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| TIDM | HUI |
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Hydrogen Utopia International PLC (HUI) released its final results for the period ended 31 December 2023, reporting group net assets of £1,857,614, administrative expenses reduced by 9% to £1,358,657, other income of £100,000, and a £123,099 R&D tax refund. During 2023, HUI entered a joint venture with Powerhouse Energy Group PLC in Ireland and was awarded a grant permitting 75% reimbursement of up to EURO 450,000 in expenditure. Separately, HUI exercised an option to acquire a 49% stake in Ohrid Organics Ltd, a medical cannabis facility in North Macedonia, and post-period, signed Heads of Terms in February 2024 for a potential reverse acquisition of Essential Energy Holdings.
| Date | 30 Apr 2024 |
| Time | 14:41:58 |
| Category | Results |
| ID | 6575M |
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
30 April 2024
Hydrogen Utopia International PLC
(the "Company" or "HUI")
Final Results for the period ended 31 December 2023
Hydrogen Utopia International PLC, a company specialising in turning non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels, new materials or distributed renewable heat, is pleased to announce its results for the period ended 31 December 2023.
HIGHLIGHTS OF 2023
Business Development, Organisation and Growth:
|
• |
Joint venture with Powerhouse Energy Group PLC in Longford, Ireland - our flagship project in Europe |
|
• |
Further building of a project pipeline in Poland |
|
• |
Award of a grant permitting the reimbursement of 75% of expenditure of up to EURO 450,000 to be incurred in Ireland |
|
• |
Exercise of an option to acquire a substantial minority interest in a medical cannabis facility with the prospects of substantial cashflows and a potential opportunity for a rollout of a proof of concept outside Europe namely in North Macedonia |
|
• |
Heads of terms with a multinational biofuels group for the potential reverse acquisition of the group by reverse takeover - providing opportunities for a rollout of a waste plastic to hydrogen facility |
|
• |
Appointment of Simon Mann as Non-Executive Chairman |
|
• |
Incorporation of a Dutch subsidiary to aid expansion into Europe |
Financial Highlights:
|
• |
Other income generated of £100,000 |
|
• |
R&D related activity, excluding CAPEX, of £179,446 |
|
• |
Reduction in administrative expenses by 9% to £1,358,657 |
|
• |
R&D tax refund of £123,099 relating to prior periods |
|
• |
Reduction in group net assets to £1,857,614 due to operating expenses and an impairment charge on investments |
Simon Mann, Non-Executive Chairman of HUI commented:
"We are pleased with our achievements in Europe during the period. We entered into a joint venture with Powerhouse Energy Group PLC (AIM:PHE) for the development of a waste plastic to hydrogen plant in Ireland. We also obtained a grant for the reimbursement of expenditure up to EUR450,000 in Ireland. Outside Europe, we are now exploring two avenues to fund, in whole or in part, a waste plastic to hydrogen project. Either through the acquisition of a substantial minority stake in a medical cannabis cultivator in North Macedonia expected to generate substantial cashflows, or by virtue of the potential acquisition by reverse takeover of a substantial and profitable international bio-energy company.
We continue to see strong support for the energy transition from governments around the world which should lead to an increase in the size and scale of hydrogen projects and further exciting opportunities for HUI."
Aleksandra Binkowska, Chief Executive Officer of HUI commented:
"To quote Francis Bacon, 'Fortitude is the marshal of thought, the armor of the will, and the fort of reason.' This sentiment resonated deeply with us in 2023, as we navigated HUI through challenging times. Now, as we look forward, I am optimistic that calmer waters await, steering us towards smoother sailing. I express my gratitude to all the shareholders for being our pillar of fortitude in the past years."
For more information about the Company, please refer to our website: www.hydrogenutopia.eu
For further information, please contact:
Hydrogen Utopia International PLC
Aleksandra Binkowska
+44 20 3811 8770
Alfred Henry Corporate Finance Limited (LSE Corporate Adviser)
Nick Michaels/Maya Klein Wassink
+44 20 7309 2203
Novum Securities Limited (Broker)
Jon Belliss/Colin Rowbury
+44 20 7399 9400
Non-Executive Chairman's statement
This is the third published Annual Report and Accounts for Hydrogen Utopia International PLC. This report marks a significant milestone for our company as we embark on a new chapter. HUI is now trading on the London Stock Exchange following our strategic decision to transition from the Aquis Stock Exchange at the beginning of 2023.
HUI is poised to emerge as a leading European entity dedicated to addressing pressing environmental challenges. Our core mission revolves around the transformation of non-recyclable mixed waste plastic into carbon-free fuels, innovative materials, and distributed renewable heat solutions. In a world grappling with the urgent need to confront escalating volumes of waste plastic, coupled with a growing demand for hydrogen derived from renewable sources, HUI stands at the forefront of sustainable innovation.
As we witness the alarming consequences of climate change, exemplified by the recent unprecedented floods in Dubai, the highest annual temperature recorded, the urgency to take decisive action has never been more evident. Yet, it is disheartening to acknowledge the formidable challenges faced by companies like ours in securing funding for inaugural facilities. From my perspective, such funding should be forthcoming, given the anticipated profitability of HUI's facility for stakeholders. It is unfortunate that HUI has had to navigate such inhospitable terrain from its inception, particularly when other entities with similar missions are grappling with substantial hurdles.
The current political landscape is undeniably unsettling, with the Russian invasion in Ukraine and ongoing conflicts in the Middle East as well as the high interest rates over 2023 are casting a shadow of instability over the small-cap market. Despite these turbulent circumstances, we are steadfastly navigating through them, cherishing every victory along the way. Notably, we have forged substantial connections in Ukraine, endeavoring to bolster their hydrogen strategy as well as their recently declared cannabis strategy which HUI could also support.
Securing the much-needed £40 million investment remains our foremost concern, compounded by the challenge of locating suitable land free from governmental red tape. Upon assuming joint stewardship of the company with the CEO, we devised a strategic vision for HUI aimed at expanding our reach beyond the confines of the established European market. Our focus has shifted towards uncharted territories, where I have done my utmost to introduce the Company to high-ranking representatives. We have been talking to the representatives of British - Kazach Society and the members of the Kazakh energy ministry in order to establish possibilities for funding and placing a first of a kind there. We have been making introductions in South Africa via my various connections in Washington, U.S. We have searched as far as in Somalia to find governments willing to support our cause, as weird as it may look at first glance.
Undoubtedly, one of the most intriguing opportunities we've encountered is the partnership proposal from Essential Energy Holdings, a prominent bio-energy company headquartered in Argentina. The groundwork for this collaboration began in 2023, culminating in the signing of Heads of Terms between HUI and EEH at the end of February 2024. I firmly believe that this venture could serve as a significant opportunity for our company to expand its horizons.
One of the bravest decisions that the Board has made was the loan and collaboration in a medical cannabis facility. As announced on 29 December 2023, the board voted to exercise its option to acquire a substantial minority stake in a medical cannabis cultivator in North Macedonia expected to generate substantial cashflows. As mentioned above, an alternative is the potential acquisition by reverse takeover of a substantial and profitable international bio-energy company as announced on 27 February 2024. The development of waste plastic to hydrogen projects could be funded, in whole or in part, through either avenue. Either option could allow a roll out of a waste to hydrogen facility within a relatively short timeframe.
We have been busy on the home front as well. As announced on 26 April 2022, HUI made an investment in an Irish company, Trifol Resources Limited (TRIFOL) with a view to gaining access to local waste companies and the energy industry in Ireland. This investment allowed HUI to apply for a grant permitting the reimbursement of 75% of expenditure of up to EUR450,000 to be incurred in Ireland. HUI was successful in its application. HUI have impaired the investment in TRIFOL, please see note 13 and 16 for accounting treatment, because of timeframe delays although ultimately, we believe the venture will be a success. Instead, HUI entered into a joint venture with Powerhouse Energy Group PLC (AIM:PHE) for the development of a greenfield site and building of a waste plastic to hydrogen plant at Fisherstown Energy Park in County Longford, Ireland. This project is an opportunity to progress a project within a European Union Just Transition Fund area, which brings with it the potential of further grant funding for the development. The parties are currently developing the application for planning and permitting on the site.
Looking ahead, the coming months will be important for HUI. Whilst we haven't yet reached the revenue generating stage, we have made tremendous strides in building solid foundations for future success. On that note I extend my sincere gratitude to the CEO, the Board and the shareholders for bestowing upon me their trust and appointing me as the Chairman. I am committed to exerting my utmost efforts to maximise opportunities for the Company, recognising this as one of the most significant endeavors I've ever undertaken. Thank you for your continued support.
Simon Mann
Non-Executive Chairman
30 April 2024
Chief Executive Officer's statement
Dear Shareholders,
In 1966, at the University of Cape Town, J.F. Kennedy delivered a speech in which he stated; ''There is a Chinese curse which says "May he live in interesting times." Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind. And everyone here will ultimately be judged - will ultimately judge himself - on the effort he has contributed to building a new world society and the extent to which his ideals and goals have shaped that effort".
Decades later, echoing Kennedy's sentiment, we find ourselves in a world of heightened uncertainty. We are facing two fundamental issues. Our biggest challenge is funding a full-scale facility, as it becomes evident that the environmental issues are not as interesting to the investors community as they were just a few years ago. Observing small cap companies in our sector, nobody is doing particularly well, which is a fundamental hurdle.
The other one is permitting. Despite the widespread desire to minimise the impact of fossil fuels and transition to more sustainable alternatives, governments have struggled to expedite the adoption of novel technologies. Throughout the EU and the US, numerous projects have faced roadblocks from local authorities, hindering progress. It often feels as though we inhabit a parallel universe, where lofty slogans about change contrast sharply with the growing number of illegal landfills. Last year, Poland was rocked by a scandal uncovered by Euro News: a massive illegal landfill on the border of Greater Poland caught fire, dangerously close to a major city, prompting evacuations. Sadly, disposing of trash illegally remains cheaper than utilising proper plastic waste management methods, particularly for plastic waste. Even when viable solutions are presented, bureaucratic red tape and permitting issues frequently impede progress. It often seems to be a chicken and egg situation: we will provide you with permitting, but show us a working plant. Consequently, we're actively seeking countries, cities, and regions where our technology will be embraced and encouraged rather than met with bureaucratic obstacles. Our search has led us to explore opportunities in countries like Kazakhstan, Albania, Kosovo, Montenegro, and, notably, North Macedonia, where we're making significant headway with local authorities. We have promised to build a strong project pipeline and we believe we need only one successful full-scale plant in order to catch the attention of the whole world, as plastic solution is a threat to all of us.
The challenges associated with the green transformation extend beyond local boundaries and are intricately tied to international politics. Recent farmer protests in the EU prompted the bloc to delay certain aspects of its ambitious green deal, which is central to the burgeoning hydrogen economy. Conversely, major automobile manufacturers are unmistakably shifting their focus to hydrogen. Volvo, once staunch supporters of Battery Electric Vehicles (BEVs), have pivoted towards hydrogen, conducting trials for their first hydrogen truck in 2023. Similarly, BMW has introduced a hydrogen-powered model, the iX5 SUV, as a pilot available for public testing. Even in nations ravaged by conflict like Ukraine, hydrogen is a focal point of discussion, with the country considering adopting a hydrogen strategy in its post-war reconstruction efforts.
Facing the financial, political and permitting issues has allowed creativity to reign in HUI in order to sail through the rough times. Whilst many are fighting for survival, we want to strive and flourish. In order to accomplish that I have come up with a couple of unorthodox undertakings.
Firstly - HUI decided to exercise an option to acquire 49 % of Ohrid Organics Ltd (OOL) - a medical cannabis facility located in North Macedonia. Due to the lack of external funding, we have decided to find a profitable business which will help us build our facility. This was possible thanks to monumental generosity of our executive director Mr Howard White and his family. Ohrid Organics stands as a prominent player in the burgeoning medical cannabis market, boasting the largest granted license in North Macedonia. With an estimated annual growth rate of around 14.7%, the industry's value stands at a substantial €14.5 billion. OOL forecasts an estimated operating margin of approximately 85%, facilitated by the notably low growing costs in comparison to other markets like the UK, Germany, and Portugal. The prospects for Ohrid Organics within the medical cannabis industry appear exceedingly promising, poised for substantial growth and profitability in the years ahead. Bureaucracy poses a significant obstacle to progress across various domains, including the hydrogen and medical cannabis sectors. Despite our eagerness to advance swiftly, hurdles impede our path. The process of gathering a substantial volume of documentation is necessary but time-consuming. Thankfully, the deadline for exercising the option has been extended to December 2024, allowing us more time to navigate through these challenges. This endeavour will provide us with capital for HUI's operating and for building the first proof of concept possibly in North Macedonia. This very action has turned HUI into a hybrid company, where our main objective - the HUI facility is fuelled by another business in a different field. I must underline that both of the businesses are centred around helping the society and the environment. We are cleaning up the world from plastic, providing it with clean energy, supported by producing sustainable medical cannabis which helps humanity all across the globe helping patients with immense pain, depression and epilepsy. I can say we are doing good on all fronts.
The second pivotal decision was appointing Mr Simon Mann as the Chairman of HUI. This action was driven by the need of expanding HUI's horizons, finding new funding opportunities and interest at high political places. Effectively the Company needs a real General to help us through the uncertain times. I believe both of my decisions have reshaped the Company into a completely new entity.
Aside from the extraordinary course that the Company has taken, we have been very diligent in following our traditional path by expanding markets in Poland and the EU obtaining EU grants and forming alliances. I am particularly very proud of working with Paul Emmitt, the CEO of Powerhouse Energy Group (AIM: PHE) in Longford, Ireland. Thanks to his stewardship PHE and HUI have never been closer. I am extremely pleased that Alister Future Technologies (AFT) Limited, HUI's Irish subsidiary received its first EU grant which will undoubtedly lead to more grant funding.
Without a doubt Ireland is our most important project where we are working hard to secure feedstock at the best price possible and an off-take partner for our synthetic gas and hydrogen. Nonetheless I am very proud of small steps to build a project pipeline in Poland despite all the political challenges. In 2023 we have gained partners in the city of Walbrzych and with the Romgos Group and a strong interest from the government of Estonia.
It's imperative to highlight a significant post-balance sheet development that holds immense promise for HUI and its stakeholders. Essential Energy Holdings, a prominent multinational biofuel company, has taken notice of our diligent efforts. We've entered into non-binding Heads of Terms to initiate discussions for the acquisition of the company via a Reverse Takeover process. This marks a pivotal moment, as we engage with a respected entity in the energy sector. We're proud to align with a partner who shares our core values of environmental preservation.
I extend my heartfelt gratitude to all the shareholders for their unwavering support. It's with a heavy heart that I acknowledge HUI's delay in showcasing the technology. However, my dedication and unwavering belief in its potential remain steadfast. It is very easy to be disheartened operating in such a difficult market, trying to implement a world changing technology, but only good spirit and optimism combined with hard work can get us there. Many companies in our sector lack the privilege that we possess.
To quote our Chairman "HUI must work, because it's right"
A Binkowska
Chief Executive Officer
30 April 2024
|
GROUP STATEMENT OF COMPREHENSIVE INCOME |
|||
|
FOR THE YEAR ENDED 31 DECEMBER 2023 |
|||
|
|
Notes |
31 December 2023 £ |
31 December 2022 £ |
|
Administrative expenses |
|
(1,358,657) |
(1,492,297) |
|
Exceptional items |
5 |
(241,417) |
- |
|
Operating loss |
6 |
(1,600,074) |
(1,492,297) |
|
|
|
|
|
|
Other income |
|
100,000 |
- |
|
Investment income |
9 |
372 |
4 |
|
Finance costs |
10 |
(28,506) |
- |
|
Loss before taxation |
|
(1,528,208) |
(1,492,293) |
|
Income tax income |
11 |
123,099 |
- |
|
Loss for the year |
|
(1,405,109) |
(1,492,293) |
|
|
|
|
|
|
(Loss)/Profit for the financial year is all attributable to the owners of the parent company. |
|||
|
Total comprehensive income for the year is all attributable to the owners of the parent company. |
|||
|
|
|
|
|
|
Earnings per share |
12 |
|
|
|
Basic and diluted |
|
(0.36) |
(0.48) |
|
|
|
|
|
|
The income statement has been prepared on the basis that all operations are continuing operations |
|||
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
|
|
Notes |
31 December 2023 £ |
31 December 2022 (restated) £ |
1 January 2022 (restated) £ |
|
Non-current assets Intangible assets |
14 |
606,125 |
513,837 |
384,862 |
|
Property, plant and equipment |
15 |
1,418 |
2,471 |
1,671 |
|
Investments |
16 |
183,898 |
425,315 |
- |
|
|
|
791,441 |
941,623 |
386,533 |
|
Current assets Trade and other receivables |
18 |
605,317 |
97,855 |
1,995,864 |
|
Cash and cash equivalents |
|
1,287,189 |
2,993,960 |
2,697,612 |
|
|
|
1,892,506 |
3,091,815 |
4,693,476 |
|
Current liabilities Trade and other payables |
19 |
227,652 |
108,540 |
505,071 |
|
Borrowings |
20 |
598,681 |
570,175 |
- |
|
|
|
826,333 |
678,715 |
505,071 |
|
Net current assets |
|
1,066,173 |
2,413,100 |
4,188,405 |
|
Net assets |
|
1,857,614 |
3,354,723 |
4,574,938 |
|
Equity Called up share capital |
25 |
385,520 |
384,320 |
344,320 |
|
Share premium account |
26 |
5,248,679 |
5,174,684 |
2,214,684 |
|
Other reserves |
27 |
157,278 |
324,473 |
3,052,395 |
|
Retained earnings |
|
(3,933,863) |
(2,528,754) |
(1,036,461) |
|
Total equity |
|
1,857,614 |
3.354.723 |
4,574,938 |
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Notes |
Share capital £ |
Share premium account £ |
Other reserves £ |
Retained earnings £ |
Total £ |
|
Balance at 1 January 2022 |
|
344,320 |
2,214,684 |
3,052,395 |
(1,036,461) |
4,574,938 |
|
Year ended 31 December 2022: |
|
|
|
|
|
|
|
Loss and total comprehensive income for the period |
|
- |
- |
- |
(1,492,293) |
(1,492,293) |
|
Issue of share capital |
25 |
40,000 |
2,960,000 |
(3,000,000) |
- |
- |
|
Share based payment expense |
|
- |
- |
272,078 |
- |
272,078 |
|
Balance at 31 December 2022 |
|
384,320 |
5,174,684 |
324,473 |
(2,528,754) |
3,354,723 |
|
Year ended 31 December 2023: |
|
|
|
|
|
|
|
Loss and total comprehensive income for the year |
|
- |
- |
- |
(1,405,109) |
(1,405,109) |
|
Issue of share capital |
25 |
1,200 |
73,995 |
- |
- |
75,195 |
|
Share based payment reversal |
|
- |
- |
(167,195) |
- |
(167,195) |
|
Balance at 31 December 2023 |
|
385,520 |
5,248,679 |
157,278 |
(3,933,863) |
1,857,614 |
GROUP STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
|
|
|
2023 |
2022 |
||
|
|
Notes |
£ |
£ |
£ |
£ |
|
Cash flows from operating activities |
|
|
|
|
|
|
Cash (absorbed by)/generated from operations |
34 |
|
(1,384,798) |
|
281,625 |
|
R&D tax credit received |
|
|
123,099 |
|
- |
|
Net cash (outflow)/inflow from operating activities |
|
|
(1,261,699) |
|
281,625 |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Purchase of unincorporated business |
|
- |
|
(89) |
|
|
Purchase of intangible assets |
|
(92,288) |
|
- |
|
|
Purchase of property, plant and equipment |
|
156 |
|
(130,052) |
|
|
Receipts from agreements |
|
100,000 |
|
- |
|
|
Investment deposits |
|
(500,000) |
|
- |
|
|
Purchase of investments |
|
- |
|
(425,315) |
|
|
Interest received/(paid) |
|
372 |
|
4 |
|
|
Net cash used in investing activities |
|
|
(491,760) |
|
(555,452) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Proceeds from issue of shares |
|
75,195 |
|
- |
|
|
Proceeds from borrowings |
|
- |
|
570,175 |
|
|
Interest paid |
|
(28,507) |
|
- |
|
|
Net cash generated from financing activities |
|
|
46,688 |
|
570,175 |
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
|
(1,706,771) |
|
296,348 |
|
Cash and cash equivalents at beginning of year |
|
2,993,960 |
|
2,697,612 |
|
|
Cash and cash equivalents at end of year |
|
1,287,189 |
|
2,993,960 |
|
|
|
|
|
|
|
|
|
Relating to: |
|
|
|
|
|
|
Bank balances and short term deposits |
|
|
1,287,189 |
|
2,993,960 |
NOTES TO THE GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
1 Accounting policies Company information
Hydrogen Utopia International PLC ("the company") is a public company limited by shares incorporated in England and Wales. The registered office is C/O Laytons Llp, 3rd Floor Pinners Hall, 105-108 Old Broad Street, London, United Kingdom, EC2N 1ER. The company's principal activities and nature of its operations are disclosed in the directors' report.
The group consists of Hydrogen Utopia International PLC and all of its subsidiaries.
1.1 Accounting convention
The financial statements have been prepared in accordance with UK adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under this standard, except as otherwise stated.
The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention.
1.2 Business combinations
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
1.3 Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Hydrogen Utopia International PLC together with all entities controlled by the parent company (its subsidiaries) and the group's share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
1.4 Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. In coming to this conclusion, the directors have reviewed the group's working capital requirements over the next 18 months. Reasonable downside sensitivities have been considered under differing scenarios in the working capital model all of which show the group has available financial resources to meet all commitments as they fall due. The cash position at the year-end was £1.3m. The directors continue to monitor cash forecasts closely and are involved in the day to day running of the business.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.5 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers 20% Straight line
Intangible IP - Indefinite *
* Refer to note
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.6 Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
1.7 Impairment of tangible and intangible assets
At each reporting end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The intangible assets noted in the financial statements are recognised at cost and predominantly the knowledge gained from the continued technological development of the HUI chemical conversion chamber and the full- scale system to be implemented into a HUI plant. These intangibles have been assessed to have indefinite useful life as there is no limit to the period over which the asset is expected to generate net cash inflows once implemented into HUI power plants. Many intangible assets are susceptible to technological obsolescence. Therefore, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9 Financial assets
Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the group's business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
The parent company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.10 Financial liabilities
The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:
· it has been incurred principally for the purpose of selling or repurchasing it in the near term,
· on initial recognition it is part of a portfolio of identified financial instruments that are managed together and has a recent actual pattern of short-term profit taking, or
· it is a derivative that is not a financial guarantee contract or a designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the group's obligations are discharged, cancelled, or they expire.
1.11 Equity instruments
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.
1.12 Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.
Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16 Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
In the case of options granted, fair value is measured by a Black-Scholes pricing model.
1.17 Leases
At inception, the group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.18 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2 New accounting standards and interpretations Changes in accounting policies and disclosures
From 1 July 2022, the group has adopted the following standards and interpretations, mandatory for annual periods beginning on or after 1 January 2022:
|
Standard
|
Description
|
Effective date
|
|
Amendment to IAS 1 and IFRS Practice Statement 2
|
Disclosure of Accounting Policies- Amendments to IAS 1 and IFRS Practice Statement 2
|
1 January 2023
|
|
Amendment to IAS 8
|
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Accounting Estimates)
|
1 January 2023
|
|
Amendment to IAS 12
|
IAS 12 Income Taxes (Amendment - Deferred Tax related to Assets and Liabilities arising from a Single Transaction)
|
1 January 2023
|
|
IFRS 17
|
IFRS 17 Insurance Contracts
|
1 January 2023
|
The application of these standards has not had a material impact on the financial statements.
Accounting standards and interpretations issued but not yet effective
The group has elected not to early adopt the following revised and amended standards:
|
Standard
|
Description
|
Effective date
|
|
Amendments to IAS 1
|
Classification of Liabilities as Current or Non-current - Amendments to IAS 1
|
1 January 2024
|
Management has reviewed and considered these new standards and interpretations and none of these are expected to have a material effect on the reported results or financial position of the group.
3 Prior Period Error
During the prior period the intangible assets were incorrectly classified as tangible assets under construction due to the development of the chemical conversion chamber which is key to HUI's unique and revolutionary technology. Subsequently, the majority of the capital expenditure is in relation to the knowledge gained in developing the technology and as such has been reclassified as an intangible asset. Please refer to the group statement of financial position, the property, plant and equipment note 15 and intangible assets note 14 for further information.
4 Critical accounting judgements and key sources of estimation uncertainty
In applying the group's accounting policies, management continually evaluates judgements, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the group. All judgements, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgements, estimates and assumptions. Significant judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined below.
Critical judgements
Impairment assessment of intangibles (note
The ultimate recovery of the value of the group's intangibles as at 31 December 2023 is dependent on the successful development and commercial exploitation, or alternatively, the sale of the chemical conversion facility.
Judgement was exercised in assessing the extent to which impairment existed as at 31 December 2023 in respect of the Hydrogen chemical conversion project and associated balances. In forming this assessment, internal and external factors were evaluated, including those that applied last year. Management determined that no impairment existed having considered the company's market capitalisation relative to the group's net asset value, the progression of the Hydrogen conversion Project and the feasibility study equivalent assessment. The underlying financial model involves estimates regarding commodity prices, operating costs and capital development together with discount rates and demonstrates significant headroom.
Impairment of assessment of the Group's investments (note
The ultimate recovery of the value of the company's investment in Trifol is dependent on the successful development and commercial exploitation, or alternatively, the sale of the TRIFOL investment back to the company at an already agreed value. In assessing the impairment of investment, the directors exercised judgement over the reasonableness of projections and considered the status of the project, together with the implied economic value of the assets, and concluded that the impairment provision made was appropriate.
Recoverability of loan receivable (note
Management have reviewed the recoverability and performed an ECL assessment of the loan receivable balance owed from Ohrid Organics Limited (OOL) and consider it fully recoverable. Management have obtained personal guarantees from the controlling director of OOL and considered the likelihood of recovery of this balance due to the future economic outlook of OOL and the guarantee on the loan.
Recognition of R&D tax credits (note
R&D tax credits are recognised when reliable estimates of the future benefits have been made and when it is reasonably certain that the tax credit will be received. Management have considered the nature of the tax claims, the limited history of successful tax claims and receipt thereof. Management also do not recognise any tax credits before submissions have been made to the relevant tax authority.
Significant accounting estimates and assumptions Share-based payment transactions (note 24)
The group measures the cost of equity-settled transactions with directors and others by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black- Scholes valuation model for awards that are not subject to market-based performance conditions. These models require estimates for inputs such as share price volatility and risk-free rate. The share-based payment arrangements are expensed on a straight-line basis over the vesting period, based on the group's estimate of shares that will eventually vest. At each reporting date, vesting assumptions are reviewed to ensure they reflect current expectations and immediately recognise any impact of the revision to original estimates. If fully vested share options are not exercised and expire, then the accumulated expense in respect of these is reclassified to accumulated losses.
|
5 Exceptional items |
2023 |
2022 |
|
Expenditure |
£ |
£ |
|
Investments written |
|
|
|
6 Operating (loss)/profit |
2023 |
2022 |
|
Operating loss for the year is stated after charging/(crediting): |
£ |
£ |
|
Exchange losses/(gains) |
12,994 |
(3,677) |
|
Depreciation of property, plant and equipment |
|
|
|
Share-based payments |
|
|
|
7 Auditor's remuneration |
2023 |
2022 |
|
Fees payable to the company's auditor and associates: |
£ |
£ |
|
For audit services Audit of the financial statements of the group and company |
42,000 |
30,000 |
|
Audit of the financial statements of the company's subsidiaries |
5,000 |
4,000 |
|
|
47,000 |
34,000 |
Fees payable to the company's auditor and associates for non-audit related services for 2023: nil (2022:
£33,500 in relation to reporting accountant services for the LSE main market listing)
8 Employees
The average monthly number of persons (including directors) employed by the group during the year was:
|
|
2023 |
2022 |
|
Directors |
6 |
6 |
|
Employees |
1 |
1 |
|
Total |
7 |
7 |
|
Their aggregate remuneration comprised: |
2023 |
2022 |
|
|
£ |
£ |
|
Wages and salaries |
412,627 |
339,865 |
|
Share based payments |
(167,195) |
272,078 |
|
Social security costs |
40,274 |
36,471 |
|
Pension costs |
3,963 |
3,801 |
|
|
|
652,215 |
The highest paid director received £80,705 (2022 - £60,000) during the period with the company average remuneration of £50,386 (2022 - £48,552).
|
9 Investment income |
2023 |
2022 |
||
|
Interest income |
£ |
£ |
||
|
Bank deposits |
|
4 |
||
|
Finance costs |
2023 |
2022 |
||
|
|
£ |
£ |
||
|
Interest |
|
- |
||
|
Taxation |
2023 |
2022 |
||
|
Current |
£ |
£ |
||
|
UK corporation tax on profits for the current period |
|
- |
||
|
The charge for the year can be reconciled to the (loss)/profit per the income statement as follows: |
||||
|
|
2023 £ |
2022 £ |
||
|
Loss before taxation |
|
|
||
|
Expected tax credit based on a corporation tax rate of 19.00% (2022: 19.00%) |
(290,360) |
(283,536) |
||
|
Unutilised tax losses carried forward |
206,647 |
283,536 |
||
|
Research and development tax credit |
(39,386) |
- |
||
|
Taxation credit for the year |
(123,099) |
- |
||
12 Earnings per share
|
Number of shares
|
2023 |
2022 |
|
Weighted average number of ordinary shares for basic earnings per share
|
385,520,000 |
312,852,798 |
|
|
2023 |
2022 |
|
Earnings |
£ |
£ |
|
Continuing operations Loss for the period from continued operations |
(1,405,109) |
(1,492,293) |
|
|
2023 |
2022 |
|
|
Pence share |
Pence share |
|
Basic and diluted earnings per share |
|
|
|
From continuing operations |
(0.36) |
(0.48) |
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares outstanding during the year.
13 Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
|
|
2023 £ |
2022 £ |
|
In respect of: |
|
|
|
Investments |
241,417 |
-
|
|
Recognised Exceptional items |
241,417 |
|
14 Intangible assets
|
Cost
|
|
Intangibles £
|
|
At 1 January 2022 |
|
384,862 |
|
Additions |
|
128,975 |
|
At 31 December 2022 |
|
513,837 |
|
Additions |
|
92,288 |
|
At 31 December 2023 |
|
606,125 |
|
Carrying amount |
|
|
|
At 31 December 2023 |
|
606,125 |
|
At 31 December 2022 |
|
513,837 |
|
|
Property, plant and equipment |
|
|
|
|
Computers |
|
|
Cost |
£ |
|
|
At 1 January 2022 |
1,694 |
|
|
Additions |
1,077 |
|
|
At 31 December 2022 |
2,771 |
|
|
Disposals |
(843) |
|
|
At 31 December 2023 |
1,928 |
|
|
Accumulated depreciation and impairment At 1 January 2022 |
|
|
|
Charge for the year |
|
|
|
At 31 December 2022 |
|
|
|
Charge for the year |
|
|
|
Eliminated on disposal |
(300) |
|
|
At 31 December 2023 |
|
|
|
Carrying amount At 31 December 2023 |
|
|
|
At 31 December 2022 |
2,471 |
|
Investments |
Current |
|
Non-current |
|
|
|
|
2023 £ |
2022 £ |
2023 £ |
2022 £ |
|
|
At 1 January |
- |
- |
425,315 |
- |
|
|
|
Additions |
- |
- |
- |
425,315 |
|
|
Impairment |
- |
- |
(241,417) |
- |
|
|
- |
- |
|
425,315 |
|
All impairment as noted in the table above relates to the Trifol investment. For more detail please see the Chairman's Statement and Audit Committee report.
Fair value of financial assets carried at amortised cost
Except as detailed below, the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
|
|
Subsidiaries |
|
|
||
|
|
Details of the company's subsidiaries |
31 December 2023 are as follows: |
|||
|
|
Name of undertaking |
Registered office |
Class of shares held |
% Held Direct |
|
|
|
HU2021 International UK |
United Kingdom |
Ordinary |
100.00 |
|
|
|
Hydropolis United |
Poland |
Ordinary |
100.00 |
|
|
|
Plastic Gold |
Greece |
Ordinary |
100.00 |
|
|
|
Alister Future Technologies (AFT) Limited |
Ireland |
Ordinary |
100.00 |
|
|
|
Eranova Longford |
Ireland |
Ordinary |
100.00 |
|
|
|
HU Future B.V. |
The Netherlands |
Ordinary |
100.00 |
|
The investments in subsidiaries are all stated at cost. Plastic Gold is a wholly controlled subsidiary by way of its shareholders giving full control to the directors of HUI PLC.
|
Trade and other receivables |
2023 |
|
2022 |
|
|
£ |
|
£ |
|
VAT recoverable |
30,091 |
|
53,781 |
|
Other receivables |
500,659 |
|
|
|
Prepayments |
74,567 |
|
43,422 |
|
|
605,317 |
|
97,855 |
|
Trade and other payables |
2023 |
|
2022 |
|
|
£ |
|
£ |
|
Trade payables |
174,557 |
|
17,830 |
|
Accruals |
53,000 |
|
89,934 |
|
Other payables |
|
|
|
|
|
227,652 |
|
108,540 |
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 29 days. For most suppliers no interest is charged on amounts payable for the first 30 days after the date of the invoice. Thereafter, interest is charged at various rates. The company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.
The directors consider that the carrying amount of trade payables approximates to their fair value.
|
Borrowings |
|
|
|
|
|
2023 |
|
2022 |
|
|
£ |
|
£ |
|
Borrowings held at amortised cost: |
|
|
|
|
Loans from shareholders |
598,681 |
|
570,175 |
|
The loan is interest bearing at 5% and repayable by December 2026. Liquidity risk |
|
|
|
The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.
|
At 31 December 2022
|
Less than 1 month £
|
|
Trade and other payables |
108,540 |
|
At 31 December 2023
|
|
|
Trade and other payables |
219,652 |
Liquidity risk management
Responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company's funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. In line with Note 19, the Company always pay their suppliers within contractual terms and per the cashflow and going concern note 1.4 the company has no liquidity issues as current assets, predominantly held in cash, far out way current liabilities.
22 Market risk
Market risk management Foreign exchange risk
The carrying amounts of the group's foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
|
|
Assets |
|
Liabilities |
|
|
2023 |
2022 |
2023 |
2022 |
|
|
Assets and liabilities in foreign currencies |
£
|
£
|
£
|
£
|
Whilst the company takes steps to minimise its exposure to foreign exchange risk, changes in foreign exchange rates will have an impact on profit or loss.
The main currencies in which the Group operates are the Pound Sterling, Polish Złoty and the Euro.
The group's principal foreign currency exposures arise from trading with overseas companies. Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.
Interest rate risk
Whilst the company takes steps to minimise its exposure to cash flow interest rate risk, changes in interest rates will have an impact on profit.
The group currently has minimal exposure to fair value interest rate risk due to lack of borrowings through bank overdrafts and loans.
23 Retirement benefit schemes
|
|
2023 £ |
2022 £ |
|
Defined contribution schemes
|
|
|
|
Charge to profit or loss in respect of defined contribution schemes |
3,963 |
3,801 |
The group operates a defined contribution retirement benefit scheme for all qualifying employees. The assets of the scheme are held separately from those of the group. The company contributes a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the group with respect to the scheme is to make the specified contributions.
24 Share-based payments
The company has a share option scheme for some employees. Options are exercisable at price equal to the average quoted market price of the company's shares on the date of grant. The vesting period is one year. If options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the company before the options vest.
|
|
Number of share options |
Average exercise price |
||
|
|
2023 |
2022 |
2023 £ |
2022 £ |
|
Outstanding at 1 January 2023 |
26,489,730 |
25,226,666 |
1,426,350 |
1,288,000 |
|
Granted in the period |
7,666,666 |
2,329,730 |
1,050,000 |
218,350 |
|
Forfeited in the period |
(19,000,000) |
(1,066,666) |
(950,000) |
80,000 |
|
Outstanding at 31 December 2023 |
|
|
|
1,426,350 |
|
Exercisable at 31 December 2023 |
|
|
|
1,298,979 |
Options granted during the year
Options granted in the year are set out below. Fair value was measured using Black Scholes.
|
|
2023 |
2022 |
|
Grant date |
- |
- |
|
Weighted average fair value |
- |
- |
|
Inputs for model: |
|
|
|
- Weighted average share price |
0.054 |
0.051 |
|
- Weighted average exercise price |
0.054 |
0.051 |
|
- Expected volatility |
|
|
|
- Expected life |
1 |
1 |
|
- Risk free rate |
2.093% |
0.483% |
|
- Expected dividends yields |
- |
- |
Due to a lack of historical data, volatility was based on data from similar companies.
Options outstanding
The options outstanding at 31 December 2023 had an exercise price ranging from £0.05 to £0.15, and a remaining contractual life of about 5 years.
During the period ended 31 December 2023, options were granted on 3 April 2023 and 21 August 2023. The weighted average fair value of the options on the measurement date was £32,444. Fair value was measured using the Black-Scholes model.
|
|
Direct measurement Expenses |
|
|||
|
Related to equity settled share based payments |
|
|
|
272,078 |
|
|
|
Share capital |
2023 |
2022 |
2023 |
2022 |
|
|
Ordinary share capital Issued and fully paid Ordinary shares of 0.1p each |
Number
|
Number
|
£
|
£
384,320 |
On 16 January 2023, the Company received notice of the exercise of warrants and therefore issued 1,200,000 ordinary shares of £0.001 each for a total consideration of £90,000
|
Share premium account |
|
||
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
At the beginning of the year |
|
5,174,684 |
2,214,684 |
|
Issue of new shares |
|
73,995 |
2,960,000 |
|
At the end of the year |
|
|
|
|
Other reserves |
|
|
|
|
|
Shares to issued reserve |
Share based payments reserve |
Total |
|
|
£ |
£ |
£ |
|
Balance at 31 December 2021 |
3,000,000 |
52,395 |
3,052,395 |
|
Additions |
- |
272,078 |
272,078 |
|
Other movements |
(3,000,000) |
- |
(3,000,000) |
|
Balance at 31 December 2022 |
- |
324,473 |
324,473 |
|
Other movements |
- |
(167,195) |
(167,195) |
|
Balance at 31 December 2023 |
- |
|
|
|
Incorporation of a business |
|
|
|
On 7 April 2023 the group incorporated in The Netherlands HU Future B.V., which is a wholly owned subsidiary of HUI.
|
Net assets of business incorporated |
Book Value £ |
Adjustments £ |
Fair Value £ |
|
Cash and cash equivalents |
|
- |
|
|
Non-controlling interests Goodwill |
|
|
- - |
|
consideration |
|
|
|
|
The consideration was satisfied |
|
|
£ |
|
Cash |
|
|
|
|
Net cash outflow arising on acquisition |
£ |
|
Cash consideration |
|
|
|
(87) |
|
|
|
|
|
- |
|
|
|
Contribution by the incorporated business for the reporting period included in the group statement of comprehensive income since incorporation:
|
|
£
|
|
Revenue |
- |
|
Loss after |
(4,620) |
|
|
|
28 Contingent liability
The Directors are aware of an employment dispute with a former director of the Company. Whilst the Directors do not believe there is any merit to this claim as required under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the Company is disclosing this matter. At this time a reliable estimate of the claim cannot be made and there is no probable settlement. The Company will continue to assess the situation as the matter develops.
29 Capital risk management
The group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the group consists of debt and equity comprising share capital, reserves and retained earnings. The group reviews the capital structure annually and as part of this review considers that cost of capital and the risks associated with each class of capital.
The group is not subject to any externally imposed capital requirements.
Currently the group will fund much of its first plant from shareholder equity raised funds. However, going forward the group has a high target gearing ratio as the group plan to raise debt against each plant to leverage relatively cheap debt costs in the current market.
30 Events after the reporting date
On 2 January 2024 it was announced that the board had agreed to exercise the option to acquire 49% of Ohrid Organics Limited (OOL) a company with a subsidiary, King Fild DOO (King Fild) that own a facility in North Macedonia with a licence, for 37 greenhouses with currently 4 operational, to grow and sell medicinal cannabis. The Board expects the dividends which will follow this acquisition to provide HUI with the necessary cashflow in 2024 and beyond for working capital purposes and to fund the development of HUI's first waste plastic to hydrogen facility.
On 22 January 2024 James Nicholls-May, CFO was granted £25,000 worth of share options in the Company at an exercise price of 3.875p per share exercisable for a period of 10 years from 22 January 2025 for his work on, amongst other things, the due diligence and exercising of the OOL option.
On 26-27 February 2024 through a number of RNS's the Company announced the potential acquisition, by way of reverse take-over, of Helmond Holding Group Corp (HHG), who are due to be renamed Essential Energy Holding Group Corp (EEH), a substantial and profitable international bio-energy company involved in the production and business of bio-fuels and its bi-products, with revenue in excess of EUR 365m and profits before taxes in excess of EUR 40m.
On 5 March 2024 the Company updated it's shareholders on the first commercial medicinal cannabis harvest from OOL's subsidiary King Fild. Where a harvest of 200kg of product had occurred, with 50kg of this being used for testing. Subsequently a purchase order for an initial 10kg at EURO 2.50/g was received from an English distributor.
On 29 April 2024 the Company signed an addendum to the OOL option agreement which extended the exercise period until 31 December 2024. Allowing the Company to finalise the exercising of the option at any point during this period.
31 Related party transactions
|
|
2023 £ |
2022 £ |
|
Shareholder Loan |
598,681 |
570,175 |
|
Ohrid Loan |
500,000 |
- |
Other transactions with related parties
During the year the group paid expenses of £nil (2022 - £nil) for Plastic Power Limited (A Binkowska) and £nil (2022 - £63) for The Plastic Neutrality Pledge (A Binkowska).
The following amounts were outstanding at the reporting end date:
As at 31 December 2023 the group was owed £250 (2022 - £250) by Plastic Power Limited (A Binkowska)
£403 (2022 - £403) by The Plastic Neutrality Pledge (A Binkowska).
32 Controlling party
There is no controlling party of the group.
33 Cash (absorbed by)/generated from operations
|
|
2023 £ |
2022 £ |
|
Loss for the year before income
|
(1,528,208) |
(1,492,293) |
|
Adjustments for: |
|
|
|
Other income |
(100,000) |
- |
|
Finance costs |
28,506 |
- |
|
Investment income |
(372) |
|
|
Loss on disposal of property, plant and equipment |
|
- |
|
Depreciation and impairment of property, plant and equipment |
|
|
|
Equity settled share based payment expense |
(167,195) |
272,078 |
|
Impairment of Intangibles |
241,417 |
- |
|
|
|
|
|
Movements in working capital: |
|
|
|
(Increase)/decrease in trade and other receivables |
(7,463) |
1,898,098 |
|
Increase/(decrease) in trade and other payables |
147,619 |
(396,531) |
|
|
|
|
|
Cash (absorbed by)/generated from operations |
(1,384,798) |
281,625 |
|
|
|
|
|
Notes |
2023 £ |
2022 £ |
|
Non-current assets Intangible assets |
606,125 |
- |
|
Property, plant and equipment |
1,418 |
1,433 |
|
Investments |
184,914 |
426,331 |
|
|
792,457 |
427,764 |
|
Current assets Trade and other receivables |
994,820 |
1,339,646 |
|
Cash and cash equivalents |
1,175,041 |
2,986,727 |
|
|
2,169,861 |
4,326,373 |
|
Current liabilities Trade and other payables |
170,592 |
101,870 |
|
Borrowings |
598,681 |
570,175 |
|
|
769,273 |
672,045 |
|
Net current assets |
1,400,588 |
3,654,328 |
|
Net assets |
|
|
|
Equity Called up share capital |
385,520 |
384,320 |
|
Share premium account |
5,248,679 |
5,174,684 |
|
Own shares |
157,278 |
324,473 |
|
Retained earnings |
(3,598,432) |
(1,801,385) |
|
Total equity |
2,193,045 |
4,082,092 |
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company's loss for the year was £1,797,047 (2022 - £1,414,607 loss).
 |
Director
Company registration number 13421937 (England and Wales)
|
|
Notes |
Share capital
£ |
Share premium account £ |
|
Other reserves
£ |
Retained earnings
£ |
Total
£ |
|
Balance at 1 January 2022 |
|
344,320 |
2,214,684 |
|
3,052,395 |
(386,778) |
5,224,621 |
|
Year ended 31 December 2022: Loss and total comprehensive income for the year |
|
|
|
|
|
|
|
|
- |
- |
(1,414,607) |
(1,414,607) |
||||
|
Share based payment expense - |
272,078 |
- |
272,078 |
||||
|
Issue of share capital |
|
40,000 |
2,960,000 |
(3,000,000) |
- |
- |
|
|
Balance at 31 December 2022 |
|
384,320 |
5,174,684 |
324,473 |
(1,801,385) |
4,082,092 |
|
|
Year ended 31 December 2023: Loss and total comprehensive income |
|
|
|
|
|
|
|
|
- |
- |
(1,797,047) |
(1,797,047) |
||||
|
Other movements - |
(167,195) |
- |
(167,195) |
||||
|
Issue of share capital |
|
1,200 |
73,995 |
|
- |
- |
75,195 |
|
Balance at 31 December 2023 |
|
385,520 |
5,248,679 |
|
157,278 |
(3,598,432) |
2,193,045 |
34 Accounting policies Company information
Hydrogen Utopia International PLC is a public company limited by shares incorporated in England and Wales. The registered office is C/O Laytons Llp, 3rd Floor Pinners Hall, 105-108 Old Broad Street, London, United Kingdom, EC2N 1ER. The company's principal activities and nature of its operations are disclosed in the directors' report.
34.1 Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101). The financial statements have been prepared under the historical cost convention, as modified and in accordance with the Companies Act 2006.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
· The requirements of IFRS 7 Financial Instruments: Disclosures;
· The requirements of IAS 1 Presentation of Financial Statements to disclose information regarding the management of capital;
· The requirements of IAS 7 Statement of Cash Flows and related notes;
· The requirements of IAS 24 Related Party Disclosures to disclose key management personnel compensation and to disclose related party transactions entered into between members of a group, provided that any subsidiary which is a party to the transaction is wholly owned;
· Certain disclosures of IAS 36 Impairment of Assets relating assumptions and valuation techniques used in impairment calculations;
· The requirements of IFRS 2 Share Based Payments to disclose narrative information concerning share- based payment arrangements;
· The requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in respect of the impact standards in issue but not yet effective.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The company applies accounting policies consistent with those applied by the group. To the extent that an accounting policy is relevant to both group and parent company financial statements, please refer to the group financial statements for disclosure of the relevant accounting policy.
34.2 Going concern
Refer to note 1.4 of the group financial statements.
34.3 Investments in subsidiaries
The Company's investment in its subsidiaries is carried at cost less provision for any impairment. Investments denominated in foreign currency are recorded using the rate of exchange at the date of acquisition. The carrying value is tested for impairment when there is an indication that the value of the investment might be impaired. When carrying out impairment tests these would be based upon future cash flow forecasts and these forecasts would be based upon management judgement
35 Intangible assets
|
|
Intangibles £
|
|
At 1 January 2023 |
- |
|
Additions |
606,125 |
|
At 31 December 2023 |
606,125 |
36 Property, plant and equipment
|
|
Computers £ |
|
Cost |
|
|
At 1 January 2022 |
|
|
Additions |
1,046 |
|
At 31 December 2022 |
1,733 |
|
Additions |
1,928 |
|
Disposals |
(1,733) |
|
At 31 December 2023 |
1,928 |
Accumulated depreciation and impairment
|
At 1 January 2022 |
|
|
Charge for the year |
277 |
|
At 31 December 2022 |
|
|
Charge for the year |
|
|
Eliminated on disposal |
(300) |
|
At 31 December 2023 |
510 |
Carrying amount
|
At 31 December 2023 |
1,418 |
|
At 31 December 2022 |
1,433 |
37 Investments
|
|
Current |
|
Non-current |
|
|
|
2023 £ |
2022 £ |
2023 £ |
2022 £ |
||
|
|
At 1 January |
- |
- |
426,331 |
- |
|
|
Additions |
-
|
-
|
-
|
426,331 |
|
|
Impairment |
- |
- |
(241,417) |
- |
|
|
|
- |
|
184,914 |
426,331 |
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
|
Movements in non-current investments |
|
|
|
|
|
Shares in subsidiaries |
Other investments |
Total |
|
|
£ |
£ |
£ |
|
Cost or valuation |
|
|
|
|
At 1 January 2023 & 31 December 2023 |
1,016 |
425,315 |
426,331 |
|
Impairment |
|
|
|
|
At 1 January 2023 |
- |
- |
- |
|
Impairment losses |
- |
(241,417) |
(241,417) |
|
At 31 December 2023 |
- |
(241,417) |
(241,417) |
|
Carrying amount |
|
|
|
|
At 31 December 2023 |
|
|
|
|
At 31 December 2022 |
|
|
|
|
Trade and other receivables |
|
|
|
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
VAT recoverable |
|
14,773 |
35,978 |
|
Amounts owed by subsidiary undertakings |
|
438,246 |
1,260,040 |
|
Other receivables |
|
500,401 |
|
|
Prepayments |
|
41,400 |
43,226 |
|
|
|
|
|
|
Trade and other payables |
|
|
|
|
|
|
2023 |
2022 |
|
|
|
£ |
£ |
|
Trade payables |
|
122,497 |
16,595 |
|
Accruals |
|
48,000 |
84,500 |
|
Other payables |
|
|
|
|
|
|
170,592 |
101,870 |
41 Related party transactions
|
|
2023 £ |
2022 £ |
|
Shareholder Loan |
598,681 |
570,175 |
|
Ohrid Loan |
500,000 |
- |
|
|
|
|
42 Events after the reporting date
Refer to note 31 of the group financial statements.
43 Ultimate controlling party
Refer to note 33 of the group financial statements.
44 Share-based payments
The company information for share-based payments is the same as the group information and is shown in note 24.
45 Share capital
Refer to note 25 of the group financial statements.
