EARNZ PLC Registered in England and Wales number 10114644
Verditek PLC
Group Annual Report and Financial Statements
Year Ended 31 December 2019
CONTENTS
CHAIRMAN'S STATEMENT........................................................................................................................... 4
CHIEF EXECUTIVE'S REVIEW........................................................................................................................ 5
FINANCIAL REVIEW ..................................................................................................................................... 8
PRINCIPAL RISKS AND UNCERTAINTIES ....................................................................................................... 9
GOVERNANCE .................................................................................................................................... 12
BOARD OF DIRECTORS .............................................................................................................................. 12
CORPORATE GOVERNANCE REPORT ......................................................................................................... 14
AUDIT COMMITTEE REPORT ..................................................................................................................... 19
DIRECTORS' REMUNERATIONREPORT ..................................................................................................... 20
CORPORATE AND SOCIAL RESPONSIBILITY ............................................................................................... 22
DIRECTORS' REPORT................................................................................................................................. 23
STATEMENT OF DIRECTORS' RESPONSIBILITIES........................................................................................ 26
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OFVERDITEK PLC ............................................. 27
FINANCIAL STATEMENTS .................................................................................................................... 32
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................... 32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................ 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................. 34
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................................................... 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ....................................................................... 36
COMPANY STATEMENT OF FINANCIAL POSITION .................................................................................... 64
COMPANY STATEMENT OF CHANGES IN EQUITY ..................................................................................... 65
NOTES TO THE COMPANY FINANCIAL STATEMENTS ................................................................................ 66
OFFICERS AND ADVISERS .......................................................................................................................... 72
Verditek PLC
Annual Report and Financial Statements For the year ended 31 December 2019
STRATEGIC REPORT
Verditek is a cleantech company, its principal interest being the manufacturing and commercialistion of cutting edge solar technologies.Verditek holds interests in three businesses operating within the clean energy, CO2 emission reduction and deodorisation markets.. This includes full control of Verditek Solar Italy housed in a new factory in Lainate Italy comprising two solar manufacturing lines (total of 20MWp p.a.) producing innovative lightweight solar modules. Additionally, the company has interests in a sustainable filtration and deodorization technology which is commercially proven to remove a wide range of odours found in wastewater and exhausts, and a unique liquid gas absorption technology which can revolutionize the global CO2-capture industry. At the date of approval of this report the Company has the following holdings:
100% holding in Verditek Solar Italy s.r.l-our Verditek Solar Italy subsidiary manufactures light weight solar modules which offer several innovations including: interconnectivity of individual PV cells, increased flexibility, and are particularly light weight compared to conventional PV modules. These properties open up markets that otherwise cannot consider solar energy to address their power requirements. The business generates revenues from the saleof 'solar enhanced' PV products. Our start-up capacity comprises two solar PV production lines with a total manufacturing capacity of 20MWp of solar panels per annum.
51% holding in BBR: BBR applies patented filtration and deodorisation technology to wastewater and industrial effluents. Our technology can be adapted to address specific odour, VOC, and HAP problems, using sustainable green methods to process industrial scale volumes of effluent. For example, our technology can remove over 99% of hydrogen sulphide from wastewater streams, as well as nuisance odours arising from mercaptans and aldehydes. Our patented reactor provides a highly efficient and cost-effective solution that can be scaled from small to very large process streams.
22.34% holding in Industrial Climate Solutions (ICSI): Many important industrial processes are governed by the effectiveness of mixing a gas with a liquid to bring about a separation or reaction of chemicals. The ICSI gas-liquid contactor does this significantly more efficiently than conventional reactors and is particularly effective when processes are influenced by precipitation. An extremely important example is that of Carbon Capture where typical flue gas streams (e.g. electricity generation, cement manufacture) must by treated to prevent carbon dioxide from entering the atmosphere. Another huge application is the treatment of natural gas (commonly contaminated with 2-5% of H2S) to meet sales gas requirements (<25 ppm). ICSI has developed a novel multiphase contacting process using a proprietary froth generator that can dramatically enhance mass transfer in gas/liquid absorption systems. We believe the reduction in capital costs, as well as operational burden, will revolutionize these markets, making access to the technology affordable to industry and protecting our planet.
In addition to these holdings, we have an exciting relationship in place with Paragraf, a start-up which has developed what we believe to be world-leading graphene technology. Together wehave worked to produce the world's firstworking Graphene Integrated Photovoltaic cell and in late 2019 we commenced our second Joint Development Programme (JDP) to focus on enhancing efficiency and commercialising this new generation technology.
Covid 19
We have considered the impact of the Covid 19 pandemic on the businesses of the Group both in terms of experience to date (the impact of the pandemic was felt somewhat earlier in Italy than in the UK) and our assessment of its potential impact on the markets which Verditek expects to commercialise its products in.
As described in this statement, the Group's sales team has been working on advancing commercial opportunities to further commercialise Verditek's lightweight low-profile Solar PV solutions during this challenging period. At the date of approval of these financial statements the Group is preparing to ship product from its factory. A number of
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Verditek PLC
Annual Report and Financial Statements For the year ended 31 December 2019
commercial counterparties are interested in arranging trials for Verditek's solar solutions in their markets (e.g.military, transport, recreational homes, commercial real estate). The Group's manufacturing site in Lainate Italyreopened on 6 April 2020 and re-commenced production. Employees were self-isolating during previous weeks in compliance with Italian government directives. No virial symptoms have been registered. Verditek has permission to work and has access to the government wage compensation program which is part of the "Cura Italia" (Cure Italy) Decree signed on 17 March 2020. Verditek will balance its production rota to optimise the welfare of its staff and the company.
The Group has prepared financial forecasts include modelling management's assessment of the impact of Covid-19 on the business of the Group, including consideration of the overall impact on those parts of the business expected to be significantly impacted and those parts which are expected to grow in the short term, the steps taken by the Directors to utilise the various support mechanisms instigated by government, including the Cura Italia scheme and the financial impact of the steps taken by and available to the Directors to protect and manage the business during the coming period, including the introduction of temporary pay reductions across the business and overhead reductions.
S172 Statement
As required by Section 172 of the Companies Act, a director of a company must act in the way he or she considers, in good faith, would likely promote the success of the company for the benefit of the shareholders. In doing so, the director must have regard, amongst other matters, to the following issues:
• the likely consequences of any decisions in the long term;
• the interests of the company's employees;
• the need to foster the company's business relationships with suppliers/customers and others;
• the impact of the company's operations on the community and environment;
• the company's reputation for high standards of business conduct; and
• the need to act fairly between members of the company.
The information required by s172 of the Companies Act 2006 is included in the Strategic Report above, the Directors Report on pages 23 to 25 and the Corporate Governance Report pages 14 to 18.
On behalf of the Board
Rob Richards
Chief Executive Officer 30 June 2020
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Verditek PLC
Annual Report and Financial Statements For the year ended 31 December 2019
2019 HIGHLIGHTS
In 2019 Verditek hasmaintained its' position in the companies invested in and focused on developing itsexceptional solar business in Europe and the UK. Our collaboration with Paragraf is on track and progressing the engineering of our unique Graphene Integrated PV technology.
Verditek Solar Italy has developed a deeper understanding of our Unique Selling Proposition that differentiates our technology from conventional PV panels, as we transitioned to creating solar solutions for our clients across six key market areas. The key markets identified comprise Transportation, EV Charging, Commercial Real Estate, Recreational Homes, Mobile Shelters and Telecommunications. In each application our technology, often integrated into a power solution, provides the client with the opportunity to harvest renewable energy that they would otherwise not have. In most cases our technology displaces or completely removes the need for diesel fuel in remote, dangerous, or pristine environments.
Regarding the growth of electric vehicles in personal and fleet transport, we have seen many cities in the UK and Europe reducing or removing internal combustion engines from core urban environments. The transport of people and goods in these environments will become electric and that provides an opportunity to providerenewable power. We are partnering with companies to provide solutions that keep EV's on the road longer andcharged when back at the depot or residence. In this respect we have recently announced several partnerships and paid trials with EAV Cargo(https://www.eavcargo.com/)and IM Efficiency(https://imefficiency.com/)to demonstrate the savings and ROI possible.
In the commercial real estate market we have signed an agreement with Green Unit to trial our technology and create a solar roof package for their beautiful ARC buildings (https://www.greenunit.co.uk/). More examples will follow.
Our factory in Italy continues to grow, and we have installed our own remote monitoring station that compares our lightweight low-profile PV panels with conventional PV and demonstrates several mounting configurations.
In our second Joint Development Program (JDP) with Paragraf we continue to make progress on the development of the exclusive Graphene Integrated PV proof-of-concept cells we created in our first JDP. We have deepened our understanding of the science promoting the performance of our new technology and have successfully grown graphene on an entire mono-silicon PV wafer and established a working cell. The program is on track and adapted for Covid-19 social distancing precautions that are required to protect the scientists.
In September 2019 , Verditek successfully closed on £600k of equity funding through the issuance of 13.3 million shares at 4.5p for working capital purposes to support of the continued growth of the Company's solar manufacturing capacity and to further fund the Joint Development Programme with Paragraf.
During the period, the businesses did not record any revenue with first commercial sales expected in 2020.
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Verditek plc published this content on 29 June 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 June 2020 07:38:02 UTC
