REGISTERED NUMBER:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUDITED FINANCIAL STATEMENTS |
|
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
FOR |
|
RECYCLING TECHNOLOGIES LIMITED |
REGISTERED NUMBER:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUDITED FINANCIAL STATEMENTS |
|
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
FOR |
|
RECYCLING TECHNOLOGIES LIMITED |
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
|
|
|
|
|
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
|
|
Page |
|
Company Information | 1 |
|
Statement of Financial Position | 2 |
|
Notes to the Financial Statements | 4 |
|
RECYCLING TECHNOLOGIES LIMITED |
|
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
|
|
|
|
|
|
DIRECTORS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REGISTERED OFFICE: |
|
|
|
|
|
|
|
|
|
|
|
REGISTERED NUMBER: |
|
|
|
|
|
|
AUDITORS: |
|
Chartered Accountants & Statutory Auditors |
Old Station House |
Station Approach |
Newport Street |
Swindon |
Wiltshire |
SN1 3DU |
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
STATEMENT OF FINANCIAL POSITION |
31 DECEMBER 2019 |
|
2019 | 2018 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 4 |
|
|
Tangible assets | 5 |
|
|
Investments | 6 |
|
|
|
|
|
CURRENT ASSETS |
Stocks |
|
|
Debtors | 7 |
|
|
Cash at bank |
|
|
|
|
CREDITORS |
Amounts falling due within one year | 8 |
|
|
NET CURRENT ASSETS |
|
|
TOTAL ASSETS LESS CURRENT
LIABILITIES |
|
|
|
CREDITORS |
Amounts falling due after more than
one year |
9 |
|
|
NET ASSETS |
|
|
|
CAPITAL AND RESERVES |
Called up share capital |
|
|
Share premium |
|
|
Retained earnings | ( |
) | ( |
) |
|
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
STATEMENT OF FINANCIAL POSITION - continued |
31 DECEMBER 2019 |
|
|
|
|
In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
|
The financial statements were approved by the Board of Directors and authorised for issue on
|
|
|
|
|
|
|
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
1. | STATUTORY INFORMATION |
|
Recycling Technologies Limited is a
|
Wales. The company's registered number and registered office address can be found on the |
Company Information page. |
|
2. | ACCOUNTING POLICIES |
|
Basis of preparing the financial statements |
|
|
Preparation of consolidated financial statements |
The financial statements contain information about Recycling Technologies Limited as an individual |
company and do not contain consolidated financial information as the parent of a group. The |
company is exempt under Section 399(2A) of the Companies Act 2006 from the requirements to |
prepare consolidated financial statements. |
|
Going concern |
Currently the business is still within the development phase and therefore is dependent on funds |
received from grants and Research and Development Tax Credits, as well as funds from external |
investors. |
|
The company has identified its funding requirements and has secured £9.4 million (€10 million) of |
additional equity to date through a partial close of the targeted £12million Series A funding round |
(note 14). However, to deliver the base business plan, including the build and installation of the first |
commercial scale production unit, an additional minimum funding requirement of approximately £6 |
million is forecast to be required within the next 12 months. This funding is being sought from a |
number of potential sources including further equity, grants and convertible loan notes issued by |
the Series A investors. Whilst this additional funding is not yet committed, negotiations with a |
number of potential providers are in progress. |
|
The Directors have also considered the impact of COVID-19 on the going concern assumption. |
Although it is extremely difficult to predict how COVID-19 will continue to impact the UK and the |
rest of the world, the Company has taken reasonable steps to minimise the short-term cash drain |
whilst keeping the business moving forward. To the extent there are delays to the planned roll out |
of the first commercial scale unit as a result of COVID-19, this will potentially increase the additional |
minimum funding requirement for the Company and this is currently being factored into ongoing |
negotiations. |
|
Based on the above, the Directors consider that the company is a going concern and the accounts |
have been prepared on this basis. |
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
2. | ACCOUNTING POLICIES - continued |
|
Turnover |
Turnover is measured at the fair value of the consideration received or receivable for goods supplied |
and services rendered, net of discounts and Value Added Tax. |
|
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership |
have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be |
measured reliably; it is probable that the associated economic benefits will flow to the entity; and |
the costs incurred or to be incurred in respect of the transactions can be measured reliably. |
|
Revenue from a contract to provide services is recognised in the period in which the services are |
provided in accordance with the stage of completion of the contract. |
|
Revenue from grants is recognised in the period in which the grant conditions are satisfied. |
|
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are |
measured at cost less any accumulated amortisation and any accumulated impairment losses. |
|
|
|
Tangible fixed assets |
|
|
Plant & Machinery | - | 10% straight line |
Fixtures & Fittings | - | 20% straight line |
Motor vehicles | - | 20% straight line |
|
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
|
Stocks & work in progress |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. |
|
Costs include all costs of purchase, costs of conversion and other costs incurred in bringing stock to |
its present location and condition. |
|
Work in progress is valued on the basis of direct costs plus attributable overheads based on normal |
level of activity. Provision is made for any foreseeable losses where appropriate. An element of |
profit is included where the outcome of the project may reasonably be determined. |
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income |
Statement, except to the extent that it relates to items recognised in other comprehensive income |
or directly in equity. |
|
Current or deferred taxation assets and liabilities are not discounted. |
|
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been |
enacted or substantively enacted by the statement of financial position date. |
|
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed |
at the statement of financial position date. |
|
Timing differences arise from the inclusion of income and expenses in tax assessments in periods |
different from those in which they are recognised in financial statements. Deferred tax is measured |
using tax rates and laws that have been enacted or substantively enacted by the year end and that |
are expected to apply to the reversal of the timing difference. |
|
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is |
probable that they will be recovered against the reversal of deferred tax liabilities or other future |
taxable profits. |
|
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the |
period of the lease. |
|
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the |
company's pension scheme are charged to profit or loss in the period to which they relate. |
|
3. | EMPLOYEES AND DIRECTORS |
|
The average number of employees during the year was
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
4. | INTANGIBLE FIXED ASSETS |
Other |
intangible |
assets |
£ |
COST |
Additions |
|
At 31 December 2019 |
|
AMORTISATION |
Charge for year |
|
At 31 December 2019 |
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
5. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2019 |
|
|
|
|
Additions |
|
|
|
|
Disposals | ( |
) | ( |
) |
|
( |
) |
Impairments | (406,703 | ) | - | - | (406,703 | ) |
At 31 December 2019 |
|
|
|
|
DEPRECIATION |
At 1 January 2019 |
|
|
|
|
Charge for year |
|
|
|
|
Eliminated on disposal | ( |
) | ( |
) |
|
( |
) |
At 31 December 2019 |
|
|
|
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
|
|
At 31 December 2018 |
|
|
|
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
6. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertaking |
£ |
COST |
Additions |
|
At 31 December 2019 |
|
NET BOOK VALUE |
At 31 December 2019 |
|
|
The company holds 100% of the issued share capital of Recycling Technologies (Scotland) Limited, a |
company incorporated in Scotland and Recycling Technologies B.V, a company incorporated in The |
Netherlands. |
|
7. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Trade debtors |
|
|
Other debtors |
|
|
|
|
|
Included within other debtors is an amount prepaid in relation to fixed assets. The outstanding |
commitment at year end is £167,821. |
|
8. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2019 | 2018 |
£ | £ |
Hire purchase contracts |
|
|
Trade creditors |
|
|
Taxation and social security | ( |
) | ( |
) |
Other creditors |
|
|
|
|
|
Included within 2018 other creditors is £746,328 of cash received for applications for share |
purchases. The share funding round was closed, and shares issued, during 2019. |
|
9. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2019 | 2018 |
£ | £ |
Bank loans |
|
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
10. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
|
The Report of the Auditors was unqualified. |
|
|
for and on behalf of
|
|
11. | DEFERRED TAX |
|
At the year end the company had tax losses carried forwards of £6.7m. The company has not |
provided for the £1.2m deferred tax asset that results from these losses. |
|
12. | RESTRICTED FUNDS |
|
Included within the value of cash held at bank, £375,273 (2018: £nil) had a restriction on use. |
|
13. | RELATED PARTY DISCLOSURES |
|
In the opinion of the directors, no one individual controls the company. |
|
During the period, the following transactions took place with directors and their connected parties: |
|
AEG (UK) Limited (a shareholder and a company controlled by a director) charged consultancy |
services to Recycling Technologies Limited of £10,008 (2018: £12,001). £1,001 was outstanding at |
the period end (2018: £1,001). |
|
Parkinson Management Limited has undertaken business development work previously on a |
contingent fee basis. Any contingent fees payable to Parkinson Management Limited are dependent |
upon whether any contracts arise from that work and will be fully covered by the value arising from |
those contracts. The phased contingency fees potentially payable under this arrangement amount to |
a maximum of £72,500, that maximum sum only becoming payable in the event of three specified |
contracts all reaching financial close within a three year period, having an estimated value to the |
company in excess of £10m. As at the year end, none of the conditions triggering a liability for any of |
these fees had been met, and therefore no amounts have been included in the accounts in this |
respect. |
Consultancy services were charged by Parkinson Management Limited to the company during the |
year of £3,200. |
|
A consultancy agreement exists between the company and Marcian Limited (company number: |
11496029), of which a director is Managing Director, under which the director will undertake |
activities which can be varied by agreement but will include providing support for entering into a |
strategic partnership with the petrochemical industry. Consultancy services of £36,000 were |
charged during the financial year. |
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
14. | POST BALANCE SHEET EVENTS |
|
On 26 March 2020, the Company completed a £9.4 million (€10 million) equity investment from two |
strategic investors in Neste Oyj and Mirova Capital (through SOF GP, S.á.r.l., acting in its capacity as |
general partner of Althelia Sustainable Ocean Fund SICAV-SIF). To complement the investment, a |
joint technology development agreement and a Plaxx offtake agreement was also completed with |
Neste. |
|
The Company also adopted new Articles of Association on 26 March 2020. |
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
|
15. | SHARE-BASED PAYMENTS |
|
EMI | USOS | Warrant |
2019 | 2018 | 2019 | 2018 | 2019 | 2018 |
Bought Forward | 1,360,627 | 945,409 | 3,584,492 | 3,439,282 | 350,000 | 350,000 |
Granted | 78,858 | 595,640 | 89,407 | 145,210 | - | - |
Exercised | - | - | - | - | - | - |
Lapsed | (66,724) | (180,422) | - | - | - | - |
|
Transfer out | - | - | - | - | - | - |
Transfer in | - | - | - | - | - | - |
Total | 1,372,761 | 1,360,627 | 3,673,899 | 3,584,492 | 350,000 | 350,000 |
Exercisable |
at year end | - | - | - | - | - | - |
|
The company has established an Enterprise Management Incentive (EMI) share option scheme with |
an exercise price of £0.30 - £1.50 per share. |
|
EMI options vest at the earliest of: |
- the company being listed on a recognised investment exchange |
- the offer to acquire control of the company by purchase of the total issued share capital or a |
negotiated share sale and purchase agreement with the shareholders |
- the offerer negotiates an asset sale |
- for some EMI options the vesting happens on specific dates |
- the discretion of the board |
|
Vested EMI options can be exercised up to 10 years from the date of the grant. As none of the |
exercising points set out above are currently foreseen, no charge has been made to the profit and |
loss account in respect of these options in the period ended 31 December 2019. Options lapse if the |
employee leaves the company before the options vest. |
|
During 2016 the company issued warrants for 350,000 Ordinary Shares at a price of £0.03 per share, |
pursuant to a warrant in favour of Mr Damian Tuite. These warrants were issued in connection with |
the termination of the subscription and shareholders' agreement between the Company and its |
shareholders dated 30 May 2014. |
|
The company has established an Unapproved Share Option Scheme (USOS) with an exercise price of |
£0.01 per share. |
|
USOS options vest at the earliest of: |
- the company being listed on a recognised investment exchange |
- the company being taken over by a company or by persons who are not an existing shareholder of |
the company |
- the company being subject to a management buy-out |
- 10 years from the date the scheme was created |
- at the discretion of the Board |
|
RECYCLING TECHNOLOGIES LIMITED (REGISTERED NUMBER: 07528795) |
|
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2019 |
Vested USOS options can be exercised immediately. As none of the exercising points set out above |
are currently foreseen, no charge has been made to the profit and loss account in respect of these |
options in the period ended 31 December 2019. |
|
Details of the number of EMI share options and weighted average exercise price (WAEP) outstanding |
during the period are as follows: |
|
|
Exercise price |
Scheme |
Net number of
shares issued |
Dec-2019 |
Dec-2018 |
£ | £ | £ |
0.30 | EMI | 33,333 | 10,000 | 10,000 |
0.35 | EMI | 94,285 | 33,000 | 33,000 |
0.45 | EMI | 516,665 | 232,499 | 245,070 |
0.50 | EMI | 144,620 | 72,310 | 72,310 |
1.10 | EMI | 551,223 | 606,345 | 598,169 |
1.50 | EMI | 32,635 | 48,953 | - |
1,372,761 | 1,003,107 | 958,549 |
WAEP | £0.731 | £0.704 |
|
16. | LEASING AGREEMENTS |
|
Non-cancellable operating leases |
2019 | 2018 |
£ | £ |
Within one year | 166,335 | 166,335 |
Between one and five years | 665,340 | 665,340 |
831,675 | 831,675 |
|
The total non-cancellable operating leases as at 31/12/2019 relate solely to the rental of premises at |
Stirling Court, Swindon under a 10 year lease agreement at an annual rent of £166,335 |
|
17. | DEVELOPMENT COSTS |
|
The accounting treatment of research and development expenditure is governed by FRS102 which |
requires a company to write off all costs to its profit and loss account. Capitalisation is only allowed |
in very limited circumstances and, at this point in time, the company does not satisfy the |
requirements for capitalisation. Therefore all research and development costs, including the costs |
for the Beta Plant, regardless of their intrinsic nature (i.e. capital or revenue), are being written off |
to the profit and loss account as they arise. |