PM400-144 is being integrated into the HyRange(R) 43
fuel cell system. The integration into the truck is being carried
out together with the vehicle manufacturer ETrucks from Belgium.
The first system was delivered in 2020. Since then, ETrucks
repeatedly ordered HyRange(R) 43 fuel cell systems in two designs.
One design is for mounting under the driver's cabin and the second
is for mounting on the roof. By the end of Q1 2022, ETrucks has
ordered 21 HyRange(R) 43 systems, of which six have been
delivered.
In mid-2021 Proton Motor received the order of a HyRange(R) 43
fuel system from Electra Commercial Vehicles Limited (Electra) for
the use in a truck. The system was delivered at the end of 2021.
The integration of the fuel cell system by Electra is now complete
and the testing of the truck has started.
In November 2021 a HyShelter 240 system was delivered to our
customer Shell New Energies. HyShelter 240 is a transportable
off-grid power supply system based on PM Frame 43 fuel cell
systems. The system is intended to power Shell's own line of
portable hydrogen refuelling units for heavy duty vehicles. In
2021, a Swiss customer ordered a fuel cell system based on our PM
Frame 28 for use as an emergency power system for a road tunnel.
The system was delivered at the end of 2021 and set in operation
successfully at the beginning of 2022.
The setting up of the production line for the stacks and stack
modules for the PM Module S8 systems achieved a major step in the
direction of industrialised production. We now intend to set up the
production line for the PM Frame systems. With the integration of
the automated fuel cell production line into the series production
together with a planned extension of the production area, Proton
Motor is achieving a continuous increase of its overall production
capacity.
Furthermore, the Group has designed a multi stack system for
power demands beyond 100 kW for larger trucks, trains, ships and
larger stationary applications. The first multi stack systems,
based on the fourth generation PM400 stack modules, consist of up
to three stack modules. These types of systems were successfully
designed and delivered for a maritime project. Also, a HyRail 213
fuel cell system, based on two fully redundant multi stack systems,
were successfully delivered to our customer for integration into a
rail milling machine.
Outlook
In the year ahead, we are focused on progressing the maturity of
the group technology offer, ramping up production capacity and
exploiting the current potential sales pipeline. The current
outlook at the end of 2021 looking into 2022 is more optimistic
than at the end of 2020.
I would like to personally thank all our customers who believe
in us, our team of committed employees and our shareholders who
have the vision to invest in our mission.
Helmut Gierse 10 June 2022
Non-Executive Chairman
Consolidated income statement
for the year ended 31 December 2021
Note 2021 2020
GBP'000 GBP'000
Revenue 4 2,771 1,893
Cost of sales (2,346) (1,976)
Gross profit / (loss) 425 (83)
Other operating income 501 492
Administrative expenses (10,047) (7,537)
Operating loss (9,121) (7,128)
Finance income 9 3 3
Finance income / (costs) 10 3,222 (8,638)
--------------------------- ---- -------- --------------------
(Loss) for the year before
embedded derivatives (5,896) (15,763)
--------------------------- ---- -------- --------------------
Fair value gain / (loss)
on embedded derivatives 22 609,201 (386,870)
Profit / (Loss) for the
year before tax 5 603,305 (402,633)
--------------------------- ---- -------- --------------------
Tax 8 - -
Profit / (Loss) for the
year after tax 603,305 (402,633)
Profit / (Loss) per share
(expressed as pence per
share)
Basic 11 78.1 (57.0)
Diluted 11 78.1 (26.4)
--------------------------- ---- -------- --------------------
Loss per share excluding
embedded derivative
(expressed as pence per
share)
Basic 11 (0.8) (2.2)
--------------------------- ---- -------- --------------------
Diluted 11 (0.8) (1.0)
--------------------------- ---- -------- --------------------
Consolidated statement of comprehensive income
for the year ended 31 December 2021
2021 2020
GBP'000 GBP'000
------------------------------------ --------- --------- ------- ------- -----------
Profit/(Loss) for the year 603,305 (402,633)
Other comprehensive income
/ (expense)
Items that may not be reclassified
to profit and loss
Exchange differences on translating
foreign operations (586) (761)
----------------------------------------------- --------- ------- ------- -----------
Total other comprehensive
(expense) (586) (761)
------------------------------------ --------- --------- ------- ------- -----------
Total comprehensive income
/ (expense) for the year 602,719 (403,394)
------------------------------------ --------- --------- ------- ------- -----------
Attributable to owners
of the parent 602,719 (403,394)
------------------------------------ --------- --------- ------- ------- -----------
Group balance sheets
as at 31 December 2021
Group
Note 2021 2020
GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 12 78 64
Property, plant and equipment 13 1,619 1,484
Right-of-use assets 14 111 285
Fixed asset investments 15 11 11
---------------------------------------- ---- ----------------- ------------------
1,819 1,844
Current assets
Inventories 16 1,835 1,790
Trade and other receivables 17 1,624 348
Cash and cash equivalents 18 2,152 2,739
---------------------------------------- ---- ----------------- ------------------
5,611 4,877
--------------------------------------- ---- ----------------- ------------------
Total assets 7,430 6,721
---------------------------------------- ---- ----------------- ------------------
Liabilities
Current liabilities
Trade and other payables 19 4,498 4,389
Lease debt 20 111 196
Borrowings 21 517 814
---------------------------------------- ---- ----------------- ------------------
5,126 5,399
Non-current liabilities
Lease debt 20 8 104
Borrowings 21 83,956 79,238
Embedded derivatives on convertible
interest 22 - 609,201
---------------------------------------- ---- ----------------- ------------------
83,964 688,543
--------------------------------------- ---- ----------------- ------------------
Total liabilities 89,090 693,942
---------------------------------------- ---- ----------------- ------------------
Net liabilities (81,660) (687,221)
---------------------------------------- ---- ----------------- ------------------
Equity
Equity attributable to equity
holders of the parent company
Share capital 24 11,023 10,598
Share premium 20,390 19,574
Merger reserve 15,656 15,656
Reverse acquisition reserve (13,861) (13,861)
Share option reserve 2,187 949
Foreign translation reserve 11,745 11,038
Capital contributions reserves 1,143 1,215
Accumulated losses
At 1 January 2021 (732,390) (328,996)
Profit / (Loss) for the year
attributable to the owners 603,305 (402,633)
Other changes in retained earnings (858) (761)
---------------------------------------- ---- ----------------- ------------------
Total equity (81,660) (687,221)
---------------------------------------- ---- ----------------- ------------------
Company balance sheets
as at 31 December 2021
Company
Note 2021 2020
GBP'000 GBP'000
Assets
Current assets
Trade and other receivables 17 366 209
Cash and cash equivalents 18 20 5
--------------------------------------------- ---- ----------------- ----------------
386 214
-------------------------------------------- ---- ----------------- ----------------
Total assets 386 214
--------------------------------------------- ---- ----------------- ----------------
Liabilities
Current liabilities
Trade and other payables 19 780 364
Lease debt - -
Borrowings - -
-------------------------------------------- ---- ----------------- ----------------
780 364
Non-current liabilities
Lease debt - -
Borrowings 21 83,956 79,238
Embedded derivatives on convertible
interest 22 - 609,201
--------------------------------------------- ---- ----------------- ----------------
83,956 688,439
-------------------------------------------- ---- ----------------- ----------------
Total liabilities 84,736 688,803
--------------------------------------------- ---- ----------------- ----------------
Net liabilities (84,350) (688,589)
--------------------------------------------- ---- ----------------- ----------------
Equity
Equity attributable to equity
holders of the parent company
Share capital 24 11,023 10,598
Share premium 20,390 19,574
Merger reserve 15,656 15,656
Share option reserve 2,187 949
Accumulated losses
At 1 January 2021 (735,366) (332,560)
Profit/(loss) for the year attributable
to the owners 602,032 (402,806)
Other changes in retained earnings (272) -
-------------------------------------------- ---- ----------------- ----------------
Total equity (84,350) (688,589)
--------------------------------------------- ---- ----------------- ----------------
Group and Company statements of changes in equity
for the year ended 31 December 2021
Reverse Share Foreign Capital
Share Share Merger Acquisition Option Translation Contribution Accumulated Total
Group Capital Premium Reserve Reserve Reserve Reserve Reserves Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2020 9,970 18,704 15,656 (13,861) 968 10,437 1,151 (328,996) (285,971)
Share based
payments - - - - (19) - - - (19)
Proceeds from
share issues 628 870 - - - - - - 1,498
Transactions
with owners 628 870 - - (19) - - - 1,479
Loss for the
year - - - - - - - (402,633) (402,633)
Other
comprehensive
income:
Currency
translation
differences - - - - - 601 64 (761) (96)
Total
comprehensive
income for
the
year - - - - - 601 64 (403,394) (402,729)
Balance at 31
December 2020 10,598 19,574 15,656 (13,861) 949 11,038 1,215 (732,390) (687,221)
Balance at 1
January 2021 10,598 19,574 15,656 (13,861) 949 11,038 1,215 (732,390) (687,221)
Share based
payments 4 284 - - 1,238 - - (272) 1,254
Proceeds from
share issues 421 532 - - - - - - 953
Transactions
with owners 425 816 - - 1,238 - - (272) 2,207
Profit for the
year - - - - - - - 603,305 603,305
Other
comprehensive
income:
Currency
translation
differences - - - - - 707 (72) (586) 49
Total
comprehensive
income for
the
year - - - - - 707 (72) 602,719 603,354
Balance at 31
December 2021 11,023 20,390 15,656 (13,861) 2,187 11,745 1,143 (129,943) (81,660)
Statements of changes in equity - Company
Share
Share Share Merger Option Accumulated Total
Company Capital Premium Reserve Reserve Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2020 9,970 18,704 15,656 968 (332,560) (287,262)
Share based payments - - - (19) - (19)
Proceeds from share issues 628 870 - - - 1,498
-------- -------- -------- -------- ----------- -------------
Transactions with owners 628 870 - (19) - 1,479
Loss for the year - - - - (402,806) (402,806)
Total comprehensive expense
for the year - - - - (402,806) (402,806)
-------- -------- -------- -------- ----------- -------------
Balance at 31 December 2020 10,598 19,574 15,656 949 (735,366) (688,589)
======== ======== ======== ======== =========== =============
Balance at 1 January 2021 10,598 19,574 15,656 949 (735,366) (688,589)
Share based payments 4 284 - 1,238 (272) 1,254
Proceeds from share issues 421 532 - - - 953
-------- -------- -------- -------- ----------- -------------
Transactions with owners 425 816 - 1,238 (272) 2,207
Profit for the year - - - - 602,032 602,032
Total comprehensive expense
for the year - - - - 602,032 602,032
-------- -------- -------- -------- ----------- -------------
Balance at 31 December 2021 11,023 20,390 15,656 2,187 (133,606) (84,350)
======== ======== ======== ======== =========== =============
Share premium
Costs directly associated with the issue of the new shares have
been set off against the premium generated on issue of new
shares.
Merger reserve
The merger reserve of GBP15,656,000 arises as a result of the
acquisition of Proton Motor Fuel Cell GmbH and represents the
difference between the nominal value of the share capital issued by
the Company and its fair value at 31 October 2006, the date of the
acquisition.
Reverse acquisition reserve
The reverse acquisition reserve (Group only) arises as a result
of the method of accounting for the acquisition of Proton Motor
Fuel Cell GmbH by the Company. In accordance with IFRS 3 the
acquisition has been accounted for as a reverse acquisition.
Share option reserve
The Group operates two equity settled share-based compensation
schemes. The fair value of the employee services received for the
grant of the share awards/options is recognised as an expense. The
total amount to be expensed over the vesting period is determined
by reference to the fair value of the share awards/options granted.
At each balance sheet date the Company revises its estimate of the
number of share awards/options that are expected to vest. The
original expense and revisions of the original estimates are
reflected in the income statement with a corresponding adjustment
to equity. The share option reserve represents the balance of that
equity.
Group statements of cash flows
for the year ended 31 December 2021
Group
Year ended 31
December
2021 2020
GBP'000 GBP'000
Cash flows from operating
activities
Profit / (Loss) for the
year 603,305 (402,633)
Adjustments for:
Depreciation and amortisation 641 574
Interest income (3) (3)
Interest expense 1,498 5,192
Share based payments 966 (19)
Movement in inventories (45) 618
Movement in trade and other
receivables (1,276) (108)
Movement in trade and other
payables 109 1,340
Movement in fair value of
embedded derivatives (609,201) 386,870
Effect of foreign exchange
rates (4,720) 3,446
--------- ---------
Net cash (used in) / generated
from operating activities (8,726) (4,723)
========= =========
Cash flows from investing
activities
Purchase of intangible assets (44) (56)
Purchase of property, plant
and equipment (633) (373)
Interest received 3 3
--------- ---------
Net cash used in investing
activities (674) (426)
========= =========
Cash flows from financing
activities
Proceeds from issue of loan
instruments 7,962 5,776
Proceeds from issue of new
shares 1,241 1,498
Repayment of other borrowings (297) -
New obligations of lease
debt 21 -
Repayment of obligations
under lease debt (202) (187)
Net cash generated from
financing activities 8,725 7,087
========= =========
Net increase/(decrease)
in cash and cash equivalents (675) 1,938
Effect of foreign exchange
rates 88 (227)
Opening cash and cash equivalents 2,739 1,028
--------- ---------
Closing cash and cash equivalents 2,152 2,739
========= =========
Company statements of cash flows
for the year ended 31 December 2021
Company
Year ended 31
December
2021 2020
GBP'000 GBP'000
Cash flows from operating
activities
Loss for the year 602,032 (402,806)
Adjustments for:
Impairment of investment 8,877 6,912
Interest income (12) (45)
Interest expense 1,476 5,148
Share based payments 966 (19)
Movement in trade and other
receivables (156) (109)
Movement in trade and other
payables 415 200
Movement in fair value of
embedded derivatives (609,201) 386,870
Effect of foreign exchange
rates (4,720) 3,446
--------- ----------------------
Net cash (used in) / generated
from operating activities (323) (403)
========= ======================
Cash flows from investing
activities
Capital contribution to
subsidiaries (8,877) (6,912)
Interest received 12 45
--------- ----------------------
Net cash used in investing
activities (8,865) (6,867)
========= ======================
Cash flows from financing
activities
Proceeds from issue of loan
instruments 7,962 5,776
Proceeds from issue of new
shares 1,241 1,498
Repayment of short-term
borrowings - -
--------- ----------------------
Net cash generated from
financing activities 9,203 7,274
========= ======================
Net increase/(decrease)
in cash and cash equivalents 15 4
Effect of foreign exchange
rates - (1)
Opening cash and cash equivalents 5 2
--------- ----------------------
Closing cash and cash equivalents 20 5
========= ======================
Notes to the financial statements
1. General information
Proton Motor Power Systems plc (the "Company") and its
subsidiaries (together the "Group") design, develop, manufacture
and test fuel cells and fuel cell hybrid systems as well as the
related technical components. The Group's design, research and
development and production facilities are located in Germany.
The Company is a public limited liability company incorporated
in England and Wales and domiciled in the UK. The address of its
registered office is Aldgate Tower, 2 Leman Street, London, E1 8QN.
The Company was admitted to AIM on 31 October 2006 and its shares
are quoted on this exchange.
Directors
The Directors who held office during the year and up to the date
of approval of this announcement were as follows:
Dr. Faiz Nahab Chief Executive 1,3
Helmut Gierse Chairman2
Antonio Bossi (appointed 5 August 2021) Non-Executive Director 5
Sebastian Goldner Chief Technical Officer and Chief Operations
Officer
Roman Kotlarzewski Chief Financial Officer and Company Secretary
4,6
Manfred Limbrunner Director Sales and Marketing
1 Chairman of the Remuneration Committee.
2 Chairman of the Audit Committee.
3 Chairman of the Nominations Committee.
4 Member of the Remuneration Committee.
5 Member of the Audit Committee.
6 Member of the Nominations Committee .
2. Summary of significant accounting policies
The Board approved this announcement on 9 June 2022. The
financial information included in this announcement does not
constitute the Group's statutory accounts for the years ended 31
December 2021 or 31 December 2020. Statutory accounts for the year
ended 31 December 2020 have been delivered to Companies House. The
statutory accounts for the year ended 31 December 2021 will be
delivered to Companies House accordingly.
Basis of preparation
The consolidated financial statements of the Group and the
financial statements of the Company have been prepared in
accordance with UK adopted international accounting standards
(IFRS) and with those parts of the Companies Act 2006 applicable to
those companies reporting under IFRS.
The consolidated financial statements and the financial
statements of the Company have been prepared under the historical
cost convention and in accordance with IFRS interpretations (IFRS
IC) except for embedded derivatives which are carried at fair value
through the income statement and on the basis that the Group
continues to be a going concern.
Until such time as the Group achieves operational cash inflows
through becoming a volume producer of its products to a receptive
market it will remain dependent on its ability to raise cash to
fund its operations from existing and potential shareholders and
the debt market. The Group has historically been dependent on the
continuing financial support of its main investors, SFN Cleantech
Investment Ltd and Mr Falih Nahab to meet its day-to-day working
capital requirements. The Group has loans with SFN Cleantech
Investment Ltd of EUR2.4m and EUR26.1m and also a loan facility
with Mr. Falih Nahab of EUR50.6m. The repayment date for all loans
is 31 December 2025. As such the loans are held as non-current
borrowings in the financial statements.
Subsequent to the 2021 year end the following changes to the
existing loan facilities were made:
Lender: Facility at Drawn down Increase Facility at
31 December as at of facility the
2021 31 December date of this
2021 report
---------------- ------------- ------------- ------------- --------------
SFN Cleantech EUR26.1m EUR23.6m EUR6.2m EUR32.3m
Investment *(GBP21.9m) *(GBP19.8m) *(GBP5.2m) *(GBP27.1m)
Ltd
SFN Cleantech EUR2.4m EUR2.4m EUR nil EUR2.4m
Investment *(GBP2.0m) *(GBP2.0m) *(GBP2.0m)
Ltd
Mr. Falih Nahab EUR50.6m EUR48.7m EUR6.3m EUR56.9m
*(GBP42.5m) *(GBP40.9m) *(GBP5.3m) *(GBP47.8m)
---------------- ------------- ------------- ------------- --------------
Total EUR79.1m EUR74.7m EUR12.5m EUR91.6m
*(GBP66.4m) *(GBP62.7m) *(GBP10.5m) *(GBP76.9m)
---------------- ------------- ------------- ------------- --------------
The Group will, at the date of sign off of the accounts, have in
place committed facilities from SFN Cleantech Investment Ltd and Mr
Falih Nahab of up to EUR91.6m which will become repayable at the
end of 2025. Cash flow forecasts demonstrate that the undrawn
portions of these committed facilities enable the Company and the
Group to meet its cash requirements for the period up to at least
June 2023. The Company and Group are also able to defer
discretionary spend during this period to provide further cash flow
headroom, should this be required.
At this point in time there has been no indication of
circumstances which would lead to either or both SFN Cleantech
Investment Ltd and Mr Falih Nahab withdrawing this support beyond
June 2023. Both SFN Cleantech Investment Ltd and Mr Falih Nahab
have confirmed their intention to fund further investment through
the sale of shares in the Company.
Due to the variability of the value of shareholding in the
Company and lack of knowledge of other assets held, material
uncertainty exists which may cast significant doubt upon the Group
and the Company's ability to continue as a going concern. The
Directors firmly believe however that the Group and Company remain
a going concern on the grounds that both SFN Cleantech Investment
Ltd and Falih Nahab have continued to support both entities
throughout recent years, as well as funding having been agreed by
SFN Cleantech Investment Ltd and Falih Nahab for at least the next
12 months.
The financial statements do not include the adjustments that
would result if the Group or the Company was unable to continue as
a going concern.
3. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. Estimates and judgements are
continually evaluated and are based on historical experience and
other factors, including expectations of future events that are
believed to be reasonable under the circumstances. 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.
Recognition of development costs
Self developed intangible assets are recognised where the Group
can estimate that it is probable that future economic benefits will
flow to the entity. See Note 12.
Classification and fair value of financial instruments
The Group uses judgement to determine the classification of
certain financial instruments, in particular convertible loans
advanced during the year. Judgement is applied to determine whether
the instrument is a debt, equity or compound instrument and whether
any embedded derivatives exist within the contracts.
Judgements have been made regarding whether the conversion
feature meets the "fixed for fixed" test in each instrument. In the
case of each instrument it is deemed it is not met on the basis
that the loan is in Euros and shares are in Sterling.
The fair values of the embedded derivatives were determined
using the Black-Scholes valuation model. The valuation was
performed by an independent expert and significant inputs into the
calculation include the share price of the Company at the valuation
date and the estimate of total accrued interest as at the exercise
date. The underlying expected volatility of share price and
risk-free rate of interest were determined by reference to the
historical data of the Company. In applying these valuation
techniques, management use estimates and assumptions that are, as
far as possible, consistent with observable market data. Where
applicable market data is not observable, management uses its best
estimate about the assumptions that market participants would make.
These estimates may vary from the actual prices that would be
achieved in an arm's length transaction at the reporting date.
Determining residual values and useful economic lives of
intangible fixed assets and property, plant & equipment
The Group depreciates property, plant & equipment and
amortises intangible fixed assets over their estimated useful
lives. The estimation of the useful lives of assets is based on
historic performance as well as expectations about future use and
therefore requires estimates and assumptions to be applied by
management.
Judgement is applied by management when determining the residual
values of property, plant & equipment and intangible fixed
assets. When determining the residual value management aim to
assess the amount that the Group would currently obtain for the
disposal of the asset, if it were already of the condition expected
at the end of its useful economic life.
The carrying amount of group intangible fixed assets at the
reporting date was GBP78k (2020: GBP64k) and the carrying amount of
group property, plant & equipment at the reporting date was
GBP1,619k (2020: GBP1,484k).
Inventory provisions
In accordance with IAS 2 the Group regularly reviews its
inventory to ensure it is carried at the lower of cost or net
realisable value. The management constantly reviews slow moving and
obsolete items arising from changes in the product mix demanded by
customers, reductions in overall volumes, supplier failures and
strategic resourcing decisions. Obsolescence provisions are
calculated based on current market values and future sales of
inventories. If this review identifies significant levels of
obsolete inventory, this obsolescence is charged to the income
statement as an impairment. The total inventory provision included
in the balance sheet at the reporting date was GBP77k (2020:
GBP12k).
Share-based payments
Non-market performance and service conditions are included in
assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied. At the end of each reporting period, the Group
revises its estimates of the number of options that are expected to
vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
4. Segmental information
The Group has adopted the requirements of IFRS8 'Operating
segments'. The standard requires operating segments to be
identified on the basis of internal financial information about
components of the Group that are regularly reviewed by the Chief
Operating Decision Maker ('CODM') to allocate resources to the
segments and to assess their performance. The CODM has been
identified as the Board of Directors. The Board considers the
business from a product/services perspective.
Based on an analysis of risks and returns, the Directors
consider that the Group has only one identifiable operating
segment: green energy. All property, plant and equipment is located
in Germany.
Revenue from external customers
2021 2020
GBP'000 GBP'000
United Kingdom 149 -
Germany 913 900
Rest of Europe 1,705 515
Rest of the World 4 478
2,771 1,893
Sales to Linsinger and Shell represented 42.5% of the Group's
revenue in 2021 (2020: Apex and E-Trucks Europe 42.5%).
The results as reviewed by the CODM for the only identified
segment are as presented in the financial statements with the
exception of the 2021 revaluation gain on the fair value of the
embedded derivative of GBP609,201k (2020: GBP386,870k loss) and the
associated impact on the balance sheet.
5. Loss for the year before tax
2021 2020
GBP'000 GBP'000
Loss on ordinary activities before taxation is
stated
after charging
Depreciation and amortisation 641 574
Hire of other assets - operating leases 84 106
Pension contributions 85 76
Change in fair value of embedded derivatives - 386,870
Foreign exchange losses - 3,446
after crediting
Gain in fair value of embedded derivatives (609,201) -
Amortisation of grants from public bodies (408) (37)
Foreign exchange gains (4,720) -
========= =======
6 . Auditors' remuneration
2020 2019
GBP'000 GBP'000
Audit services
Fees payable to the Company's auditor for the audit
of the parent Company and consolidated financial
statements 25 28
Fees payable to the Company's auditor and its associates
for other services:
Other services 9 2
34 30
7. Staff numbers and costs
The monthly average number of persons employed by the Group
(including Directors) during the year, analysed by category, was as
follows:
2021 2020
Development and construction 59 47
Administration and sales 45 41
104 88
The aggregate payroll costs of these persons were as
follows:
Group
2021 2020
GBP'000 GBP'000
Wages and salaries 5,094 4,252
Share based payments 1,319 169
Social security costs 954 777
Other pension costs 85 76
7,452 5,274
There are no staff, or direct wages specific to the Company.
Share based payments charge to the non-executive and executive
Directors of the Company is GBP154k (2020: GBP188k).
Share based payments
The Group has incurred an expense in respect of shares and share
options during the year issued to employees as follows:
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Share options (64) (19) (64) (19)
Share awards 1,318 - 1,318 -
Shares 65 188 65 188
1,319 169 1,319 169
The cost of the share options granted during 2021 to the Group
is being charged over a two year period from the date of grant at
which point they become exercisable.
At 31 December 2021 the Group operated a single share option
scheme ("SOS"). The SOS allows the Company to grant options to
acquire shares to eligible employees. Options granted under the SOS
are unapproved by HM Revenue & Customs. The maximum number of
shares over which options may be granted under the SOS may not be
greater than 15 per cent of the Company's issued share capital at
the date of grant when added to options or awards granted in the
previous 10 years. The exercise of options can take place at any
time after the second anniversary of the date of grant. Options
cannot, in any event, be exercised after the tenth anniversary of
the date of grant.
All share-based employee remuneration will be settled in equity.
The Group has no legal or constructive obligation to repurchase or
settle options. Share options and weighted average exercise price
are as follows for the reporting periods presented:
2021 2020
Weighted Weighted
average average
exercise exercise
Number price Number price
000's GBP 000's GBP
Opening balance 46,197 0.048 49,635 0.228
Exercised - 0.000 (2,250) (0.030)
Forfeited (6,585) (0.042) (1,188) (0.076)
Closing balance 39,612 0.046 46,197 0.048
The fair values of options granted were determined using the
Black-Scholes valuation model. Significant inputs into the
calculation include a weighted average share price and exercise
prices. Furthermore, the calculation takes into account future
dividends of nil and volatility rates of between 50% and 98%, based
on expected share price. Risk-free interest rate was determined
between 0.640% and 5.125% for the various grants of options. It is
assumed that options granted under the SOS have an average
remaining life of 28 months (2020:34 months).
The underlying expected volatility was determined by reference
to the historical data, of the Company. No special features
inherent to the options granted were incorporated into the
measurement of fair value.
At 31 December 2021 the Group also operates a Key Person Stock
Award Scheme whereby key staff members can build up an entitlement
to target amounts of shares over a period of three to ten years,
with the vesting condition that the employees are still employed at
the time the entitlement vests. After three years amounts of shares
subject to predetermined thresholds can be drawn annually. The
remaining full entitlement can be drawn after ten years.
The fair values of awards granted were determined using the
Black-Scholes valuation model. Significant inputs into the
calculation include a weighted average share price and exercise
prices. Furthermore, the calculation takes into account future
dividends of nil and volatility rates of 50%, based on expected
share price. Risk-free interest rate was determined between 0.021%
and 1.313% for the various grants of awards.
The number of Ordinary 1p shares issued under the scheme in the
year having vested was 400,000 (2020: nil). The total number of
outstanding awards yet to vest at reporting date is 38.75m Ordinary
0.5p shares (2020: 19.78m Ordinary 1p shares). The weighted average
of time to vest for outstanding awards is 5.2 years (2020: 6.2
years) and weighted average fair value of outstanding awards is
0.32p (2020: 0.32p).
8. Tax
The tax on the Group's loss before tax differs
from the theoretical amounts that would arise using
the weighted average tax rate applicable to losses
of the Companies as follows: 2021 2020
GBP'000 GBP'000
Tax reconciliation
Profit / (Loss) before tax 603,305 (402,633)
Expected tax credit at 19% (2020:19%) 114,628 (76,500)
Effects of different tax rates on foreign subsidiaries (457) (404)
Expenses not deductible for tax purposes 285 74,492
Income not taxable for tax purposes (115,748) -
Tax losses carried forward 1,292 2,412
Tax charge - -
9. Finance income
Group
2021 2020
GBP'000 GBP'000
Interest 3 3
3 3
10. Finance costs
Group
2021 2020
GBP'000 GBP'000
Interest 1,498 5,192
Exchange (gain) / loss on shareholder
loans (4,720) 3,446
------- -------
(3,222) 8,638
======= =======
11. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of Ordinary shares in issue during the year.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. The Company has two
categories of dilutive potential ordinary shares, share options and
convertible debt; however, dilutive ordinary shares have not been
included in the calculation of loss per share because they are
non-dilutive for these periods.
11. Loss per share 2021 2020
Basic Diluted Basic Diluted
GBP'000 GBP'000 GBP'000 GBP'000
As restated
Loss before embedded derivative (5,896) (5,896) (15,763) (15,763)
---------- ---------- --------- -----------
Fair value gain / (loss) on embedded
derivatives 609,201 609,201 (386,870) (386,870)
Gain / (Loss) attributable to equity
holders of the Company 603,305 603,305 (402,633) (402,633)
---------- ---------- --------- -----------
Weighted average number of Ordinary
shares in issue (thousands) 772,677 772,677 706,344 706,344
Effect of dilutive potential Ordinary
shares from convertible debt (thousands) - - - 816,749
Adjusted weighted average number
of Ordinary shares 772,677 772,677 706,344 1,523,093
Pence Pence Pence per Pence per
per share per share share share
Gain/(loss) per share (pence per
share) 78.1 78.1 (57.0) (26.4)
Loss per share before embedded derivatives
(pence per share) (0.8) (0.8) (2.2) (1.0)
======== ============= =========== =======
Copyrights,
trademarks
and other
intellectual
property Development
12. Intangible assets - Group Goodwill rights costs Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2020 2,126 229 - 2,355
Exchange differences - 13 - 13
Additions - 56 - 56
Transfers - - - -
Disposals - - - -
-
-------- ------------- ----------- -------
At 31 December 2020 2,126 298 - 2,424
At 1 January 2021 2,126 298 - 2,424
Exchange differences - (18) - (18)
Additions - 44 - 44
Transfers - - - -
Disposals - - - -
-
-------- ------------- ----------- -------
At 31 December 2021 2,126 324 - 2,450
Accumulated Amortisation
At 1 January 2020 2,126 198 - 2,324
Exchange differences - 10 - 10
Charged in year - 26 - 26
Disposals - - - -
At 31 December 2020 2,126 234 - 2,360
At 1 January 2021 2,126 234 - 2,360
Exchange differences - (14) - (14)
Charged in year - 26 - 26
Disposals - - - -
At 31 December 2021 2,126 246 - 2,372
Net book value
At 31 December 2021 - 78 - 78
At 31 December 2020 - 64 - 64
At 1 January 2020 - 31 - 31
Self-developed intangible assets in the amount of GBP26,000
(2020: GBP56,000) are recognised in the reporting year, because the
prerequisites of IAS 38 have been fulfilled.
Amortisation and impairment charges are recognised within
administrative expenses.
As self-developed intangible assets are not material to the
Group financial statements no impairment test has been
performed.
There are no individually significant intangible assets.
The company does not hold any intangible assets.
13 . Property, plant and equipment - Group
Leasehold Technical Office Self-constructed
property equipment & other plant &
improvements & machinery equipment machinery Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2020 644 1,179 702 184 2,709
Exchange differences 36 66 39 10 151
Additions - 100 142 131 373
Transfers - 174 - (174) -
Disposals - - (32) - (32)
At 31 December 2020 680 1,519 851 151 3,201
At 1 January 2021 680 1,519 851 151 3,201
Exchange differences (40) (91) (51) (9) (191)
Additions 41 93 104 395 633
Transfers - 183 - (183) -
Disposals (2) (73) (78) - (153)
At 31 December 2021 679 1,631 826 354 3,490
Accumulated Depreciation
At 1 January 2020 365 664 274 - 1,303
Exchange differences 21 38 16 - 75
Charge for year 66 148 139 - 353
Disposals - - (14) - (14)
At 31 December 2020 452 850 415 - 1,717
At 1 January 2021 452 850 415 - 1,717
Exchange differences (28) (55) (30) - (113)
Charge for year 65 186 169 - 420
Disposals (2) (73) (78) - (153)
At 31 December 2021 487 908 476 - 1,871
1
============= ============ ========== ==================== ======================
Net book value
At 31 December 2021 192 723 350 354 1,619
At 31 December 2020 228 669 436 151 1,484
At 1 January 2020 279 515 428 184 1,406
The company does not hold any property, plant and equipment.
14 . Right-of-use assets - Group
Land and Plant
buildings and machinery Total
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2020 584 74 658
Additions - - -
At 31 December 2020 584 74 658
At 1 January 2021 584 74 658
Additions - 21 21
At 31 December 2021 584 95 679
Accumulated Depreciation
At 1 January 2020 167 13 180
Charge for year 167 26 193
At 31 December 2020 334 39 373
At 1 January 2021 334 39 373
Charge for year 167 28 195
At 31 December 2021 501 67 568
Net book value
At 31 December 2021 83 27 111
At 31 December 2020 250 35 285
At 1 January 2020 417 61 478
The company does not hold any right-of-use assets.
15. Fixed asset investments
2020 2019
Group GBP'000 GBP'000
Shares in associate undertaking
Cost
At beginning of year 18 7
Additions - 11
At end of year 18 18
Impairment
At beginning of year 7 -
Charge for the year - 7
At end of year 7 7
Net book value
At end of year 11 11
In Q3 2019 Proton signed a joint venture agreement to establish
Nexus-e GmbH, a company registered in Achern, Germany. Proton owns
50.00% of the share capital of Nexus-e GmbH.
2021 2020
Company GBP'000 GBP'000
Shares in Group undertaking
Cost
At beginning of year 89,524 82,612
Additions 8,877 6,912
At end of year 98,401 89,524
Impairment
At beginning of year 89,524 82,612
Charge for the year 8,877 6,912
At end of year 98,401 89,524
Net book value
At end of year - -
On 31 October 2006 the Company acquired the entire share capital
of Proton Motor Fuel Cell GmbH, a company incorporated in Germany.
The cost of investment comprises shares issued to acquire the
Company valued at the listing price of 80p per share, together with
costs relating to the acquisition and subsequent capital
contributions made to the subsidiary.
Following a review of the Company's assets the Board has
concluded that there are sufficient grounds for its investment in
the subsidiary undertakings to be subject to an impairment review
under IAS 36. In arriving at the charge in the year of GBP8,877k
(2020: GBP6,912k) the Board has determined the recoverable amount
on a value in use basis using a discounted cash flow model.
16. Inventories
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Work in progress 157 295 - -
Consumable stores - - - -
Raw materials 1,678 1,495 - -
1,835 1,790 - -
The cost of goods sold during 2021 is GBP2,346k (2020:
GBP1,976k). It includes GBP77k impairment loss for slow moving
inventories and goods anticipated to be sold at a loss.
17. Trade and other receivables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade receivables 811 181 179 -
Other receivables 479 122 33 -
Amounts due from Group companies - - 126 197
Prepayments and accrued income 334 45 27 12
1,624 348 366 209
The Directors consider that the carrying amount of trade and
other receivables approximates to their fair values.
In addition some of the unimpaired trade receivables are past
due as at the reporting date. The age of financial assets past due
but not impaired is as follows:
Group
2021 2020
GBP'000 GBP'000
Not more than three months (all
denominated in Euros) - -
The Directors consider that trade and other receivables which
are not past due or impaired show no risk of requiring
impairment.
18. Cash and cash equivalents
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 2,152 2,739 20 5
2,152 2,739 20 5
The Directors consider that the carrying amount of cash and cash
equivalents approximates to their fair values.
19. Trade and other payables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 505 276 - -
Other payables 3,130 3,371 203 1
Amounts due to Group companies - - 259 132
Accruals and deferred income 863 742 318 231
4,498 4,389 780 364
The Directors consider that the carrying amount of trade and
other payables approximates to their fair values.
20. Lease debt
The company implemented IFRS 16 'Leases' as of 1 January 2019
(see Note 2). Whilst the Company implemented the accounting
standard using the Cumulative retrospective approach which does not
require comparatives to be restated the below fully details the
effect of IFRS 16 on the Company's lease debt.
A summary of the lease debt maturity is shown below:
Group
Total
Principal Interest 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Less than 1 year 116 (5) 111 196
Between 2 and 5 years 8 - 8 104
Over 5 years - - - -
124 (5) 119 300
=========== ======== ======= =======
The carrying value of assets held under lease within
right-of-use assets is GBP111k (2020: GBP285k). The balances relate
to the Benzstrasse 7, Puchheim, Germany property lease and a number
of vehicle leases held in Proton Motor Fuel Cell GmbH.
21. Borrowings
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Bank overdraft 517 814 - -
Loans
Current - - - -
Non-current 83,956 79,238 83,956 79,238
Current and total borrowings 84,473 80,052 83,956 79,238
Included within non-current borrowings as at year end are
amounts of GBP30,320k (2020: GBP27,144k) due to SFN Cleantech
Investment Limited which includes a principal loan of EUR23.6m
(2020: EUR18.4m) and accrued interest thereon. The principal loan
attracts interest of EURIBOR+3% per annum (2020: 10%). At the end
of 2020 SFN Cleantech Investment Limited had the option to convert
the accrued interest at any time into Ordinary shares in the parent
company at varying rates per share. At the end of 2021 SFN
Cleantech Investment Limited waived its right to convert interest
on their loan. Subsequent to the year end it was agreed to extend
this loan facility by a further EUR6.2m, from EUR26.1m to
EUR32.3m.
Also included within non-current borrowings as at year end are
amounts of GBP2,235k (2020: GBP2,345k) due to SFN Cleantech
Investment Limited which includes a principal loan of EUR2.3m
(2020: EUR2.3m) and accrued interest thereon. The principal loan
attracts interest of EURIBOR+2% per annum. Interest is to be rolled
up and repaid at the termination of the loan agreement.
Further included within non-current borrowings as at year end
are amounts of GBP51,401k (2020: GBP49,749k) due to Mr Falih Nahab,
a brother of Dr Faiz Nahab, a director of the Company. This balance
includes principal loan advances of EUR48.7m (2020: EUR43.5m) and
accrued interest thereon. The principal loan attracts interest of
EURIBOR+3% per annum (2020: 10%). At the end of 2020 Mr. Falih
Nahab had the option to convert the accrued interest at any time
into Ordinary shares in the parent company at varying rates per
share. At the end of 2021 Mr. Falih Nahab waived his right to
convert interest on his loan. Subsequent to the year end it was
agreed to extend this loan facility by a further EUR6.3m, from
EUR50.6m to EUR56.9m.
The loans are all secured on the assets of the Group.
The redemption date of all loans is 31 December 2025. As such
the loans are held as non-current borrowings.
The debt has been measured at amortised cost.
22. Embedded derivatives on convertible interest
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Embedded derivatives on convertible
interest - 609,201 - 609,201
At the end of 2020 the embedded derivatives related to the
conversion features attached to convertible interest as disclosed
under note 21. Due to the waivers of convertible interest signed by
SFN Cleantech Investment Limited and Mr. Falih Nahab, which were
executed upon the confirmation of the subdivision of shares noted
in Note 24, the embedded derivative on convertible interest is no
longer applicable at the end of 2021 and thus was reversed in the
income statement. The derivatives were initially recognised at fair
value and fair valued at each subsequent accounting reference
date.
The previous fair values of the embedded derivatives were
determined using the Black-Scholes valuation model. The valuation
was performed by an independent expert and significant inputs into
the calculation include the share price of the Company at valuation
date and the estimate of total accrued interest as at the exercise
date. The underlying expected volatility of share price and
risk-free rate of interest were determined by reference to the
historical data of the Company.
23. Deferred income tax - Group
Deferred tax assets are recognised for tax loss carry-forwards
to the extent that the realisation of the related benefit through
future taxable profits is probable. The Group has not recognised
deferred income tax assets of GBP25,072k (2020: GBP23,398k) in
respect of losses amounting to GBP10,291k (2020: GBP7,279k) and
EUR95,053k (2020: EUR86,251k).
24. Share capital
The share capital of Proton Motor Power Systems plc consists of
fully paid Ordinary shares with a par value of GBP 0.005 (2020:
GBP0.01) and Deferred Ordinary shares with a par value of GBP 0.01
(2020: GBP0.01 ) . All Ordinary shares are equally eligible to
receive dividends and the repayment of capital and represent one
vote at the shareholders' meeting of Proton Motor Power Systems
plc. Deferred Ordinary shares have no rights other than the
repayment of capital in the event of a winding up. None of the
parent's shares are held by any company in the Group.
During 2021, 66,667 Ordinary shares of 1p each were issued each
at a price of 92p per share in settlement of a Director's annual
fee for the period ended 31 January 2021. Additionally 5,000
Ordinary shares of 1p each were issued as part of the Employee
Share Purchase Scheme during 2021 to a Director at a price of
66p.
On 29 December 2021 a resolution was passed by shareholders at a
General Meeting to subdivide all of the Company's Ordinary shares
in issue at that date. This resulted in an additional 774,370,274
Ordinary shares being issued to existing shareholders, with the
nominal value of all Ordinary shares restated to 0.5p each, from 1p
per share.
The number of shares in issue at the balance sheet date is
1,548,740,548 Ordinary shares of 0.5p each (2020: 731,828,107
Ordinary shares of 1p each) and 327,963,452 (2020: 327,963,452)
Deferred Ordinary shares of 1p each (2020: 1p each).
Proceeds received in addition to the nominal value of the shares
issued during the year have been included in share premium, less
registration and other regulatory fees and net of related tax
benefits.
.
2021 2020
Deferred Deferred
Ordinary ordinary Ordinary ordinary
shares shares shares shares
No. No. No. No.
'000 GBP'000 '000 GBP'000 '000 GBP'000 '000 GBP'000
Shares authorised, issued and
fully paid
At the beginning of the year 731,828 7,318 327,963 3,280 669,008 6,690 327,963 3,280
Share issue 542 5 - - 570 6 - -
Share issue - under share option
scheme - - - - 2,250 22 - -
Share issue - conversion on
loan interest 42,000 420 - - 60,000 600 - -
Share subdivision 774,370 - - - - - - -
1,548,740 7,743 327,963 3,280 731,828 7,318 327,963 3,280
25. Commitments
Neither the Group nor the Company had any capital commitments at
the end of the financial year, for which no provision has been
made. In addition to the lease debt which is recorded on the
Group's balance sheet as per Note 20, there are also various short
term and low value leases which are accounted for as operating
leases. Total future lease payments under non-cancellable operating
leases are as follows:
2021 2020
Land and Land and
buildings Other buildings Other
Group GBP'000 GBP'000 GBP'000 GBP'000
Operating leases payable:
Within one year 11 229 17 105
In the second to fifth years inclusive - 17 3 12
After more than five years - - - -
11 246 20 117
26. Related party transactions
During the year ended 31 December 2021 the Group and Company
entered into the following related party transactions:
Group Company
Year ended 31 Year ended 31
December December
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
(Expenses) / Income
SFN Cleantech Investment Limited
effective loan interest (452) (1,093) (452) (1,093)
Falih Nahab effective loan interest (993) (2,815) (993) (2,815)
SFN Cleantech Investment Limited
other loan interest (30) (40) (30) (40)
SFN Cleantech Investment Limited
credit arising on convertible interest
waiver 315,703 - 315,703 -
Falih Nahab credit arising on convertible
interest waiver 293,498 - 293,498 -
At 31 December 2021 the Group and Company had the following
balances with related parties:
Group Company
Year ended 31 Year ended 31
December December
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Amounts due (to) / from
SFN Cleantech Investment Limited
borrowings and embedded derivatives
(see Notes 21 and 22) (30,320) (342,846) (30,320) (242,195)
SFN Cleantech Investment Limited
bank guarantee (1,933) (2,055) - -
Dr Faiz Nahab bank guarantee (2,235) (2,345) - -
SFN Cleantech Investment Limited
loans to SPower GmbH (51,401) (343,247) (51,401) (443,897)
Falih Nahab borrowings and embedded
derivatives (See Notes 21 & 22) (30,320) (342,846) (30,320) (242,195)
Due to the waivers of convertible interest by SFN Cleantech
Investment Limited and Mr. Falih Nahab the embedded derivative on
convertible interest is no longer applicable at the end of 2021 and
thus GBP609.2m was reversed in the income statement. During the
year the Company made capital contributions to Proton Motor Fuel
Cells GmbH of GBP8,877,000 (2020: GBP6,912,000) and to SPower GmbH
of GBPnil (2020: GBPnil).
27. Risk management objectives and policies
The Group's activities expose it to a variety of financial
risks:
-- foreign exchange risk (note 28);
-- credit risk (note 29); and
-- liquidity risk (note 30).
The Group's overall risk management programme focuses on the
unpredictability of cash flows from customers and seeks to minimise
potential adverse effects on the Group's financial performance. The
Board has established an overall treasury policy and has approved
procedures and authority levels within which the treasury function
must operate. The Directors conduct a treasury review at least
monthly and the Board receives regular reports covering treasury
activities. Treasury policy is to manage risks within an agreed
framework whilst not taking speculative positions.
The Group's risk management is co-ordinated at Proton Motor Fuel
Cell GmbH in close co-operation with the Board of Directors, and
focuses on actively securing the Group's short to medium term cash
flows by minimising the exposure to financial markets.
28. Foreign currency sensitivity
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the Euro and Sterling.
The Group does not hedge either economic exposure or the
translation exposure arising from the profits, assets and
liabilities of Euro business.
Euro denominated financial assets and liabilities, translated
into Sterling at the closing rate, are as follows:
Year ended 31 Year ended 31 December
December 2021 2020
EUR'000 GBP'000 EUR'000 GBP'000
Financial assets 4,835 4,063 3,744 3,345
Financial liabilities (107,161) (90,052) (770,752) (688,667)
Short-term exposure (102,326) (85,989) (767,008) (685,322)
The following table illustrates the sensitivity of the net
result for the year and equity with regard to the parent Company's
financial assets and financial liabilities and the Sterling/Euro
exchange rate. It assumes a +/- 7.97% change of the Sterling/Euro
exchange rate for the year ended 31 December 2021 (2020: 12.78%).
This percentage has been determined based on the average market
volatility in exchange rates in the previous 12 months. The
sensitivity analysis is based on the parent Company's foreign
currency financial instruments held at each balance sheet date.
If the Euro had strengthened against Sterling by 7.97% (2020:
12.87%) then this would have had the following impact:
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Net result for the year (6,853) (87,584)
------------ ------------
Equity (6,853) (87,584)
============ ============
If the Euro had weakened against Sterling by 7.97% (2020:
12.78%) then this would have had the following impact:
Year ended Year ended
31 December 31 December
2021 2020
GBP'000 GBP'000
Net result for the year 6,853 87,584
------------ ------------
Equity 6,853 87,584
============ ============
Exposures to foreign exchange rates vary during the year
depending on the value of Euro denominated loans. Nonetheless, the
analysis above is considered to be representative of Group's
exposure to currency risk.
29. Credit risk analysis
Credit risk is managed on a Group basis. Credit risk arises from
cash and deposits with banks, as well as credit exposures to
customers, including outstanding receivables and committed
transactions. For banks and financial institutions, only
independently rated parties with a minimum rating of 'A' are
accepted. If customers are independently rated, these ratings are
used. Otherwise, if there is no independent rating, risk control
assesses the credit quality of the customer, taking into account
its financial position, past experience and other factors.
Individual risk limits are set based on internal or external
ratings in accordance with limits set by the Board.
No credit limits were exceeded during the reporting period, and
management does not expect any losses from non-performance by these
counterparties. The Directors do not consider there to be any
significant concentrations of credit risk.
The Group's maximum exposure to credit risk is limited to the
carrying amount of financial assets recognised at the balance sheet
date, as summarised below:
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 2,152 2,739 20 5
Trade and other receivables 1,624 348 238 12
Short-term exposure 3,776 3,087 258 17
The Group continuously monitors defaults of customers and other
counterparties, identified either individually or by group and
incorporates this information into its credit risk controls. Where
available at reasonable cost, external credit ratings and/or
reports on customers and other counterparties are obtained and
used. The Group's policy is to deal only with creditworthy
counterparties.
The Group's management considers that all the above financial
assets that are not impaired for each of the reporting dates under
review are of good credit quality, including those that are past
due.
None of the Group's financial assets are secured by collateral
or other credit enhancements.
In respect of trade and other receivables, the Group is not
exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar
characteristics. The credit risk for liquid funds and other
short-term financial assets is considered negligible, since the
counterparties are reputable banks with high quality external
credit ratings.
30. Liquidity risk analysis
Prudent liquidity risk management includes maintaining
sufficient cash and the availability of funding from an adequate
amount of committed credit facilities. The Group maintains cash to
meet its liquidity requirements.
The Group manages its liquidity needs by carefully monitoring
scheduled debt servicing payments for long-term financial
liabilities as well as cash-outflows due in day-to-day business.
Liquidity needs are monitored in various time bands, on a
day-to-day and week-to-week basis, as well as on the basis of a
rolling 30-day projection. Long-term liquidity needs for a 180-day
and a 360-day lookout period are identified monthly.
As at 31 December 2021, the Group's liabilities have contractual
maturities which are summarised below:
Within 6 to 12 1 to 5
6 months months years
GBP'000 GBP'000 GBP'000
Trade payables 505 - -
Other short term financial liabilities 3,993 - -
Lease debt - 111 8
Borrowings - 517 83,596
This compares to the maturity of the Group's financial
liabilities in the previous reporting period as follows:
Within 6 to 12 1 to 5
6 months months years
GBP'000 GBP'000 GBP'000
Trade payables 276 - -
Other short term financial liabilities 4,113 - -
Lease debt - 196 104
Borrowings and embedded derivatives
on convertible loans - 814 79,238
The above contractual maturities reflect the gross cash flows,
which may differ to the carrying values of the liabilities at the
balance sheet date. Borrowings and embedded derivatives on
convertible loans have been combined as they relate to the same
instruments. Contractual maturities have been assumed based on the
assumption that the lender does not convert the loans into equity
before the repayment date.
31. Financial instruments
The assets of the Group and Company are categorised as
follows:
As at 31 December 2021 Group Company
Non-financial Non-financial
assets assets
/ financial / financial
assets assets
not in not in
scope scope
Loans of IAS Loans of IAS
and receivables 39 Total and receivables 39 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Intangible assets - 78 78 - - -
Property, plant and equipment - 1,619 1,619 - - -
Right-of-use assets - 111 111 - - -
Fixed asset investments - 11 11 - - -
Inventories - 1,835 1,835 - - -
Trade and other receivables 1,624 - 1,624 366 - 366
Cash and cash equivalents 2,152 - 2,152 20 - 20
3,776 3,654 7,430 386 - 386
================ ============= ======= ================ ============= =======
As at 31 December 2020 Group Company
Non-financial Non-financial
assets assets
/ financial / financial
assets assets
not in not in
scope scope
Loans of IAS Loans of IAS
and receivables 39 Total and receivables 39 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Intangible assets - 64 64 - - -
Property, plant and equipment - 1,484 1,484 - - -
Right-of-use assets - 285 285 - - -
Investment in subsidiary - 11 11 - - -
Inventories 1,790 1,790 - - -
Trade and other receivables 348 - 348 209 - 209
Cash and cash equivalents 2,739 - 2,739 5 - 5
---------------- ------------- ------- ---------------- ------------- -------
3,087 3,634 6,721 214 - 214
================ ============= ======= ================ ============= =======
The liabilities of the Group and Company are categorised as
follows:
As at 31
December
2021 Group Company
Financial Financial
liabilities liabilities
valued valued
at fair Liabilities at fair Liabilities
Financial value not within Financial value not within
liabilities through the scope liabilities through the scope
at amortised the income of IAS at amortised the income of IAS
cost statement 39 Total cost statement 39 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade and
other
payables 4,498 - - 4,498 780 - - 780
Lease debt 119 - - 119 - - - -
Borrowings 84,473 - - 84,473 83,596 - - 83,596
Embedded
derivatives
on
convertible
loans - - - - - - - -
89,090 - - 89,090 84,736 - - 84,736
============ ============ =========== ======= ============ ================== =========== =======
As at 31
December
2020 Group Company
Financial Financial
liabilities liabilities
valued valued
at fair Liabilities at fair Liabilities
Financial value not within Financial value not within
liabilities through the scope liabilities through the scope
at amortised the income of IAS at amortised the income of IAS
cost statement 39 Total cost statement 39 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade and
other
payables 4,389 - - 4,389 364 - - 364
Lease debt 300 - - 300 - - - -
Borrowings 80,052 - - 80,052 79,238 - - 79,238
Embedded
derivatives
on
convertible
loans - 609,201 - 609,201 - 609,201 - 609,201
84,741 609,201 - 693,942 79,602 609,201 - 688,803
============ ============ =========== ======= ============ ================= =========== =======
Fair values
Management believe that the fair value of trade and other
payables and borrowings is approximately equal to book value.
IFRS 13 sets out a three-tier hierarchy for financial assets and
liabilities valued at fair value. These are as follows:
-- Level 1 - quoted prices (unadjusted) in active markets for
identical assets and liabilities;
-- Level 2 - inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly or
indirectly; and
-- Level 3 - unobservable inputs for the asset or liability.
The embedded derivatives fall within the fair value hierarchy
level 2.
32. Capital management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, provide returns
for shareholders and benefits to other stakeholders and to maintain
a structure to optimise the cost of capital. The Group defines
capital as debt and equity. In order to maintain or adjust the
capital structure, the Group may consider: the issue or sale of
shares or the sale of assets to reduce debt.
The Group routinely monitors its capital and liquidity
requirements through leverage ratios consistent with industry-wide
borrowing standards. There are no externally imposed capital
requirements during the period covered by the financial
statements.
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Total liabilities 89,090 693,942 84,736 688,803
Less: cash and cash equivalents (2,152) (2,739) (20) (5)
Adjusted net debt 86,938 691,203 84,716 688,798
33. Ultimate controlling party
The Directors consider SFN Cleantech Investment Ltd to be the
Ultimate Controlling Party at the date of approval of the financial
statements. Dr. Faiz Nahab, Chief Executive, is connected to SFN
Cleantech Investment Ltd.
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