I T M

P OW
E R PLC
A N N UA L R E P O R T
F O R T H E Y E A R E N D E D 30 A PR I L 2021
Company Registration Number: 05059407
 W W W. I T M P O W E R .C O M
2 B E S S E M E R PA R K , S H E F F I E L D, S 9 1 D Z ,
UNITED KINGDOM
+ 4 4 (0)114 24 4 5111

ITM ANNUAL REPORT 2021

B E S S E M E R PA R K

ITM ANNUAL REPORT 2021

 OFFIC ER S AND
ANNUAL REPORT FOR ITM POWER PROFES SIONAL
THE YEAR ENDED 30 APRIL 2021 ADVISOR S
PAGE DIREC TORS
Sir R Bone Mr M Green
OFFICERS AND PROFESSIONAL ADVISORS 3 Dr S Bourne Mr J Nowicki
Dr G Cooley Mrs K Roe (Appointed 6 May 2020)
HIGHLIGHTS 4 Dr R Smith Mr R Pendlebury (Resigned 31 July 2020)
Mr A Allen
Mr T Rae (Appointed 3 December 2020)
STRATEGIC REPORT 8

DIRECTORS’ REPORT 29

CORPORATE GOVERNANCE REPORT 32 C O M P A N Y S E C R E TA R Y

Ms N Ham Edmonds
REMUNERATION COMMITTEE REPORT 42
REGISTERED OFFICE
AUDIT COMMITTEE REPORT 56 2 Bessemer Park
Shepcote Lane
Sheffield
INDEPENDENT AUDITOR’S REPORT 59 South Yorkshire
S9 1DZ
CONSOLIDATED INCOME STATEMENT AND OTHER 68
COMPREHENSIVE INCOME N O M I N AT E D
R E G I S T R A R S A D V I S O R A N D B R O K E R
Link Asset Management Investec Bank plc
CONSOLIDATED BALANCE SHEET 68
The Registry 30 Gresham Street
34 Beckenham Road London
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 69 Beckenham EC2V 7QP
BR3 4TU
CONSOLIDATED CASH FLOW STATEMENT 69
B A N K E R S S O L I C I T O R S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70 National Westminster Bank plc Burges Salmon LLP
1 Cathedral Square One Glass Wharf
COMPANY STATEMENT OF CHANGES IN EQUITY 98 Peterborough Bristol
Lincolnshire BS2 0ZX
PE1 1XH
COMPANY BALANCE SHEET 98
P R E S S A N D
NOTES TO THE COMPANY FINANCIAL STATEMENTS 99 S TAT U T O R Y A U D I T O R INVESTOR ENQUIRIES
Grant Thornton UK LLP Tavistock Communications Limited
1 Holly Street 1 Cornhill
Sheffield London
S1 2GT EC3V 3ND WHITELEE

ITM ANNUAL REPORT 2021

HIGHLIGHTS 2021 FINANC IAL
DEVELOPMENTS IN RESULT S
T H E L A S T 12 M O N T H S
Total Revenue & Project Grant Funding of £5.1m (2020: £5.4m) down 6%, comprising:
First full year of operating the strategic partnership with Linde,
Sales revenue: £4.3m (2020: £3.3m) up 30%
which together with our investment in ITM Linde Electrolysis (ILE) GmbH,
allows ITM Power to focus exclusively on the manufacture of electrolysis Collaborative grant income recognised: £0.8m (2020: £2.1m) down 63%
equipment for larger scale systems
Loss from operations £26.7m (2020: £29.4m), reduced by 9%
Sale of world’s largest PEM electrolyser to Linde and sale of first Adjusted EBITDA loss (see note 6) £21.4m (2020: loss £18.1m), increased 18%
MW-scale electrolyser to Sumitomo for deployment in Japan Available cash balance of £176.1m at year-end (2020: £39.9m)

Commercial partnership agreement with Snam (one of the world’s

leading energy infrastructure operators), including a £30m strategic
investment and an initial 100MW preferred supplier commitment
to 2024 RE VIEW OF OPER ATIONS
Successful equity fund raise of £172m (including the Snam investment) ITM POWER -
to accelerate development
BUILDING A GLOBAL PRESENCE

“
Completion of the world's first electrolyser Gigafactory, expected to
ITM Power has worked hard to build relationships globally
reach annual production capacity of 1,000MW per annum by end 2023 by adding anchor points - via our partnership with Linde and
and official opening by the Business & Energy Secretary, Kwasi Kwarteng through collaborations - outside of the UK market. This effort
will put the Group in a good position to service markets
Contracts backlog of £171m (2020: £119m) constituting 310MW internationally both now and in the future.
of electrolysers up 44% YoY Graham Cooley, CEO, commented
One such partnership with Optimal Group Australia will provide
long-term commissioning, operational and maintenance
£36m (2020: £16m) of contracted backlog (Work in Progress) up 125% 2021 has been another
support, enhancing ITM Power’s capabilities to deploy skilled
YoY representing 43MW of electrolysers engineering resource and spare parts for its customers across transformational year for ITM Power.
Australia. To ensure that ITM Power’s customers continue We attracted a strategic investor
10MW of the backlog (Work in Progress) is the REFHYNE I project to enjoy the benefits of low cost and low carbon energy well
recognised over time into the future, Optimal will provide nationwide service and
in Snam S.p.A., and through our fund
support through its network of factory certified ASP’s raise in October 2020 gave ourselves
The balance of the backlog (Work in Progress) is expected to be delivered (Authorised Service Personnel). a platform to deliver to market our
in FY22
The provision of a 0.7MW HGas electrolyser system for use next generation product, the 5MW
in a hydrogen microgrid project in Tasmania supported by the Gigastack, two years earlier than
Tender pipeline value to ITM Power of £378m (2020: £195m), Federal Government’s Blue Economy CRC programme will be
up 94% YoY the first deployment with Optimal and a platform for training
previously planned. We also moved
(through ITM Power’s Hydrogen Academy). into Bessemer Park, the world’s largest
Tender pipeline constitutes 1,011MW of potential electrolysis demand
The sale of a 2.0MW electrolyser to Sumitomo Corporation will PEM electrolyser factory and
Installation of the 10MW REFHYNE I project completed, with expansion
by 100MW planned for REFHYNE II, at Shell’s Rhineland Refinery

Refuelling assets now grouped together under ITM Motive, with focus
shifting to larger scale refuelling projects for fleets, buses and trains
to increase profitability and provide a more appropriate structure for
be used as an important reference plant for further sales in
Japan through our partnership with Sumitomo. This will be the
first MW scale electrolyser system ITM Power has deployed
in Japan. The HGas3SP product will undergo modification
to ensure hydrogen supply pressure is below 10 bar in order
to comply with Japan’s High Pressure Gas Safety Act.

ITM Power and Sumitomo are continuing their collaboration

commenced manufacturing there in
January 2021. We have seen national
commitments to net zero accelerate, “
and I believe we are very well placed,
with our partner Linde, to address the
rapidly growing demand in the market.
sustainable growth of the network
in the areas of business development, local compliance and
after sales support to ensure a comprehensive green hydrogen
Part of consortium awarded €5m for the OYSTER Project to Study offering in Japan.
Offshore Green Hydrogen Production

ITM ANNUAL REPORT 2021

C HAIRMAN ’S
C H A I R M A N ' S S TAT E M E N T

STATEMENT

The year to April 2021 was a further year of innovation

and growth for the Group, as the build of Bessemer Park,
our new 1GW factory concluded, and the Group started
to win its first contracts through its joint venture with
Linde GmbH, ITM Linde Electrolysis GmbH. The partnership
with Linde has enabled the Group to concentrate more
directly on its key manufacturing capabilities, and to
develop a more comprehensive, solutions-led approach
to an increasing number of addressable markets,
both in geography and application.

During the year, the Group completed a £172m fund raise

to accelerate the technology offering, both in terms of
performance of the existing products but also to accelerate
the development of the 5MW Gigastack, in a direct response
to market demand for larger systems. The opportunity
pipeline has grown significantly. New and larger systems,
using the Gigastack, remain on track for factory readiness
in late 2022 and are already being bid into a growing range
of projects.

During the past year the Group made changes to the board,
with Katherine Roe joining the board, and leading both
the Remuneration Committee and the ESG Committee.
In December 2020, Tom Rae also joined the board as
nominee director of JCB.

In May two important reports were published regarding

the macro market dynamics for hydrogen. The IEA
(International Energy Agency) report “Net Zero by 2050;
A roadmap for the Global Energy Sector” stated that The potential scale of demand originally underpinned the
to get to net zero by 2050 the world needs 322m Tonnes Group's decision to invest in a step change in capacity at
of electrolytic hydrogen and a global electrolyser capacity the new Bessemer Park facility. In the event, the new 1GW
of 3,585GW’ The Aurora Energy report “HyMAR” identifies per annum capacity is likely to be fully utilised earlier than
a current pipeline of electrolysers of over 200GW with originally envisioned, as evidenced by tendering activity
85% of the 200GW is in Europe. and ITM Power’s backlog of firm orders. As the drive to
achieve net zero targets continues, the market for large
National electrolyser targets increased from 40GW to
scale electrolysis equipment to produce green hydrogen
144GW in the year and the EU announced its new net-zero
may well become supply constrained.
law. China also declared net-zero by 2060. The US re-joined
the Paris Agreement on Feb 19th, 2021 and declared In closing, I would like to thank all shareholders, old and
its first DOE “Earthshot” for Green Hydrogen on 7th June new, for their support and to recognise the significant
2021. Global demand for electrolysers from industry, achievements of the staff at ITM Power resulting from
to decarbonise production processes, and from utilities their hard work in 2020 and 2021.
and power companies, to store renewable energy,
is accelerating. SIR ROGER BONE AND JUAN CARLOS
J O B E T, M I N I S T E R F O R E N E R G Y A N D
MINING IN CHILE SIR ROGER BONE
Chairman

ITM ANNUAL REPORT 2021

CORPOR ATE MARKE TING
C O R P O R AT E A N D
M A R K E T I N G U P D AT E S

UPDATE UPDATE
C O V I D -19

Covid-19 has continued to have an impact on the normal ITM Power has been developing a dedicated Training
operations of the Group. Staff who can work from home and Marketing suite facility at the Bessemer Park
have been doing so throughout the financial year, Gigafactory, which will enable the business to host our
supported through VPN access, Microsoft Teams, own marketing and training events, as well as provide
various sharepoint spaces dealing with wellness and a venue for National and International conferences that
mental health related topics and more recently, align with ITM Power’s objectives. The Marketing suite K WA SI K WARTENG MP
an internal network space called Yammer that aims can provide seating for over 100 attendees and will AT B E S S E M E R PA R K
to provide a community spirit to the workforce. become an important marketing resource as the world

“
opens up again post-Covid.
As reported in our previous financial statements,
the factory was temporarily reduced to a skeleton staff The business has hosted a number of visitors as the Covid
at the start of the 2020-21 financial year, with 29 restrictions have started to be lifted, including Mr Clive
Betts, the Member of Parliament for Sheffield South East B E S S EM ER PA R K – Business & Energy Secretary Kwasi Kwarteng:
production staff furloughed under the government job
and a delegation from Chile’s Energy and Mining Ministry, GLOBAL MANUFAC T URING HQ , SHEFFIEL D
retention scheme while changes were implemented to
ensure the premises were Covid-secure. led by Minister Juan Carlos Jobet.
The fit out of the 1,000MW per annum Gigafactory
Hydrogen has the potential to provide
In early June, we began the process of returning people The Group has been active in supporting the Gigastack at Bessemer Park reached ‘Practical Completion’ – a third of the UK’s energy in the future.
to the factory. This required risk assessments of areas to project and developing communications alongside BEIS, the handover to the Group by the contractors of the Our first-ever Hydrogen Strategy sets
make them suitable for work under new social distancing Ørsted and Phillips 66 Limited. The project won the completed building – in January 2021, having suffered
Humber Renewables Award for Innovation in March 2021, only a minor delay from the Covid-19 pandemic. out how we will back this technology,
rules, close liaison with shop floor personnel over abilities
to return to work and skillset requirements to further the and published a project update in May this year, with the The completed fit out included an expansion of the ramp up domestic production and
final report due in September 2021. existing offices, enlargement of the stack manufacturing
production process at the correct times, as well as return
and production areas and a dedicated ATEX rated space
create a new, British industry that
to work inductions to explain the new PPE and location
requirements for safe, effective working.
This year the Covid restrictions have continued, and
for factory acceptance testing of products, all coupled will thrive over the next decade
exhibitions including the Hannover Messe, normally a key
event in ITM Power's calendar and the source of much
with the necessary 5MW power supply on site. and beyond.
With Bessemer Park available for office use from the
autumn and a transfer of the factory after the Christmas interest for our technology, have been cancelled or limited The Gigafactory also houses the 24-hour remote and
break, we have additional flexibility and space to enable to online activities. The Group continues to send out technical monitoring centre that will support ITM ITM Power is at the forefront of
staff to come into work safely, whilst ensuring numbers regular communications via a newsletter and we have Power’s after-sales service proposition, the Marketing manufacturing green hydrogen and
a growing number of sign-ups to receive the news from centre, Technology centre and component stores.
remained manageable within social distancing guidelines.
ITM Power. The site, just off J34 of the M1 in Sheffield will welcome
its world-leading technologies are
This has allowed us to offer alternatives for people who
have been struggling to work from home. visitors in the near future, with the creation of already playing an important role
in cutting emissions as the UK moves
Management continued to monitor the effect of Covid-19
to deploy personnel efficiently to project site works
in order to minimise project delays, utilising European
and third party engineers in locations to which UK staff
could not travel. A contingent liability has been disclosed
in note 28 to the accounts concerning the delays caused
by different national Covid strategies and rules,
the conferencing facility, as well as a Hydrogen Academy
to support the training of apprentices, local engineers
and customers, together with facilities for site visits
by customers, shareholders and other stakeholders.

The ITM Power Gigafactory delivers a blueprint for

a high capacity, semi-automated PEM electrolyser
manufacturing facility, which can be readily replicated
“
away from fossil fuels, helping us
meet our climate commitments, while
creating thousands of high-quality jobs
and unlocking billions-of-pounds of
private investment.
and how this may impact our resources across our elsewhere, enabling a local facility to be planned and
ongoing projects. rapidly deployed in response to large order volumes.

Further information about how the Group has The factory was officially opened by the Rt Hon Kwasi
supported its workforce can be found in the Corporate Kwarteng, Secretary of State for Business, Energy and
Governance Report. the Environment on 17 August 2021 as he launched the
UK Government’s Hydrogen Strategy.

ITM ANNUAL REPORT 2021

PRODUC T S AND
PRODUCTS AND
TECHNOLOGY

TEC HNOLOGY

SIR ROGER BONE AND

JUAN CARLOS JOBET
B E S S E M E R PA R K AT B E S S E M E R PA R K

ITM Power continues to place strategic focus on the

development of its technology. The opening of Bessemer
Product cost reduction is an important focus area for
ITM Power. Last year the Group presented a full system
Another focus area has been continued reduction
of precious metal loading. Over the last 10 years,
OVER THE
Park earlier this year saw the Product Development
and Technology teams relocate into the new Technology
price reduction plan including a target to halve the average
product price within five years. The strategy to achieve
the use of precious metals within ITM Power stacks has
reduced by over 80%. This core competency and vertical
LAST 10 YEARS,
Centre. The additional space provides an excellent
location to build on the Group’s 20 years of experience
these improvements is centred on standardisation
and modularisation of the product offering alongside
integration enabled ITM Power to achieve the 2030
EU target of 0.4mg/W for precious metal loading for THE USE
and accelerate key development activities.

The ITM Power technology roadmap is focused

fully leveraging global buying power of partners and
an integrated technology roadmap. The single biggest gains
electrolysers in 2019 and significant further progress
has been made since then. As a manufacturer of its own OF PRECIOUS
METALS WITHIN
are available from the PEM stack and the power conversion catalyst inks, ITM Power has been working on the
on reducing cost, increasing efficiency and expanding systems. ITM Power has brought key stack preparation reduction, recycling and reuse of precious metal catalyst
production capacity of our electrolyser stacks and
ITM POWER
processes in-house with the move to Bessemer Park. loading for 20 years. As part of the Group’s existing cost
products. Particular emphasis has been placed reduction plan, these developments will be rolled out
on verification of improvements at the stack level. Together with semi-automation and in-line quality in phases, subject to ITM Power’s well-established
These have included improved membrane materials,
ultra-low catalyst loadings and in-house component
assurance, this has achieved both cost reduction and
capacity expansion for the stack platform.
verification process. This long running activity makes
an important contribution to cost reduction and provides
STACKS HAS
preparation. The now co-located technology and
production teams work closely together as new
some insulation against the risk of supply constraints
in the precious metal supply chain.
REDUCED
BY OVER 80%
manufacturing machines are adopted by the business
to underpin production capacity ramp up and prepare
for the larger 5MW Gigastack platform.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

STR ATEGIC
REPORT
S TAT EMEN T OF S COPE
The purpose of the Strategic Report is to inform the
members as to how the directors have performed
in their duty to promote the success of the Group.

The Strategic Report contains certain forward-looking

statements. These statements are made by the directors
in good faith based on the information available to them
up to the time of their approval of this report and
such statements should be treated with caution due
to the inherent uncertainties, including both economic
and business risk factors, which underly any such
forward-looking information.

This Strategic Report has been prepared for the Group

as a whole and therefore gives greater emphasis to those
matters that are significant to ITM Power and its subsidiary
undertakings when viewed as a whole.
DR GR AHAM COOLE Y WITH K WA SI K WARTENG MP

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

BUSINES S
MODEL

INTRODUC TION

ITM Power designs and manufactures integrated hydrogen energy

systems based on Proton Exchange Membrane (PEM) electrolyser
technology and has a product offering that is scalable above
100MW in size. Of particular importance is the ability of the
systems to respond rapidly and to generate hydrogen at
a pressure, flow rate and purity appropriate to its application.

ITM Power is a globally recognised expert in hydrogen

technologies with the overarching principle of taking renewable
energy from the power network or other directly coupled sources,
converting it into green, zero-carbon-footprint hydrogen and
using it in one of three broad applications – Power to Gas,
Clean Fuels and Industrial Hydrogen. There has been significant
growth in demand for these applications in the market place and
the directors continued to believe that all of these markets will
grow further over the coming years based on the commitment
by governments worldwide to mitigate climate change, the growth
of renewables in the energy mix and the need to decarbonise WORKING WITH THE PIPELINE
LINDE GMBH
OF POTENTIAL
industrial processes.

The directors believe that ITM Power remains uniquely

well-placed to capture material shares of each market. Following on from Linde GmbH’s strategic investment in ITM
Power and the establishment of ITM Linde Electrolysis GmbH, PROJECTS COMING
THROUGH THE
in which ITM Power holds a 50% stake, work has continued
to develop and embed the strategic partnership with Linde.
This partnership allows each company to focus on its core
competencies, with ITM Power to focus solely on its prime
source of competitive advantage – the efficient manufacture
JOINT VENTURE
WORKING WITH and supply of best in class PEM electrolysers, while Linde will
provide its world leading EPC services to offer best-available
CONTINUES TO
S N A M S . P. A . hydrogen solutions to customers.
GROW AND THE
RELATIONSHIP
As part of the strategic fund raise in October 2020, Snam invested This partnership is now starting to bear fruits, with the signing
£30 million in ITM Power, and entered into a Commercial in January 2021, of the first contract under the partnership,
to build, own and operate the world’s largest PEM electrolyser
WITH LINDE
Partnership Agreement between the businesses, which included
preferred supplier status for the first 100MW of Snam’s PEM plant at the Leuna Chemical Complex in Germany. This new
24-megawatt electrolyser, supplied by ITM Power will produce
CONTINUES TO
electrolyser orders for delivery by 2024/2025.
green hydrogen for industrial customers through Linde’s
The Commercial Partnership Agreement also includes the potential existing pipeline network. In addition, Linde will distribute
for collaboration on a global pipeline of further projects. Since the
partnership was agreed in October 2020, initial discussions have
liquefied green hydrogen to refuelling stations and other
industrial customers in the region. The total green hydrogen
STRENGTHEN
taken place between ITM Power and Snam to establish best
practices for working and partnering on projects.
to be produced from the electrolyser system could fuel
approximately 600 fuel cell buses driving 40 million kilometres AT ALL LEVELS
and save up to 40,000 tons of carbon dioxide exhaust
SNAM have also taken positions on the Technology Management
emissions per year.
Committee and Strategic Advisory Committee within the ITM
Power business.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

BUSINES S ENVIRONMENT & ANNUAL RE VIE W

OF THE BUSINES S
EUROPE AN COMMISSION ANNOUNCES HYDROGEN
S T R AT E G Y, E N E R G Y S Y S T E M S I N T E G R AT I O N
S T R AT E G Y A N D C L E A N H Y D R O G E N A L L I A N C E

In July 2020, the European Commission announced its EU Hydrogen Strategy and its Energy
Systems Integration Strategy. The announcement prioritised the development of renewable
hydrogen, produced using mainly wind and solar energy and went on to state:

From 2020 to 2024, we will support the installation of at least 6 gigawatts

of renewable hydrogen electrolysers in the EU, and the production of up to one
million tonnes of renewable hydrogen.

From 2025 to 2030, hydrogen needs to become an intrinsic part of our integrated
energy system, with at least 40 gigawatts of renewable hydrogen electrolysers
and the production of up to ten million tonnes of renewable hydrogen in the EU.

From 2030 to 2050, renewable hydrogen technologies should reach maturity

and be deployed at large scale across all hard-to-decarbonise sectors.

“
To help deliver on this Strategy, the Commission has launched the European Clean Hydrogen
Alliance, which aims to build up an investment pipeline for scaled-up production and support
demand for clean hydrogen in the EU.

RenewableUK CEO Hugh McNeal:

Green hydrogen has a key role to play alongside

renewables in the transition to a net zero energy system.
RenewableUK and our members see enormous potential
for renewable hydrogen in the decarbonisation of industry,
heating, heavy transport and shipping, as well as offering
a large-scale energy storage solution. Renewable hydrogen
is set to be a game-changer for decarbonising our economy
and, with the right policies in place, the UK can be
“
a world-leader in this market.

In August 2021, the UK government set out its own Hydrogen Strategy to drive forward a green
industrial revolution and meet their ambition for 5 GW of low-carbon hydrogen production
capacity by 2030. The Strategy sets out a policy landscape to identify priorities and support
mechanisms for rolling out green hydrogen production in the UK. It includes a Hydrogen
Business Model designed to overcome the cost gap between low-carbon hydrogen and fossil
fuels and a Net Zero Hydrogen Fund for the commercial deployment of new low-carbon
B E S S E M E R PA R K
hydrogen production plants across the UK.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

T HE OYS T ER
PROJEC T
POWER-TO - GA S

“
As governments and supra-national bodies continue THE OYSTER PROJEC T TO
to legislate for the reduction of emissions following the
COP21 Paris Agreement on climate change, planting up
S TUDY OFFSHORE GREEN
with renewable generation has increased the need for HYDROGEN PRODUC TION
energy storage to address the challenge of intermittency.
Battery technology cannot achieve this at the scale The Fuel Cells and Hydrogen 2 Joint Undertaking Anders Christian Nordstrøm, Vice President and Head
required. Thus, the offshore wind and gas sectors have (FCH2-JU), a public private partnership of the European of Ørsted’s hydrogen activities:
started to advocate green hydrogen as the means for Commission, has made an award of €5m to investigate
sustaining their long-term business models. the feasibility and potential of combining an offshore
To create a world that runs entirely
wind turbine directly with an electrolyser and transporting on green energy, we need to electrify
Power-to-Gas can meet the demand for long-term,
large-scale energy storage, converting surplus renewable
renewable hydrogen to shore. as much as we can. However, some
energy into hydrogen gas by rapid response electrolysis To realise the potential of offshore hydrogen production, sectors cannot decarbonise through
and subsequently injecting it into the gas distribution there is a need for compact electrolysis systems that
network. These grid balancing services can be an can withstand harsh offshore environments and have
electrification and that’s where
important source of revenue for operators and ITM minimal maintenance requirements while still meeting renewable hydrogen could play
Power’s rapid response Proton Exchange Membrane cost and performance targets that will allow production a significant role. Offshore hydrogen
(PEM) technology allows units to be turned on and off of low-cost hydrogen. The project will provide a major
in under one second making them eligible for the UK advance towards this aim. The electrolyser system will
production could be a future,
National Grid’s Enhanced Frequency Response Payments. ITM POWER ENJOYS be designed to be integrated with a single offshore wind supplemental way of getting large
turbine, and to follow the turbine’s production profile. amounts of energy generated from
A UNIQUE POSITION Furthermore, the electrolyser system will integrate
desalination and water treatment processes, making offshore wind power to shore.
HAVING SUPPLIED it possible to use seawater as a feedstock for the
electrolysis process.
As the largest offshore wind
company in the world, we’re of
THE WORLD’S FIRST The OYSTER project partners share a vision of hydrogen
being produced from offshore wind at a cost that is
course keen to better understand
PEM POWER-TO-GAS competitive with natural gas (with a realistic carbon tax),
thus unlocking bulk markets for green hydrogen making
what it will take to produce
renewable hydrogen offshore as
ELECTROLYSER a meaningful impact on CO2 emissions, and facilitating the
a potential future supplement to
IN 2014,
AND CONTINUES
TO ENGAGE IN
transition to a fully renewable energy system in Europe.
This project is a key first step on the path to developing
a commercial offshore hydrogen production industry
and will demonstrate innovative solutions with significant
potential in Europe and beyond.

The project is planned to start in 2021 and run to the

end of 2024, over which time the consortium will develop
production of renewable electricity.
Having pioneered the offshore wind
industry, we know that thorough
analysis and testing are required
before deploying new technologies
“
A NUMBER OF and test a megawatt-scale fully marinised electrolyser
in a shoreside pilot trial. ITM Power is responsible for
at sea.

INDUSTRY-LEADING the development of the electrolyser system and the

electrolyser trials, while Ørsted will lead the offshore

STRATEGIC deployment analysis, the feasibility study of future

physical offshore electrolyser deployments, and support

PROJECTS ITM Power in the design of the electrolyser system for

marinisation and testing. Siemens Gamesa Renewable
Energy and Element Energy are providing technical
and project expertise.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T
BUSINESS ENVIRONMENT & ANNUAL REVIEW
OF THE BUSINESS

“
CLEAN FUEL L ARGER VEHICLE REFUELLING
‘G R E E N H Y D R O G E N
The transport sector is one of the largest users of fuel Within the transport sector, a renewed focus has been FOR SCOTL AND’
in the world, and currently it is dependent on fossil fuels,
which are highly polluting and are becoming ever scarcer
placed on the development of zero-emission heavy
vehicles, where fleets need to be refuelled with large
TO HELP REACH Lindsay McQuade, CEO of ScottishPower Renewables:
and more expensive. Hydrogen fuel is generated on site amounts of hydrogen on a regular basis. ITM Power N E T Z E R O TA R G E Ts By working with industry leaders
by ITM Power’s rapid response electrolyser system, has won contracts to supply on-site hydrogen generation
using renewable electricity and water with a full tank equipment for refuelling in the UK, France, the US A pioneering strategic partnership has been established ITM Power and BOC to bring our
of fuel dispensed within a matter of minutes at the station
where it is generated. This means a zero-carbon footprint
and Australia. to create new green hydrogen production facilities with collective expertise together,
clusters of refuelling stations across Scotland.
and no use of further transport infrastructure. These clusters will allow Scotland’s abundant renewable we will maximise the potential
Hydrogen is light and can be stored under pressure,
power generation capacity to be converted to hydrogen of this new technology to offer fleet
for use by vehicles, supporting efforts to achieve net zero
making it suitable for many vehicle types as it does not add
by 2045. ‘Green Hydrogen for Scotland’ will offer
operators and industry a packaged
further weight, or use further energy when on board.
ITM REFUELLING SITE
an end-to-end market solution for reducing vehicle solution that brings all of the pieces
An additional benefit of hydrogen is its role in supporting
the drive for cleaner air, especially important in densely
emissions through the provision of green hydrogen. of the jigsaw together – production,
distribution, supply. All they have
populated cities. When hydrogen fuel cell electric vehicles
are driven, the only emission is water vapour and
each three-minute car refuel provides a range of up
to 400 miles.

O W N E R - O P E R AT O R O F R E F U E L L I N G S TAT I O N S
The partnership’s first project, ‘Green Hydrogen
for Glasgow’, is designed to provide carbon-free transport
and clean air for communities across the city, which wants
to become the first net-zero city in the UK. A planning
application has now been made for a proposed green
hydrogen production facility located on the outskirts
of the city at ScottishPower Renewables’ Whitelee Wind
Farm, the UK’s largest onshore wind farm. This will be
to do is provide the vehicles.
We have a huge opportunity here
to bring net zero ever closer for the
benefit of everyone and support
a better future, quicker – and we
“
ITM Power continue to roll out a network of hydrogen
refuelling stations in the UK and was proud to play a part
operated by BOC, using wind and solar energy to power will make it happen.
a 20MW electrolyser, delivered by ITM Power.
in the support of key workers during the Covid-19 This represents a doubling in the electrolyser scale capacity
lockdowns. In the year, the Group dispensed 14 tonnes originally envisaged and is in response to market demand.
of hydrogen from its refuelling stations (2020: 31 tonnes). The project aims to supply hydrogen to the commercial
The Group recently completed work on its ninth UK public market within the next two years.
access hydrogen refuelling station (HRS) at Tyseley Energy This project also supports the Scottish Government’s
Park in Birmingham. This is due to be joined by a bus decarbonisation targets and Glasgow City Council’s
refueller in the coming months. commitment to creating a zero emissions vehicle fleet,
Post year-end plans were announced to group ITM Power’s using only electric and hydrogen-powered vehicles
refuelling station portfolio into a separate subsidiary, by the end of 2029.
ITM Motive. The strategy will be to focus on larger scale
refuelling for fleets of vehicles while the public stations
build their revenue. ITM Motive continues to work closely
with its partners across the entire supply chain and is
particularly excited to see OEMs bringing new vehicles to
the market including the MK2 Mirai this year, several bus
options, and coming early next year trucks from Hyzon
and panel vans from a range of manufacturers including King Willem Alexander opens HyStock, where ITM Power Plc supplied the electrolyser to Gasunie

Vauxhall in the UK. The availability of a wide range

of vehicle options should lead to a significant growth
WHITELEE WIND FARM
in the market.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T
BUSINESS ENVIRONMENT & ANNUAL REVIEW
OF THE BUSINESS H2O Z B U S P R O J E C T -
DEPLOYING HYDROGEN
FUEL CELL BUS FLEE TS
FOR PUBLIC TR ANSPORT
ACROS S AUS TR ALIA

In May 2020, ITM Power announced the formation of the

H2OzBus Project and the signing of a memorandum
of understanding with strategic partners. The project will
focus on infrastructure requirements and detailed plans for
an initial deployment of 100 hydrogen fuel cell electric
buses in up to 10 central hub locations across Australia
where interest and demand for fuel cell buses has already
been identified. This aligns well with ARENA’s (Australian
Renewable Energy Agency) key investment priorities
in Accelerating Hydrogen and Decarbonising Industry.

The key expertise of each partner and their proposed

“
roles in the project are: ITM Power and BOC will provide
the hydrogen production and refuelling infrastructure;
Ballard Power Systems will supply the fuel cell system to be
integrated into the electric buses supplied by supporting
Joachim Ronge, Chairman of AGR’s Management Board:
bus manufacturers; Transit Systems, will maintain and
operate the vehicles as part of their daily urban transit
GREEN HYDROGEN
operations (or within a strategically located project PROJEC T IN HERT EN, For years we have been pursuing
managed by Transit Systems), and: Palisade Investment
Partners will assist in providing funding and strategic
GERMANY WITH LINDE a strategy of high energy recovery
financial oversight, for the project. ENGINEERING in connection with disposal security
and climate protection.

“
Linde Engineering announced its successful bid for the After increasing district heat supply
design and construction of an integrated hydrogen
starting in 2019, we have been making
refuelling station and electrolysis plant for AGR in Herten,
Roger Lloyd, Managing Director & CEO of Palisade
confirming that ITM Power is the preferred supplier of the further steps toward more climate
Investment Partners:
electrolysis equipment envisioned by the project. protection by producing hydrogen
Palisade believes green hydrogen The project is receiving funding from the German Federal together with other companies.
will play an important role in the
Ministry of Transport and Digital Infrastructure. Thermal waste treatment offers
further decarbonisation of our The electrolysers will have an annual capacity of around excellent conditions to implement this
economy, providing an alternate
440,000 kg of hydrogen with electricity coming from AGR’s
technology to decarbonize logistics:
waste-to-energy thermal power plant, where municipal
fuel source and an energy storage
mechanism. We are an active
investor in renewable energy and
transportation and are delighted
to work with industry leading
“ and commercial waste with a biogenic content of around
50 percent serves as the primary fuel source. The planned
refuelling station will be able to fill vehicles at 350 bar and
700 bar and therefore will be suitable for both cars and
trucks, including AGR’s own fleet of waste trucks.

Through the thermal recycling of local waste and its

conversion into hydrogen, the undertaking is a successful
“
Waste collection vehicles deliver waste
with biogenic content, and the energy
it contains is transformed into
hydrogen. The waste collection vehicles
are then refuelled with the resulting
green hydrogen.
partners and the Government example of the circular economy in action, providing an
on the H2OzBus project. important reference site for the municipality market.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

INDUS TRIAL
Many industries use hydrogen as part of their production
processes. Today, almost all of this hydrogen is made
by steam reformation of methane (natural gas), a highly
carbon intensive method. Three industries dominate
carbon emissions from the use of hydrogen: ammonia
production, steel making and the Group’s prime target,
refineries. Refineries currently use hydrogen to improve
the quality of fractional distillation products and most
of this hydrogen is produced from steam-reformation
but in order to comply with stringent legislation and
avoid fines, refineries need a cost-effective green
hydrogen solution that reduces carbon emissions
while allowing them to maintain output.

In addition, natural gas reformers have long start-up times.

With their rapid start up times, ITM Power’s PEM
electrolysers could provide an immediate backup solution
to prevent production downtime and preserve security
of hydrogen supply.

In steel making, iron ore requires chemical reduction

before being used to produce steel; this is currently
achieved through the use of carbon, in the form of coal
or coke. When oxidised, this leads to emissions of about
2.2 tonnes of CO2 for each tonne of liquid steel produced.
The substitution of hydrogen for carbon has the potential

“
to significantly reduce CO2 emissions, because hydrogen
is an excellent reducing agent and produces only water
as a by-product.

Jens Waldeck, President Region Europe West, Linde:

SALE TO LINDE
Clean hydrogen is a cornerstone
O F WO RL D’S L A RGE S T of the German and EU strategies
P E M E L E C T R O LY S E R s to address the challenge of climate
In January 2021, Linde announced that it will build, change. It is part of the solution
own and operate the world’s largest PEM electrolyser to help reduce carbon dioxide
plant at the Leuna Chemical Complex in Germany.
This new 24-megawatt electrolyser will be supplied
by ITM Power to produce green hydrogen for industrial
customers through Linde’s existing pipeline network.
In addition, Linde will distribute liquefied green hydrogen
to refuelling stations and other industrial customers in the
region.The total green hydrogen to be produced could fuel
approximately 600 fuel cell buses driving 40 million
emissions across many industries,
including chemicals and refining.
This project shows that
electrolyser capacity continues
to scale up and it is a stepping
stone towards even larger plants.
“
kilometres and save up to 40,000 tons of carbon dioxide
exhaust emissions per year.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

P L A N N E D 10 0 M W
E X PA N S I O N O F
THE SHELL REFINERY
PROJEC T

In February, Shell announced plans to increase the

capacity of the ITM Power PEM electrolysis plant
by 100MW at its Rhineland Refinery in Germany.
Shell’s partners for the Refhyne II electrolysis project
are ITM Power, ITM Linde Electrolysis and Linde.
Subject to finalising contracts and securing some
match funding, the partners will work with the Shell
to effect this upgrade.

Shell intends to manufacture sustainable aviation fuels

in the Wesseling section of the Rhineland Refinery.
To this end, the company wants to set up a first
commercial Bio Power-to-Liquid plant. The synthetically
produced kerosene is intended to help reduce airlines’
CO2 footprint. Construction of this facility could start
in 2022, pending final investment decisions. Both the
electrolyser upgrade and the synthetic kerosene projects
E L E C T R O LY S E R S A L E THE USE OF
T O L I N D E F O R H2P O W E R
are integral parts of the planned transformation of the
IN AUS TRIA ELECTROLYSIS

“
site into the “Shell Energy and Chemicals Park Rhineland”.

One of the main goals of the H2Pioneer project is

SIMPLIFIES
Dr. Fabian Ziegler, CEO of Shell Deutschland Oil
demonstrating the production of green hydrogen on-site
to be used in semiconductor production, mostly replacing DOWNSTREAM
We will only be able to maintain
the supply of liquefied hydrogen delivered in trailers.
An HGas3SP (2MW) electrolyser system will produce green HYDROGEN
PURIFICATION
hydrogen, which after further purification by Linde will be
mobility in the future if it is made ultra-pure and suitable for semiconductor manufacture.
more sustainable and vehicles on
AND MINIMISES
The use of electrolysis simplifies downstream hydrogen
purification and minimises delivery logistics while helping
the road, on water and in the air to reduce carbon dioxide emissions from the hydrogen
can significantly reduce emissions. supply chain. This is an industry that Linde understands
very well and for which it has numerous existing
DELIVERY LOGISTICS
“
To make this possible, the product
portfolio of the area will and must
change significantly. As a partner
to business, politics and society
in the Rheinische Revier, Shell would
customers worldwide but will be a new industry for ITM
Power technology.
WHILE HELPING
TO REDUCE
CARBON DIOXIDE
like to drive its change. EMISSIONS FROM
THE HYDROGEN
SUPPLY CHAIN

ITM ANNUAL REPORT 2021

S T R AT E G I C R E P O R T

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

RE VENUE S TRE AM S FINANC IAL

FOR THE GROUP PERFORMANC E
As well as having potential revenue streams from three large application
markets, there are a variety of ways in which the Group can generate
revenue globally:

PRODUC T SALES

ITM Power positions itself as a provider of PEM electrolyser systems,

selling to a range of customers and target markets globally. The Group
offers standard containerised and modular large-scale solutions based
around core technology.

C O N S U LT I N G C O N T R A C T S

Many system contracts that are bespoke are preceded by a design

study or a Front-End Engineering Design (FEED) contract that defines
solutions to customer specifications.

MAINTENANCE CONTR AC TS Sales revenues in the year were largely generated from The pre-tax loss for the year under review decreased
product sales and consultancy. This was predominantly to £27.6m (2020: £29.5m). The prior year contained the
ITM Power offers warranties on systems alongside remote support from two major projects, the REFHYNE I electrolyser build significant impairment of our refuelling assets but despite
and maintenance contracts. The Group expects to generate a growing and the design and proof of concept project commissioned the continuing growth of the workforce, costs have also
long-term income stream from these activities as system by BEIS. been kept in check this year through a combination
deployments continue. of reduced expenditure during Covid-19 lockdowns and
Whilst the investment partnership with Linde has started through closure of our previous properties, leading to
to generate new contracts, the revenues and cost of sales a consolidation of related service expenditure that will
FUEL & OTHER SALES from these have not yet materialised, owing to the continue into the new financial year.
accounting treatment under IFRS 15 Revenue from
The Group has been the beneficiary of funding from UK and EU bodies, Contracts with Customers which will keep our standard Net cash burn increased to £32.7m before fund raise
which has helped accelerate infrastructure development for the provision product sales in WIP until handover to the customer, (2020: £23.3m). Cash burn is a non-statutory measure
of hydrogen to fleets and individual users from our Hydrogen Refuelling marking the completion of the performance obligation. the directors use to monitor the Group, and is calculated
Stations (owner-operator model). These sales are retail in nature, Thus, the gross margin is still heavily influenced by legacy by deducting from annual cash flow (£136.2m) the effects
occurring at a point in time. Other income may be received and projects and the challenging EPC scope of the works of any equity fund raise after costs (£168.9m). A key factor
accounted in a similar way e.g. scrap sales. contracted, particularly when hampered further by in this movement is that we have continued to invest in
Covid-19 restrictions. our future, as illustrated by the increase in the investment
activities section of the cashflow statement from £11.1m
G R A N T F U N D I N G F O R I N N O V AT I O N A N D S C A L E U P Fuel sales also suffered through Covid-19 lockdowns, in 2020 to £12.4m in the current financial year. Within this
generating only £0.2m (2020: £0.4m), despite continuing to cash burn figure, there was the completion of our new
The Group utilises funding from grant bodies to contribute towards provide hydrogen road fuel to emergency service workers. building and the fit-out of the factory, from which we have
research and the technical advancement of its electrolyser products been operating since January.
New collaborative project funding recognised in the
through generating greater efficiencies and cost reductions for
year was £0.8m. This has funded research and data
ITM Power systems.
collection projects.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

FINANC IAL KE Y
POSITION FINANC IAL S
A summary of the financial KPIs discussed throughout the annual report is set out in the table below:

2021 2020 2019

£m £m £m

TOTAL PROJECTS INCOME, BEING SALES AND GRANTS 5.04 5.35 17.56
RECEIVABLE (AS SPLIT BELOW)

OF WHICH: SALES REVENUE 4.28 3.29 4.59

OF WHICH: GRANT RECOGNISED IN THE INCOME STATEMENT 2.12 2.47 7.23

OF WHICH: GRANT RECOGNISED ON THE BALANCE SHEET* (1.35) (0.42) 5.74

In the year, the Group capitalised development costs and accrued project income. The effort to reduce the
of £1.5m (2020: £1.6m). This was for design of standard number of prepaid suppliers will continue into the new
products that will facilitate our offering to the markets financial year but has been aided by an improved credit PRE TAX LOSS 27.65 29.52 9.32
and developments to adapt our core technologies for rating and a review of our approved supplier base.
new potential uses. The directors see continued product Prepayments totalled £6.5m (2020: £13.3m), down 51%. ADJUSTED EBITDA (21.4) (18.1) (7.3)
development as key to building commercial traction.
Trade debtors in the prior year predominantly related
PROPERTY, PLANT AND EQUIPMENT PLUS INTANGIBLE ASSETS 16.78 8.66 6.41
There was an increase in fixed assets (excluding right to grant income debtors, whereas in the current year it is
of use assets) to £13.5m from £6.5m in the prior year. purely made up of commercial customers (2021: £5.5m
The uplift relates to the leasehold improvements at our and 2020: £5.3m). At year end, the Group had trade NET ASSETS 197.44 55.75 26.21
new premises and the kitting out of all the new areas, creditors of £1.2m against a prior year balance of £2.5m.
including labs, factory, test bays and offices.
Overall, creditors have decreased from £14.0m (2020)
At year end, ITM Power had current assets totalling to £12.9m. The figure continues to be dominated by
£205.5m (2020: £67.5m). Funds in the bank totalled deferred income (£9.0m in the current year and £9.2m
£177.1m (2020: £41.0m), of which there were amounts in 2020), which for the most part this year reflects money
on guarantee (restricted cash) of £1.0m (2020: £1.1m). received up front on contracts. This is partly due to the *Grant income recognised on the balance sheet includes grant income recognised against the cost of assets acquired and the
The Group has previously been required to place amounts timing of contracts as we embarked on the next wave movement on grant income receivable for assets paid on pro-forma terms but not yet delivered.
on guarantee as cash cover, which limits working capital of commercial contracts but also point in time revenue
available to the Group mid-contract. ITM Power continues recognition now that we have moved on to standard
to structure quotes to obtain sufficient monies up front product sales (see revenue policy note explaining the
to limit the adverse impact of increased activity on treatment under IFRS 15).
working capital.

Total receivables excluding restricted cash amounts

have decreased from £22.1m (2020) to £21.9m.
However, this balance is no longer dominated by pro
forma and early stage payments made to suppliers for
stock items required in the next wave of units through
production. Instead the balance is split fairly evenly
between trade debtors, prepayments, accrued income

ITM ANNUAL REPORT 2021

 S T R AT E G I C
S TRREAPTOERGTI C R E P O R T

NON - FINANC IAL KE Y E VENT S AF TER THE

PERFORMANC E INDIC ATOR S BAL ANC E SHEE T DATE

Post balance sheet, a new subsidiary was created

to house the refuelling assets that had previously
sat within ITM Power (Trading) Limited. ITM Motive
Limited will own and operate the UK refuelling stations
in order to drive their profitability. It is a 100% owned
subsidiary so there will be no material impact on the
consolidated accounts.

FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 OUTLOOK

FUEL DISPENSED (KG) 14,452 30,707 31,984 13,036 1,043 Against a rapidly growing market backdrop ITM Power has
made strong progress in the period, laying the foundations
to deliver turnkey solutions that include the Group’s
FUEL CONTRACTS SIGNED 40 36 33 20 14
manufactured products to markets as a result of partnering
with world-class EPC provider Linde. The near-term outlook
is positive as the record backlog reflects the demand for
larger systems, as well as the strength of partnerships with
No expectations have been set with regards to KPI but prior years provide a baseline. major blue-chip companies.

Fuel dispensed has been affected by the Covid-19 lockdowns in the year with people working from home and not travelling Post year end, the creation of ITM Motive Ltd -still a
to events or meetings. 100%-owned subsidiary- allows the Group to focus on both
its core manufacturing model and the own/operate model
The number of new fuel contracts will become a less important measure of the growth of the market for ITM Power. for refuelling assets. ITM Support is also developing into
This is due to an increase in the number of vehicles on the road but under the umbrella of existing customer contracts and a revenue-generating business unit that will add a further
the uptake of private users rather than businesses. New contracts in the current year were mainly foreign one-off users. offer to customers.

The Board looks forward to reporting progress as contracts

are awarded, and to providing an update at the AGM
in September.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

S TR ATEGY
AND OB JEC TIVES

ITM POWER HA S THE FOLLOWING

N E A R A N D M I D -T E R M O B J E C T I V E S:

NEW TERRITORIES

ITM Power has continued to expand its activities in Europe,

with continued investment in its German Subsidiary and partnerships
with Linde GmbH and SNAM S.p.A. In addition to this, ITM Power PTY
Ltd is well positioned to take advantage of significant potential
opportunities that arise across Australia.

We also continue to monitor the global Hydrogen market and will

be well positioned in order to take advantage of market growth
as these opportunities arise. We assess the requirement for further
investment in new regions and will do so based on strategic business
reviews as required.

P R O D U C T S C A L E U P A N D C O S T O P T I M I S AT I O N

Our R&D activities continue to focus on the scale-up of systems

and our ability to do this at lower costs and long with improved S T R AT E G I E S F O R A C H I E V I N G
efficiencies and the standardisation of our product range. OUR OBJEC TIVES

The Group has a model of locating agents in key territories to position

CASH FLOW ITM Power as a world leading developer and supplier of electrolyser
products. The Group has subsidiaries in Germany, the US (California),
The Board are committed to the Group becoming cash-generative and Australia, with sales representatives also covering France and
in the mid-term. In the short-term, funds received from the strategic Benelux. This is augmented by the growing business development
fund raise will continue to support the ongoing rollout of the experience and resources within ITM Linde Electrolysis GmbH and
business plan. with the wider Linde network.

Product development, and in particular upscaling of product offering,

GROWING PIPELINE AND DELIVERY continues to be achieved through securing and utilising project
O F C O N T R A C T E D O R D E R S A N N U A L LY funding along with funding secure through the strategic fund raise.
Utilising project funding serves the dual purpose of reducing cash
The Group need to grow the contracted pipeline in the near term
outflow and creating strong key partnerships within industry.
as it signals the revenue that the Group will deliver in the forthcoming
periods. As such, pipeline development and then project delivery ITM Power has also been developing a suite of standard products
remain key objectives for the Board. However, care has been taken that can meet many customer requirements, as well as further
over the past year to ensure that projects are not undertaken solely developing the concept of modular systems that can facilitate
for their revenues but with due consideration to their fit with the multi-MW solutions.
other business objectives.
In the medium term, national recovery strategies and announced
commitments to achieve net zero by many countries will enable
ITM Power to fill its factory, and address a demand-led market.
It will also seek to generate recurring revenue from after sale services
and world class remote technical support.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

PRINC IPAL RI SK S
AND UNC ERTAINTIES
TECHNOLOGY AND IP

OUR APPROACH TO RISK DESCRIPTION AND IMPACT Alternative technologies are adopted in preference to the Group’s technology.
The Group could struggle to gain market share or may find itself operating
The Board is responsible for the risk framework and aims to ensure that the Group’s ability
in a smaller market than is currently anticipated.
to achieve its objectives outweighs its risk exposure. However, the Group’s risk management
programme can only provide reasonable, but not absolute, assurance that principal risks are
managed to an acceptable level.
CHANGE YEAR ON YEAR DECREASING

The roadmap to cost parity and outperformance with other forms of hydrogen
is accelerating, with the Group achieving cost reductions in products.
There are a number of risks and uncertainties that have the potential
to impact the execution of the Group’s strategy, as well as its
short-term results. There are a number of measures taken to review
MITIGATION ITM’s technology continues to be considered superior to other technology
and manage risks. currently on the market.
The Executive Directors are responsible for identifying, managing and mitigating the risks Through continual analysis of the competitive landscape and targeted
to the Company. The Executive Directors review the risks facing the Company at executive improvements in technology development ITM seeks to retain that
committee meetings and with senior management across operations as a core part of day competitive advantage.
to day operations of the business.
The Group has placed emphasis on technology acceleration throughout 2021
There is a monthly review process to assess the risk register at corporate level and projects to continue to offer best electrolyser performance and have recruited further
specific risks are reviewed at project level. experienced hires to support the acceleration. Further team expansion is
planned including for product validation.
The Audit Committee undertake several activities:

Reviews the processes and controls for ensuring material

business risks are identified and managed appropriately

Reviews the risk register periodically in detail DESCRIPTION AND IMPACT Loss of intellectual property rights and/or competitive advantage in
technology: working an increasing range of partners together with additional
Undertake deep dives with senior managers directly on key staff mean that there is greater risk of inappropriate information sharing,
risks areas risking the protection of ITM Power trade secrets and proprietary technology.

The Board reviews the risk register and received reports from the Chair of the
CHANGE YEAR ON YEAR INCREASING
Audit Committee.
The profile of the partnerships and geographic locations where the Group
intends to do business is the same as the prior year. The number of employees
The following pages set out a summary of our principal risks based on the findings of our most has increased. The number of customers who whilst under NDA receive
recent board review. The Directors have carried out a robust assessment of these principal risks. information about ITM products is increasing.
However, this summary is not intended to include all risks that could ultimately impact our
business and the risks are presented in no particular order. MITIGATION The Group has an agreed IP management policy. This includes processes
so that contractual confidentiality provisions are usually in place before sharing
Beyond our principal risks, ITM Power faces other operational risks that we manage as part
information with prospective customers, suppliers and partners.
of our daily routines, such as employee health, safety and wellbeing, and commercial risk
commensurate with the profile of the business. Further secure file sharing practices are employed to provide technical
mitigation. The Group has an ongoing training plan for staff to support this aim.
 
The Group has a long-standing Patent and IP management committee who
proactively review risks to IP and advise the Group accordingly.

P R I N C I P A L RI TI SMK SA N
AND
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PR I N C I PA L R I S K S
A N D U N C E R TA I N T I E S

MARKE T S AND T R AC T ION, GROW T H T R A JEC TORY MARKE T S AND T R AC T ION, GROW T H T R A JEC TORY

DESCRIPTION AND IMPACT The growth plans include offering standard products to more territories. DESCRIPTION AND IMPACT As the business increases its capacity and delivery of products, it will
As such, there are risks of compliance, contract risk, H&S and managing have a greater reliance on third parties for installation and maintenance
a global operation from the Sheffield HQ of kit, including a reliance on the expertise of its partners. Poor selection /
management of suppliers & sub-contractors could lead to supply of
CHANGE YEAR ON YEAR STATIC sub-standard products or services. This could also lead to contractual risk,
HSE risk and reputational risk for if those suppliers do not have appropriate
and effective compliance processes in place to manage those.

MITIGATION The Group has worked with Linde to increase resourcing and accelerate CHANGE YEAR ON YEAR STATIC
homologation for products and to reduce compliance risk. ITM Power has
also employed staff who have experience of managing larger operations,
as well as planned an integration project for global systems scalability.

ITM Power has increased its compliance function size and agreed
a prioritised plan for homologation. MITIGATION Having employed new Heads of Quality, HSE and Procurement and enhanced
the procurement team as well as working with Linde, ITM Power has been
able to improve its quality processes for managing existing supply chain and
improve its due diligence and quality management for new suppliers.

DESCRIPTION AND IMPACT The demand for electrolyser products hydrogen exceeds the Group's
ability to match supply, giving other competitors advantage who have larger
supply capacity or who can ramp up faster.

DESCRIPTION AND IMPACT ITM Power relies on third parties to supply raw materials and components
for manufacture of its products. Failure in the supply chain (to meet demand,
CHANGE YEAR ON YEAR INCREASING
quality and compliance requirements) could lead to ITM Power being unable
Global demand continues to grow faster than expected. The Group is still to meet demand and/or quality, HSE or other risks or increased costs.
relatively small including its management team. ITM Power relies on some sole suppliers in certain areas and in-demand
raw materials.

MITIGATION The Group has sufficient working capital for a second gigawatt scale facility. CHANGE YEAR ON YEAR STATIC
The Group continues to develop semi-automation [and plan for increasing Whilst demand is increasing, ITM’s supplier management processes continue
automation for new facilities]. The management team review plans for to develop.
automation and increased capacity proactively. The Group has increased its
senior management team and continues to look at organisational development
to plan for continued growth.
MITIGATION ITM Power is developing a strategy for long-term management of rare raw
materials. This includes a product development map with reduction of rare
materials showing maintaining product performance in test. Supply chain
management is improving through new Heads of Quality, HSE and Procurement
and enhanced the procurement and improved its quality processes for
sourcing and managing existing and new suppliers. This includes increasing
and developing additional suppliers and/or bringing production of core parts
in-house.

P R I N C I PA L R I S K S A N D U N C E R TA I N T I E S P R I N C I P A L RI TI SMK SA N
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L E G A L A N D S TAT U T O R Y L E G A L A N D S TAT U T O R Y

DESCRIPTION AND IMPACT With the rapidly maturing market, the Group is being required to commit DESCRIPTION AND IMPACT ITM Power undertake the supply of product to complex commercial projects.
to levels of performance and quality for its products now whilst they are still Such projects include risks of delay and cost overruns.
in the prototyping phase. The risk is that the technology may not meet
contract expectations when beyond prototyping phase and leave the Group CHANGE YEAR ON YEAR DECREASING
with remedial work to correct products.
ITM Power delivers larger projects with its associate, ILE, and no longer
CHANGE YEAR ON YEAR INCREASING undertakes EPC work. Projects are increasing in scale and commercial
requirements are increasing but the ITM component will remain standard.
The need to provide a mature offer to large scale solutions has accelerated
in the last year as the market seeks to deploy X(X)L opportunities which would MITIGATION ITM Power’s joint venture with Linde means EPC work is delivered
be appropriate for the ITM Power GEP platform. The ITM Power GEP platform by a world-class EPC contractor. ITM Power has increased its project
is now being bid into sales tenders, whilst at the same time is expected to be management function scale, processes and capacity. Regular reporting
a complete product in 2022. identifies challenges early.

MITIGATION The Group has implemented a more robust contractual approval process,
including with Linde for joint venture contracts. It continues to develop
and improve its product testing regime at its facilities and develop Reliability,
Accessibility and Maintainability analysis to mitigate the likelihood of
this occurring.

DESCRIPTION AND IMPACT With more product in the field, as well as more and larger product
being handled by the Group, there is the risk of either product liability claims
or a Health and Safety (HSE) incident occurring, which could result in disruption
to operations, financial loss, regulatory intervention, or damage
to our reputation.

CHANGE YEAR ON YEAR STATIC

The increase in product, creating a perceived greater risk, has been offset
through investment in the HSE team at ITM Power, as well as increasing the
size of the compliance team to address the need to deploy in many markets.

MITIGATION The Group has appointed a new Head of HSE. It continues to periodically
review its HSE management system in place and has also implemented
a series of training events for all staff both as part of a drive for
a safer culture, but also as part of the Group's core values and academy
initiatives. Product validation team expansion is under development.
Further development of standardised robust product testing is underway
as products become standardised.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T
PR I N C I PA L R I S K S
A N D U N C E R TA I N T I E S

I T - C Y B E R AT TA C K S PEOPLE

DESCRIPTION AND IMPACT We rely on a diverse IT landscape, using both internal and external systems, DESCRIPTION AND IMPACT Key Man Risk: The Group has an executive team (and experience senior
including some systems that are outside our direct control with a diversified leadership team) with many years’ experience in the business. The impact
employee location base during Covid. These systems are potentially vulnerable of a departure of any member of staff could disrupt the operational activities
to cyber threats. of the business, as well as destabilising the share price.

As a result, we could experience disruption to operations, financial loss, CHANGE YEAR ON YEAR STATIC
regulatory intervention, or damage to our reputation.

CHANGE YEAR ON YEAR INCREASING MITIGATION The Board has a fully established succession plan as part of the ongoing board
evaluation, which is reviewed annually.
The size of the workforce, the introduction of hybrid working and the
increasing number of products, coupled with increasingly sophisticated
options for attackers, mean that this risk has increased in the period.

MITIGATION The Group has in place good practice normal processes and systems to manage
cyber risk. This includes proactive monitoring of risks, updating processes,
firewall protection, multi-factor authentication, penetration testing and
back-up systems. ITM Power launched a Cyber Academy for all employees
to increase awareness of the risks to the Group. We routinely test the systems
for penetration and weakness and review products on the market to ensure
the overall system protection in place remains appropriate and proportionate.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

CORPOR ATE SOC IAL

RESPON SIBILIT Y
DISABILITIES EMPLOYEE WELL BEING

ITM Power are committed to promoting equal opportunity ITM Power employees have access to an Employee
for all staff and job applicants. We aim to create a working Assistance Programme (EAP) run by Health Assured.
environment in which all individuals are able to make best The Employee Assistance Programme is a wide range
use of their skills, free from discrimination or harassment, of services that employees can access without cost
and in which all decisions are based on merit. The measures but with total confidentiality.
we take to implement the principles of non-discrimination
are supported by best-practice employment and legislative Health Assured offers:
driven guidance. Unlimited access to a helpline
We positively encourage applications from suitably Face to face or telephone-based counselling
qualified and eligible candidates regardless of disability,
and we aim to ensure no job applicant receives less Legal information
favourable treatment. Individuals are treated on the basis
of their relevant merits, abilities and capabilities for Bereavement support
the role in question. Medical information
B E S S E M E R PA R K In the event an existing employee is or becomes disabled CBT online
whilst employed by ITM Power, all efforts would be made
by the Group to support the employee and their continued
1202 TROPER LAUNNA MTI service. We would consult with relevant qualified medical KEY EMPLOYMENT POLICIES
advisers, occupational health professionals and where
ITM Power’s products are being continually developed Our commitment to source our products and services
possible make necessary reasonable adjustments. We have consistently sought to recruit and retain the
to meet and maintain our own and our customers locally where possible has seen ITM Power develop
best employees in our sector, and this has contributed
high standards; in providing the global marketplace a supplier control program that assists and develops our Non-discrimination and equality of opportunity applies to the advancement and successes of the products
with a sustainable alternative energy solution, supply chain with Health, Safety and Environmental goals equally to the treatment of former employees, visitors, we manufacture. We have high levels of employee
creating a reduction in the global carbon footprint and and objectives. clients, customers and suppliers by members of our current retention and work hard to ensure this remains the case,
a reductionin global greenhouse gas emissions. workforce. We do not tolerate any discriminatory practice.
Our global commitment to supply chain promotes and ensuring employees have access to regular feedback and
The continued growth period and more detailed customer develops ITM Power’s ethics towards Health, Safety and support from their line manager. Aside from statutory
demands has seen the management systems grow and Environmental factors within the global supply chain. employee benefits, we are constantly reviewing salaries
E M P L O Y E E C O N S U LTAT I O N
become structurally sounder this year; we recertified our to ensure we remain competitive in the marketplace
accreditation to ISO 14001 2015 and 18001 2007 with Last year we established a program for full recycling of to attract and retain the valued skills we have within the
ITM Power are committed to providing information and
our current accreditation body and continue with the UKAS all waste materials where possible, controlled with AATF’s business. Supplementary benefits include: a share save
clear guidance on all matters affecting employees in their
accreditation program targeted for Q3 2021, to incorporate and environmentally aware recycling partners. We will scheme, a cycle to work scheme, child care vouchers and
work. Employees are updated frequently regarding any
all operations within the Group. be working with a charity partner from our local area an employee discounts platform.
factors affecting the performance of the Group. The Group
to support the furnishing of Bessemer Park. The Group
places considerable value on involvement of its employees All employees are given appropriate access to training
The management systems are being reviewed throughout also set up a charity committee to match funds raised
and actively encourages participation through working to enable them to fully and safely perform their roles,
the business to ensure that ITM are ready for the business by employees for charitable causes.
groups, committees and an open-door policy on raising and to progress within the organisation. ITM Academy
expansion in the new facility as part of the accreditation
concerns or providing feedback to senior managers. launches in 2021 which will bring all aspects of learning
process, identifying both systems and people development
opportunities as we develop lean processes to exceed ITM Power has no formal requirement to consult and development within the ITM Group under a central
customer expectations. with its workforce (other than specific scenarios driven strategy to promote individual and business growth.
by legislation). When required, employee representatives All employment policies are accessed via our employee
would be utilised to consult on a wide range of matters handbook, and these are consistently reviewed to ensure
affecting current and future employee interests. not just compliance and relevance but also employee
Informal meetings, Group-wide emails, a SharePoint engagement and the overall employee value proposition.
IT system, an internal newsletter and suggestions through
our Yammer communications channel all drive different
forms of engagement.

C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

S172
S TATEMENT E M P L O Y E E S (C O N T I N U E D) THE WIDER COMMUNIT Y

Appropriate remuneration and incentive schemes The Board recognises that the Group has a duty to be
The Directors are required by the Companies Act 2006 to act in the including bonuses and Long Term Incentives are a good corporate citizen and is conscious that its business
way they consider, in good faith, would be most likely to promote maintained to align employees’ objectives with those processes minimise harm to the environment, and that
success of the Group for the benefit of its shareholders as a whole of the Group. The Group has increased its employee it contributes as far as is practicable to the local
and in doing so are required to have regard for the following: engagement through a new intranet, it has an employee communities in which it operates. As such, it established
newsletter, employee engagement initiatives, through ITM an ESG committee this year and published its first ESG
Nurture, a social engagement programme including report so that it can continue to hold itself to the highest
The likely long-term consequences of any decision; a significantly active charity committee raising money standards for the purposes of ESG.
The interests of the Group’s employees; for employee-nominated charities including Sheffield
Children’s hospital, and a social committee to ensure The Board recognizes the importance of maintaining
The need to foster the Group’s business relationships with employees feel they are contributing to the progress high standards of business conduct. The Group operates
suppliers, customers and others; of the Group. ITM Academy has been launched to create appropriate policies on business ethics and provides
a centre for learning and development. mechanisms for whistle blowing and complaints, which
The impact of the Group’s operations on the community are reviewed annually by the audit committee as part
and the environment; of a rolling programme.
SUPPLIERS
The desirability of the Group maintaining a reputation
for high standards of business conduct; and the need to act SHAREHOLDERS
The Board ensures that the Group works hard to maintain
fairly as between shareholders of the Group.
good relationships with its suppliers. This is achieved
by contracting on reasonable business terms and making The Company values the views of shareholders and
payments on time. We consider suppliers to be partners recognises their interests in the Group’s strategy
The Corporate Governance Report sets out how the Group approaches and performance. The Board endeavours to maintain
whereby the right relationship can create growth for both
corporate governance as a whole. The Group applies the ten principles good relationships with its shareholders and treat them
companies. We meet with our significant suppliers
of the QCA Code in support of its growth and this is set out on the equally. It maintains a number of ways in which
regularly and where required audit their activities
Group’s website, and in the Corporate Governance Report on page 32 shareholders can get in touch with the Company,
to ensure that components for our products are delivered
of this report. seeks to send out newsletters monthly to all stakeholders
to the quality standards we require and in timely and
The Group’s activities, strategy and future prospects are discussed cost-efficient manner. We also have supplier development including shareholders, and the Chief Executive ensures
in the Strategic Report, beginning on page 8. The Directors are fully programs to improve the standards and relationship set a consistent dialogue with shareholders through
committed to effective engagement with all key stakeholders. including through applying ITM’s Supplier Code of presentations and webinars.
Conduct. We aim to offer fair contracts with longer term In 2020, ITM Power strengthened its investor relations
visibility to provide stability to their business in return for management through the appointment of its first Head
S TA K E H O L D E R S competitive pricing. These principles ensure that the of Investor Relations. Shareholder communication
Group’s and our significant suppliers’ interests are aligned. is coordinated by its Head of Investor Relations together
The Board considers its major stakeholders to be its employees,
its suppliers, customers, partners, and shareholders. When making with Investec (NOMAD) and Corporate Communications
decisions, the interests of these stakeholders is considered both Consultants, Tavistock Communications Limited.
C U S T O M ER S A N D PA R T N ER S
formally and informally as part of the Board’s group discussions, ITM Power is committed to maintaining a good dialogue
depending on the likely impact of these decisions. The Executive Directors meet major existing and with shareholders through proactively organising meetings
prospective customers and encourage a dialogue with and presentations with fund managers, retail brokers
them and with the territory business development team and analysts, as well as responding to a wide range
EMPLOYEES as appropriate. This year, this has been primarily online of enquiries.
but engagement has continued in breadth and depth.
The Board has a good relationship with the Group’s employees. In 2020, Covid-19 prevented the Company from presenting
The Board maintains constructive dialogue with employees through The Executive Directors maintain a close dialogue with its results to shareholders in person. The Company held
the Executive Directors, and through various visits to meet senior all partners to the business, such as Linde, Snam, Shell, its Annual General Meeting and two Extraordinary General
management throughout the year. In support of the organisational Ørsted, and others and ensure that expectation in ongoing Meetings virtually. It utilised a specialist shareholder
development of the organisation a Head of HR was appointed and prospective projects are being met. platform to maximise attendance at the events.
in the year ended 30 April 2020 who has grown the HR team to 6 The AGM and the EGM were well attended with nearly
at the date of this report. 400 meeting attendees.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

S TR ATEGIC The Board understands the importance of its role in embedding

the right culture in the Group. This was reflected during the year
DEC I SION - MAKING through the steps taken by the Board to agree a new Code of Ethics
and anti-fraud and bribery framework. This is to maintain the
The principal decision taken in the year was the decision to raise ethical values at the foundations of the Group through the Group’s
working capital through a firm placing and open offer including rapid growth.
investment in the Company by Snam, to deliver a new business plan
to accelerate the Group's products and operations. The table below
illustrates how the Board considered different appropriate EMPLOYEES
stakeholders in recommending the investment.
The Board wanted to provide a clear framework, a communication
and engagement plan, training and support to help ITM staff do the
EMPLOYEES right thing. This includes a clear Speaking Up Policy, a training plan
for the Code of Ethics and a department-led approach to identifying
The Board considered the impact on employees of the investment and setting KPIs to manage anti-fraud and bribery risk. Ethical values
and the acceleration plan, and the possibility of growth within the and culture need to be led by the Board and all members of the Board
Group. This has been borne out since with the creation of over enthusiastically support the new Code of Ethics.
80 new roles within the Group.
The new framework includes Compliance Champions, volunteer
The Board considered the placing and open offer, including the Snam employees across the business to ensure that the ethical values
investment to put the Group on a stronger, longer term footing are led by ITM team members as well as ITM leaders.
to give employees greater assurance for the future of the Group.
The executive team gave a presentation virtually to the workforce
shortly after the announcement and encouraged engagement C U S T O M ER S A N D PA R T N ER S
to understand the impact of the investment.
Establishing a Code of Ethics that is available on the ITM website for
all ITM stakeholders helps give confidence to customers and partners
C U S T O M ER S A N D PA R T N ER S that ITM Power can be trusted to deliver and that our values are built
on transparent, fair, honest and sustainable working practices.
In recommending the investment, the Board considered that the ITM Power wants to give confidence that we don’t just follow the
business would be stronger and quicker to the market with new rules but hold ourselves to high standards in everything we do.
products, allowing greater assurance for new and existing customers
and partners. This included working capital to semi-automate the
facility, meeting increasing demand. SUPPLIER S

Paying suppliers on time and working with suppliers on fair terms

SHAREHOLDERS gives suppliers confidence to work with us. The Code of Ethics
demonstrates to suppliers that ITM Power holds itself to high
The Board considered the impact of the investment on other standards when working with suppliers at the same time as
shareholders, and aimed to ensure a fair price was reached so demanding high ethical standards from our suppliers through our
that the recommendation to shareholders was positive. The Board Supplier Code of Conduct.
ensured that major non-institutional shareholders were consulted
through the roadshow and that all existing investors could participate
through an open offer. SHAREHOLDERS

A part of the agreement with Snam was the preferred supplier status The Board considers that a robust framework is essential as the
for 100MW of PEM electrolysis deals in Italy. This enabled the Board Group grows. The Code of Ethics is intended to give shareholders
to demonstrate that the deal was not only financial but also create confidence that good controls are in place. This is because we believe
value operationally, both in terms of creating demand for the new that a culture of doing the right thing is essential for a positive culture
gigafactory, Bessemer Park, and future revenue growth. for productivity and employee retention, driving shareholder value
as well as minimising the risk of compliance issues that may adversely
After the formal business of the EGM, the Chief Executive presented affect shareholder value.
via webinar and answered questions raised online by shareholders
during the event.

ITM ANNUAL REPORT 2021

 S T R AT E G I C R E P O R T

GOING
CONC ERN

The directors have prepared a cash flow forecast for the

period ending 30 September 2022. This forecast indicates
that the Group and parent company would expect to
remain cash positive without the requirement for further
fund raising based on delivering the existing pipeline,
for a period of at least 12 months from the date of
approval of these financial statements.

By the end of the period analysed, the Group will still hold
a large proportion of the monies from the fund raise in the
THE GROUP AND
year. This should give the business sufficient funds to trade
for the next three years if the business continued to PARENT COMPANY
operate in a similar way beyond the forecast period.

With the uncertainty created for the economy by Covid-19,

WOULD EXPECT TO
this cash flow forecast has also been stress tested.
As a worst-case scenario, if all payments had to continue
REMAIN CASH
as forecast while receipts were not received at all,
the business would remain cash positive for the full
POSITIVE WITHOUT
twelve months from the date of approval of these
financial statements.
THE REQUIREMENT
The accounts have therefore been prepared on a going
concern basis.
FOR FURTHER
Approved by the Board and signed on its behalf by:
FUNDRAISING [...]
FOR A PERIOD OF
ANDY ALLEN
Director
AT LEAST
Date: 10 September 2021 12 MONTHS
ITM ANNUAL REPORT 2021
 DIREC TOR ’S
REPORT
The directors present their annual report and audited
financial statements on the affairs of ITM Power
(the “Company”) and its subsidiaries (the “Group”),
together with the financial statements and auditor’s
report, for the year ended 30 April 2021.

The directors believe that the financial statements

are fair, balanced and understandable.

The following disclosures have been made in the

Strategic Report and are cross-referenced here:
business review including KPIs, Principal risks and
uncertainties, and future prospects.

SIR ROGER BONE AND DR GRAHAM COOLEY

ITM ANNUAL REPORT 2021

 DIREC TOR'S REPORT

BR ANC HES OUT SIDE

THE UK

BRANCHES OUTSIDE THE UK C H A R I TA B L E A N D P O L I T I C A L C O N T R I B U T I O N S

The Group has subsidiary companies, in Germany, the United States and Australia. During the year, the Group made charitable donations of £6,693
(2020: £371). The Group made no political donations in either year.

C A P I TA L S T R U C T U R E
S U P P L I E R P AY M E N T P O L I C Y
Details of the Group’s capital structure are provided in notes 23 and 31 to the financial statements.
The Group’s policy is to settle terms of payment with suppliers when
agreeing each transaction, ensuring that suppliers are made aware
S U B S TA N T I A L S H A R E H O L D I N G S of the Group’s terms of payment and abide by those terms.
At 30 April 2021, the trade creditors balance equated to -27 days
On 30 April 2021 the Company had been notified, in accordance with chapter 5 of the Disclosure and Transparency Rules, (2020: -217 days), based on daily total costs excluding payroll,
of the following voting rights as a shareholder of the Company: and including the pro forma payments made to suppliers up front.
We have been working to reduce the number of pro forma invoices
received from suppliers this year. Wherever possible we have been
asking for staged payment or actual invoices rather than pro formas,
NAME OF P E R C E N TA G E O F NO OF ORDINARY making use of an improved credit rating to request new credit
accounts and narrowing down the supplier base in order to try
HOLDER VOTING RIGHTS SHARES to build better relationships.
AND ISSUED
S H A R E D C A P I TA L FINANCIAL RISK MANAGEMENT
OBJEC TIVES AND POLICIES

LINDE PLC 17.25% 95,000,000 The Group’s finance function monitors and manages the financial
risks relating to the operations of the Group. The Group’s activities
JCB RESEARCH 9.6% 52,865,764 expose it primarily to the financial risks of changes in foreign
exchange rates.
MR. PETER 5.2% 28,621,793
The Group also receives and spends money in different currencies.
K HARGREAVES
Significantly, contracts are often in the currency of the customer.
As such, the Group has exposure to foreign exchange variation.
This is naturally hedged where possible by paying for supplies
in the currencies in which they are invoiced, but this does not
eliminate exposure. Management will look to use forward contracts
DIVIDENDS as a means of mitigating exposure to exchange rate volatility
on long-term contracts.
The directors do not recommend a dividend payment for the year (2020: £nil). The losses for the year are transferred
to reserves. The Group seeks to minimise the effects of these risks and others
discussed in note 29. The Group’s policies approved by the board
of directors provide written principles on interest rate risk and the
RESEARCH AND DEVELOPMENT investment of excess liquidity. Compliance with policies and exposure
limits is reviewed on a continuous basis.
During the year the Group incurred research and development related costs of £3.48m (2020: £2.30m). A description
The treasury activities are reported quarterly to the Group’s Board.
of the activities undertaken can be found under the heading of “Products and Technology” within the Strategic Report.

ITM ANNUAL REPORT 2021

 DIREC TOR'S REPORT

FUTURE DEVELOPMENTS AND POST BAL ANCE D I R E C T O R S ’ R E S P O N S I B I L I T I E S S TAT E M E N T

SHEET EVENTS
The directors are responsible for preparing the Strategic Report and Directors’ Report, and the
Moving into the new financial year, a new subsidiary was created to
financial statements in accordance with applicable law and regulations. Company law requires the
house the refuelling assets that had previously sat within ITM Power
directors to prepare financial statements for each financial year. Under that law the directors have
(Trading) Limited. ITM Motive Limited will own and operate the UK
to prepare the financial statements in accordance with international accounting standards in
refuelling stations in order to drive their profitability. It is a 100%
conformity with the requirements of the Companies Act 2006, and have elected to prepare parent
owned subsidiary so there will be no material impact on the
company financial statements in accordance with United Kingdom Generally Accepted Accounting
consolidated accounts.
Practice (United Kingdom Accounting Standards and applicable law), including FRS
101 ‘Reduced Disclosure Framework’.
AUDITOR Under company law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company
Grant Thornton UK LLP have expressed their willingness to continue
and Group for that period. In preparing these financial statements, the directors are required to:
in office as auditor. In accordance with Section 489 (4) of the
Companies Act 2006, a resolution to reappoint Grant Thornton UK
LLP will be proposed at the Annual General Meeting. Select suitable accounting policies and then apply them consistently;

Make judgements and accounting estimates that are reasonable and prudent;
DIREC TORS
State whether applicable international accounting standards in conformity
The following Directors served throughout the year and subsequently, with the requirements of the Companies Act 2006 have been followed, subject
unless stated otherwise: to any material departures disclosed and explained in the financial statements;

Prepare the financial statements on the going concern basis unless it is

Sir R Bone Dr G Cooley inappropriate to presume that the Group will continue in business.
Dr S Bourne Dr R Smith

Mr A Allen Mr R Pendlebury (resigned 31 July 2020) The directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group's transactions and disclose with reasonable accuracy at any time
Mr M Green Mrs K Roe (appointed 6 May 2020) the financial position of the Group and enable them to ensure that the financial statements
Mr J Nowicki Mr T Rae (appointed 3 December 2020) comply with the Companies Act 2006. They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
DIREC TORS’ INDEMNITIES The directors confirm that:

The Group has made qualifying third-party indemnity provisions for

the benefit of its directors, which were made during a preceding year So far as each director is aware, there is no relevant audit information of which
and remain in force at the date of this report. the Group’s auditor is unaware; and

The directors have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information
and to establish that the Group's auditor is aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and
financial information included on the Group's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.

Approved by the Board and signed on its behalf by:

ANDY ALLEN
Director
10 September 2021 

ITM ANNUAL REPORT 2021

 C O R P O R AT E G O V E R N A N C E R E P O R T

CORPOR ATE
GOVERNANC E
REPORT

ITM ANNUAL REPORT 2021

 CORPOR ATE
C O R P O R AT E G O V E R N A N C E R E P O R T

GOVERNANC E REPORT BOARD

COMPOSITION:
DEAR SHAREHOLDER,
E XPERIENCE, SKIL L S AND
At ITM Power, we are proud of putting values and ethics Those ethical principles are: C APABIL I T IE S OF T HE BOARD
at the heart of what we do. Our mission is to help the
world reach net zero through the power of green Always safety first
hydrogen. This underpins the Group as a sustainable,
Always act in accordance with laws and regulations Maintaining the right composition of the Board is essential. The Board was strengthened in the
dynamic business, continuing to deliver shareholder
year ended 30 April 2021, with the addition of Katherine Roe, CEO of Wentworth Resources plc,
and stakeholder value in the long term. Always act with integrity to deliver excellence who brings significant expertise and Tom Rae, who brings 25 years’ global supply chain
ITM Power is committed to excellent corporate governance management experience supporting ITM Power’s continuing growth into a Group that needs
Always committed to work well together
and aims to be best in class in the AIM Top 50. to be ready to deliver in increasing global markets.
Good governance is vital for our organisation as we scale Always respectful
The Board is satisfied that the members of the Board possess the right balance of skills,
up to meet increasing global demand for green hydrogen.
experience, personal qualities and capabilities to support delivery of the Group’s strategy and
This year, we launched our first ESG strategy and report,
Good governance also means looking after our employees. as required by the QCA Code. However, given the ambitions of the Group, rapidity of growth
“Sustainable Energy, Engineered Sustainably”.
I’m proud of how the Group has been able to support and scale of the market demand, the composition of the Board remains under active review.
This represents a major step-change in our ambitions
its staff through the difficulties of Covid-19 and lockdowns.
as a business. We wish to ensure that long-term growth The Group has a separate Chairman and Chief Executive Officer, each having his own separate
We have made sure staff received full pay, were able to
sustains rather than harms people and the environment, responsibilities. The Chairman is responsible for the effective working of the Board
work at home where possible, were able to have flexibility
as well as delivering best value for shareholders. As we set and the Chief Executive Officer is responsible for all operational matters and the financial
to deal with childcare and home schooling and have had
out in that report, our aim is to invest in governance performance of the Group. The Board is balanced, both numerically and in experience,
fully paid time off for Covid-related quarantine, symptoms,
processes that ensure that we achieve those objectives. with the intention that no individual or small group of individuals should be able to dominate
testing and illness. We also understand the impact that this
last year has had on mental health for many. To support decision-making. The Board has not appointed a Senior Independent Director. However, any
Our ESG Strategy sets out key focus areas our staff we have provide access to an Employee Assistance of the Non-Executive Directors are available on request as a conduit of communication to the
for ITM Power in terms of governance: Programme and created wellbeing champions. We have Board in the event that the Chairman and/or the Chief Executive Officer are not appropriate
this includes: launched ITM Academy to provide a centre of learning and conduits for shareholder concerns and issues.
development from a formal induction programme, health An induction programme is undertaken for new directors to on-board directors and provide
Ensuring employee and customer health and safety training, apprenticeships to technical skill
and safety them with full information on the Group's operations and performance. All members
development and leadership and management skills. of the Board are given access and support for continuing development to ensure their effective
Driving a culture of ethical behaviour through 2021 has seen the launch of ITM Nurture, to capture the stewardship of the Group.
ITM’s new Code of Ethics and the roll-out social engagement and charitable activities of the Group.
of a new, global, comprehensive internal Led by an employee committee, this has brought together
programme on anti-fraud and bribery ITM team members to raise money for local charities,
Ensuring our supply chain meets our Supplier including the Sheffield Children’s Hospital. I look forward
Code of Conduct requirements including to sharing more of the activities of ITM Nurture over the
on human rights and avoiding exploitative coming months and years.
work practices Finally, the Board continues to consider the most
Data security, risk management, tax appropriate code for ITM Power based on its development,
and compliance sector and size remains The Quoted Companies Alliance
Corporate Governance Code 2018 (the “QCA Code”).
The QCA Code provides a flexible, principle-based model
Instilling the right culture creates the right work-place
that will allow the execution of the Group’s corporate
environment for our staff, and a business that delivers.
governance principles to evolve with the business as
The Board has established a Group-wide Code of Ethics
it grows rapidly to meet the demands of our customers.
as a key part of making sure that the ethical values that
are integral to the Group are maintained through as we
grow and expand. The Board is committed to ensuring that
our ethical principles are understood and lived by every SIR ROGER BONE
leader and every employee. Chairman

ITM ANNUAL REPORT 2021

DIREC TOR
C O R P O R AT E G O V E R N A N C E R E P O R T

BIOGR APHIES

SIR ROGER BONE MARTIN GREEN

Non-Executive Director Non-Executive Director

Sir Roger was President of Boeing UK from 2005 Martin Green had a 30 year plus career with Johnson
to 2014. He is the Chairman of Over-C Ltd, a small high Matthey plc until March 2019, most recently as Group TOM RAE
tech company in the telecoms sector, and was senior Strategy Director. In this role he was responsible for Non-Executive Director
independent director of Foreign and Colonial a portfolio of growth businesses, strategy development
Investment Trust plc until May 2021. As well and implementation, including M&A. As Director of Tom was Group Director of Purchasing & Supply
as chairing ITM Power, Sir Roger also chairs ITM Battery Technologies Martin made £120m of acquisitions Chain and a member of the Group Executive
Motive Ltd, a wholly owned subsidiary company. and took the division from a standing start to an annual Committee at JCB until late 2019 when he set up his
He was a non-executive director and trustee of the turnover of £150m in four years. own consultancy practice. He began his career with
National Centre for Universities and Business (NCUB) Uniroyal Ltd, advancing to Manufacturing Manager
A chemistry graduate, Martin has particular expertise
from 2013 to 2019, and was one of the Prime in 1989. In 1992, Tom moved to Germany to join
and experience in battery, fuel cell and hydrogen
Minister’s honorary Ambassadors for British business Continental AG and was active in manufacturing JV
technologies as well as strategic corporate development.
from 2009 to 2015. projects in Russia, Brazil and India before moving
to the UK in 1997 to lead Conti’s UK manufacturing
He was British Ambassador to Brazil from 1999 to and sales operations.
2004 and to Sweden from 1995 to 1999, and prior
to that an Assistant Under-Secretary of State in the In 2002, Tom returned to Germany as SVP of
Foreign and Commonwealth Office. He was a Trustee JUERGEN NOWICKI Procurement, Continental AG until 2007 when
of the Royal United Services Institute, the London Non-Executive Director he joined Japan’s NSG Group as CPO; as a member
based think tank, from 2013 to 2020 and is an of the Executive Committee Tom split his time
honorary fellow of the Institution of Engineering Juergen is Executive Vice President of Linde plc and between the UK and Japan. He holds a BSc in
Designers. He was educated at Oxford University CEO of Linde Engineering. Prior to this, he was Senior chemistry and an MBA.
and holds an honorary doctorate in engineering Vice President, Commercial, of Linde Engineering.
from Sheffield University. He joined Linde in 1991 as Internal Auditor and
subsequently held different positions in Finance
& Controlling. In 2002, he was appointed CFO of

DR GRAHAM COOLEY
Linde Gas North America, USA, and was named Head KATHERINE ROE
of Finance & Control for The Linde Group in 2006. Non-Executive Director
Chief Executive Officer (CEO) He assumed his role as Managing Director of Linde
Engineering in 2011 and was appointed Speaker
Katherine is CEO of Wentworth Resources plc, an AIM
Dr Graham Cooley joined ITM Power as CEO in 2009. of the Board of Linde Engineering in 2015.
listed leading Tanzanian-focused natural domestic gas
ITM Power was the first hydrogen related company to
Juergen holds a master’s degree in Industrial producer. She is currently a non-executive director
be listed on the London Stock Market, and has been
Engineering from the Technical University and Audit Committee Chair of Longboat Energy plc.
developing electrolyser equipment for over 20 years.
of Karlsruhe, Germany. Katherine joined Wentworth in 2014 and was
Graham started his career in the power sector in 1989, responsible for corporate development and investor
joining the CEGB and becoming Business Development relations before becoming CFO in 2018 and CEO
Manager at National Power plc and then International in 2019. Before joining Wentworth, Katherine had
Power plc, developing energy storage and new a 14-year plus career in investment banking and
generation technologies. corporate finance, initially with Morgan Stanley
and subsequently with Panmure Gordon where
Before joining ITM Power Graham was CEO of she was a Director within Investment Banking and
Sensortec Ltd, founding CEO of Metalysis Ltd, headed up the energy team from 2010 to 2014.
a spin out of Cambridge University and founding
CEO of Antenova Ltd.

Graham has a PhD in physics, an MBA and is a Fellow

of the Institute of Metals, Minerals and Mining
(FIMMM). Graham also sits on a number of industry
bodies, and is a member of the UK Government’s
Hydrogen Advisory Council. DR GRAHAM COOLEY

ITM ANNUAL REPORT 2021

 C O R P O R AT E G O V E R N A N C E R E P O R T

DIRECTOR
BIOGRAPHIES

THE BOARD IS
DR SIMON BOURNE, DR R ACHEL SMITH AND MR ANDY ALLEN
SATISFIED THAT
THE MEMBERS
OF THE BOARD
DR SIMON BOURNE
Chief Technology Officer (CTO)
DR RACHEL SMITH
Executive Director
MR ANDY ALLEN
Finance Director (CFO)
POSSESS THE RIGHT
Dr Simon Bourne joined ITM Power in 2002 and has Dr Rachel Smith joined ITM Power at its incorporation
BALANCE OF SKILLS,
been one of the leading technologists involved in the
development of the Group's core technology.
in 2002. Starting as a research scientist Rachel has
a solid background in ITM materials and their use
Mr Andy Allen qualified as a chartered accountant
in Sheffield in 2007, and has an extensive background EXPERIENCE,
As Chief Technology Officer, Simon is responsible for
Research & Development, Product Development, Sales
in electrochemical cells.
in auditing manufacturing companies in South
Yorkshire. Andy joined ITM Power in 2011 as Financial PERSONAL QUALITIES
AND CAPABILITIES
She has worked on and managed various externally Controller before becoming CFO in 2015.
and After Sales functions. Having been instrumental
in the design and realisation of the Group's electrolyser funded projects and now acts as director responsible

TO SUPPORT
platform, Simon was responsible for the realisation for Project Management, Grant Funding, HR and HSE.
of two flagship projects; the world’s first PEM Rachel also manages ITM’s patent and trademark
portfolio and leads its IP Committee. Rachel is the
Power-to-Gas system deployed in Frankfurt in 2013
and Europe’s largest (10MW) PEM electrolyser Board’s champion for health and safety. DELIVERY OF THE
GROUP’S STRATEGY
deployed at Shell’s Energy and Chemicals Park Rachel has a BSc Hons in Environmental Science
Rheinland in Wesseling, Germany. (Leicester), MSc in Energy Conservation (Cranfield)
Before joining ITM Power, Simon was Project Engineer
with Sonatest Plc and a Researcher with the Ministry
and an EngD (Cranfield).
AND AS REQUIRED
of Defence. Simon has a BSc Hons in Materials Science
(UMIST) and a PhD (Cranfield). BY THE QCA CODE
ITM ANNUAL REPORT 2021
 C O R P O R AT E G O V E R N A N C E R E P O R T

THE
BOARD

The Board membership and committee membership is as follows:

MEMBER

TECHNOLOGY MANAGEMENT
& GOVERNANCE COMMITTEE
REMUNERATON COMMITTEE

NOMINATIONS COMMITTEE

DISCLOSURES COMMITTEE

EXECUTIVE COMMITTEE
ENVIRONMENT, SOCIAL

STRATEGIC ADVISORY
AUDIT COMMITTEE

COMMITTEE

COMMITTEE
BOARD
DIRECTOR ROLE
INDEPENDENC E
Dr S Bourne Chief Technology Officer
The Board considers all the Non-Executive Directors to be independent in character
Dr G Cooley Chief Executive Officer
and judgement. The Non-Executive Directors have provided excellent independent advice
and challenge throughout the year. In concluding that all its Non-Executive Directors are
Dr R Smith Executive Director independent the Group considered, inter-alia, the fact that all of the Non-Executive Directors
are directors of other corporations and are not reliant on any shares or share options they
Mr A Allen Executive Director hold in, or income they receive from, ITM Power.

Sir R Bone Non-Executive Director

Mr T Rae Non-Executive Director

Mr J Nowicki Non-Executive Director

Mr M Green Non-Executive Director

Mrs K Roe Non-Executive Director

In addition, the Technology Management Committee has a representative from Snam, Marco Chiesa and the Strategic
Advisory Committee has a representative from Snam, Cosma Panzacchi.

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GOOD GOVERNANC E: NON - FINANC IAL

INTERNAL CONTROL AND CONTROL S
RI SK MANAGEMENT

The Board is responsible for reviewing and approving overall Group strategy, the corporate The Board recognises that maintaining sound controls
objectives, the financial strategy, the annual budget, capital fundraising and for structure of the and discipline is critical to managing the risks to ITM Power’s
Group. The Board receives financial reports at each regular Board meeting, tracking budget and strategy. The Board has ultimate responsibility for the
forecasts. Operational, detailed ongoing tracking of financial performance is undertaken by the Group’s system of internal control and for reviewing its
Executive Committee. In accordance with good practice, the Board delegates to the Audit effectiveness. The Audit Committee regularly reviews
Committee responsibility for monitoring the integrity of the financial reporting of the Group and the risk management procedures and key corporate risks.
ensuring that the internal financial controls are sufficiently robust and appropriate. It undertakes in depth assessments of core risk areas
throughout the year. The Executive Committee has
The Group’s Financial Controller oversees budgeting, cash flow forecasts and financial operational responsibility for managing risk and ensuring
statements and the operation of the Group’s financial systems as well as managing the the internal controls remain appropriate, with day to day
engagement with ITM Power’s auditors. In the year ended 30 April 2021, the Finance team responsibility with the Finance Director. Further detail on
has been expanded to include additional staff to focus on internal controls and financial risk management and risks is set out in the Principal Risks
system transformation. and Uncertainties section of the Strategic Report.
There are procedures in place for budgeting, forecasting and financial planning, for monitoring Close management of the day-to-day activities of the Group
and reporting to the Board the performance against those budgets, forecasts and plans, and for by the Executive Directors and detailed monthly reporting
projecting expected performance over the financial year. of performance against corporate objectives, project
The Board considers that the internal controls in place are appropriate for the size, complexity schedules, budget, risks and expected performance and
and risk profile of the Group but given the rapid growth of ITM Power, this remains under operational needs are a key part of the internal
active review. management and control system.

The Board periodically review the internal controls, led by the Audit Committee. The Board In the financial year ended 30 April 2021, ITM Power has
consider risks facing the Group in its decision making and periodically reviews the top corporate also made further senior appointments to support its
risks identified through the risk register process. The Audit Committee reviews key areas business plan and address the resulting operational needs
of financial controls throughout the year. and risks. This includes a new Head of HR, new Head
of Quality, a new Head of Health and Safety, a new Head
of After-Sales Support, a new Head of Investor Relations
and a new Managing Director for its Motive division.

ITM ANNUAL REPORT 2021

 C O R P O R AT E G O V E R N A N C E R E P O R T

DE ALINGS GOOD GOVERNANC E:

POLIC Y DEC I SION S AT
THE RIGHT LE VEL S
The Group has a dealing policy and dealing code that applies to all employees. This enables the Executive management structure and appointments;
T he B oard approves the
Group and directors to comply with Rule 21 of the AIM Rules relating to directors’ and
appropriate employee dealings as applicable to AIM companies. All employees are provided with over all f inancial authorities Strategic/Policy considerations;
access to the dealing policy and dealing code and have access to the Company Secretary in the within the or ganisation. Material transactions;
event of any questions.
It reser ves decision making Health, Safety and Environmental Strategy
in the following areas:
Finance; and

General governance and capital matters.

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 C O R P O R AT E G O V E R N A N C E R E P O R T

BOARD
MEE TINGS

Board members devote the time needed to their role. This includes attending Board
and committee meetings and being available for shareholders at the General Meetings
of the Group. The Board scheduled 6 regular meetings in the year ended 30 April
2021, with additional meetings convened when required. The table below shows the
attendance of Directors at regular Board meetings and at meetings of the Committees
during the year. This year these meetings moved online and virtual meetings were
held in addition to regular communication and updates to ensure good communication
continued throughout the period.

The Board is supplied in a timely manner with information in a form and of a quality
appropriate to enable it to discharge its duties.
ANDY ALLEN

AUDIT COMMITTEE

ESG COMMITTEE
REMUNERATION

MANAGEMENT
TECHNOLOGY
COMMITTEE

COMMITTEE
PRINCIPLE

RE- ELEC TION

OF DIREC TOR S
NO. OF MEETINGS HELD 6 6 5 3 4
New Directors are subject to election at the first Annual General Meeting of the Company
Non-Executive Directors
following their appointment. In addition, all Directors who have been in office for three years
or more since their election or last re-election are required to submit themselves for re-election
Sir R Bone (Chairman) 6 6 5 - -
at the Annual General Meeting of the Company. At each Annual General Meeting of the
Mr M Green 6 6 5 - - Company all those Non-Executive Directors who have been in office for nine years or more since
the date on which they were originally elected as a Non-Executive Director of the Company are
Mr J Nowicki 6 - - - 4 required to retire from office, but may stand for re-appointment.

Mr T Rae 3 - - - 1

Mrs K Roe 6 - 4 3 -

Mr R Pendlebury (retired) 2 - - - 3

Executive Directors

Dr S Bourne 6 - - - 4

Dr R Smith 5 - - 3 -

Dr G Cooley 6 - 4 3 -

Mr A Allen 6 6 4 - -

ITM ANNUAL REPORT 2021

 C O R P O R AT E G O V E R N A N C E R E P O R T

COMMIT TEES
The Board operates through clearly identified Board The Executive Committee regularly meets to consider
committees to which it delegates certain powers. business development, technology development,
These are the Remuneration Committee, the Audit project performance, the financial performance of the
Committee, the Nominations Committee, the Environment Group and other management issues.
Social and Governance Committee, the Strategic Advisory
Committee, the Technology Management Committee and
The Technology Management Committee’s primary
the Executive Committee. They are properly authorised
responsibilities are to review the Group's product
under the constitution of the Company to take decisions
portfolio and development plans and the suitability
and act on behalf of the Board within the guidelines and
of portfolio, manufacturing capacity and planned
delegations laid down by the Board. The Board is kept fully
developments to satisfy anticipated market developments
informed of the work of these committees and each
and meet the Group's technology goals to be best-in-class.
committee has access to and support from the Company
Secretary. Any issues requiring resolution are referred
to the full Board. The Environment Social and Governance Committee
A summary of the operations of these Committees was established in early 2021 to lead the delivery
is set out below. of the Group's ESG strategy. It is responsible for the
Group's short and long term ESG objectives and reporting
of key metrics, and it ensures that all ESG-related policies
The Remuneration Committee’s role is to determine remain compliant with relevant laws and good corporate
and recommend to the Board the terms and conditions governance. In preparing its first formal ESG strategy and
of service, the remuneration and grant of options to report, the ESG Committee has received independent
Executive Directors under the EMI scheme adopted advice from GoodBusiness.
by the Company. Further details of the work of the
Remuneration Committee is set out in the Director’s
Remuneration Report from the Chair of the Remuneration The Board has constituted a Strategic Advisory Committee
Committee in this report. EY have provided independent that met for the first time in the first quarter of the
advice to the Remuneration Committee as set out in the new financial year ending 30 April 2022. This will comprise
Director’s Remuneration Report. four directors, Martin Green, Jürgen Nowicki, Tom Rae,
Dr Rachel Smith and Cosma Panzacchi, a representative
from Snam SpA. The Strategic Advisory Committee has
The Audit Committee’s primary responsibilities are to been set up to advise the Board on key business
monitor the quality of internal control, ensuring that the development matters.
financial performance of the Group is properly measured
The Board also has a Disclosure Committee that meets
and reported on and for reviewing reports from the
periodically to consider matters relating to its obligations
Group’s auditor relating to its accounting and internal
to make regulatory disclosures required in law and under
controls in all cases having due regard to the interests of
the rules of the AIM exchange.
the shareholders. Further details of the work of the Audit
Committee is set out in the report from the Chair of the The Board has sought advice where necessary, from
Audit Committee. Investec, the Company’s NOMAD, for the placing of the
fundraising exercise undertaken in the year ending 30 April
2021. In addition, the Board has access to Nicola Ham
The Nominations Committee leads the process for Board Edmonds as Company Secretary and Head of Legal and,
appointments. It vets and presents to the Board potential where appropriate, external counsel.
new Directors, particularly Non-Executives. All new
appointees undergo a rigorous nomination process before
the Board agrees on their appointment.

ITM ANNUAL REPORT 2021

 C O R P O R AT E G O V E R N A N C E R E P O R T

QC A CODE PRINCIPLE HOW IS THE DISCLOSURE

COMPLIANC E REQUIREMENT ME T?

PRINCIPLE 6:
ITM Power has reviewed the ten principles of the QCA code and considers that it complies with it as set out in this Annual
Report and on its website: Ensure that between the Directors have the necessary The Board is satisfied that the members of the Board
up to date experience, skills and capabilities possess an appropriate balance of skills, experience,
https://www.itm-power.com/corporate-governance.com personal qualities and capabilities as required by
the QCA Code. The Chair of the Group undertook
a formal Board evaluation in early 2020 which
considered the composition of the Board, including the
diversity and gender balance. Further details are
provided on the ITM Power website and in the director
biography section of this report.

PRINCIPLE HOW IS THE DISCLOSURE PRINCIPLE 7:

REQUIREMENT ME T? Evaluate Board performance based on clear and With the full support of the Board, the Chairman leads
relevant objectives, seeking continuous improvement an evaluation of the performance of the Board and its
committees approximately every 18 months. The last
review took place in early 2020 concluded that the
PRINCIPLE 1:
Board and its committees are currently effective and
Establish a strategy and business model which In the Strategic Report of the Annual Report each Director continues to demonstrate commitment
promotes long term value for shareholders and on the ITM Power website. to their role. The Board plans a further evaluation
within the year ending 2022.
PRINCIPLE 2:
The Board measures the performance of the Executive
Seek to understand and meet shareholder needs On the ITM Power website. Directors against key performance indicators.
and expectations Further information is set out in the Remuneration
Committee report. Each committee evaluates its
PRINCIPLE 3: performance annually.

Take into account wider stakeholder and social In the section 172 statement of the Annual Report
responsibilities and their implication for long term and on the ITM Power website. PRINCIPLE 8:
success
Promote a culture that is based on ethical values On the ITM Power website, this corporate
PRINCIPLE 4: and behaviours governance report and in the ESG Report on the
ITM Power website.
Embed effective risk management, considering On the ITM Power website and in this corporate
both opportunities and threats, throughout governance report and the Principal Risks and
PRINCIPLE 9:
the organisation Uncertainties section of this report.
Maintain governance structures and processes On the ITM Power website.
PRINCIPLE 5: that are fit for purpose and support good decision
Maintaining the Board as a well-functioning, On the ITM Power website and in this corporate -making by the Board
balanced team led by the Chair governance report.
PRINCIPLE 10:

Communicate how the Company is governed On the ITM Power website and in this corporate
and is performing by maintaining a dialogue with governance report.
shareholders and other relevant stakeholders

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

REMUNER ATION
COMMIT TEE
REPORT

ITM ANNUAL REPORT 2021

REMUNER ATION
R E M U N E R AT I O N
COMMITTEE REPORT

COMMIT TEE REPORT

DEAR SHAREHOLDER,

On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the
year-ended 30 April 2021. The Committee approved the introduction of a Group-wide Buy as You Earn
share scheme, as the Board is keen to ensure that all of the Group’s workforce,
I was appointed Chair of the Remuneration Committee on 1 July 2020 and have continued the regardless of position, have the ability to be rewarded for their part in the
Remuneration Committee’s focus to ensure that remuneration is fair, appropriately rewards growth and success of the business; and
performance and aligns the interests of the Executive Directors with those of shareholders.
It is also paramount that the Remuneration Committee ensures the Group retains key talent For the bonus attributable for the year ended 30 April 2022, the Committee
at the executive level. agreed to adjust the proportion associated with financial performance
objectives in order to allow for the introduction of measurable ESG and Health
This report is split into three sections: the Remuneration Committee Chair Statement; and Safety targets.
Remuneration Policy Report, including how it will be applied to the coming year, and the Annual
Report on Remuneration which provides details of the remuneration earned by Directors for
performance in this financial year. As a result of this comprehensive review, the Committee is satisfied that the remuneration
structure and outcomes in respect of the incentives and remuneration during the financial year
For the first time this report will be put to an advisory vote of shareholders at the upcoming under review are appropriate, fair and adequate to retain key talent.
AGM and I look forward to engaging with investors in this regard.
On behalf of the Board, I would like to thank shareholders for their continuing support.
A summary of the key matters considered by the Committee during the year and since the year
end in respect of the year ended 2020/21 is as follows:
KATHERINE ROE
Reviewed the 2020 executive director pay benchmarking results provided by Chair, Remuneration Committee
Ernst & Young who were retained to provide independent remuneration advice
to the Committee. From this, the Committee determined to accelerate the
agreed salary increase from a three-year to a two-year period. An increase to COMMITTEE MEMBERS
the fees of the Chairman and independent Non-Executive directors was also DURING 2020/21
agreed based upon this benchmarking exercise; Katherine Roe (Chair from 1 July 2020)
In relation the annual bonus, the Committee determined that 50% of the agreed Martin Green
performance targets had been achieved. The Committee also agreed that an Roger Bone (Chair until 30 June 2020)
additional exceptional bonus, equivalent to 33% of base salary, should be paid
to the Executive Directors in the year, to reflect the successful achievement of
the £172 million shareholder fundraising exercise in October 2020 and the
creation of a strategic partnership with Italian based Snam, a material
development towards the future success of our business;

A new LTIP Scheme was approved by the Board in October 2020, under which all
future LTIP awards will be made. Grants made under the new LTIP in 2020 vest
after three years and are subject to performance conditions associated with
As a result ofshareholder
this comprehensive review, the
return, financial Committee
performance andis satisfied thatover
ESG targets the remuneration
that period. The
structure andCommittee
outcomes believes
in respect of the incentives and remuneration during the financial year
that this, together with new director shareholding
under review are appropriate, fair and adequate to retain key talent.
guidelines introduced during the year, ensures that Executive Director interest
continues to become more aligned to long term shareholder values;

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

MAIN ROLES AND REMUNER ATION

RESPON SIBILITIES POLIC Y PRINC IPLES
OF THE COMMIT TEE

Determine and agree with the Board the framework or broad The Group’s remuneration policy has been reviewed to ensure
policy for the remuneration of the Group's Chair and the that overall remuneration is set at a competitive level against the
Executive Directors; Group’s peer group thus enabling the Group to attract and retain
high-calibre employees with the requisite skill-sets required
to execute the Group's strategy. To support the Group's strategy
Ensuring such remuneration supports the Group's strategy and promote long¬term sustainable success, the Remuneration
and promotes long term sustainable success; Committee takes into account all factors to:

Approve the design of, and determine targets for, any performance Ensure executive remuneration is aligned to the Group's purpose
related pay schemes operated by the Group and approve the and values, clearly linked to the successful delivery of the Group's
total annual payments made under such schemes; long-term strategy, and that enable the use of discretion to override
formulaic outcomes and to adjust sums or awards under appropriate
specified circumstances;
Review the design of all share incentive plans for approval by the
Board and determine each year whether awards will be made to
Executive Directors and other senior executives and the performance Attract, retain and motivate the executive management of the Group
targets to be used; without inappropriate financial burden on the Group; and

Review the formal policy for shareholding requirements; Consider the requirements for clarity, transparency, risk mitigation,
predictability, proportionality and alignment to culture.

Ensure that contractual terms on termination for the Executive

Directors, and any payments made, are fair to the individual, and the
Company, that failure is not rewarded and that the duty to mitigate
loss is fully recognised;

Assess annually the remuneration trends across the Group; and

Be responsible for the appointment and selection for any

remuneration consultants who advise the Committee.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

REMUNER ATION
POLIC Y
EXECUTIVE DIREC TOR BA SE SAL ARY P E R F O R M A N C E R E L AT E D B O N U S E S

PURPOSE AND LINK To ensure the Group is able to recruit and retain high-calibre executives. PURPOSE AND LINK The purpose of the annual bonus is to incentivise the Executive Directors,
TO STRATEGY TO STRATEGY members of the Executive team and senior management to deliver strategic
and financial success, as well as long-term growth to the benefit of the Group
and its shareholders.
OPERATION Salaries are set by the Committee considering a number of factors, including
market rates, benchmarking to peers, as well as the individual Director’s
experience, responsibilities and performance.
OPERATION Measures and targets for the annual bonus for the Executive Directors are
Salaries are paid monthly in arrears by bank transfer and are normally
set annually by the Committee, to ensure they are fairly rewarded for their
reviewed annually.
contribution to the success of the Group.

Performance criteria include the financial targets of the Group as agreed

by the Committee and specific annual targets based on clear and measurable
objectives that underpin, and are key to achievement of, the Group’s strategy,
PENSION PROVISION
with particular emphasis on forward-looking objectives relating
to technology, business development and ESG factors.

PURPOSE AND LINK Retirement benefits are regarded as an important element of the Group’s All bonus payments are at the ultimate discretion of the Committee and
TO STRATEGY basic benefits package to attract and retain talent. the Committee retains an overriding ability to ensure that overall bonus
payments reflect its view of corporate performance during the year when
OPERATION Membership of the Group’s defined contribution, or similar pension scheme, determining the final bonus amount to be awarded.
or in agreed circumstances, a cash allowance in lieu of pension. The Committee retains the ability in exceptional circumstances to adjust
Where Executive Directors are members of the Group’s pension scheme, the targets and/or set different measures and alter weightings for the annual
they receive a pension contribution of 5% of base salary, or such other bonus if certain events occur, such as a material divestment of a Group
amount in line with that available to the majority of the UK general workforce. business, which cause it to determine they are no longer appropriate and
a change is required to ensure that they achieve their original purpose
and are not materially less difficult to satisfy.

The maximum level of performance related bonus for the CEO is capped
BENEFITS at 100% of base salary, with the other Executive Directors capped at 60%
of base salary.

Bonuses are paid in cash following the year-end.

PURPOSE AND LINK To provide competitive cost-effective benefits to assist in attracting and
TO STRATEGY retaining the employees across the Group.

OPERATION Benefits may include private medical insurance, sick pay, a fully expensed
car (or equivalent cash allowance), disability and life assurance cover.
All employees benefit from life assurance of four times salary.

Some benefits may be provided in the case of relocation, such as removal

expenses, and in the case of international relocation might also include such
items as cost of accommodation, children’s schooling, home leave,
tax equalisation and professional advice etc.

The Group has the ability to reimburse the tax payable (grossed up) on any
business expenses captured as taxable benefits.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT
EXECUTIVE DIRECTOR
POLICY

LT I P NON-EXECUTIVE DIREC TOR FEES

PURPOSE AND LINK The objectives of the LTIP are to align the long-term interests of shareholders PURPOSE AND LINK To ensure the Group is able to attract and retain experienced and skilled
TO STRATEGY and management and reward achievement of long-term, stretching targets. TO STRATEGY Non-Executive Directors able to advise and assist with establishing and
monitoring the strategic objectives.
To attract and retain the calibre of Executive Directors and senior management
required to implement and realise the Group’s long-term strategy. The LTIP is
intended to align the Executive Directors interests with the long-term interests
of shareholders.
OPERATION The remuneration of the Chairman and the Non-Executive Directors is payable
OPERATION The new LTIP was approved by the Board in October 2020 and replaced in cash fees.
all existing LTIP schemes for future awards.
They are not eligible to participate in bonus or share incentive schemes.
There remain options to be exercised under historical schemes, details of
Their services do not qualify for pension or other benefits.
which are set out later in this report.
Expenses incurred for advice in respect of UK tax returns for non-UK NEDs may
Any awards granted are subject to a three-year vesting period and stretching
be reimbursed.
performance targets.
Fees are paid monthly and reasonable expenses are reimbursed where
All vesting is at the ultimate discretion of the Committee and the Committee
appropriate. Tax may be reimbursed if these expenses are determined
retains an overriding ability to ensure that vesting reflects its view of corporate
to be a taxable benefit.
performance of the set period.
No Non-Executive Director is involved in decisions setting their remuneration.
The Committee retains the ability in exceptional circumstances to adjust
the targets and/or set different measures and alter weightings if certain events Fees for the Chairman are determined by the Remuneration Committee.
occur, such as a material divestment of a Group business, which cause
it to determine they are no longer appropriate and a change is required to Base fees for other Non- Executive Directors, as well as any supplementary
ensure that they achieve their original purpose and are not materially less fee paid to Committee Chairs to reflect their additional responsibilities,
difficult to satisfy. are determined by the Chief Executive and Chair of the Board.

The Board has regard to the level of fees paid to Non-Executive Directors
of comparator companies similar to the Group and the time commitment
and responsibilities of the role. A benchmarking exercise has been undertaken
since the end of the financial year.

Any director representing a shareholder on the board receives a fee from

the shareholder and not the Group.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

DIFFERENCES IN THE POLICY FOR EXECUTIVE

D I R E C T O R S R E L AT I V E T O T H E B R O A D E R
E M P L O Y E E P O P U L AT I O N

The Policy for the Executive Directors is informed by the

structure operated for the broader employee population.
SHARE OWNER SHIP GUIDEL INE S/REQUIREMEN T S Pay levels and components vary by organisational level
but the broad themes and philosophy remain consistent
across the Group:
PURPOSE AND LINK Executive Directors are required to build and maintain a shareholding in the
TO STRATEGY Company as this represents the best way to align their interests with those Salaries are reviewed annually with regard to the
of shareholders. Levels are set in relation to earnings and according to the same factors as those set out in the Policy table
post held in the Group. Non-Executive Directors are encouraged to build and for Executive Directors;
maintain a shareholding.

All staff can be considered for awards under the LTIP

and BAYE schemes. This is intended to encourage share
OPERATION The expectation is that Executive Directors will build up to these levels over ownership in the Company and align the management
a period of time, usually five years, through retaining shares received under team and all staff with the strategic business plan; and
the Group’s incentive arrangements, net of sales to settle tax and/or shares
purchased in their own right.
Eligibility for and provision of benefits and allowances
There is no maximum; however, Executive Directors are required to build varies by level and local market practice
and maintain a minimum shareholding equivalent to 100% of salary.

Newly appointed Executive Directors would normally be required to SERVICE CONTR AC TS AND CHANGE
achieve the required shareholding within a five-year period of appointment OF CONTROL PROVISIONS
to the Board.
Each Executive Director has a signed service contract that
terminates on 12 months’ notice.

The Directors’ service contracts are available to view

at the Company’s registered office and prior to each AGM
at the venue for the meeting.

The contracts contain restrictive covenants for periods

of up to six months post-employment relating to
non-competition and non-solicitation of the Group’s
customers, suppliers and employees and indefinitely
with respect to confidential information. In addition,
they provide for the Group to own any intellectual
property rights created by the Directors in the course
of their employment.

T E R M I N AT I O N O F E M P L O Y M E N T

Each Executive Director’s service agreement includes

the right of the Group to terminate the agreement
and make a payment of basic salary in lieu of the
notice period.

There are no contractual rights to additional compensation

at termination.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

IMPLEMENTATION OF DIREC TOR

REMUNER ATION POLIC Y FOR 2021/22
EXECUTIVE DIREC TORS EXECUTIVE DIREC TORS

BASE SALARY Base salary reviews for the Executive Directors and senior management were ANNUAL BONUS Performance metrics have been agreed with the Executive Directors for their
undertaken in June 2021. FY2021/22 annual bonus targets under the following classifications (note the
performance targets have been deemed commercially sensitive and will be
BENCHMARKING - A benchmarking exercise was conducted in June 2021 which reconfirmed retrospectively disclosed in next year’s remuneration report):
EXECUTIVE DIRECTORS the output of the benchmarking conducted in 2020, showing that executive
remuneration is positioned below the lower quartile of comparably-sized Financial including revenue and overhead targets;
organisations.
Business development;
During its deliberations, the Committee recognised:
Strategic development including production and procurement
capability; and
That shareholders would expect care and discretion to be used
in judging to what extent, and over what timeframe, adjustments ESG and Health & Safety targets.
should be made, with longer timeframes expected for more
substantial increases;
Total bonus opportunities remain capped as set out in the policy table above.
Its strategy as set out at the start of this report including the need
to ensure its policy remains competitive and retains key talent; and

The performance of the management team and the transformative

year including the £172 million shareholder fundraising exercise LTIP During the year it is intended to grant LTIP awards to the Executive Directors
in October 2020, the creation of a strategic partnership with (as well as all other eligible staff). Any awards granted will vest after three
Italian based Snam and the resultant share price appreciation years and will be subject performance conditions related to TSR (60%),
and value creation for shareholders. Financial (20%) and ESG (20%) targets.

Consequently, the Remuneration Committee agreed to accelerate the BENEFITS AND PENSION The Executive Directors will receive the range of Group benefits and pension
planned salary increases from a three-year to a two-year period. CONTRIBUTION contribution in line with the Remuneration Policy.

Base salaries for the Executive Directors with effect from 1 July 2021 are
as follows:

ANDY ALLEN £300,000

SIMON BOURNE £300,000

GRAHAM COOLEY £420,000

RACHEL SMITH £230,000

The Remuneration Committee will undertake a further benchmarking

exercise in June 2022. As per the remuneration policy, salaries will be set by
reference to a number of factors including market benchmarking, experience,
scope of responsibilities and individual performance.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

APPLIC ATION OF
REMUNER ATION POLIC Y FOR 2021/22
S I N G L E T O TA L R E M U N E R AT I O N F I G U R E F O R
T H E E X E C U T I V E D I R E C T O R S F O R F Y 2020/21
NON-EXECUTIVE DIREC TORS

FEES The FY2021/22 fees for the Non-Executive Directors were reviewed during FIXED PERFORMANCE
June 2021 as part of the benchmarking exercise.
R E M U N E R AT I O N R E L AT E D
BENCHMARKING - An updated exercise was undertaken in relation to the fees for the
NON-EXECUTIVE Non-Executive Directors, using the same comparator group as in

REMUNERATION

REMUNERATION
BASE SALARY (£)
DIRECTORS the previous year.

PERFORMANCE
TOTAL FIXED
PENSION (£)
Following the exercise, it was considered appropriate to increase the base fee

BONUS (£)

RELATED
to £51,000 to match the lower quartile of the market. The additional fee of

LTIPS (£)

TOTAL

TOTAL
£10,000 for chairing each of the Board’s four Committees was not adjusted.
The base fee change was made with effect from 1 July 2021.

(£)

(£)
BENCHMARKING – An updated exercise was undertaken in relation to the Chairman’s fee,
CHAIRMAN’S FEE using the same comparator group as in the previous year. ANDY 155,925 7,796 163,721 82,640 907,921 990,561 1,154,282
ALLEN
Following the exercise, it was considered appropriate to increase the fee
to reflect the lower quartile, as well as the additional chairmanship of the
ITM Motive subsidiary board. The Chairman’s fee was therefore changed SIMON 230,360 11,518 241,878 145,127 3,196,994 3,342,121 3,583,999
to £150,000 with effect from 1 July 2021. BOURNE

BENEFITS Non-Executive Directors do not receive any benefits.

GRAHAM 299,833 28,000 327,833 248,861 4,211,672 4,460,533 4,788,366
COOLEY

RACHEL 155,736 7,787 163,523 82,540 1,048,475 1,131,015 1,294,538

SMITH

Full base salary refers to the salary set for the year before salary exchange and upon which the bonus calculations were
based. The pension figure represents the value of the Group’s contribution (excluding salary exchange) to the individual’s
pension scheme and/or the cash value of payments in lieu of pension contribution. Benefits currently consist of life cover
only so no monetary value is presented here.

The annual bonus is the cash value of the annual bonus and exceptional bonus due to be paid in respect of the year.
The LTIPs amount represents the value received by the directors in relation to any options exercised under the EMI
Scheme 2010 and Unapproved Share Option Scheme 2010 in the year.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

PENSION EXCEPTIONAL BONUS

During the year, the Group paid Andy Allen, Simon Bourne and Rachel Smith equivalent of 5% of base salary. The Committee determined than an additional exceptional
Graham Cooley received £28,000 cash in lieu of pension. The Group has a contracted agreement with Graham Cooley bonus, equivalent to 33% of base salary, should be paid
that this payment relieves the Group of any liability for pension provision on their behalf. to the Executive Directors in the year. This amounted
to payments of £51,455, £76,019, £98,945 and £51,393 for
Andy Allen, Simon Bourne, Graham Cooley and Rachel Smith

ANNUAL BONUS
respectively.

These awards reflect the successful achievement of the £172

For the 2020/21 financial year, the maximum bonus opportunity and actual outcomes for the Executive Directors, million shareholder fundraising exercise in October 2020
as determined by the Committee were as follows based upon a range of financial and operational performance and the creation of a strategic partnership with Italian based
and strategic targets: Snam, one of the world's leading energy infrastructure
companies. This partnership also secured a 100MW
preferred supplier pipeline for the Group.
PERFORMANCE MEASURE WEIGHTING ACTUAL PAYOUT %
(% OF POTENTIAL MAXIMUM BONUS)

SALES IN THE YEAR 15 5

GROSS MARGIN 10 0

BUSINESS DEVELOPMENT 10 7

COST MANAGEMENT 20 5

CASH MANAGEMENT 25 18

OPERATIONAL MANAGEMENT 15 10

STRATEGIC – MOTIVE SEPARATION 5 5

TOTAL 100 50

Based upon the 50% pay out achievement set out above, the directors received the following bonus as a percentage
of base salary:

DIRECTOR MAXIMUM POTENTIAL ACTUAL % ACHIEVED VALUE OF BONUS

% OF BASE SALARY ACHIEVED (£)

ANDY ALLEN 40 20 31,185

SIMON BOURNE 60 30 69,108

GRAHAM COOLEY 100 50 149,917

RACHEL SMITH 40 20 31,147

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

LT I P s
E M I S C H E M E 2010 UNAPPROVED SHARE
The EMI Scheme 2010 was introduced on 29 January 2010. Options granted under the scheme vest in three equal O P T I O N S C H E M E 2010
instalments on the first, second and third anniversaries of the grant and exercisable up to the tenth anniversary of the The Unapproved Share Option Scheme 2010 was introduced
date of grant. There are no performance conditions attached to the exercising of the options. on 29 January 2010. Options granted under the scheme for
All outstanding options for all directors were exercised on the 9 June 2020. years prior to 2019 vest in three equal instalments on the
first, second and third anniversaries of the grant and
Detailed assumptions used in calculating the fair value of the options are outlined in note 8 of the consolidated exercisable up to the tenth anniversary of the date of grant.
financial statements. Options granted in 2019 vest on the third anniversary of the
date of grant and are exercisable up to the tenth anniversary
Interests of the directors under the EMI Scheme 2010 at 1 May 2020 and 30 April 2021 are set out below:
of the date of grant. No further awards will be granted
under this plan.

There are no performance conditions attached to the

exercising of the options.

OPTIONS EXERCISABLE

OPTIONS EXPIRY DATE

NUMBER OF OPTIONS

NUMBER OF OPTIONS

Detailed assumptions used in calculating the fair value

OPTIONS EXERCISED

of the options are outlined in note 8 of the consolidated

AT 30 APRIL 2021
DATE OF GRANT

DATE AT WHICH
EXERCISE PRICE
AT 1 MAY 2020

financial statements.
IN YEAR

DIRECTOR

23.11.2011 16,666 16,666 - 55p 22.03.2012 23.01.2021

ANDY ALLEN 23.11.2011 16,666 16,666 - 55p 22.03.2013 23.01.2021

23.11.2011 16,668 16,668 - 55p 22.03.2014 23.01.2021

24.01.2011 123,596 123,596 - 67p 24.01.2014 23.01.2021

SIMON BOURNE
01.08.2012 100,000 100,000 - 50p 01.08.2015 31.07.2022

GRAHAM COOLEY 19.07.2012 250,000 250,000 - 50p 19.07.2015 18.07.2022

TOTAL 523,596 523,596 -

No new options were granted and no options lapsed in the year.

Under the scheme rules the exercise price is deemed to be the mid-market price of shares on the London Stock Exchange
AIM market at the close of trading on the day before the grant of the share options.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

Interests of the directors under the Unapproved Share Option Scheme 2010 at 1 May 2020 and 30 April 2021 are set out below:

OPTIONS EXPIRY DATE

NUMBER OF OPTIONS

NUMBER OF OPTIONS

OPTIONS EXERCISABLE

OPTIONS EXPIRY DATE

NUMBER OF OPTIONS

NUMBER OF OPTIONS
OPTIONS EXERCISED

OPTIONS EXERCISED
AT 30 APRIL 2021

DATE AT WHICH
DATE OF GRANT

AT 30 APRIL 2021
EXERCISE PRICE

DATE OF GRANT
AT 1 MAY 2020

DATE AT WHICH
EXERCISE PRICE
EXERCISABLE

AT 1 MAY 2020
OPTIONS
IN YEAR

IN YEAR
DIRECTOR DIRECTOR

14.08.2018 333,333 333,333 - 30p 14.08.2019 13.08.2028 24.01.2011 800,000 800,000 - 67p 24.01.2014 23.01.2021

14.08.2018 333,333 - 333,333 30p 14.08.2020 13.08.2028 06.08.2014 750,000 750,000 - 27p 06.08.2015 05.08.2024
ANDY ALLEN
14.08.2018 1,000,000 - 1,000,000 30p 14.08.2019 13.08.2028
14.08.2018 333,334 - 333,334 30p 14.08.2021 13.08.2028
GRAHAM COOLEY
14.08.2018 1,000,000 - 1,000,000 30p 14.08.2020 13.08.2028
24.10.2019 47,250 - 47,250 48p 23.10.2022 23.10.2029
14.08.2018 1,000,000 - 1,000,000 30p 14.08.2021 13.08.2028
24.01.2011 276,404 276,404 - 67p 24.01.2014 23.01.2021
24.10.2019 307,500 - 307,500 48p 23.10.2022 23.10.2029
06.08.2014 250,00 250,000 - 27p 06.08.2017 05.08.2024

14.08.2018 583,333 583,333 - 30p 14.08.2019 05.08.2024 14.08.2018 416,666 416,666 - 30p 14.08.2019 13.08.2028
SIMON BOURNE
14.08.2018 583,333 - 583,333 30p 14.08.2020 13.08.2028 14.08.2018 416,667 - 416,667 30p 14.08.2020 13.08.2028
RACHEL SMITH
14.08.2018 583,334 - 583,334 30p 14.08.2021 13.08.2028 14.08.2018 416,667 - 416,667 30p 14.08.2021 13.08.2028

24.10.2019 159,750 - 159,750 48p 23.10.2022 23.10.2029 24.10.2019 72,000 - 72,000 48p 23.10.2022 23.10.2029

TOTAL 9,662,904 3,409,736 6,253,168

No new options were granted and no options lapsed in the year.

Under the scheme rules the exercise price is deemed to be the mid-market price of shares on the London Stock Exchange
AIM market at the close of trading on the day before the grant of the share options.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

UNAPPROVED SHARE
O P T I O N S C H E M E 2020
Interests of the directors under the Unapproved Share Option Scheme 2020 at 1 May 2020 and 30 April 2021 are set
out below:

OPTIONS EXPIRY DATE

NUMBER OF OPTIONS

NUMBER OF OPTIONS
OPTIONS GRANTED

AT 30 APRIL 2021
DATE OF GRANT

EXERCISE PRICE
AT 1 MAY 2020

VESTING DATE
IN YEAR
DIRECTOR

22.10.2020 - 52,478 52,478 5p 22.10.2023 22.10.2030

ANDY ALLEN
The Unapproved Share Option Scheme 2020 was introduced on 23 October 2020 and replaced both the EMI Scheme
13.11.2020 - 45,919 45,919 5p 22.10.2023 13.11.2030
2010 and Unapproved Share Option Scheme 2010.

No consideration is payable for the grant of the awards, which are structured as nominal cost options. The grant in 2020 22.10.2020 - 52,415 52,415 5p 22.10.2023 22.10.2030
was provided with an option exercise price of £0.05 per ordinary share. The number of ordinary shares granted under SIMON BOURNE
the award in 2020 was calculated using a share price of 270.5 pence, being the average mid-market quotation as derived 13.11.2020 - 48,863 48,863 5p 22.10.2023 13.11.2030
from AIM for the last 5 days of trading prior to close on 21 October 2020.

The vesting of an award is subject to the satisfaction of performance conditions which have been set by the Remuneration 22.10.2020 - 100,912 100,912 5p 22.10.2023 22.10.2030
Committee. The awards are subject to a three-year vesting period and to the achievement of the performance conditions GRAHAM COOLEY
and the participant being either a director, employee or contributor to the Group, or a good leaver at that time. 13.11.2020 - 88,298 88,298 5p 22.10.2023 13.11.2030

The performance conditions applying to 2020 grant relate to the performance of the Company's shareholder return 22.10.2020 - 77,530 77,530 5p 22.10.2023 22.10.2030
with that of the performance of the AIM 50 Index over the applicable performance period. RACHEL SMITH
13.11.2020 - 67,839 67,839 5p 22.10.2023 13.11.2030
Detailed assumptions used in calculating the fair value of the options are outlined in note 8 of the consolidated
financial statements.
TOTAL - 534,254 534,254

No options were exercised or lapsed in the year.

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

BUY A S YOU E ARN S I N G L E T O TA L R E M U N E R AT I O N

S C H E M E 2020 FIGURE FOR THE NON-EXECUTIVE
DIREC TORS

The Group launched a Buy As You Earn scheme across its workforce in October 2020. Under the scheme participants NON-EXECUTIVE DIRECTOR FEE 2020/21 (£)
can buy up to £150 of ordinary shares per month, with the Group matching the purchase on a one-for-one basis.
An annual top up is also permitted, subject to a maximum contribution of £1,800 in each tax year.
ROGER BONE 82,500
Shares acquired are held by a BAYE Trust until a request is received to withdraw them or a participant leaves employment.
MARTIN GREEN 53,333
Interests of the directors under the Buy As You Earn Scheme 2020 at 30 April 2021 are set out below:

JUERGEN NOWICKI -

DIRECTOR NUMBER OF SHARES NUMBER OF SHARES TOTAL SHARES HELD TOM RAE -
PURCHASED IN THE YEAR AWARDED BY GROUP UNDER IN BAYE TRUST
MATCHING RULE KATHERINE ROE 52,814

ROBERT PENDLEBURY -
ANDY ALLEN 367 367 734

SIMON BOURNE 367 367 734

Shareholder nominated Non-executive directors do not receive any fees from the Group.
GRAHAM COOLEY 367 367 734

RACHEL SMITH 367 367 734

ITM ANNUAL REPORT 2021

 R E M U N E R AT I O N
COMMITTEE REPORT

S TAT E M E N T O F R E M U N E R AT I O N C O M M I T T E E
DIREC TOR'S SHAREHOLDINGS SUPPORT AND ADVISERS
The directors who served during the year and their interests in the shares of ITM Power (including those of their
spouse or civil partner and children under the age of 18) were as follows: The Company Secretary acted as secretary to the
Committee. Other directors attended Committee meetings
at the invitation of the Committee and as appropriate.

The Committee engaged the services of Ernst and Young LLP

(‘EY’) to provide professional advice on remuneration
matters. EY received £86,950 (2020: £11,400) in respect of
those services and included Executive Director
DIRECTOR

BENEFICIALLY OWNED AT 30
VALUE OF SHARES AS AT 30 remuneration benchmarking, support on the LTIP and BAYE
TOTAL SHARES BENEFICIALLY

share schemes and general guidance on remuneration

OWNED AT 30 APRIL 2021

matters. EY adheres to the Remuneration Consultant

% OF BASE SALARY
Group’s Code of Conduct which seeks to clarify the scope

GUIDELINES MET?
SHAREHOLDING
and conduct of the role of executive remuneration

TOTAL SHARES
APRIL 2021 (£)

consultants when advising UK listed companies. The

APRIL 2020
Committee is satisfied that the advice EY provided was
objective and independent.

ANDY ALLEN 47,156 245,446 157 Yes 25,000 MISCELL ANEOUS

ROGER BONE 279,986 1,457,327 - n/a 258,710 DISCLOSURES
The Group provides limited Directors’ and Officers’
SIMON BOURNE 79,767 415,187 180 Yes 349,462
liability insurance, at a cost of approximately £57,500
exclusive of VAT for the insurance year which runs
GRAHAM COOLEY 706,382 3,676,718 1,226 Yes 1,137,726
until 29 September 2021.
MARTIN GREEN 55,319 287,935 - n/a 40,000 As a company listed on AIM, the Company is not required
to comply with Schedule 8 of the Large and Medium-sized
JUERGEN NOWICKI - - - n/a -
Companies and Groups (Accounts and Reports) Regulations
2008 as amended (the “Regulations”), nor is it required
TOM RAE - - - n/a -
to comply with the principles relating to directors’
KATHERINE ROE 7,659 39,865 - n/a - remuneration in the UK Corporate Governance Code.
The Company follows the requirements of the QCA code.
RACHEL SMITH 70,461 366,749 235 Yes 80,886 The Remuneration Committee’s terms of reference
are available upon request from the registered office.
ROBERT PENDLEBURY - - - - 112,209
This report has not been audited. It should be read in
conjunction with details of Directors’ remuneration in note
8, which forms part of the audited financial statements.
Tom Rae was appointed as the JCB nominee Non-Executive Director with effect from 3 December 2020
This report was approved by the Remuneration Committee
Katherine Roe was appointed as a Non-Executive Director with effect from 6 May 2020 and authorised for issue on 10 September 2021 and was
signed on its behalf by:
Robert Pendlebury retired with effect from 31 July 2020

Katherine Roe
Remuneration Committee Chair

ITM ANNUAL REPORT 2021

 AUDIT COMMIT TEE REPORT

AUDIT
COMMIT TEE
REPORT

ITM ANNUAL REPORT 2021

AUDIT COMMIT TEE
AUDIT COMMIT TEE REPORT

REPORT
Impairment of non-current assets
A S S E S S I N G T H AT T H E R I S K A N D C O N T R O L
SUMMARY OF ROLE Recoverability of grant debtors FR AMEWORK AND PROCESSES ARE
O P E R AT I N G P R O P E R LY
The Audit Committee’s primary role is to ensure the integrity Deferred Tax Asset
of the financial reporting of the Group and to undertake assurance
A key role of the Audit Committee is to monitor the
activities relating to internal controls. The Audit Committee acts
A SSESSING THE EX TERNAL AUDITOR, effectiveness of the internal control environment which
in accordance with its terms of reference available on the ITM
A P P R O A C H O N A P P O I N T M E N T/ includes consideration of the Group’s internal control and
Power website.
REAPPOINTMENT AND POLICY ON risk management policies and systems, their effectiveness
A U D I T O R R O TAT I O N and the requirements for an internal audit function in the
SUMMARY OF SIGNIFIC ANT ISSUES CONSIDERED context of the Group’s overall risk management system.
There are no contractual restrictions on the choice of the
The Audit Committee follows an agreed work plan to focus on matters external auditor. The external audit function plays an important part
as set out in its terms of references with specific regard to the Annual in assessing the effectiveness of financial reporting and
The Audit Committee reviews the auditor’s performance internal controls. In turn, the effectiveness and quality
Report and Accounts. It considers Group financial disclosures and and independence annually based on feedback from the
accounting matters, including the impact and treatment of key of the external audit is of key importance, including
management team and the Committee. It reviews annual ensuring that sufficient weight is given to new areas
accounting standards. It tracks key control recommendations and fees to ensure they are in line with market rates and
improvement opportunities identified by either the external auditor of compliance, such as International Financial Reporting
reflect performance. The Committee also closely monitors Standards (“IFRS”) and existing areas of risk as is
or the management team. the nature and level of any non-audit services provided, deemed appropriate.
Other areas to which the Audit Committee paid specific regard in the with a policy that such work is both minimised and that
year are noted below: where any work is undertaken, it is approved by the Audit
Committee. Such work may only proceed exceptionally HOW INTERNAL ASSUR ANCE IS GAINED
Audit planning and process and must exclude involvement in making any business
judgments that need to be made concerning the nature As the Audit Committee considered that the Group has
Appropriateness of setting up an internal audit function of work undertaken to help safeguard the auditor’s not been at the stage where it is appropriate to have an
independence. Details of fees paid/payable to the auditors internal audit function, the Audit Committee planned extra
Reviewing the Audit Committee terms of reference
are set out in note 7. The only non-audit services provided levels of assurance in specifically identified areas in the
Reviewing the Risk Register in the year ended 30 April 2021 were related to limited financial year and will continue to do so through the Audit
assurance procedures as part of the publication of the Committee’s work cycle.
Key legal contractual matters
interim results. This is primarily undertaken by the Audit Committee
Management of key business risks including IP and members meeting with senior management team
The Audit Committee terms of reference require it to make
cyber-security. members responsible for the relevant areas of the Group’s
an annual recommendation to the Board. The Audit
Committee looks at auditor rotation as part of the review operations to carry out in-depth reviews of the identified
A review of the new anti-fraud and bribery policies for the
process. Auditor rotation is typically considered at least risk areas. The outcomes of these activities are discussed
group including its whistle-blowing policy (known as its
every five years, unless the annual performance review at the Audit Committee and, where appropriate
Speak Up Policy)
identifies earlier reason to rotate. Ahead of the planned recommendations made to the management team.
A review of the treasury management policies and processes retirement of the lead auditor for Grant Thornton, This is considered appropriate for the relative size
for the Group the Audit Committee has agreed that a new auditor was and complexity of the Group’s activities.
brought in to undertake the audit of the year ending In the year ended 30 April 2021, the Audit Committee
A review of financial authorities for the Group.
30 April 2021. reviewed the need for an internal audit function. The Audit
A summary of the areas in which the Audit Committee were required Finally, the Audit Committee gave due consideration Committee agreed with the Group's recommendation
to exercise significant judgement is noted below, all of which are to the adequacy of its whistleblowing procedures that it was now appropriate to begin work to set up
further disclosed within notes 2-4 of the Annual Report and Accounts: and the ongoing engagement of Grant Thornton, an internal audit function during the year ended 30 April
their independence, associated remuneration and 2022. The Audit Committee is satisfied that the Group
Contract accounting, including consideration of non-audit fees. controls are operating such that a separate internal audit
contract balances and loss provisions function is not required earlier.
Our Auditors, Grant Thornton UK LLP, have been in place
Capitalisation of Development Costs since the financial year 2017/2018.

MARTIN GREEN
Chairman, Audit Committee

ITM ANNUAL REPORT 2021

 AUDIT COMMIT TEE REPORT

MEMBERS OF THE AUDIT COMMIT TEE

The current members of the Audit Committee are Martin Green

(Chair) and Sir Roger Bone.

The Board of ITM Power consider that there is a broad range

of financial expertise in the members of the Audit Committee.
Martin Green was Managing Director of Johnson Matthey Battery
Systems and Group Strategy Director of Johnson Matthey plc with
P&L responsibility for a portfolio of Johnson Matthey business.
Sir Roger Bone has extensive experience including as a Non-Executive
Director of the F&C Investment Trust, which has a total asset portfolio
of over £4bn, and where he served as the Senior Independent
Non-Executive Director and a member of the Audit Committee,
until he stepped down from the Board in May 2021. Both members
of Audit Committee bring extensive financial expertise together
with a breadth of skills in line with the requirements of the QCA
guidance on Audit Committees.

NUMBER OF MEETINGS HELD

The Audit Committee met six times during the year ended 30 April
2021 together with a further three meetings time post-year end.
All members of Audit Committee attended each meeting.

RESPONSIBILITIES OF THE COMMIT TEE

The Committee is responsible for the following activities:

Reviewing the effectiveness of the Group’s financial

reporting, internal control policies and procedures for the
identification, assessment and reporting of risk;

Monitoring the integrity of the Group’s financial statements;

Reviewing the provision of pension arrangements

for employees;

Keep under review the effectiveness of the Groups internal

controls and risk management systems;

Reviewing the Group’s whistleblowing, fraud and

bribery procedures

Agreeing the scope of the auditors’ annual audit programme

and reviewing the output;

Keeping the relationship with the auditors under review,

assessing the effectiveness of the audit process; and

Developing and implementing policy on the engagement

of the auditors to supply non-audit services.

The external auditors have unrestricted access to the Chairman

of the Audit Committee. Audit Committee meetings are also attended
by the external Auditor where appropriate and, by invitation,
the Chief Executive Officer, Finance Director, Group Financial SIR ROGER BONE
Controller and other members of senior management.

ITM ANNUAL REPORT 2021

 INDEPENDENT AUDITOR'S REPORT

INDEPENDENT
AUDITOR'S
REPORT

ITM ANNUAL REPORT 2021

INDEPENDENT AUDITOR’S
INDEPENDENT AUDITOR'S REPORT

REPORT TO THE MEMBERS

OF ITM POWER
OPINION BASIS FOR OPINION We evaluated management’s reverse stress test to check
the extent of overspend required to eliminate all
Our opinion on the financial statements is unmodified. We conducted our audit in accordance with International headroom in the base forecast, as well as the available
Standards on Auditing (UK) (ISAs (UK)) and applicable law. mitigations to avoid such a scenario occurring.
We have audited the financial statements of ITM Power Our responsibilities under those standards are further
(the ‘parent company’) and its subsidiaries (the ‘group’) for We inspected capital and lease commitments entered into
described in the ‘Auditor’s responsibilities for the audit and costs expected to be incurred to check that these have
the year ended 30 April 2021 which comprise Consolidated of the financial statements’ section of our report. We are
Income Statement and Other Comprehensive Income, been appropriately incorporated into the forecasts and
independent of the group and the parent company in that there was sufficient cash in hand to cover these costs
Consolidated Balance Sheet, Consolidated Statement accordance with the ethical requirements that are relevant
of Changes in Equity, Consolidated Cash Flow Statement, for the going concern period.
to our audit of the financial statements in the UK, including
Company Statement of Changes in Equity, Company the FRC’s Ethical Standard as applied to listed entities, We assessed the projected cash flows in management’s
Balance Sheet and notes to the financial statements, and we have fulfilled our other ethical responsibilities forecasts for the going concern assessment period by
including a summary of significant accounting policies. in accordance with these requirements. We believe that reference to our expectations formed from the audit work
The financial reporting framework that has been applied the audit evidence we have obtained is sufficient and performed on contracts and by comparing forecast cash
in their preparation is applicable law and international appropriate to provide a basis for our opinion. costs to those incurred in previous years. We have
accounting standards in conformity with the requirements confirmed the cash held by the group at 30 April 2021
of the Companies Act 2006. The financial reporting and compared this to the cash requirements indicated
framework that has been applied in the preparation of the CONCLUSIONS RELATING TO GOING CONCERN in management’s forecasts, noting that the balance held
parent company financial statements is applicable law and is significantly higher than forecasted costs.
United Kingdom Accounting Standards, including Financial We are responsible for concluding on the appropriateness
Reporting Standard 101 ‘Reduced Disclosure Framework’ of the directors’ use of the going concern basis of In our evaluation of the directors’ conclusions, we
(United Kingdom Generally Accepted Accounting Practice). accounting and, based on the audit evidence obtained, considered the inherent risks associated with the group’s
whether a material uncertainty exists related to events or and the parent company’s business model including
In our opinion: conditions that may cast significant doubt on the group’s effects arising from macro-economic uncertainties such as
and the parent company’s ability to continue as a going
• The financial statements give a true and fair view concern. If we conclude that a material uncertainty exists,
Brexit and Covid-19, we assessed and challenged the
of the state of the group’s and of the parent reasonableness of estimates made by the directors and
we are required to draw attention in our report to the the related disclosures and analysed how those risks might
company’s affairs as at 30 April 2021 and of the
related disclosures in the financial statements or, if such affect the group’s and the parent company’s financial
group’s loss for the year then ended;
disclosures are inadequate, to modify the auditor’s resources or ability to continue operations over the going
• The group financial statements have been opinion. Our conclusions are based on the audit evidence concern period.
properly prepared in accordance with obtained up to the date of our report. However, future
International Accounting Standards in conformity events or conditions may cause the group or the parent Based on the work we have performed, we have not
with the requirements of the Companies Act 2006; company to cease to continue as a going concern. identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
• The parent company financial statements have Our evaluation of the directors’ assessment of the group’s significant doubt on the group’s and the parent company’s
been properly prepared in accordance with and the parent company’s ability to continue to adopt ability to continue as a going concern for a period of at
United Kingdom Generally Accepted Accounting the going concern basis of accounting included evaluation least twelve months from when the financial statements
Practice; and of management’s cashflow forecast to September 2022, are authorised for issue.
along with challenge and assessment of the inputs into
• The financial statements have been prepared the forecast. In auditing the financial statements, we have concluded
in accordance with the requirements of the that the directors’ use of the going concern basis of
Companies Act 2006. accounting in the preparation of the financial statements
is appropriate.

The responsibilities of the directors with respect to going

concern are described in the ‘Responsibilities of directors
for the financial statements’ section of this report.

ITM ANNUAL REPORT 2021

 INDEPENDENT AUDITOR'S REPORT

OUR APPROACH TO THE AUDIT KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
OVERVIEW OF OUR AUDIT APPROACH
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the overall
O V E R A L L M AT E R I A L I T Y audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
Group: £1,034,000, which represents 3.75% of the group's loss and we do not provide a separate opinion on these matters.
before taxation.

Parent company: £967,000, which represents 0.5% of the

parent company's gross assets
AUDIT
DESCRIPTION RESPONSE
K E Y A U D I T M AT T E R S W E R E I D E N T I F I E D A S

• Inappropriate recognition of revenue -

Same as previous year; KAM
• Inappropriate recognition of grant income -
Same as previous year; and

• Incomplete recognition of the loss provision DISCLOSURES KEY OBSERVATIONS

Materiality Key audit in relation to contract accounting - Same as / OUR RESULTS
matters previous year

Our auditor’s report for the year ended 30 April 2020 included
one key audit matter that has not been reported as a key audit In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
matter in our current year’s report. This relates to the use
of the going concern assumption when preparing the financial
statements which has been removed as there is significant
headroom in cash reserves held when compared to costs
Scoping
expected to be incurred.
HIGH

Incomplete recognition of
Scoping has been determined to ensure appropriate coverage Parent only - the loss provision in relation
Investments Inappropriate
of the significant risks as well as coverage of the key results in recognition to contract accounting
the financial statements: of grant income
Going concern

• Revenue 98% (2020: 94%) Management override

Intangible
of controls
GRAPH KEY
• Loss before tax 94% (2020: 96%) assets
Inappropriate Key audit
• Total assets 95% (2020: 95%) Share based recognition
matter
POTENTIAL FINANCIAL

payments Inventory of revenue

STATEMENT IMPACT

There have been no changes in scope from the prior year. As the Significant
finance function for the group is based in the UK, the audit Trade and grant risk
of the group has been performed by the primary team. receivables
Other risk

HIGH
EXTENT OF MANAGEMENT JUDGEMENT

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

KE Y AUDIT
MAT TER - GROUP
RELEVANT DISCLOSURES IN THE ANNUAL REPORT OUR RESULTS
INAPPROPRIATE RECOGNITION OF REVENUE HOW OUR SCOPE ADDRESSED THE MATTER - GROUP
AND ACCOUNTS 2021

We identified the inclusion of fraudulent In responding to the key audit matter, we performed the following • Financial statements: Note 5, Revenue, Operating Based on our audit work addressing the risk of improper
transactions within revenue, including completeness audit procedures: Segments & Income from Government Grants recognition of revenue, we are satisfied that the
of deferred income, as one of the most significant assumptions made by management in recognising
assessed risks of material misstatement. • Assessing whether the group’s accounting policies for • Financial statements: Note 4, Critical accounting revenue were appropriate and in accordance with,
revenue from product sales and consultancy contracts judgements and key sources of estimation the financial reporting framework, including IFRS 15,
Revenue recorded in the financial statements were in accordance with the financial reporting uncertainty and we did not identify any material misstatements
is £4,275,000 (2020: £3,291,000). framework, including IFRS 15; in the revenue recognised.
There is a significant risk of fraudulent reporting • Tested a sample of contracts to original signed
due to the judgemental nature of assessing revenue contractual agreements or terms to confirm these
recognised, using the ‘over time’ principles in with support management’s categorisation of the
IFRS 15 ‘Revenue from Contracts with Customers’. contract as ‘over time’ or not;
Management’s assessment includes a number
of estimates: • Performed procedures over management’s contract
forecast models, testing mathematical accuracy and
• Estimated total contract costs; agreeing amounts and terms to underlying contracts;

• Estimated stage of completion derived from • For a sample of contracts we recalculated revenue
the total contract costs; and recognised over time using the input method of costs
incurred to date as a percentage of total expected costs.
• Forecasted margin which is also derived We tested a sample of those costs incurred to date
from total contract costs. to supporting evidence;

• We challenged management’s estimate of total expected

costs to assess whether revenue had been properly
recognised. We did this by comparing costs expected with
post year end results and testing a sample of forecasted
costs to supporting evidence such as purchase orders
and supplier quotations;

• We made enquires of the individual project managers

to obtain an understanding of the current progress of the
contract and to understand their process and methods
for estimating costs to complete;

• For deferred contract income, we recalculated the

deferred income balance and agreed inputs to supporting
evidence, such as invoices raised and cash received.
We also reviewed contracts in place and tested those
with no deferred contract income to determine if the
liability is complete; and

• We recalculated accrued income in respect of revenue

from Product sales and Consulting contracts, based on
revenue recognised to date and progress billings.

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

INAPPROPRIATE RECOGNITION OF GRANT INCOME HOW OUR SCOPE ADDRESSED THE MATTER - GROUP RELEVANT DISCLOSURES IN THE ANNUAL REPORT OUR RESULTS
AND ACCOUNTS 2021

We identified the inclusion of fraudulent transactions In responding to the key audit matter, we performed the • Financial statements: Note 5, Revenue, Based on our audit work addressing the risk of improper
within grant income, including existence and valuation following audit procedures: Operating Segments & Income from recognition of grant income, we are satisfied that
of accrued grant income and completeness of deferred Government Grants the assumptions made by management in recognising
grant income, as one of the most significant assessed • Assessed whether the group’s accounting income from government grants were appropriate,
risks of material misstatement. policies for grant income are in accordance • Financial statements: Note 4, Critical accounting and in accordance with, the financial reporting
with International Accounting Standard IAS 20; judgements and key sources of estimation framework, including IAS 20.
Grant income recorded in the financial statements uncertainty
is £2,546,000 (2020: £2,768,000). • For a sample of grant income, we agreed the
terms to the signed contractual agreement,
ITM Power present grant income as a reduction in cost agreed the funding level to grant agreements INCOMPLETE RECOGNITION OF THE LOSS PROVISION HOW OUR SCOPE ADDRESSED THE MATTER - GROUP
of sales and/or admin costs. There is a significant risk and recalculated the amounts recognised, IN RELATION TO CONTRACT ACCOUNTING
of fraudulent reporting due to the judgemental nature deferred, or accrued based on actual costs
of assessing grant income recognised under IAS 20 incurred to date and, where appropriate, We identified incomplete recognition of the loss In responding to the key audit matter, we performed the
‘Accounting for Government Grants and Disclosure claims submitted; provision in relation to contract accounting as one of the following audit procedures:
of Government Assistance’ and inappropriate application most significant assessed risks of material misstatement
of the contract terms. The following judgements • Tested whether the costs associated with grant due to error. This is because of the judgement needed to • We obtained management's schedule of contract
income recorded to date are accurate and assess the contract provisions. loss provisions;
are applied by management in the recognition of
appropriately allocated to the correct grant
grant income:
project to challenge the validity of the claim Loss provision provided in the financial statements is • We identified on-going contracts at the year end
where no loss provision was recognised and
• Interpretation of the contract to assess the and recognition; £4,820,000 (2020: £3,645,000).
challenged whether this was appropriate by
costs that are reclaimable; and
• To test the validity of the submitted claims, To date, the majority of contracts that ITM Power have testing material costs to complete and comparing
• Assessment of the amount that can be we tested a sample of amounts receivable entered into have been loss making. There is a significant to contracted revenue amounts;
recognised as accrued grant income which under grant claims agreeing the terms level of judgment in calculating future expected costs
is based on when the terms of the grant to the signed contractual agreement on the contracts as the contracts are bespoke in nature. • We made enquiries of the specific project
The impact of incorrect assessment of these costs is the managers to obtain an understanding of their
income contract have been met. and agreed the funding level to grant
potential for immediate recognition of future losses. process and methods of estimating costs
agreements. This included accrued income
As these are typically multi-year projects, the estimate to complete. We looked for indicators of
in relation to grant income and the grant
around forecasting losses is sensitive and has the management bias in their assumptions and
receivable balance;
potential for material error. corroborated estimates based on prior
• We tested a sample of accrued grant income experience to historic data;
to subsequent invoice and cash receipt
in order to determine if the income was
• We obtained post year end schedules for total
expected costs to identify whether the costs
genuine. We also documented our
used in assessing contract losses were
understanding of the claim submission
appropriate. We did this by assessing if the
process; and
forecast costs to complete had increased
• For deferred grant income, we recalculated significantly and where they did, corroborating
the deferred income balance and agreed inputs management’s explanations for the changes;
to supporting evidence, such as invoices raised
and cash received.
• We compared the total expected costs by contract
from the year end to the previous year end,
obtaining explanations for movements in order
to test the historical accuracy of forecasting;

• We obtained supporting evidence, such as

purchase orders and supplier quotations for
a sample of forecast costs to complete; and

• We assessed and challenged the appropriateness

of the financial statement disclosures.

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

RELEVANT DISCLOSURES IN THE ANNUAL REPORT KEY OBSERVATIONS

AND ACCOUNTS 2021

KEY AUDIT MATTER - GROUP HOW OUR SCOPE ADDRESSED THE MATTER - GROUP

• Financial statements: Note 21, Provisions When assessing contract costs incurred post year end,
we identified a minority of contracts where additional
• Financial statements: Note 4, Critical accounting costs had been incurred which were not forecast.
judgements and key sources of estimation Management have subsequently recalculated forecast
uncertainty contract costs and the resulting loss provision.

Based on our audit work addressing the risk of

incomplete recognition of the loss provision, we are
satisfied that assumptions made by management in
recording the loss provision are appropriate, and its
recognition is in accordance with the financial reporting
framework, including IAS 37 ‘Provisions, Contingent
Liabilities and Contingent Assets’ and IFRS 15.

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

O U R A P P L I C AT I O N O F M AT E R I A L I T Y
MATERIALITY MEASURE GROUP PARENT COMPANY

We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion SIGNIFICANT In determining materiality, we made In determining materiality, we made
in the auditor’s report. JUDGEMENTS MADE the following significant judgements: the following significant judgements.
BY AUDITOR IN
Materiality was determined as follows: Prior experience of misstatements that Prior experience of misstatements that
DETERMINING THE
PERFORMANCE were subsequently corrected. were subsequently corrected.
MATERIALITY General industry risk and the group General industry risk and the group
specific risk due to the speed of change specific risk due to the speed of change
MATERIALITY MEASURE GROUP PARENT COMPANY of the industry. of the industry.

MATERIALITY FOR We define materiality as the magnitude of misstatement in the financial statements SPECIFIC MATERIALITY We determine specific materiality for one or more particular classes of transactions,
FINANCIAL STATEMENTS that, individually or in the aggregate, could reasonably be expected to influence the account balances or disclosures for which misstatements of lesser amounts than
AS A WHOLE economic decisions of the users of these financial statements. We use materiality in materiality for the financial statements as a whole could reasonably be expected to
determining the nature, timing and extent of our audit work. influence the economic decisions of users taken on the basis of the financial statements.

£1,034,000 which is 3.75% of loss before £967,000 which is 0.5% of gross assets. SPECIFIC MATERIALITY We determined a lower level of specific We determined a lower level of specific
MATERIALITY THRESHOLD
tax. materiality for Related party transactions. materiality for Related party transactions.

In determining materiality, we made the In determining materiality, we made COMMUNICATION OF We determine a threshold for reporting unadjusted differences to the audit committee.
SIGNIFICANT
following significant judgements: the following significant judgements: MISSTATEMENTS TO THE
JUDGEMENTS MADE
AUDIT COMMITTEE
BY AUDITOR IN
The shareholder perception that the The primary objective of the parent
DETERMINING THE
value of the group is derived from company is to hold the investments
MATERIALITY THRESHOLD FOR £51,000 and misstatements below that £48,000 and misstatements below that
the potential of the products being in the group undertakings, as well
COMMUNICATION threshold that, in our view, warrant threshold that, in our view, warrant
developed and the value that can be as to provide financing.
reporting on qualitative grounds. reporting on qualitative grounds.
derived from these assets;
Materiality for the current year is higher
The primary objective of the group than the level that we determined for The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
is development and sale of the products the year ended 30 April 2020 to reflect potential uncorrected misstatements.
being developed, with the capacity the increase in assets held.
and production methods along with OVERALL MATERIALITY - GROUP OVERALL MATERIALITY - PARENT COMPANY
trading results being a key focus of
management; and PM PM
£620,000 £580,000
60% 60%
Materiality for the current year is higher
than the level that we determined for the Loss before tax Gross
Grossassets
assets
year ended 30 April 2020 to reflect the £27,648,000 £192,197,000
£190,000,000
increase in absolute loss realised in 2021.

PERFORMANCE We set performance materiality at an amount less than materiality for the financial
MATERIALITY USED TO statements as a whole to reduce to an appropriately low level the probability that TFPUM TFPUM
£414,000 £387,000
DRIVE THE EXTENT OF the aggregate of uncorrected and undetected misstatements exceeds materiality 40% 40%
OUR TESTING for the financial statements as a whole. FSM FSM
£1,034,000 £967,000
3.75% 0.5%

PERFORMANCE £620,000 which is 60% of financial £580,000 which is 60% of financial FSM: Financial statements materiality
MATERIALITY THRESHOLD statement materiality. statement materiality. PM: Performance materiality
TFPUM: Tolerance for potential uncorrected misstatements

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

AN OVERVIEW OF THE SCOPE OF OUR AUDIT O T H E R I N F O R M AT I O N

We performed a risk-based audit that requires an understanding of the group’s and the parent company’s business The directors are responsible for the other information.
and in particular matters related to: The other information comprises the information included
in the annual report and financial statements, other than
U N D E R S TA N D I N G T H E G R O U P, I T S C O M P O N E N T S , A N D T H E I R E N V I R O N M E N T S , the financial statements and our auditor’s report thereon.
IN C LUD IN G GRO UP-WID E C O N T RO L S Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
• The engagement team obtained an understanding of the group and its environment, including group-wide controls, explicitly stated in our report, we do not express any form
and assessed the risks of material misstatement at the group level; of assurance conclusion thereon.
• The engagement team obtained an understanding of the effect of the group organizational structure on the scope In connection with our audit of the financial statements,
of the audit, for example, the level of centralisation of the group control function and the use of service organizations. our responsibility is to read the other information and,
in doing so, consider whether the other information
is materially inconsistent with the financial statements
IDENTIFYING SIGNIFIC ANT COMPONENTS or our knowledge obtained in the audit or otherwise
• The engagement team evaluated the identified components to assess their significance and determined the planned appears to be materially misstated. If we identify such
audit response based on a measure of materiality. Significance was determined as a percentage of the group’s total material inconsistencies or apparent material misstatements,
assets, revenues and profit before taxation and qualitative factors, such as component’s specific nature we are required to determine whether there is a material
or circumstances were also considered. misstatement in the financial statements or a material
misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material
PERFORMANCE OF OUR AUDIT misstatement of this other information, we are required
to report that fact.
• All three KAM’s were addressed with the audit of the full and specific scope locations. There were no KAM’s that
related directly to the parent company, ITM Power Plc; We have nothing to report in this regard.

• Specific procedures were primarily designed to audit the KAM’s but additional procedures were performed on cash Our opinion on other matters prescribed by the Companies
balances as well; Act 2006 is unmodified.

• The engagement team performed audit procedures across all components in line with the scope described. In our opinion, based on the work undertaken in the course
There were no component teams engaged to support the primary team. of the audit:

• The information given in the strategic report

and the directors’ report for the financial year for
which the financial statements are prepared
is consistent with the financial statements; and
AUDIT APPROACH NUMBER OF % COVERAGE % COVERAGE LOSS
COMPONENTS REVENUE BEFORE TAX
• The strategic report and the directors’ report
have been prepared in accordance with applicable
legal requirements.
AUDIT OF FINANCIAL INFORMATION 2 98 91

AUDIT OF SIGNIFICANT ACCOUNT 1 0 3 M AT T E R O N W H I C H W E A R E R E Q U I R E D T O

BALANCES / TRANSACTIONS R E P O R T U N D E R T H E C O M P A N I E S A C T 20 0 6

In the light of the knowledge and understanding of the

ANALYTICAL PROCEDURES 3 2 6 group and the parent company and its environment
obtained in the course of the audit, we have not identified
TOTAL 6 100 100 material misstatements in the strategic report or the
directors’ report.

ITM ANNUAL REPORT 2021

 K E Y A U D I T M AT T E R - G R O U P

M AT T E R S O N W H I C H W E A R E R E Q U I R E D AUDI TOR’S RE SPONSIBIL I T IE S FOR T HE AUDI T • We assessed the susceptibility of the group's • In assessing the potential risks of material
TO REPORT BY EXCEPTION O F T H E F I N A N C I A L S TAT E M E N T S financial statements to material misstatement, misstatement, we obtained an understanding of:
including how fraud might occur, by evaluating
We have nothing to report in respect of the following Our objectives are to obtain reasonable assurance about The entity's operations, including the nature
management's incentives and opportunities for
matters in relation to which the Companies Act 2006 requires whether the financial statements as a whole are free from of its revenue sources, products and services
manipulation of the financial statements.
us to report to you if, in our opinion: material misstatement, whether due to fraud or error, and of its objectives and strategies to understand
This included the evaluation of the risk of
and to issue an auditor’s report that includes our opinion. the classes of transactions, account balances,
• Adequate accounting records have not been kept Reasonable assurance is a high level of assurance, but is
management override of controls. We determined
expected financial statement disclosures
by the parent company, or returns adequate for that the principal risks were in relation to:
not a guarantee that an audit conducted in accordance with and business risks that may result in risks
our audit have not been received from branches ISAs (UK) will always detect a material misstatement when Journal entries that increased revenues or that of material misstatement.
not visited by us; or it exists. Misstatements can arise from fraud or error and reclassified costs from the income statement
The applicable statutory provisions
• The parent company financial statements are are considered material if, individually or in the aggregate, to the balance sheet;
not in agreement with the accounting records they could reasonably be expected to influence the
Potential management bias in determining The entity's control environment, including the
and returns; or economic decisions of users taken on the basis of these
accounting estimates, especially in relation to their adequacy of the training to inform staff of
financial statements.
the relevant legislation, rules and other regulations
• Certain disclosures of directors’ remuneration assessment of the valuation of intangible assets;
of the regulator, the adequacy of procedures
specified by law are not made; or A further description of our responsibilities for the audit
of the financial statements is located on the Financial Transactions with related parties. for authorisation of transactions, internal review
• We have not received all the information and Reporting Council’s website at: www.frc.org.uk/ • Assessment of the appropriateness of the
procedures over the entity's compliance with
explanations we require for our audit. auditorsresponsibilities. This description forms part of regulatory requirements, the authority of,
collective competence and capabilities and procedures to ensure that possible breaches
our auditor’s report. of the engagement team including consideration of requirements are appropriately investigated
of the engagement team's: and reported.
RESPONSIBILITIES OF DIREC TORS FOR THE
F I N A N C I A L S TAT E M E N T S Understanding of, and practical experience
E X P L A N AT I O N A S T O W H AT E X T E N T T H E A U D I T
WA S C O N S I D ER ED C A PA B L E O F D E T EC T I N G with audit engagements of a similar nature
As explained more fully in the directors’ responsibilities USE OF OUR REPORT
IRREGUL ARITIES, INCLUDING FR AUD and complexity through appropriate training
statement, the directors are responsible for the preparation
and participation This report is made solely to the company’s members,
of the financial statements and for being satisfied that they
Irregularities, including fraud, are instances of as a body, in accordance with Chapter 3 of Part 16 of the
give a true and fair view, and for such internal control as the Knowledge of the industry in which the
non-compliance with laws and regulations. We design Companies Act 2006. Our audit work has been undertaken
directors determine is necessary to enable the preparation client operates
procedures in line with our responsibilities, outlined above, so that we might state to the company’s members those
of financial statements that are free from material
to detect material misstatements in respect of irregularities, Understanding of the legal and regulatory matters we are required to state to them in an auditor’s
misstatement, whether due to fraud or error.
including fraud. Owing to the inherent limitations of an requirements specific to the entity including: report and for no other purpose. To the fullest extent
In preparing the financial statements, the directors are audit, there is an unavoidable risk that material permitted by law, we do not accept or assume responsibility
responsible for assessing the group’s and the parent misstatements in the financial statements may not be The provisions of the applicable legislation to anyone other than the company and the company’s
company’s ability to continue as a going concern, disclosing, detected, even though the audit is properly planned and members as a body, for our audit work, for this report,
performed in accordance with the ISAs (UK). The regulators rules and related guidance,
as applicable, matters related to going concern and using the or for the opinions we have formed.
including guidance issued by relevant
going concern basis of accounting unless the directors either
The extent to which our procedures are capable of detecting authorities that interprets those rules
intend to liquidate the group or the parent company or
irregularities, including fraud is detailed below:
to cease operations, or have no realistic alternative but The applicable statutory provisions
to do so. • We obtained an understanding of the legal and DAVID WHITE
regulatory frameworks that are applicable • Team communications in respect of potential Senior Statutory Auditor
to the group and determined that the most non-compliance with laws and regulations
significant are those related to the reporting and fraud included the potential for fraud for and on behalf of Grant Thornton UK LLP
frameworks (International Accounting Standards in revenue recognition through manipulation Statutory Auditor, Chartered Accountants
in conformity with the requirements of the of deferred income. Sheffield
Companies Act 2006, United Kingdom Generally
10 September 2021
Accepted Accounting Practice, and the Companies
Act 2006),as well as the relevant tax regulations,
health and safety law, employments law and data
protection laws.

ITM ANNUAL REPORT 2021

CONSOLIDATED INCOME CONSOLIDATED
C O N S O L I D AT E D I N C O M E

STATEMENT AND OTHER BAL ANC E SHEE T

COMPREHENSIVE INCOME NOTE
2021
£’000
2020
£’000

2021 2020
NON-CURRENT ASSETS
RESTATED
NOTE £’000 £’000 £’000 £’000 Investment in associate 12 259 346
Intangible assets 13 3,269 2,154
REVENUE 5 4,275 3,291
Right of use assets 14 6,399 6,520
Direct costs (12,145) (10,839) Property, plant and equipment 15 13,514 6,501
Grant income against direct costs 5 1,356 1,719 Financial asset at amortised cost 29 148 137
COST OF SALES (10,789) (9,120) TOTAL NON-CURRENT ASSETS 23,589 15,658
GROSS LOSS (6,514) (5,829) CURRENT ASSETS
OPERATING COSTS Inventories 16 6,418 4,432
Research and development (3,489) (2,298) Trade and other receivables 18 22,981 23,166
Production and engineering (8,839) (13,919) Cash and cash equivalents 19 176,078 39,919
Sales and marketing (1,436) (1,385) TOTAL CURRENT ASSETS 205,477 67,517
Administration expenses (7,404) (7,028) CURRENT LIABILITES
Expected credit loss (165) 15 Trade and other payables 20 (12,857) (14,013)
Other income - government grants 5 1,190 1,049 Provisions 21 (12,276) (6,890)
LOSS FROM OPERATIONS 6 (26,657) (29,396) Lease liability 22 (204) (211)
Share of loss of associate company 12 (595) (3) TOTAL CURRENT LIABILITIES 10 (25,337) (21,114)
Finance income 9 83 90 NET CURRENT ASSETS 180,140 46,403
Finance costs 9 (479) (214) NON-CURRENT LIABLITIES
LOSS BEFORE TAX (27,648) (29,523) Lease liability 22 (6,282) (6,315)
Tax 10 (49) (38) NET ASSETS 197,447 55,746
LOSS FOR THE YEAR (27,697) (29,561) EQUITY
OTHER TOTAL COMPREHENSIVE INCOME: Called up share capital 23 27,533 23,664
Items that may be reclassified subsequently
Share premium account 23 302,248 137,236
to profit or loss
Merger reserve 23 (1,973) (1,973)
Foreign currency translation differences
on foreign operations (78) 50 Foreign exchange reserve 23 83 161
Net other total comprehensive income (78) 50 Retained loss 23 (130,444) (103,342)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (27,775) (29,511) TOTAL EQUITY 197,447 55,746

Basic and diluted loss per share 11 (5.5p) (7.4p)

The financial statements of ITM Power Plc, registered number 05059407, were approved by the Board of Directors
and authorised for issue on 10 September 2021. Signed on behalf of the Board of Directors:
Research and development, Production and engineering, All results presented above are derived from continuing
Sales and marketing were included as “distribution costs” operations and are attributable to owners of the Company.
in the previous year. These have been presented as
individual functions in the current year and therefore
ANDY ALLEN
restated in the comparative.
Director

ITM ANNUAL REPORT 2021

CONSOLIDATED STATEMENT CONSOLIDATED C A SH
C O N S O L I D AT E D S TAT E M E N T
OF CHANGES IN EQUITY

OF C HANGES IN EQUIT Y FLOW STATEMENT

CALLED SHARE FOREIGN
UP SHARE PREMIUM MERGER EXCHANGE RETAINED TOTAL
CAPITAL ACCOUNT RESERVE RESERVE LOSS EQUITY 2021 2020
NOTE £’000 £’000 £’000 £’000 £’000 £’000 NOTE £’000 £’000

AT 1 MAY 2019 23 16,200 86,631 (1,973) 111 (74,760) 26,209 NET CASH USED IN OPERATING ACTIVITIES 25 (20,141) (12,040)
INVESTING ACTIVITIES
TRANSACTIONS
WITH OWNERS Investment in associate (535) (349)
Issue of shares 23 7,464 50,605 - - - 58,069 Purchases of property, plant and equipment (14,422) (8,986)
Credit to equity for
share based payment - - - - 979 979 Finance asset (security deposit) - (137)

TOTAL TRANSACTIONS 7,464 50,605 - - 979 59,048 Capital Grants received against purchases of non-current assets 3,992 89
WITH OWNERS Proceeds on disposal of Property, Plant & Equipment 3 1
Payments for intangible assets (1,524) (1,771)
Loss for the year - - - - (29,561) (29,561)
Other comprehensive Interest received 83 90
income 23 - - - 50 - 50 NET CASH USED IN INVESTING ACTIVITIES (12,403) (11,063)
TOTAL - - - 50 (29,561) (29,511) FINANCING ACTIVITIES
COMPREHENSIVE
INCOME Issue of ordinary share capital 173,835 59,299
Costs associated with fund raise (4,954) (1,230)
AT 1 MAY 2020 23 23,664 137,236 (1,973) 161 (103,342) 55,746 Payment of lease liabilities 26 (156) (236)

TRANSACTIONS 168,881 NET CASH FROM FINANCING ACTIVITIES 168,725 57,833

WITH OWNERS
Issue of shares 23 3,869 165,012 - - - 168,881 INCREASE IN CASH AND CASH EQUIVALENTS 136,181 34,730

Credit to equity for

share based payment - - - - 595 595 CASH AND CASH EQUIVALENTS AT THE 39,919 5,173
BEGINNING OF YEAR
TOTAL 3,869 165,012 - - 595 169,476
TRANSACTIONS Effect of foreign exchange rate changes (22) 16
WITH OWNERS CASH AND CASH EQUIVALENTS AT THE END OF YEAR 176,078 39,919
Loss for the year - - - - (27,697) (27,697)
Other comprehensive
income 23 - - - (78) - (78)
TOTAL - - - (78) (27,697) (27,775)
COMPREHENSIVE
INCOME

AT 30 APRIL 2021 23 27,533 302, 248 (1,973) 83 (130,444) 197,447

ITM ANNUAL REPORT 2021

NOTES TO THE CONSOLIDATED
N O T E S T O T H E C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S

FINANC IAL STATEMENT S

1. G E N E R A L I N F O R M AT I O N NEW AND REVISED IFRSS IN ISSUE BUT • IAS 8 Amendments to Definition of Accounting When the Company has less than a majority of the voting
NOT YET EFFEC TIVE Estimates (effective for periods beginning on or rights of an investee, it considers that it has power over
ITM Power Plc is a public company incorporated in England after 1 January 2023) the investee when the voting rights are sufficient to give
and Wales under the Companies Act 2006. The registered Certain new accounting standards and interpretations it the practical ability to direct the relevant activities of the
have been published that are not mandatory for 30 April • IAS 12 Deferred Tax related to Assets and investee unilaterally. The Company considers all relevant
office is at 2 Bessemer Park, Shepcote Lane, Sheffield,
2021 reporting periods and have not been early adopted Liabilities arising from a Single Transaction facts and circumstances in assessing whether or not the
South Yorkshire S9 1DZ. The entity is a parent and the
by the Group. These standards are neither expected (effective for periods beginning on or after Company’s voting rights in an investee are sufficient
nature of the Group’s operations and its principal activities
to have a material impact on the entity in the current 1 January 2023)   to give it power, including:
are disclosed in the Directors’ Report.
or future reporting periods nor on foreseeable future
These financial statements are presented in pounds transactions: • the size of the Company’s holding of voting rights
sterling, which is also the functional currency, 3. S I G N I F I C A N T relative to the size and dispersion of holdings of
because that is the currency of the primary economic • IFRS 16 Amendment for Covid-19 related Rent ACCOUNTING POLICIES the other vote holders;
environment in which the Group operates. Concessions (effective for periods beginning on or
after 1 June 2020) • potential voting rights held by the Company,
BASIS OF ACCOUNTING other vote holders or other parties;
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
2. ADOPTION OF NEW and IFRS 16 for Interest Rate Benchmark The consolidated financial statements have been prepared • rights arising from other contractual
A N D R E V I S E D S TA N D A R D S reform-phase 2 (effective for periods beginning in accordance with International Accounting Standards, arrangements; and
on or after 1 January 2021) in conformity with the requirements of the Companies
A M E N D M E N T S T O I F R S S T H AT A R E Act 2006. • any additional facts and circumstances that
M A N D AT O R I LY E F F E C T I V E F O R T H E • IFRS 16 Amendment for Covid-19 related Rent indicate that the Company has, or does not
Concessions beyond 30 June 2021 (effective for The financial statements have been prepared under the have, the current ability to direct the relevant
CURRENT YEAR.
periods beginning on or after 1 April 2021) assumption that the Group operates on a going concern activities at the time that decisions need
basis and on the historical cost basis. Historical cost is to be made, including voting patterns at previous
In the current year, the Group has applied the following
amendments to IFRSs issued by the International
• IFRS 3 Amendments to references to the generally based on the fair value of the consideration shareholders’ meetings.
Conceptual Framework Current (effective for given in exchange for goods and services.
Accounting Standards Board (IASB) that are mandatorily Consolidation of a subsidiary begins when the Company
periods beginning on or after 1 January 2022)
effective for an accounting period that begins on or after obtains control over the subsidiary and ceases when the
1 January 2020: • IAS 16 Amendments to Property, Plant and B A S I S O F C O N S O L I D AT I O N
Company ceases to have control of the subsidiary.
Equipment – Proceeds before intended Use
• Amendments to References to the Conceptual Specifically, the results of subsidiaries acquired or disposed
Current (effective for periods beginning on or
Framework in IFRS Standards The consolidated financial statements incorporate the of during the year are included in the consolidated
after 1 January 2022)
financial statements of the Company and entities
• IFRS 3 Amendments to the definition of a business income statement from the date the Company gains
• IAS 37 Amendments to Onerous Contracts-Cost of controlled by the Company (its subsidiaries) made up to control until the date when the Company ceases to control
• IAS 1 and IAS 8 Amendments to the definition Fulfilling a Contract (effective for periods beginning 30 April each year. Control is achieved when the Company: the subsidiary.
of material to align with the Revised Conceptual on or after 1 January 2022)
• has power over the investee; Profit or loss and each component of other comprehensive
Framework
• Annual Improvements to IFRS Standards • is exposed, or has rights, to variable return income are attributed to the owners of the Company.
• IFRS 9, IAS 39 and IFRS 7 amendments in Interest 2018-2020 (effective for periods beginning on
from its involvement with the investee; and Total comprehensive income of the subsidiaries is attributed
Rate Benchmark Reform when accounting or after 1 January 2022) to the owners of the Company.
for hedging • has the ability to use its power to affect
• IAS 1 Classification of Liabilities as Current or its returns. Where necessary, adjustments are made to the financial
These standards have not had a material impact on the Non-Current (effective for periods beginning statements of subsidiaries to bring the accounting policies
entity in the current reporting period. on or after 1 January 2023) The Company reassesses whether or not it controls an used into line with the Group’s accounting policies.
investee if facts and circumstances indicate that there are
• IAS 1 and IFRS Practice Statement 2 Disclosure changes to one or more of the three elements of control All intragroup assets and liabilities, equity, income,
of Accounting Policies from significant to material expenses and cash flows relating to transactions between
listed above.
(effective for periods beginning on or after the members of the Group are eliminated on consolidation.
1 January 2023)

ITM ANNUAL REPORT 2021

 N O T E S T O T H E C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S

3. S I G N I F I C A N T Under IFRS15, a performance obligation is satisfied over • Bespoke contracts by their nature do not create Parts that are replaced due to being at their end of life are
ACCOUNTING POLICIES time if one of the following criteria is met: an asset with an alternative use to the Group; not included. Expected lifetimes of individual parts will be
some have traceability requirements attached provided in a detailed maintenance plan during the design
(C O N T I N U E D) a) the customer simultaneously receives and to them that would prevent them being diverted phase of the project. Out-of-warranty repairs and part
consumes the benefits provided by the seller’s during production whilst others are simply bespoke replacements will be charged to the customer. It should
GOING CONCERN performance as the seller performs; to the customer’s requirements and therefore be noted that a maintenance contract is mandatory for the
would not meet the needs of, or be easily converted duration of any warranty period and will form a separate
b) the seller’s performance creates or enhances
The directors have prepared a cash flow forecast for the for use on, another project. There is also performance obligation. After the warranty period, it is
an asset that the customer controls as the asset
period ending 30 September 2022. This forecast indicates an enforceable right to payment for performance recommended that a maintenance package is continued
is created or enhanced; or
that the Group and parent company would expect completed to date if the contract is terminated (see maintenance contracts below).
to remain cash positive without the requirement for c) the seller’s performance does not create an asset by the customer for reasons other than ITM Power's
further fund raising based on delivering the existing ITM Power’s standard contract wording limits the right
with an alternative use to the seller and the seller failure to perform as promised.
pipeline, for a period of at least 12 months from the date of rejection once a customer has accepted the unit under
has an enforceable right to payment for
of approval of these financial statements. Revenues for bespoke contracts will therefore be either factory acceptance testing (for ex-works) or site
performance completed to date
recognised over time according to how much of the acceptance testing. Up until that time, contractual
By the end of the period analysed, the Group will still Revenue from product sales, which do not meet the performance obligation has been satisfied. This is obligations would protect our right to recognise revenues
hold a large proportion of the monies from the fund raise first two criteria, will therefore be treated differently measured using the input method, comparing the extent for work performed to date, which include a reasonably
in the year. This should give the business sufficient funds depending on whether the product is standard of inputs (labour and material costs) towards satisfying attributable profit margin. Remedies would instead exist
to trade for the next three years if the business continued or bespoke in reference to point (c) above: the performance obligation with the expected total inputs in a separate claim for damages.
to operate in a similar way beyond the forecast period. required. Any changes in expectation are reflected in the
• Revenue from standard products will be recognised total inputs figure as they become known. The progress
With the uncertainty created for the economy by only when the performance obligation has been MAINTENANCE CONTRACTS
percentage obtained is then applied to the revenue
Covid-19, this cash flow forecast has also been stress fulfilled and ownership of the goods has associated with that performance obligation. Maintenance contracts typically involve two scheduled
tested. As a worst-case scenario, if all payments had transferred, which is typically at point of delivery
to continue as forecast while receipts were not received Management view this as a much more reliable measure annual visits. Therefore, revenue is recognised in two
or site acceptance, whichever is the official
at all, the business would remain cash positive for the of progress towards completion of the performance instalments against the costs of those visits, i.e. when each
handover of control of the goods to the immediate
full twelve months from the date of approval of these obligation than the output method as, despite contracting performance obligation is met. However, where remote
customer. This is due to the “transferability” of
financial statements. with milestone payments, these are not reliable measures support forms part of the contract, revenue for this
such products and their components up until
of progress or value to the customer but instead have performance obligation will be recognised over time as
handover, so the asset generated has an alternative
The accounts have therefore been prepared on a going the customer simultaneously receives and consumes the
use to the Group up to the point of handover. been designed to aid cash flow.
concern basis. benefits of such a service, and criteria (a) under IFRS15 is
• During the product build and until the performance ITM Power supply units with a standard 12-month met as referred to above.
REVENUE RECOGNITION obligation has been met, income will be reflected warranty, which covers the equipment against any fault
PRODUCT SALES in the balance sheet as either accrued or deferred due to manufacturing defects. Any repairs made under
income depending on progress billings and this warranty will be completed free of charge. CONSULTING CONTRACTS
ITM Power undertakes product sales that involve the advances received from customers. Where possible, diagnosis will be performed via remote
manufacture, installation and commissioning of an connection in order to minimise the disruption to Where the IFRS 15 criteria for recognition over time
electrolyser system over a period of several months. • Costs incurred on projects to date will not be customers. The warranty period starts from the date the are met (in this case that the customer simultaneously
Such systems are usually quoted to a customer as a single included in the statement of comprehensive performance obligations under Site Acceptance Testing receives and consumes the benefits of the service),
value but may be split into agreed payment milestones income but will be accumulated on the balance is deemed to have been passed. revenue will be recognised over time. For those contracts
in order to facilitate cash flow. Any ancillary requests will sheet as work in progress (as they are considered where these criteria are not met, revenue will be
recoverable) and transferred to cost of sales Unless an extended warranty is specifically purchased recognised on completion of the contract.
be treated as separate performance obligations if costs
once the revenue applicable to those costs under the sales contract and thus, together with its
can be separately identified and the revenue value is also
can be recognised in the accounts. Should costs maintenance obligations, creates a separate performance
quoted separately, but the main objective, to provide
exceed anticipated revenues, a provision will be obligation under that contract, warranty provisions will FUEL SALES OR SALES OF SCRAP/SPARES
a working system for use in a specific application,
recognised and the excess costs expensed with continue to be treated under IAS 37 as they are by nature
is viewed as a single performance obligation.
immediate effect. an assurance warranty. Sales are recognised immediately upon completion of the
performance obligation, being the transfer of ownership
of the goods.

ITM ANNUAL REPORT 2021

 N O T E S T O T H E C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S

3. S I G N I F I C A N T
ACCOUNTING POLICIES In preparing the financial statements of the individual calculated using tax rates that have been enacted or I N V E S T M E N T I N A S S O C I AT E S
(C O N T I N U E D) companies, transactions in currencies other than the substantively enacted by the balance sheet date.
entity’s functional currency (foreign currencies) are The resulting tax charge, where applicable, is shown An associate is an entity over which the Group has
recognised within the tax line of the income statement. significant influence but that is neither a subsidiary nor
GRANTS
at the rates of exchange prevailing on the dates of the an interest in a joint venture. Significant influence is the
Research and development tax credits are recognised power to participate in the financial and operational
Government and other grants are included in other operating transactions. At each balance sheet date, monetary assets
on an accruals basis, and are reported in the income policy decisions of the investee but is not control or joint
income in the period that the related expenditure is incurred, and liabilities that are denominated in foreign currencies
statement. By their nature, they are similar to grant control over those policies. Investments in associates are
unless relating to property, plant and equipment when they are retranslated at the rates prevailing at that date.
funding and are presented amongst other income. accounted for using the equity method.
are netted against the cost of the assets acquired on the Non-monetary items carried at fair value that are
balance sheet. Deferred tax is the tax expected to be payable or An investment in associate is initially recognised at cost
denominated in foreign currencies are translated
recoverable on differences between the carrying amounts and adjusted thereafter to recognise the Group’s share of
Grants have stage payments, which can include up-front at the rates prevailing at the date when the fair value
of assets and liabilities in the financial statements and the the profit or loss and other comprehensive income of the
payments to ITM Power. Where pre-finance has been was determined. Non-monetary items that are measured
corresponding tax bases used in the computation of associate, adjusted where necessary to ensure consistency
received at the start of the grant and continues to exceed in terms of historical cost in a foreign currency are
taxable profit, and is accounted for using the balance with the accounting policies of the Group. When the
expenditure incurred to date, the surplus is shown as not retranslated. Group’s share of losses of an associate exceeds the
sheet liability method. Deferred tax liabilities are generally
deferred income and is included in the consolidated balance recognised for all taxable temporary differences and Group’s interest in that associate, the Group discontinues
Exchange differences are recognised in profit or loss in
sheet as a liability. When expenditure incurred to date deferred tax assets are recognised to the extent that it is recognition of its share of further losses. Additional losses
the period in which they arise except exchange differences
exceeds receipts from the grant body, the surplus is shown are then recognised only to the extent that the Group
on monetary items receivable from or payable to a foreign probable that taxable profits will be available against
as accrued income until such time that it can be claimed. has incurred legal or constructive obligations or made
operation for which settlement is neither planned which deductible temporary differences can be utilised.
Such balances are reviewed for recoverability, ensuring that payments on behalf of the associate.
nor likely to occur (therefore forming part of the net Such assets and liabilities are not recognised if the
the costs incurred met the conditions of the grant for investment in the foreign operation), which are recognised temporary difference arises from goodwill or from the As per IAS 28, the investment in an associate will be
recognition of grant income and such recognition of income initially in other comprehensive income and reclassified initial recognition (other than in a business combination) subject to impairment review only with objective
does not exceed the maximum value of the award. from equity to profit or loss on disposal or partial disposal of other assets and liabilities in a transaction that affects evidence of impairment from observable data as a result
of the net investment. neither the tax profit nor the accounting profit. of one or more events adversely impacting the expected
In specific instances where grant income subsidises a sale,
future cashflows and where such impact can be reliably
grant income can be recognised against appropriate For the purpose of presenting consolidated financial Deferred tax liabilities are recognised for taxable estimated. Any such impairment will reduce the carrying
expenditure on agreed projects and shown as receivable statements, the assets and liabilities of the Group’s foreign temporary differences arising on investments in value of the investment and be recognised immediately in
from the time of the expense. This means that grant income operations are translated at exchange rates prevailing subsidiaries and associates, and interests in joint ventures, profit or loss to the extent that it relates to the investment
can be recognised against stage payments made on larger on the balance sheet date. Income and expense items are except where the Group is able to control the reversal by the Group.
items. Thus, a further category of grant income receivable translated at the average exchange rates for the period, of the temporary difference and it is probable that the
against pro forma payments has been established within unless exchange rates fluctuate significantly during that temporary difference will not reverse in the foreseeable Unrealised gains and losses on transactions between the
deferred income on the balance sheet to allow for period, in which case the exchange rates at the date of future. The carrying amount of deferred tax assets is Group and its associates and joint ventures are eliminated
a difference in treatment in grant-subsidised sales. reviewed at each balance sheet date and reduced to the to the extent of the Group’s interest in those entities.
transactions are used. Exchange differences arising, if any,
Once the items have been received, this grant income will Where unrealised losses are eliminated, the underlying
are recognised in other comprehensive income and extent that it is no longer probable that sufficient taxable
come to be shown as “grant income against direct costs” asset is also tested for impairment.
accumulated in equity (attributed to non-controlling profits will be available to allow all or part of the asset
in profit and loss. interests as appropriate). to be recovered.

Deferred tax is calculated at the tax rates that are I N TA N G I B L E A S S E T S - S O F T W A R E

expected to apply in the period when the liability is settled
FOREIGN CURRENCIES TA X AT I O N Software purchased from external companies has been
or the asset is realised. Deferred tax is charged or credited
recognised at cost under the heading of intangible assets.
The individual financial statements of each group company in the income statement, except when it relates to items Amortisation is charged so as to write off the cost
The tax expense represents the sum of the tax currently
are presented in the currency of the primary economic charged or credited directly to equity, in which case the of assets over an estimated useful life of three years
payable and deferred tax.
environment in which it operates (its functional currency). deferred tax is also dealt with in equity. Deferred tax (in-line with the Group policy for computer equipment),
For the purpose of the consolidated financial statements, The tax currently payable is based on taxable profit for assets and liabilities are offset when there is a legally using the straight-line method. This is recognised in
the results and financial position of each group company the year. Taxable profit differs from net profit as reported enforceable right to set off current tax assets against Administration expenses.
are expressed in pounds sterling, which is the functional in the income statement because it excludes items of current tax liabilities, and when they relate to income
currency of the Group, and the presentation currency for income or expense that are taxable or deductible in other taxes levied by the same taxation authority, and the Group
the consolidated financial statements. The financial years and it further excludes items that are never taxable intends to settle its current tax assets and liabilities
statements are presented in round thousands. or deductible. The Group’s liability for current tax is on a net basis.

ITM ANNUAL REPORT 2021

 N O T E S T O T H E C O N S O L I D AT E D
F I N A N C I A L S TAT E M E N T S

3. S I G N I F I C A N T
ACCOUNTING POLICIES
(C O N T I N U E D) RIGHT OF USE ASSETS P R O P E R T Y, P L A N T A N D E Q U I P M E N T (C T D) The recoverable amounts of non-current assets are
derived from value-in-use calculations. In assessing value
I N T E R N A L LY- G E N E R AT E D I N TA N G I B L E A S S E T S - Right of use assets are recognised at the total value of Depreciation is charged so as to write off the cost of in use, the estimated future cash flows are discounted to
RE SE ARCH AND DE VELOPMEN T E XPENDI T URE. the minimum lease payments (i.e. initial measurement assets, other than land and properties under construction, their present value using a pre-tax discount rate that
of the lease liability) plus any deposit or lease payments over their estimated useful lives, using the straight-line reflects current market assessments of the time value of
Expenditure on research activities is recognised as an made at or before the commencement date, less any lease method, on the following bases: money and the risks specific to the group of units.
expense in the period in which it is incurred, except where incentives. The company creates a separate asset under
the costs of activities are considered development for the leasehold improvements for the initial direct costs incurred If the recoverable amount of an asset is estimated to be
purposes of capitalising development costs. in establishing the lease but also for any dilapidations costs RECOGNITION less than its carrying amount, the carrying amount is
to restore a property to the condition required by the CATEGORY PERIOD IN PROFIT reduced to its recoverable amount. An impairment loss is
An internally-generated intangible asset arising from the landlord at the end of the lease. AND LOSS recognised immediately in profit and loss. Where an
Group’s product development is recognised only if all of the impairment loss subsequently reverses, the carrying
following conditions can be demonstrated: Depreciation of right of use assets will be recognised over amount of the asset is increased to the revised estimate of
the lease term in production or administration expenses LABORATORY AND 4 years Research and
its recoverable amount, but so that the increased carrying
• The technical feasibility of completing the intangible depending on the asset. TEST EQUIPMENT development
amount does not exceed the carrying amount that would
asset so that it can be made available for use costs
have been determined had no impairment loss been
or sale; recognised in prior years. A reversal of an impairment loss
P R O P E R T Y, P L A N T A N D E Q U I P M E N T PRODUCTION 4 years Production and
• The intention to complete the intangible asset PLANT AND engineering costs
is recognised immediately in profit or loss. The value of
to use or sell it; any impairment (or its reversal) is recognised within the
Leasehold improvements, laboratory & test equipment, EQUIPMENT
same cost line that the depreciation or amortisation would
production plant & equipment, computer equipment
• The availability of adequate technical, financial COMPUTER 3 years Administration normally appear in.
and office furniture & fittings are stated at cost
and other resources to complete the development
less accumulated depreciation and any recognised EQUIPMENT expenses
and to use or sell the intangible asset
impairment loss. INVENTORIES
• An asset is created that can be separately identified OFFICE FURNITURE 4 years Administration
Assets in the course of construction are carried at cost, AND FITTINGS expenses Inventories are stated at the lower of cost and net
for use or sale;
less any recognised impairment loss. Depreciation of these realisable value. Cost comprises direct materials and,
• It is probable that the asset created will generate assets, on the same basis as other property assets, LEASEHOLD 4 years Administration where applicable, direct labour costs and those overheads
future economic benefits; and commences when the assets are complete and ready for IMPROVEMENTS or the expenses that have been incurred in bringing the inventories to their
their intended use. remainder present location and condition. Cost is calculated using the
• The development cost of the asset can be of the “first in, first out” (FIFO) method. Net realisable value
measured reliably. lease term represents the estimated selling price less all estimated
Once completed, Development Costs transfer into the costs of completion and costs to be incurred in marketing,
category of Know-how. As these assets form the basis selling and distribution.
of the Group’s product range (being the development of The gain or loss arising on the disposal or retirement
new processes, standard products or new product features of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset
that improve the capacity or efficiency of the electrolysers)
and is recognised in income.
amortisation is recognised on a straight-line basis in
Research and development costs over their useful lives,
considered to be four years, in line with expected product I M P A I R M E N T O F TA N G I B L E A N D
life cycles. Each asset is assessed on an annual basis to I N TA N G I B L E A S S E T S
ensure that it still meets the criteria and will still contribute
to the Company’s products. If not, an impairment will be At each balance sheet date, the Group reviews the
recognised. Where no internally-generated intangible asset carrying amounts of its tangible and intangible assets to
can be recognised, development expenditure is recognised determine whether there is any indication that those
as an expense in the period in which it is incurred. assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of each asset (or
cash-generating unit) is estimated to determine the extent
of the impairment loss.

ITM ANNUAL REPORT 2021

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F I N A N C I A L S TAT E M E N T S

3. S I G N I F I C A N T IMPAIRMENT LEASES EQUIT Y INSTRUMENTS

ACCOUNTING POLICIES The Group assesses, on a forward-looking basis,

At inception of a contract, the Group assesses whether An equity instrument is any contract that evidences
(C O N T I N U E D) the expected credit losses associated with its assets
it conveys the right to control the use of an identified a residual interest in the assets of the Group after
carried at amortised cost. The impairment methodology deducting all of its liabilities. Equity instruments issued
asset -and obtain substantially all of the economic benefits
applied depends on whether there has been a significant by the Group are recorded at the proceeds received,
FINANCIAL ASSETS from use of the asset- for a period of time in exchange
increase in credit risk in trade receivables and contract net of direct issue costs.
for consideration. In this instance the contract should
assets (accrued sales income). For trade receivables only,
At initial recognition, the Group measures a financial asset be accounted as a lease.
the company applies the simplified approach permitted
at its fair value plus, in the case of a financial asset not S H A R E - B A S E D P AY M E N T S
by IFRS 9, which requires expected lifetime losses to be The Group recognises a right-of-use asset and a lease
at fair value through profit or loss, transaction costs that
recognised from initial recognition of the receivables. liability at the lease commencement date. The right-of-use
are directly attributable to the acquisition of the financial The Group issues equity-settled share-based payments to
asset is recognised at cost and is subsequently depreciated
asset. Transaction costs of financial assets carried at fair certain employees. Equity-settled share-based payments
using the straight-line method over the lease term.
value through profit or loss are expensed in profit or loss. C A S H A N D C A S H EQU I VA L EN T S are measured at fair value at the date of grant. The fair
Subsequent measurement of financial assets depends on The lease liability is initially measured at the present value determined at the grant date of the equity-settled
the Group’s business model for managing the asset and Cash and cash equivalents comprise cash in hand and value of the lease payments and discounted using the share-based payments is expensed in profit or loss on
the cash flow characteristics of the asset. There are three on demand deposits, and other short-term highly liquid interest rate implicit in the lease or, if that rate cannot a straight-line basis over the vesting period, based on the
measurement categories of which the Group holds investments that are readily convertible to a known be determined, the Group’s incremental borrowing rate Group’s estimate of shares that will eventually vest.
financial instruments: amount of cash and are subject to an insignificant risk or best estimate of the same. The lease liability continues
of change in value. to be measured at amortised cost using the effective The group also recognises a provision for Employer’s
AMORTISED COST interest method. It is remeasured when there is a change National Insurance Contributions (NIC) that becomes
in the future lease payments. When the lease liability payable on the exercise of share options granted under
FINANCIAL LIABILITIES
Assets that are held for collection of contractual cash is remeasured in this way, a corresponding adjustment the Group’s non-tax advantaged share plans, to the extent
flows where those cash flows represent solely payments is made to the carrying amount of the right-of-use asset. that the liability has not been transferred to the employees.
Financial liabilities are obligations to pay cash or other
of principal and interest are measured at amortised cost. Where a liability is due, the provision has been calculated
financial assets and are recognised when the company The Group has elected not to recognise right-of-use
A gain or loss on a debt investment that is subsequently using the intrinsic value of the share option which is the
becomes a party to the contractual provisions of the assets and lease liabilities for leases of less than 12 months
measured at amortised cost and is not part of a hedging difference between the Group’s share price at the balance
instrument. Financial liabilities are recorded initially at and leases of low value assets. These largely relate
relationship is recognised in profit or loss when the asset sheet date and the exercise price. The actual amount
fair value, net of direct issue costs, and are subsequently to short-term rentals of equipment to undertake our field
is derecognised or impaired. Interest income from these of Employer’s NIC that will be payable will be determined
recorded at amortised cost using the effective interest activities. The Group recognises the lease payments
financial assets is included in finance income using the on the difference between the exercise price and Group’s
method, with interest-related charges recognised as an associated with these leases, together with any property
effective interest rate method. share price at the date of exercise. For share options that
expense in finance cost in the income statement. service charges and storage fees, as an expense on have not vested, the provision for Employer’s NIC is
Finance charges are charged to the income statement a straight-line basis over the lease term (see note 6).
FAIR VALUE THROUGH PROFIT OR LOSS calculated on the same basis and is accrued over the
on an accruals basis using the effective interest method
vesting period.
and are added to the carrying amount of the instrument
Assets that do not meet the criteria for amortised cost PROVISIONS
to the extent that they are not settled in the period For option grants prior to 2020, the Group has agreed
or Fair Value through Other Comprehensive Income
in which they arise. A financial liability is derecognised only that settlement of the Employer’s NIC liability arising
(FVOCI) are measured at fair value through profit or loss. Provisions are recognised when the Group has a present
when the obligation is extinguished, that is, when the on gains made on the exercise of unapproved share
A gain or loss on a debt investment that is subsequently obligation (legal or constructive) as a result of a past event,
obligation is discharged or cancelled or expires. options be capped at the exercise price of the options.
measured at fair value through profit or loss and is not and it is probable that the Group will be required to settle
part of a hedging relationship is recognised in profit that obligation, and that a reliable estimate can be made Any excess liability for Employer’s NIC would be recovered
or loss and presented net in the profit or loss statement D E R I V AT I V E F I N A N C I A L I N S T R U M E N T S of the amount of that obligation. Provisions are measured from the option holder. For option grants from 2020,
within other gains/(losses) in the period in which it arises. at the directors’ best estimate of the expenditure required the employees have agreed to pay any Employer’s NIC
Interest received from these financial assets is included The Group enters into derivative financial instruments to settle the obligation at the balance sheet date, and are liability that is due on exercise of their options.
to manage its exposure to foreign exchange rate risk. discounted to present value where the effect is material.
in investment income.
These are not deemed to be effective hedging instruments PENSION COSTS
WA RR A N T IE S
to be matched off against a related asset or liability but
rather as stand-alone financial assets or liabilities at fair The Group operates a defined contribution pension
Provisions for the expected cost of warranty obligations
value through profit and loss. Within the financial scheme. The amount charged to the income statement
under local sale of goods legislation are recognised at
statements, therefore, this portfolio of contracts will be in respect of pension costs is the contributions actually
the date of sale of the relevant products, at the directors’
shown as either an asset or liability on the balance sheet, payable in the year. Differences between the contributions
best estimate of the expenditure required to settle the
with a corresponding gain or loss through the income actually payable and those paid are shown as accruals
Group’s obligation. or prepayments in the consolidated balance sheet.
statement, depending on how the contractual rate of
exchange compares with the year-end rate.

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4. C R I T I C A L A C C O U N T I N G Management must decide at what point such efforts of refuelling events can be more reliably ascertained Management have particularly considered the following:
become development work that will result in future when the station becomes fully operational.
JUDGEMENTS AND KEY economic benefits to the Group and thus, at which point Warranty provisions are based on Management’s current
S O U R C E S O F they meet the criteria for capitalisation. See note 13. Post year-end the assets in use were transferred into best estimate of the potential costs involved in diagnosing
a new 100% owned subsidiary, and assets under and correcting faults and the likelihood of such faults
E S T I M AT I O N U N C ER TA I N T Y IMPAIRMENT OF NON-CURRENT ASSETS construction will be transferred upon completion. As the occurring within the first year of operation of a unit.
majority of the stations are sited in strategic locations These assumptions are built upon historical data of units
In the application of the Group’s accounting policies, in the field so are likely to be reviewed and revised
In the case of there being a trigger for a review of with important partners, and an obligation exists within
which are described in note 3, the directors are required as more information becomes available with a higher
impairment, the Group performs a review on the carrying funding arrangements to continue to operate for a period
to make judgements, estimates and assumptions about quantity of machines in operation. If it becomes known
amounts of its tangible and intangible assets to determine of time, the fleet of refuelling stations will continue to
the carrying amounts of assets and liabilities that are not that additional work is required, then the provision
whether there is any indication of impairment at the offer hydrogen before upgrades can be planned in the
readily apparent from other sources. The estimates and is immediately extended.
Balance Sheet date. future to meet the critical capacity required of the new
associated assumptions are based on historical experience
business model. A provision for onerous contracts (contract losses) has
and other factors that are considered to be relevant. The Group particularly tests the net recoverable amounts been recognised in line with the requirements of IAS 37,
Actual results may differ from these estimates. of its internally-generated assets held (or previously held) Impairment of £862,000 was also recognised for a unit given the expected costs to complete legacy projects
in assets under construction to ensure that the costs of that will now no longer be put to public use but instead exceeding the headroom in contracted sales values.
The estimates and underlying assumptions are reviewed
their production have not over-run their operational or retained as an internal training aid. Cost forecasts produced by Project Managers are
on an on-going basis. Revisions to accounting estimates
commercial value. Typically, assets under construction are monitored on a monthly basis to ensure that such
are recognised in the period in which the estimate is During the year, management reconsidered the
grouped under the same cash generating unit (CGU) where potential losses are recognised immediately in the
revised if the revision affects only that period, or in the recoverability of its internally-generated intangible asset
they are funded by the same grant, but once deployed and accounts. As quotes are finalised with suppliers these
period of the revision and future periods if the revision which is included in its balance sheet at £3.2m (2020:
opened to the public, each hydrogen refuelling station is estimates may fluctuate but the provision will be adjusted
affects both current and future periods. £2.1m). Most of the development projects currently
considered as a separate CGU. accordingly and ultimately used to off-set the future costs
capitalised here, and being amortised, relate to of the project as it nears completion. Furthermore, the
C R I T I C A L J U D G E M E N T S I N A P P LY I N G T H E One such trigger for impairment review, which has technologies being used in our current sales and so remain Group uses software to track the risks and opportunities
GROUP’S ACCOUN T ING POL IC IE S occurred in the current year, is that the Group was loss relevant. Further capitalisations during the year relate to of each project. This gives a potential cost and risk rating
making and another was the impact of the Covid-19 continuing design work for standard products and for active risks and has been reviewed by management
The following are the critical judgements, apart from those
lockdown on the number of vehicles on the roads advancements or efficiencies that should allow the Group at year end in order to determine if any additional
involving estimations (which are dealt with separately
requiring refuelling. This is the fifth year that a review of to improve its offering and gain interest in new markets. contingency should be recognised on projects.
below), that the directors have made in the process of A sensitivity analysis was performed on the current
the refuelling assets of the company has been undertaken,
applying the Group’s accounting policies and that have the provision and future forecast costs. If forecasted costs
with the financial year ended April 2017 being the first RECOVERABILITY OF GRANT DEBTORS
most significant effect on the amounts recognised in the were to increase by 10%, the provision would need
year of deployment.
financial statements. Accrued grant income is specifically reviewed to ensure to increase by £1.8m (2020: £0.9m).
As part of a strategic review in June 2020, a Managing spend continues within the parameters of the grants and
CONTRACT ACCOUNTING, INCLUDING CONSIDERATION Director was appointed to the Motive division to establish the value of the grant award is unchanged. In the case of A leasehold property provision was recognised in prior
OF CONTRACT BALANCES AND LOSS PROVISIONS a strategy for refuelling in the UK. As such, it was deemed grants awarded by the EU, following Brexit all grants that years for dilapidations work in relation to our previous
are contracted continue to be considered recoverable. premises for handover to the landlords. The amount was
that a critical volume of hydrogen output was needed
Management have assessed sales contracts in accordance calculated by a value per square metre and adjusted based
for the stations to be cash generative. The first-generation
with the 5-step principle laid out by IFRS 15 to confirm on assessment of the first premises that we were due
stations deployed by ITM do not meet these minimum DEFERRED TAX ASSET
whether a contract should be recognised over time or at to leave. As we near vacation of properties, the provision
volume requirements. As such the Group has fully is flexed on a property by property basis to reflect best
a point in time. Contract balances are reviewed to ensure As in previous years, the Group has not recognised
impaired the remaining value of the assets, including estimates of dilapidations work to be completed.
that they reflect the status of the project and that a deferred tax asset for its historical losses, mentioned in
a further £851,000 in the current year.
amounts remain recoverable. Rolling forecasts of costs to note 10. This is due to the fact that the Group has forecast Additionally this year, an estimate for reinstatement
complete the performance obligation are also maintained This year’s impairment review therefore largely focussed further losses over the coming 13 months and likely for the works at Bessemer Park has been provided by the
so that onerous contracts can be recognised and provided on the sole refuelling station that will facilitate sales not next few years. This decision will continue to be reviewed Employers Agent retained by the Company for the fit-out
for at the point where costs are predicted to exceed the only to the general public but also to buses, as this model as we approach break-even or become profit-making and of the factory. They have provided this information using
expected income. See notes 5 and 17. of station is deemed to be more commercial than its in light of any changes to tax legislation that might arise an estimated 2.5% inflation but the further calculation of
predecessors. The impairment review suggested that to limit the losses that can be utilised. present value requires the use of a discount factor.
CAPITALISATION OF DEVELOPMENT COSTS cashflows would be positive throughout the life of the The Group has selected a discount factor of 7.5% as this
station, with the initial investment (including both monies falls between the risk free rate for a fifteen year
already expensed and forecast costs to complete) K E Y S O U R C E S O F E S T I M AT I O N U N C E R TA I N T Y government bond and a full WACC rate that would
The Group undertakes a number of internal projects for
being covered within the first four years of operation. incorporate the effects of tax etc. that are not relevant
the advancement of our core technology, the design of PROVISIONS
For this reason, no further impairment has been to this scenario. It also aligns the dilapidations with the
our standard products and improved efficiencies around
undertaken on this asset. For the time being though, Note 21 gives details of the amounts currently recognised incremental borrowing rate used on both the deposit and
our business. Whilst these will be timebound and involve lease of Bessemer Park. This provided us with a provision
management has maintained the impairment that was under four different categories of provision.
specific groups of staff, time and costs can easily be of £530,000. 
tracked through our reporting and accounting systems. placed on the asset in the prior year until the volume

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5. R E V E N U E, O P E R AT I N G S E G M E N T I N F O R M AT I O N

SEGMENTS & INCOME FROM ITM Power is organised internally to report to the Group’s Chief Operating Decision Maker, the Chief Executive Officer,
GOVERNMENT GR ANTS on the financial and operational performance of the Group as a whole. The Group’s Chief Operating Decision Maker
is ultimately responsible for entity-wide resource allocation decisions, evaluating performance on a group-wide basis
All revenues are derived from continuing operations. and any elements within it on a combination of information from the executives in charge of the Group and Group
An analysis of the Group’s revenue is as follows: financial information.

Management has previously identified three target markets for our products (Power-to-Gas, Refuelling, and Industrial).
Revenue reporting has begun to look at these three sectors to assess the commerciality of those sales.
2021 2020
However, decisions for resourcing etc. cannot be made by reference to these segments. The Group operates a single
£’000 £’000
factory that builds units for use across all sectors. It would be hard to assign overhead costs to particular product
segments as builds all occur in that one facility and can run concurrently. Similarly, fixed assets and suppliers’ balances
Revenue from product sales recognised over time 1,697 2,256 cannot be assigned to the production of one specific segment. For overhead costs and net asset resources,
therefore, decisions are taken on a group basis.
Consulting contracts recognised over time 2,108 470
An analysis of the Group’s revenue, by major product (or customer group), is as follows:
Maintenance contracts recognised at a point in time 112 48
2021 2020
Fuel Sales 153 367 £’000 £’000

Other (e.g. scrap sales) 205 150 POWER-TO-GAS

(of which product sales recognised
REVENUE IN THE CONSOLIDATED INCOME STATEMENT 4,275 3,291 over time £42,000) 210 332

REFUELLING
Grant income shown against cost of sales 1,356 1,719
(of which product sales recognised
over time -£215,000) (38) 1,247
Grant income (claims made for projects) 761 753
INDUSTRIAL
Other government grants (R&D claims) 404 252 (of which product sales recognised
over time £1,870,000) 1,870 1,147
Other government grants (Covid-19 furlough scheme) 25 44
OTHER 2,233 565
1,190 1,049
REVENUE IN THE CONSOLIDATED INCOME STATEMENT 4,275 3,291
6,821 6,059

The negative sales revenue on refuelling was caused by the effects of foreign exchange as well as actual and forecast
overruns (affecting stage of completion) on the product sale therein.

At 30 April 2021, the aggregate amount of the transaction price allocated to remaining performance obligations
of continuing build contracts was £16.7m (2020: £3.8m). The Group expects to recognise the remaining performance
obligations within one year.

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5. R E V E N U E, O P E R AT I N G
SEGMENTS & INCOME FROM 6. LOSS FOR THE YEAR
GOVERNMENT GR ANTS 2021 2020
(C O N T I N U E D) £’000 £’000

Loss for the year has been arrived at after charging/ (crediting):
G E O G R A P H I C A L A N A LY S I S
Net foreign exchange (gains) (53) (184)
The United Kingdom is the Group’s country of domicile but the Group also has subsidiary trading companies in the
United States, Germany and Australia. All non-current assets were domiciled in the United Kingdom, with the exception Shared based payment charge (note 24) 799 2,625
of one hydrogen refuelling station in California (net book value £Nil, 2020: £Nil) and assets relating to our German
office (net book value £60,000, 2020: £31,000). Revenues have been generated as follows: Depreciation of property, plant and equipment 2,321 2,440

Impairment of non-current assets 1,713 5,588

Amortisation of intangibles 274 197

2021 2020
Research and non-capitalised Development costs 3,489 2,298
£’000 £’000
Expected credit loss (debtors) (3) (15)
UNITED KINGDOM 2,505 828
Expected credit loss (prepaid suppliers) 168 -
GERMANY
(of which product sales recognised
Loss on disposal of property, plant and equipment 173 473
over time £1,893,000) 1,966 1,167

REST OF EUROPE RENTALS UNDER SHORT-TERM LEASES:

(of which product sales recognised
• Land and buildings 8 83
over time -£196,000) (196) 1,118
• Other equipment 142 413
UNITED STATES - 178
Government grants receivable (2,546) (2,768)
4,275 3,291
Staff costs (note 8) 11,434 8,642

Included in revenue are the following amounts, Cost of inventories recognised as an expense 4,241 4,326
which each accounted for more than 10% of total revenue:
Movement on aged stock provision 845 108
2021 2020
£’000 £’000

CUSTOMER A INDUSTRIAL 1,870 1,140

CUSTOMER B OTHER 2,027 410

CUSTOMER C REFUELLING <10% 854

Except where extended warranties have been purchased and treated as separate performance obligations for
the purpose of IFRS 15 Revenue from Customers, warranty commitments are covered under IAS 37 Provisions
and are therefore accounted under note 21. 

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6. LOSS FOR THE YEAR 7. A U D I T O R S ’

(C O N T I N U E D) R E M U N E R AT I O N
Whilst costs have been shown on the income statement by function within the company, the following table shows costs The following amounts were payable to the Group’s auditor and have been charged within the loss before tax:
grouped by nature:

2021 2020 2021 2020

£’000 £’000 £’000 £’000

DIRECT COSTS FEES PAYABLE TO THE COMPANY’S AUDITOR FOR

Materials 4,241 4,624
• The audit of the Company’s annual accounts 120 60
Labour 707 923
• The audit of the Company’s subsidiaries pursuant to legislation 33 30
Other bought in items 6,987 5,181
Warranty 210 111 TOTAL AUDIT FEES 153 90
TOTAL DIRECT COSTS 12,145 10,839
OPERATING COSTS OTHER SERVICES PURSUANT TO LEGISLATION
Staff & employment costs 9,594 8,831
• Interim agreed upon procedures/review work (audit related services) 13 13
Consultancy & consumables 5,666 5,655
TOTAL NON-AUDIT FEES 13 13
Building overheads 1,650 2,097
Depreciation 2,321 2,447
Amortisation 274 197
In addition to last year’s reported audit figures an additional amount was agreed and paid of £70,000, making the total
Impairment 1,713 5,588 payable £160,000.
Other 115 (199)
TOTAL OPERATING COSTS 21,333 24,616

CALCULATION OF ADJUSTED EBITDA

In reporting EBITDA, management use the metric of adjusted EBITDA, to better reflect underlying performance
and remove the effect of the following items;
2021 2020
£’000 £’000

Loss from operations (26,657) (29,396)

ADD BACK:

Depreciation 2,321 2,440

Impairment 1,713 5,588

Amortisation 274 197

Loss on disposal 173 473

Share based payment charge (note 24) 799 2,625

(21,377) (18,073)

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8 . R E M U N E R AT I O N O F The amount shown for M Green is net of the pay accrued in the prior year and shown in the table below.
DIREC TORS AND EMPLOYEES
FEES/BASIC TOTAL
TOTAL ANNUAL EXCLUDING
SALARY PENSION
FEES/BASIC ANNUAL EXCLUDING PENSION
£’000 BONUSES PENSION CONTRIBUTIONS TOTAL
SALARY BONUSES PENSION CONTRIBUTIONS TOTAL 2019-20 £’000 £’000 £’000 £’000
2020-21 £’000 £’000 £’000 £’000 £’000
EXECUTIVE
EXECUTIVE DIRECTORS
DIRECTORS
Dr S Bourne 178 56 234 9 243
Dr S Bourne 214 121 335 20 355
Dr G Cooley 214 109 323 23 346
Dr G Cooley 311 189 500 - 500
Dr S Smith 118 25 143 11 154
Dr R Smith 144 68 212 13 225
A Allen 102 17 119 18 137
A Allen 135 66 201 22 223
NON-EXECUTIVE
DIRECTORS
NON-EXECUTIVE
DIRECTORS
Prof R Putnam 192 - 192 - 192
R Bone 83 - 83 - 83
Lord Freeman 19 - 19 - 19
M Green 52 - 52 - 52
B Pendlebury - - - - -
K Roe 53 - 53 - 53
R Bone 58 - 58 - 58
B Pendlebury - - - - - M Green 30 - 30 - 30
J Nowicki - - - - - J Nowicki - - - - -
T Rae - - - - - AGGREGATE
EMOLUMENTS 911 207 1,118 61 1,179
AGGREGATE
EMOLUMENTS 992 444 1,436 55 1,491 EMPLOYERS NI 167
EMPLOYERS NI 169 SHARE BASED
PAYMENT EXPENSE
SHARE BASED
IN RESPECT OF
PAYMENT EXPENSE
DIRECTORS 2,611
IN RESPECT OF
DIRECTORS 549 TOTAL COSTS FOR
DIRECTORS AND
TOTAL COSTS FOR
KEY MANAGEMENT
DIRECTORS AND
PERSONNEL 3,957
KEY MANAGEMENT
PERSONNEL 2,209
Four directors were members of money purchase schemes during the year (2020: 4).

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8 . R E M U N E R AT I O N O F
DIREC TORS AND EMPLOYEES 1 MAY 30 APRIL EXERCISE DATE FROM
NAME OF 2020 GRANT 2021 PRICE WHICH EXPIRY
(C O N T I N U E D) DIRECTOR SCHEME NUMBER DATE NUMBER £’000 EXERCISABLE DATE

Dr G Cooley Unapproved 1,000,000 14/08/2018 1,000,000 30p 14/08/2019 13/08/2028

SHARE OPTIONS SCHEME
Dr G Cooley Unapproved 1,000,000 14/08/2018 1,000,000 30p 14/08/2020 13/08/2028
On 29 January 2010 the Group introduced a new EMI and Unapproved Share Option Scheme to be applied to all subsequent
Dr G Cooley Unapproved 1,000,000 14/08/2018 1,000,000 30p 14/08/2021 13/08/2028
issues of share options. Under the scheme rules the exercise price is deemed to be the mid-market price of shares on the
London Stock Exchange AIM market at the close of trading on the day before the grant of the share options. Share options
Dr G Cooley Unapproved 307,500 24/10/2019 307,500 48p 23/10/2022 23/10/2029
vest in three equal instalments on the first, second and third anniversaries of the grant and are exercisable up to the tenth
anniversary of the grant. Dr R Smith Unapproved 416,666 14/08/2018 - 30p 14/08/2019 13/08/2028
Details of options for directors who served during the year are as follows:
Dr R Smith Unapproved 416,667 14/08/2018 416,667 30p 14/08/2020 13/08/2028

Dr R Smith Unapproved 416,667 14/08/2018 416,667 30p 14/08/2021 13/08/2028

Dr R Smith Unapproved 72,000 24/10/2019 72,000 48p 23/10/2022 23/10/2029

30 APRIL EXERCISE DATE FROM A Allen EMI 16,666 23/03/2011 - 55p 22/03/2012 22/03/2021
NAME OF 1 MAY 2020 2021 PRICE WHICH
DIRECTOR SCHEME NUMBER GRANT DATE NUMBER £’000 EXERCISABLE EXPIRY DATE A Allen EMI 16,666 23/03/2011 - 55p 22/03/2013 22/03/2021

Dr S Bourne EMI 123,596 24/01/2011 - 67p 24/01/2015 23/01/2021 A Allen EMI 16,668 23/03/2011 - 55p 22/03/2014 22/03/2021

Dr S Bourne Unapproved 276,404 24/01/2011 - 67p 24/01/2014 23/01/2021 A Allen Unapproved 333,333 14/08/2018 - 30p 14/08/2019 13/08/2028

Dr S Bourne EMI 100,000 01/08/2012 - 50p 01/08/2015 31/07/2022 A Allen Unapproved 333,333 14/08/2018 333,333 30p 14/08/2020 13/08/2028

Dr S Bourne Unapproved 250,000 06/08/2014 - 27p 01/08/2017 05/08/2024 A Allen Unapproved 333,334 14/08/2018 333,334 30p 14/08/2021 13/08/2028

Dr S Bourne Unapproved 583,333 14/08/2018 - 30p 14/08/2019 13/08/2028 A Allen Unapproved 47,250 24/10/2019 47,250 48p 23/10/2022 23/10/2029

Dr S Bourne Unapproved 583,333 14/08/2018 583,333 30p 14/08/2020 13/08/2028

Dr S Bourne Unapproved 583,334 14/08/2018 583,334 30p 14/08/2021 13/08/2028

Dr S Bourne Unapproved 159,750 24/10/2019 159,750 48p 23/10/2022 23/10/2029

Dr G Cooley Unapproved 800,000 24/01/2011 - 67p 24/01/2014 23/01/2021

Dr G Cooley EMI 250,000 19/07/2012 - 50p 19/07/2015 18/07/2022

Dr G Cooley Unapproved 750,000 06/08/2014 - 27p 06/08/2015 05/08/2024

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8 . R E M U N E R AT I O N O F Gains made by directors exercising share options in the year:

DIREC TORS AND EMPLOYEES
(C O N T I N U E D) NUMBER MARKET PRICE
TYPE OF OF SHARES EXERCISE AT DATE GAIN MADE
DIRECTOR SHARE OPTION EXERCISED PRICE OF EXERCISE £’000

The following LTIP awards were granted in the year for directors: S Bourne EMI 123,596 67p 283.05p 267.3

OPTIONS LAST S Bourne Unapproved 276,404 67p 283.05p 597.9

NAME OF AT 30 APRIL GRANT VESTING EXPIRY EXERCISE
DIRECTOR SCHEME 2021 DATE DATE DATE PRICE S Bourne EMI 100,000 50p 283.05p 233.2

A Allen Unapproved 52,478 22/10/2020 22/10/2023 22/10/2030 5p S Bourne Unapproved 250,000 27p 283.05p 641.4

A Allen Unapproved 45,919 13/11/2020 22/10/2023 13/11/2030 5p S Bourne Unapproved 583,333 30p 283.05p 1,476.1

Dr G Cooley Unapproved 100,912 22/10/2020 22/10/2023 22/10/2030 5p G Cooley Unapproved 800,000 67p 283.05p 1,730.4

Dr G Cooley Unapproved 88,298 13/11/2020 22/10/2023 13/11/2030 5p G Cooley EMI 250,000 50p 283.05p 582.6

Dr R Smith Unapproved 77,530 22/10/2020 22/10/2023 22/10/2030 5p G Cooley Unapproved 750,000 27p 283.05p 1,924.1

Dr R Smith Unapproved 67,839 13/11/2020 22/10/2023 13/11/2030 5p R Smith Unapproved 416,666 30p 283.05p 1,054.4

Dr S Bourne Unapproved 52,415 22/10/2020 22/10/2023 22/10/2030 5p A Allen EMI 50,000 55p 283.05p 114.3

Dr S Bourne Unapproved 48,863 13/11/2020 22/10/2023 13/11/2030 5p A Allen Unapproved 333,333 30p 283.05p 798.9

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8 . R E M U N E R AT I O N O F 9. FINANCE INCOME
DIREC TORS AND EMPLOYEES AND COSTS
(C O N T I N U E D)
REMUNERATION OF THE HIGHEST PAID DIRECTOR 2021 2020 FINANCE INCOME 2021 2020
£’000 £’000 £’000 £’000

Aggregate emoluments 500 323 Interest received on cash deposits 83 90

Money purchase pension contributions - 23 FINANCE COST

500 346
Interest paid (60) (11)

Lease liability interest paid (419) (203)

Gains made by the highest paid director exercising share options in the year were £4.2m (2020: £0.4m)
(479) (214)

NET FINANCE COSTS (396) (124)

MONTHLY AVERAGE NUMBER OF PERSONS EMPLOYED 2021 2020
NUMBER NUMBER

• Research and development 54 28

• Production and engineering 113 116

• Sales and marketing 13 12

• Administration 30 22

210 178

STAFF COSTS DURING THE YEAR (INCLUDING DIRECTORS) 2021 2020

£’000 £’000

Wages and salaries 8,687 7,208

Social security costs 1,988 821

Other pension costs 759 613

Share based payment expense 799 2,625

12,233 11,267

Less: staff costs capitalised in development costs (1,430) (1,690)

STAFF COSTS EXPENSED IN THE YEAR 10,803 9,577

As at 30 April 2021 pension contributions of £72,000 (2020: £52,000) due in respect of the current year had not been paid
over to the scheme. These were paid over in the following month and within statutory deadlines

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10. TA X 11. L O S S P E R S H A R E

CURRENT TAXATION 2021 2020 The calculation of the basic and diluted earnings per share is based on the following data:
£’000 £’000

Tax charge in the year 25 12 2021 2020

£’000 £’000
Tax charge relating to prior years 24 26
Loss for the purposes of basic and diluted loss per share being (27,697) (29,561)
49 38 net loss attributable to owners of the Company

NUMBER OF SHARES

Corporation tax is calculated at 19% (2020: 19%). Taxation for other jurisdictions is calculated at the rates prevailing in the Weighted average number of ordinary shares for the purposes 507,262,743 398,184,707
respective jurisdictions.The charge for the year can be reconciled to the income statement as follows: of basic and diluted earnings per share

Loss per share 5.5p 7.4p

2021 2020
£'000 £'000
The loss per ordinary share and diluted loss per share are equal because share options are only included in the calculation
of diluted earnings per share if their issue would decrease the net profit per share. The number of potentially dilutive shares
Loss before tax (27,648) (29,523)
not included in the calculation above due to being anti-dilutive in the years presented were 50,893,546 (2020: 85,329,719).
TAX ON LOSS AT 19% (2020: 19%) (5,253) (5,609)

Factors affecting (charge)/credit for the year:

Expenses not deductible for tax purposes 204 542

12. I N V E S T M E N T S
Fixed asset differences 1,510 1,649
A list of investments in subsidiaries, including the name, country of incorporation and proportion of ownership interest
Tax charge on current year RDEC claim 25 12 is given in note 6 to the Company’s separate financial statements.

Adjustments in respect of prior years 24 26 Below we provide information regarding the performance of the investment in associate within the year:

Unrelieved tax losses carried forward 3,539 3,418 2021 2020

£’000 £’000
TAX CHARGE FOR THE YEAR 49 38
Cost brought forward 346 -

F A C T O R S A F F E C T I N G F U T U R E TA X C H A R G E S Additions 535 344

The Group has tax losses of approximately £65.6m (2020: £47.8m) available to carry forward against future taxable profits, Foreign exchange adjustment (27) 5
subject to agreement with HM Revenue & Customs. Deferred tax would have been calculated at the new rate of 25%
following substantive enactment in May 2021. However, a deferred tax asset has not been recognised so this change 50% share of loss recognised in the year (595) (3)
is immaterial to the current financial statements.
259 346

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12. I N V E S T M E N T S 13. I N TA N G I B L E A S S E T S
(C O N T I N U E D)
SOFTWARE KNOW-HOW DEVELOPMENT COSTS TOTAL
The amount shown in the Consolidated Balance Sheet relates to the establishment and incorporation in the year of ITM £’000 £’000 £’000 £’000
Linde Engineering GmbH (incorporated in Germany, with registered office: Bodenbacher Str. 80, 01277 Dresden,
Germany). Interest in the new company is split 50:50 with Linde Engineering GmbH, although control is deemed to lie with Cost at 1 May 2019 59 559 297 915
Linde for the purposes of consolidation as they appoint the Managing Director. ITM Power has significant influence in the
company due to its representation on the Board. Transfers - 66 (66) -

The investment is therefore an equity-accounted investment in associate but will be subject to impairment review. In the Additions 81 - 1,690 1,771
current year, no such impairment was deemed necessary.
Grant received - - (89) (89)
Key financial data of ITM Linde Electrolysis (ILE):

Cost at 1 May 2020 140 625 1,832 2,597

Transfers - 2,170 (2,170) -

30 April 2021 30 April 2020 Additions - - 1,524 1,524

£’000 £’000
Grant received - - (135) (135)
Non-current assets 14 -
Cost at 30 April 2021 140 2,795 1,051 3,986
Current Assets 3,145 640

Current liabilities (2,658) -

Amortisation at 1 May 2019 6 240 - 246
Revenue 1,018 -
Charge for the year 36 161 - 197
Loss from continuing operations (1,193) (6)
Amortisation at 1 May 2020 42 401 - 443

Charge for the year 46 228 - 274

Amortisation at 30 April 2021 88 629 - 717

Carrying amount
at 30 April 2021 52 2,166 1,051 3,269
Balance Sheet figures were translated from euros using year-end exchange rate of 1.16 (2020: 1.12). Revenue and loss figures
were translated using an average exchange rate of 1.12 (2020: 1.14). Carrying amount
at 30 April 2020 98 224 1,832 2,154
During the year, besides the transfer of further investment, ITM Power continues to pay for the hosting of ILE’s website.
ITM Power engaged ILE for consultancy work equating to £0.8m during the year, of which £0.2m remained unpaid
at year-end. Sales of £2.1m were billed to ILE and were outstanding at year-end. Further cash injections are planned The amortisation period for externally purchased software Within the Know-how category is the design of our
over the next few months, equating to €750,000 by each party. has been set at three years (in line with our policy for 10MW standard product. This transferred in towards
computer equipment). the year-end with a value of £1.69m (2020: £1.1m
included within development costs) and combines
Development costs are generated internally by not only the design of our first modular system but
development of our stack technology, unit designs and also the working-practice templates for larger system
processes. They are built up over a period of time but development and deployment in locations under
capitalisation ceases once the asset comes into use and stricter HSEQ/ regulatory controls, such as refineries.
is transferred to the Know-how category, where they
will amortise over four years.

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14. R I G H T O F U S E A S S E T S

LEASEHOLD LEASED OFFICE

PROPERTY VEHICLES EQUIPMENT TOTAL
£’000 £’000 £’000 £’000
The Group currently holds right of use assets in both the UK (4 properties, 12 vehicles and office equipment) and Germany
Cost at 1 May 2019 (1 property and 3 vehicles).
(on transition to IFRS 16) 1,014 72 - 1,086
Right of Use assets are depreciated over their lease term. An impairment was recognised in the prior year, in accordance
Additions 6,058 22 - 6,080 with IAS 36 Impairment of Assets, for the remaining leases on buildings that we were preparing to quit when we moved
to Bessemer Park. This involved three separate properties that housed our UK workforce and reduced their carrying value
so as not to be depreciating them beyond March 2021.
Cost at 1 May 2020 7,072 94 - 7,166
In the current year, the leasehold property additions include the provision for Bessemer Park dilapidations.
Additions 544 52 48 644

Disposals (179) (2) - (181)

COST AT 30 APRIL 2021 7,437 144 48 7,629

Depreciation at 1 May 2019 - - - -

Charge for the year 475 38 - 513

Impairment 133 - - 133

Depreciation at 1 May 2020 608 38 - 646

Charge for the year 698 45 2 745

Disposals (159) (2) - (161)

DEPRECIATION AT 30 APRIL 2021 1,147 81 2 1,230

NET BOOK VALUE AT 30 APRIL 2021 6,290 63 46 6,399

NET BOOK VALUE AT 30 APRIL 2020 6,464 56 - 6,520

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15. P R O P E R T Y, P L A N T A N D E Q U I P M E N T

PRODUCTION PLANT LABORATORY & COMPUTER OFFICE FURNITURE LEASEHOLD ASSETS IN THE COURSE
& EQUIPMENT TEST EQUIPMENT EQUIPMENT & FITTINGS IMPROVEMENTS OF CONSTRUCTION TOTAL
£’000 £’000 £’000 £’000 £’000 £’000 £’000

COST AT 1 MAY 2019 4,799 1,903 789 207 3,579 3,033 14,310

Additions 178 156 129 6 4,006 4,103 8,578

Transfers 950 - - - - (950) -

Disposals (484) (66) (1) - - (383) (934)

Foreign Exchange 23 - (1) - - 42 64

COST AT 1 MAY 2020 5,466 1,993 916 213 7,585 5,845 22,018

Additions 893 309 376 244 7,463 5,140 14,425

Grant income (3,857) (3,857)

Transfers 1,657 - - - - (1,657) -

Disposals (437) (45) (9) (135) (1,534) - (2,160)

Foreign Exchange - - - - - (84) (84)

COST AT 30 APRIL 2021 7,579 2,257 1,283 322 13,514 5,387 30,342

DEPRECIATION AT 1 MAY 2019 3,478 1,552 649 191 2,698 - 8,568

Disposals (400) (53) (1) - - - (454)

Charge for the year 989 175 99 6 658 - 1,927

Impairment 910 - - - 151 4,394 5,455

Foreign Exchange 20 - - - - - 20

DEPRECIATION AT 1 MAY 2020 4,997 1,674 747 197 3,507 4,394 15,516

Disposals (268) (44) (5) (126) (1,533) - (1,976)

Charge for the year 325 191 140 39 881 - 1,576

Impairment 841 - - - - 872 1,713

Foreign Exchange (1) - - - - - (1)

DEPRECIATION AT 30 APRIL 2021 5,894 1,821 882 110 2,855 5,266 16,828

NET BOOK VALUE AT 30 APRIL 2021 1,685 436 401 212 10,659 121 13,514

NET BOOK VALUE AT 30 APRIL 2020 469 319 169 16 4,078 1,450 6,501

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16. I N V E N T O R I E S
The contract position will change according to the number or size of contracts in progress at the year-end as well as the
2021 2020 status of payment milestones towards those contracts. The Group will continue to structure payment milestones in order
£’000 £’000
to cover the up-front costs of materials for cash flow purposes. The variance between these and the performance obligations
for revenue recognition under IFRS 15 (typically acceptance of the product by the customer for all standard products),
Raw Materials 3,879 3,277
will cause increasing values to remain in deferred income for longer.
Work in progress 2,539 1,155

6,418 4,432

Inventories have been stated after a provision for impairment of aged-stock of £1.3m (2020: £0.4m). 18 . T R A D E A N D O T H E R R E C E I VA B L E S

2021 2021 2020 2020

17. C O N T R A C T B A L A N C E S & P E R F O R M A N C E O B L I G AT I O N S £’000 £’000 £’000 £’000

2021 2020 Amount receivable for the sale of goods 100 45

£’000 £’000
Amounts due from construction contract
Contract revenue recognised through release from deferred income 1,538 484 customers (note 17) 5,432 1,067

Release from transitional adjustment - 10 Amounts receivable under grant claims - 4,273

1,538 494 Impairment for credit risk (59) (62)

Total trade receivables 5,473 5,323

Restricted cash balances 1,050 1,083

In 2019, ITM Power elected to transition to the new standard IFRS 15 Revenue from Customers using the modified
retrospective method. This meant that retained earnings were adjusted by an amount that would have increased Other receivables 503 869
deferred income brought forward. In 2020, the last of those projects completed and thus the remaining adjustment
was released and shown separately. R&D relief claims receivable 550 317

2021 2020 Prepayments 6,526 13,289

£’000 £’000
Amounts recoverable from employees 3,183 -

Contracts with customers in progress at the balance sheet date: Accrued Sales income 873 735

Amounts due from contract customers included in trade and other receivables 5,727 1,067 Accrued Grant income 4,823 1,550

Contract assets (accrued income) 873 735 22,981 23,166

Contract liabilities (deferred income) (6,740) (3,050)

Balance sheet position of sales contracts (140) (1,248)

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18 . T R A D E A N D O T H E R R E C E I VA B L E S 19. C A S H A N D C A S H E Q U I VA L E N T S
(C O N T I N U E D)
2021 2020
£’000 £’000
Grant receivables are no longer held within Trade Receivables but remain within Accrued Grant income until received.

Prepayments include amounts paid up-front by way of pro forma and stage payments to suppliers for the long-lead time Cash and cash equivalents 176,078 39,919
items required on our build projects.

Amounts recoverable from employees relates to the employer’s national insurance on share options where, under the terms
of the offer, staff will cover this cost upon exercise.
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months
Restricted cash balances refer to monies received from customers that are currently sat on bank guarantee until specific or less. The directors consider that the carrying amount of these assets approximates to their fair value.
performance milestones are met on product sales contracts.

Trade receivables are measured at amortised cost.

Their ageing is analysed as follows: 20. T R A D E A N D O T H E R PAYA B L E S

2021 2020
£’000 £’000 2021 2020
£’000 £’000
Less than 30 days 4,955 3,713
Trade payables 1,191 2,507
31-60 days 220 95
Other taxation and social security 511 272
61-90 days 245 777
Other creditors - 33
Greater than 91 days 112 800
Forward contracts 8 -
5,532 5,385
Accruals 2,112 1,957

Deferred Sales income 6,740 3,050

M OV EMEN T IN T HE A L LOWA N C E F O R D O UB T FUL D EB T S Deferred Grant income 1,751 305

2021 2020 Grant income received against pro-forma 544 5,889

£’000 £’000
12,857 14,013
Brought forward balance at 1 May 62 77

Impairment losses recognised - -
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
Movement on credit risk provision (3) (15)
 
Amounts written off during the year as uncollectible - -

BALANCE AT 30 APRIL 59 62

The movement on the doubtful debts provision in the year related the IFRS 9 credit risk provision that recognises a potential
loss of 1% on the company’s trade debtor and accrued sales income balances.

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21. P R O V I S I O N S

LEASEHOLD WARRANTY PROVISION EMPLOYERS' OTHER TOTAL The warranty provision represents management’s best estimate of the Group’s liability under warranties granted on
PROPERTY £’000 FOR NATIONAL PROVISIONS PROVISIONS products, based on historical knowledge of the products and their components. As with any product warranty, there is an
2019-20 PROVISION CONTRACT INSURANCE £'000 £’000 inherent uncertainty around the likelihood and timing of a fault occurring that would trigger further work or part
£’000 LOSSES PROVISION replacement. Warranties are usually granted for a period of one year, although two-year warranties are the standard within
£’000 £'000 some jurisdictions.

Included within warranties is the cost of extensive refurbishment of a system due to extreme weather conditions. The effect
Balance at of removing this one unit from the provision would be:
1 May 2019 (750) (855) - - - (1,605)

Provision
created in WARRANTY
the year - (873) (3,645) (1,647) - (6,165) £’000

Use of the Balance at 1 May 2019 (409)

provision - 870 - - - 870
Provision created in the year (65)
Release in
Use of the provision 9
the year - 10 - - - 10
Release in the year 10
Balance at
1 May 2020 (750) (848) (3,645) (1,647) - (6,890) Balance at 1 May 2020 (455)

Provision Provision created in the year (210)

created in
the year (584) (210) (2,574) (3,871) (677) (7,916) Use of the provision 20

Use of the Release in the year 9

provision 140 252 1,399 560 - 2,351
Balance at 30 April 2021 (636)
Release in
the year 170 9 - - - 179

Balance The movement on the doubtful debts provision in the year related the IFRS 9 credit risk provision that recognises
at 30 April a potential loss of 1% on the company’s trade debtor and accrued sales income balances.
2021 (1,024) (797) (4,820) (4,958) (677) (12,276)
The provision for contract losses is created when it becomes known that a commercial contract has become onerous.
Project Managers provide rolling spend forecasts, updating these as quotes are obtained. The provision is therefore based
on best estimates and information known at the time to ensure the expected losses are recognised immediately through
The leasehold property provision represented management’s best estimate for the dilapidations work that may be required profit and loss. This provision will be used to off-set the costs of the project as it reaches completion in future periods.
to return our old factory, office and laboratory buildings to the landlords at the end of their lease term. During the year we This is expected to unwind within the next financial year.
vacated one of those properties, incurring fewer costs than anticipated. We also started the dilapidations work on a second
property with costs forecast to exceed the provision so an additional amount was added to the provision. The third property The provision for employer’s national insurance due on share options as they exercise (see share-based payment note 24).
carries a potential break clause in April 2022. During the year, we completed our adaptation works at Bessemer Park and so
have recognised a dilapidations provision at a discounted value. This is for the present value of the cost of works quoted by The other provisions category relates to a provision for breach of contract by a supplier and for potential late penalties
our Employers Agent for stripping the work back to the original condition at handover from the landlords. The discounting on a project.
will amortise over the remaining 14 years of the lease.

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22. L E A S E L I A B I L I T I E S
The following table describes the types of right of use asset owned by the Group and shows the movements on lease
liabilities within the year:

LEASEHOLD OFFICE MOTOR 2020 LEASEHOLD OFFICE MOTOR

PROPERTY EQUIPMENT VEHICLES TOTAL PROPERTY EQUIPMENT VEHICLES TOTAL
2021 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Brought forward at 1 May 2020 6,492 - 34 6,526 Existing contracts at 1 May 2019 800 - 50 850

Adjustments 15 - 1 16 Adjustments 117 - - 117

Additions - 48 52 100 Additions 5,776 - 19 5,795

Interest Applied 454 - 1 455 Interest Applied 199 - 4 203

Payments made (573) (4) (34) (611) Payments made (400) - (39) (439)

AT 30 APRIL 2021 6,388 44 54 6,486 AT 30 APRIL 2020 6,492 - 34 6,526

SPLIT: SPLIT:

Within 1 year 430 11 30 471 Within 1 year 564 - 27 591

2-5 years (inclusive) 3,169 41 27 3,237 2-5 years (inclusive) 2,747 - 9 2,756

Over 5 years 6,711 - - 6,711 Over 5 years 7,557 - - 7,557

LESS: LESS:

Future finance charges (3,922) (8) (3) (3,933) Future finance charges (4,376) - (2) (4,378)

PRESENT VALUE OF LEASE OBLIGATIONS 6,388 44 54 6,486 PRESENT VALUE OF LEASE OBLIGATIONS 6,492 - 34 6,526

IN THE BALANCE SHEET: IN THE BALANCE SHEET:

Due within 12 months (current) 168 8 28 204 Due within 12 months (current) 184 - 27 211

Due after 12 months (non-current) 6,220 36 26 6,282 Due after 12 months (non-current) 6,308 - 7 6,315

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22. L E A S E L I A B I L I T I E S 23. C A L L E D U P S H A R E
(C O N T I N U E D) C A P I TA L A N D R E S E R V E S

2021 2020
Adjustments refers to contracts that have changed £’000 £’000
their length of duration or their value during the year
e.g. following a rent review or a change in decision CALLED UP, ALLOTTED AND FULLY PAID:
regarding potential break clauses. The interest charge
appears with other interest at the bottom of the 550,658,155 (2020: 473,277,926) ordinary shares of 5p each 27,533 23,664
income statement and is the only value described
above that affects profit or loss. Each liability is
AUTHORISED SHARE CAPITAL:
matched by a corresponding right of use asset,
upon which depreciation is also charged to the income 550,658,155 (2020: 473,277,926) ordinary shares of 5p each 27,533 23,664
statement (see note 14). The two amounts together
replace the previous accounting treatment
of expensing rentals payments.

Total lease payments for capitalised leases and Holders of ordinary shares have voting rights at Annual General Meetings and Extraordinary General Meetings in proportion
short-term leases was £762,000 (2020: £935,000). with their shareholding.

The share premium account can move when shares are sold and represents the amount paid in excess of the nominal value
when shares are issued.

The merger reserve arose on the acquisition of ITM Power (Research) Limited in 2004.

The foreign exchange reserve arises upon consolidation of the foreign subsidiaries in the Group, and accounts for
the difference created by translation of the income statement at average rate compared with the year-end rate used
on the balance sheet as well as the effect of the change in exchange rates on opening and closing balances.

The Group’s other reserve is retained earnings which represents cumulative profits or losses, net of any dividends
paid and other adjustments.

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Movements within the year on the share option plans (including both the EMI and non EMI options) were as follows:
24. S H A R E - B A S E D PAY M E N T S
E Q U I T Y- S E T T L E D S H A R E O P T I O N S C H E M E

The Group operates a number of share schemes to provide employees and third parties
NUMBER 2021 NUMBER 2020
with the opportunity to acquire a proprietary interest in the Group as an incentive to attract
WEIGHTED WEIGHTED
and retain their services as follows:
AVERAGE AVERAGE
EXERCISE EXERCISE
An all-employee Share Incentive Plan (referred to as the BAYE scheme) PRICE PRICE

Enterprise Management Incentive (EMI) options; and Outstanding at the beginning of the year 10,486,500 36p 12,316,745 33p

Non EMI or “unapproved” options in lieu of payment for services. Granted during the year 1,275,172 5p 586,500 48p

Exercised during the year (4,183,333) 44p (2,213,338) 23p

SHARE INCENTIVE PL AN
Expired during the year (76,485) 5p (203,407) 18p
In FY21, the group implemented a new Share Incentive Plan (referred to as the BAYE scheme),
which is available to all employees. Employees can contribute up to £150 per month to acquire
partnership shares, which are purchased or allotted in monthly accumulation periods. OUTSTANDING AT THE END OF THE YEAR 7,501,854 27p 10,486,500 36p
The Group currently matches employee contributions on a one-for-one basis to acquire
matching shares. EXERCISABLE AT THE END OF THE YEAR 3,333,333 30p 5,233,332 41p
At 30 April 2021 the trustees of the SIP held 25,679 ordinary shares in ITM Power, of which
25,518 have been conditionally awarded to employees and 161 remain unallocated.

The group recognised a charge of £75,000 in relation to this scheme in 2021 (2020: £nil). The options outstanding at 30 April 2021 had a weighted average exercise price of 27p and a weighted average remaining
contractual life of 5 years.

EMI & NON-EMI SHARE OPTION PL ANS The fair value of options issued in the current year was measured using a Monte Carlo options pricing model. This is a change
from our previous measure (the Black Scholes model) as the more recent issue of share options included a TSR performance
In 2010 the Group introduced a new EMI and Unapproved Share Option Scheme to be applied condition. Thus, IFRS 2 requires the use of a model that can take into account the likelihood of the performance condition
to all subsequent issues of share options. Under the scheme rules the exercise price is deemed being achieved.
to be the mid-market price of shares on the London Stock Exchange AIM market at the close
of trading on the day before the grant of the share options. Share options vest over a period
of 3-5years and are exercisable up to the tenth anniversary of the grant. The last of the EMI
share options were exercised in the current financial year. These were replaced by a new The assumptions used in the models are as follows:
non-EMI scheme in 2020. A more comprehensive description of the different schemes can 2021 2020
be found within the Remuneration Committee Report.
WEIGHTED AVERAGES

Share price 256p 41p

Exercise price 5p 41p

Expected volatility 84.7% 81.9%

Expected life 3 years 5 years

Risk-free rate -0.06% 2.18%

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24. S H A R E - B A S E D PAY M E N T S 25. N O T E S T O T H E C A S H F L O W S TAT E M E N T

(C O N T I N U E D)
2021 2020
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects £’000 £’000
of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility was determined
by calculating the historical volatility of the Company’s shares over a period in line with the expected term of the Loss from operations (26,657) (29,396)
options. The expected dividend impact used is 0% as participants are entitled to dividend equivalents.
ADJUSTMENTS:
The Group has recognised a share-based payment expense in the income statement for the year, made up of three elements:
Depreciation 2,321 2,440

Share based payment 595 978

2021 2020
£’000 £’000
Loss on disposal 173 473
Share based payment expense (as seen through equity) 595 978
Impairment 1,712 5,588
Purchase of partnership shares under the BAYE scheme 75 -
Amortisation 274 197
Provision for employers’ national insurance on potential gain 129 1,647

799 2,625 OPERATING CASH FLOWS BEFORE MOVEMENTS (21,582) (19,720)

IN WORKING CAPITAL

(INCREASE) IN INVENTORIES (1,987) (2,525)

DECREASE IN RECEIVABLES 185 7,964

For options granted prior to 2020, the Group have elected to pay employer’s National Insurance on gains made on unapproved
share options exercise, to be capped at the proceeds the Group would receive from the exercise. Any further Employer’s DECREASE IN PAYABLES (1,156) (2,882)
National Insurance would be recovered from the exercising party. For options granted from 2020, the Group have agreed
to transfer the employer’s National Insurance liability to the employee share option holders. INCREASE IN PROVISIONS 4,857 5,285

CASH USED IN OPERATIONS (19,683) (11,878)

Interest paid (479) (214)

Income taxes received 21 52

NET CASH USED IN OPERATING ACTIVITIES (20,141) (12,040)

The movement on provisions has been adjusted by £530,000 as the Bessemer Park dilapidations provision has been posted
against right of use assets and therefore no adjustment to the income statement for this non-cash item is required.

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26. N E T C A S H R E C O N C I L I AT I O N 28 . C O N T I N G E N T L I A B I L I T Y
RECEIPT OF GOVERNMENT GR ANTS The capital risk management landscape has not
LEASE
materially changed in the last year for the Group.
LIABILITIES CASH TOTAL The Group participates in a number of grant funded Larger cash reserves gained through the fund raise
£’000 £’000 £’000
projects. Income is recognised in the accounts as have led management to put some of the funds
receivable based on the grant contract and the levels of on fixed-term deposit to generate interest. The funds
NET DEBT AS AT 1 MAY 2019 - 5,173 5,173 expenditure incurred on the project. It is claimed have also been split between different banking
periodically according to a timetable laid down by each institutions. Given the Covid-19 situation,
Recognised on adoption of IFRS 16 (850) - (850) coordinator. The claims are audited before any money is more frequent credit checks have been performed
awarded. However, grants are ultimately funded by and bank guarantees sought from some suppliers
Adjusted (117) - (117) government or EU institutions and can be subject to where up-front payments were made.
further scrutiny at later dates. This leaves grant income in
Cashflows 439 34,730 35,169
the accounts subject to potential recall.
E X T E R N A L LY I M P O S E D C A P I TA L
Acquisition -leases (5,795) - (5,795) Management do not know which grants will be subject to REQUIREMENT
such audit nor the time that they are likely to arise and as
Other changes -interest expense (203) - (203) such would be unable to quantify the potential financial The Group also have bank guarantees that can require
impact of any subsequent recall of funds. To the best of cash cover, which it considers to be an externally
Foreign exchange adjustments - 16 16
their knowledge, claims are made for expenditure agreed imposed capital requirement.
ahead of any project undertaking and in accordance with
NET DEBT AS AT 1 MAY 2020 (6,526) 39,919 33,393 During the year the Group was not required to comply
grant procedure.
with any externally imposed capital requirements,
Adjusted (16) - (16) with the exception of placing on guarantee contract
amounts for projects as bank guarantees.
C O V I D -1 9 E F F E C T O N P R O J E C T S
Cashflows 611 136,181 136,792
The Group has been in regular contact with customers
Acquisition -leases (100) - (100)
regarding the Force Majeure situation arising as a result of
the pandemic and national lockdowns. However, given the
Other changes -interest expense (455) (22) (477)
unknown timings surrounding the lifting of travel bans and
NET CASH AS AT 30 APRIL 2020 (6,486) 176,078 169,592 the different quarantine arrangements that each country
might impose, it is still not clear how long some of our
projects may be affected and whether late penalties within

contracts will be enforced given the circumstances.
One such provision has been made within Other Provisions.
27. C A P I TA L C O M M I T M E N T S At the current time, no further penalties have been raised
by customers.
The Group had capital commitments of £1.1m at the Balance Sheet date (2020: £7.9m, of which £4.7m related
to Bessemer Park).

29. F I N A N C I A L I N S T R U M E N T S
C A P I TA L R I S K M A N A G E M E N T

The current capital risk management objective is to ensure

that the existing pipeline continues to be delivered in line
with cash management expectations.

The Group manages cash balances in dollars, euros and

pound sterling, with natural hedges occurring for most
transactions. The Group keeps under review the need
for other hedging opportunities with regards to Capital
Risk Management.

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29. F I N A N C I A L I N S T R U M E N T S The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
(C O N T I N U E D) earliest date on which the Group can be required to pay.

C AT E G O R I E S O F F I N A N C I A L I N S T R U M E N T S

FINANCIAL ASSETS – AMORTISED COST 2021 2020

£’000 £’000

Financial asset at amortised cost 148 137 WITHIN 2-5 YEARS OVER
1 YEAR (INCLUSIVE) 5 YEARS TOTAL
Cash and cash equivalents 176,078 39,919 £’000 £’000 £'000 NET PAYABLE

Trade debtors (excluding IFRS 9 impairment) 5,532 5,385 2021

Restricted cash balances 1,050 1,083 Trade and other payables 3,303 - - 3,303

Other receivables 455 869 Lease liabilities 473 3,236 6,711 10,420

Accrued Sales income 541 735 3,776 3,236 6,711 13,723

Accrued Grant income 4,823 1,550 2020

188,627 49,678 Trade and other payables 4,497 - - 4,497

Lease liabilities 591 2,756 7,557 10,904

5,088 2,756 7,557 15,401

The financial asset at amortised cost sits under non-current assets in the balance sheet and relates to the security deposit
on our new leasehold property. The rest of the Group’s financial assets consist of cash and receivables. The latter are
largely due from grant bodies and large organisations with a strong credit history. Accrued income amounts are included
as financial assets as they relate to contractual agreements that will result in future cash inflows. ITM Power do not
consider there to be undue risk associated with receivables.

FINANCIAL LIABILITIES - AMORTISED COST 2021 2020

£’000 £’000

Trade payables 1,191 2,507

Other creditors - 33

Accruals 2,112 1,957

Lease liabilities 6,486 6,526

9,789 11,023

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29. F I N A N C I A L I N S T R U M E N T S
(C O N T I N U E D) CREDIT RISK MANAGEMENT FOREIGN CURRENCY RISK MANAGEMENT

FA I R VA LU E T H RO U G H PRO FI T A N D LO S S At year end, the Group did not hedge its exposure of foreign investments held in foreign currencies.
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss
As at 30 April 2021, the Group held foreign currency The table below shows the Group’s currency exposure at year end. Such exposure comprises the monetary assets
to the Group. The Group has adopted a policy of only
forward contracts that were measured at fair value and monetary liabilities that are not denominated in the functional currency of the operating unit involved.
dealing with creditworthy counterparties. Sales invoices
through profit or loss (2020: none). The figure shown The Group’s exposure to currency risk predominately arises on trade (transactions with both suppliers and customers)
are expected to be paid within 30 – 60 days under our
in note 20 represents the difference between their in a variety of locations and denominated in currencies other than the functional currency of the operating unit
usual contractual terms.
contract value and the exchange rates at the balance excluding intercompany balances.
sheet date. These financial instruments would sit within At the year-end there were receivables totalling £0.4m
level 2 of a fair value hierarchy, being derived from other (2020: £1.6m) that were overdue but considered fully
FOREIGN CURRENCY RISK MANAGEMENT
inputs -other than quoted prices in active markets- recoverable. Of this, £0.1m relates to temporary contractual
that are observable. However, as they are the only retentions. For comparison, it should be noted that grant These exposures were as follows:
financial instruments measured by fair value, no fair claims are no longer held in trade receivables but
value hierarchy table has been presented. represented £1.03m of the previous year’s balance. Most of
our sales income is subject to contractual terms and LIABILITIES ASSETS
The carrying value of all other financial instruments
therefore largely protected from default. Other less material
at 30 April 2021 and 30 April 2020 approximated to their 2021 2020 2021 2020
sales are followed up monthly and only written off once all
fair value. £’000 £’000 £’000 £’000
internal efforts have been exhausted for their recovery.

The credit risk of liquid funds (cash, cash equivalents and EUR (i) 1,504 91 4,175 12,754
FINANCIAL RISK MANAGEMENT OBJEC TIVES short-term deposits) is limited because the counterparties
AND POLICIES are banks with high credit-ratings assigned by international USD (ii) 32 100 596 1,016
credit-rating agencies.
The Group’s finance function monitors and manages the SEK (iii) - - - 68
financial risks relating to the operations of the Group.
The Group’s activities expose it primarily to the financial AUD (iv) 9 - 285 1
LIQUIDIT Y AND INTEREST RISK MANAGEMENT
risks of changes in interest rates.
1,545 191 5,056 13,839
The Group is exposed to the interest rate risks associated
The Group also receives and spends money in different
with its holdings of cash and cash equivalents and
currencies. Significantly, contracts are often in the
short-term deposits.
currency of the customer. As such, the company has
exposure to foreign exchange variation. This is naturally Ultimate responsibility for liquidity risk management rests (i) This is mainly attributable to the exposure to outstanding Euro to Pound Sterling receivables and payables in the
hedged where possible by paying for supplies in the with the Board of Directors, which regularly monitors the Group at the balance sheet date.
currencies in which they are invoiced, but this does Group’s short, medium and long-term funding, and liquidity
not eliminate exposure. Management may look to use management requirements. The Group manages liquidity (ii) This is mainly attributable to the exposure to outstanding US Dollar to Pound Sterling receivables and payables
forward contracts as a means of mitigating exposure risk by maintaining adequate reserves and banking facilities, at the balance sheet date.
to exchange rate volatility on long-term contracts. by continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets (iii) This is mainly attributable to the exposure to outstanding Swedish Kroner to Pound Sterling receivables and
The Group seeks to minimise the effects of these risks.
and liabilities. payables at the balance sheet date.
The Group’s policies approved by the board of directors
provide written principles on interest rate risk and the
investment of excess liquidity. Compliance with policies (iv) This is mainly attributable to the exposure to outstanding Australian Dollar to Pound Sterling receivables and
and exposure limits is reviewed on a continuous basis. payables at the balance sheet date.

The treasury activities are reported to the Group’s Board

as required.

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29. F I N A N C I A L I N S T R U M E N T S 30. T R A N S A C T I O N S W I T H 32. E V E N T S A F T E R T H E

(C O N T I N U E D) R E L AT E D PA R T I E S B A L A N C E S H E E T D AT E
F O R E I G N C U R R E N C Y S E N S I T I V I T Y A N A LY S I S Transactions between the Company and its subsidiaries, Post balance sheet, a new subsidiary was created
which are related parties, have been eliminated on to house the refuelling assets that had previously sat
The table below assumes an increase/decrease of 10% change of the Euro to Pound Sterling exchange, the US Dollar consolidation and are not disclosed in this note. All related within ITM Power (Trading) Limited. ITM Motive
to Pound Sterling exchange rate and the Australian Dollar to Pound Sterling exchange rate. party transactions which were not intra group have been Limited will be the own and operate the UK refuelling
conducted at arms’ length. stations in order to drive their profitability. It is a 100%
The sensitivity analysis is based on the subsidiaries’ profit or loss for the year. owned subsidiary so there will be no material impact
In the year, sales of hydrogen fuel to JCB Research
on the consolidated accounts.
(a corporate shareholder, represented on the Board by
T Rae) totalled £141 (2020: £631). The balance outstanding
EURO impact USD impact AUD impact at the year-end was £260 (2020: £631), which is deemed
as being fully recoverable.
2021 2020 2021 2020 2021 2020 During the year purchases from Linde/BOC Group,
£’000 £’000 £’000 £’000 £’000 £’000 represented on the Board by J Nowicki, totalled £3.5m
(2020: £1.3m) with £255,867 outstanding for payment
Profit or loss 70 93 61 34 37 46
at year-end (2020: £2,427). Furthermore, an amount
of £0.6m relates to stage payments made for goods included
in AUC but not yet received. There were also sales of £0.4m
of which only £13,684 remained outstanding at year end
(2020: £2,997 outstanding at the year-end).
If interest rates had been 1% higher/lower and all other variables had remained constant, loss for the year would have
decreased/increased by £168,000 (2020: £173,000). Balances with ITM Linde Electrolysis GmbH are shown in
note 12 Investments. These were also the only transactions
The Group’s financial liabilities consist of trade and other payables as shown on the balance sheet. No interest is paid
made with that entity in the year.
on these balances and all amounts are due within 3 months.
The remuneration of the directors, who are the key
management personnel of the Group, is shown in note 8.
FA I R VA LU E O F FI N A N C I A L I N S T RU M EN T S

Carrying amounts of financial instruments are a reasonable approximation of the fair values of those instruments. 31. C O N T R O L L I N G PA R T Y

As at the date of these accounts neither the directors

together, nor any individual shareholder, owned more than
50% of the issued share capital of the Company
and hence, in the opinion of the directors, there is no
controlling party at this date.

ITM ANNUAL REPORT 2021

COMPANY STATEMENT COMPANY
OF C HANGES IN EQUIT Y BAL ANC E SHEE T
2021 2020
NOTE £’000 £’000

CALLED UP SHARE RETAINED TOTAL

FIXED ASSETS
SHARE CAPITAL PREMIUM LOSS EQUITY
£’000 ACCOUNT £’000 £’000
£’000 Tangible assets 4 8 5

Intangible assets 5 8 15
AT 1 MAY 2019 16,200 86,631 (100,896) 1,935
Investments 6 37,508 28,674
Issue of shares 7,464 50,605 - 58,069
37,524 28,694
Credit to equity for - - 1,058 1,058
share-based payment
CURRENT ASSETS
Loss for the year & - - (24,943) (24,943)
Debtors 7 2,117 375
comprehensive loss
Cash at bank and in hand 152,556 8,641
AT 1 MAY 2020 23,664 137,236 (124,781) 36,119
154,673 9,016
Issue of shares 3,869 165,012 - 168,881
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Credit to equity for share-based - - 595 595
payment
Trade and other payables 8 (611) (597)
Loss for the year & - - (16,928) (16,928)
Provisions 9 (2,919) (994)
comprehensive loss
(3,530) (1,591)
AT 30 APRIL 2021 27,533 302,248 (141,117) 188,667

NET CURRENT ASSETS 151,143 7,425

NET ASSETS 188,667 36,119

CAPITAL AND RESERVES

Called up share capital 10 27,533 23,664

Share premium account 10 302,248 137,236

Profit and loss reserve 10 (141,114) (124,781)

SHAREHOLDERS’ FUNDS 188,667 36,119

The Company reported a loss for the financial year ended 30 April 2021 of £16.9m (2020: £24.9m).

The financial statements of ITM Power Plc, registered number 05059407, were approved by the
Board of Directors and authorised for issue 10 September 2021.

Signed on behalf of the Board of Directors

ANDY ALLEN
Director

ITM ANNUAL REPORT 2021

NOTES TO THE COMPANY
N OT E S TO T H E C O M PA N Y
F I N A N C I A L S TAT E M E N T S

FINANC IAL STATEMENT S

1. S I G N I F I C A N T I M P A I R M E N T O F TA N G I B L E A N D and that the parent company continues to support its PENSION COSTS
I N TA N G I B L E A S S E T S subsidiaries as they build up trade, all investments have
ACCOUNTING POLICIES been compared with their net asset value and where that The Company operates a defined contribution pension
does not provide any immediate prospect of repayment, scheme. The amount charged to the profit and loss
B A S I S O F P R E P A R AT I O N At each balance sheet date, the Company reviews
especially if assets are not sufficiently liquid, investment account in respect of pension costs is the contributions
the carrying amounts of its tangible assets to determine
values are impaired down to nil value. actually payable in the year. Differences between
The separate financial statements of the company are whether there is any indication that those assets have
contributions payable and contributions actually paid
presented as required by the Companies Act 2006. suffered an impairment loss. If any such indication exists, During the prior year, the Company invested in ITM Linde are shown as either accruals or prepayments in the
the recoverable amount of the asset is estimated in order Electrolysis GmbH (ILE), which is owned equally by both
The company meets the definition of a qualifying entity balance sheet.
to determine the extent of the impairment loss (if any). investors (50% shares), although control is deemed to lie
under FRS 100 (Financial Reporting Standard 100) Where the asset does not generate cash flows that are with Linde for the purposes of consolidation as they
issued by the Financial Reporting Council. Accordingly, independent from other assets, the Company estimates appoint the Managing Director, who also has the casting
financial statements have been prepared in accordance the recoverable amount of the cash-generating unit to vote. ITM Power has significant influence due its 2. C R I T I C A L A C C O U N T I N G
with FRS 101 (Financial Reporting Standard 101) which the asset belongs.
‘Reduced Disclosure Framework’ as issued by the Financial
representation on the Board. As such, ITM Power accounts JUDGEMENTS AND KEY
for this investment in associate using the equity method.
Reporting Council. Recoverable amount is the higher of fair value less costs
This means that the investment is originally recognised at
S O U R C E S O F E S T I M AT I O N
to sell and value in use. In assessing value in use,
As permitted by FRS 101, the company has taken the estimated future cash flows are discounted to their
cost, with subsequent movements to reflect ITM Power’s U N C E R TA I N T Y
advantage of the disclosure exemptions available share of the profit or loss after the date of acquisition.
present value using a pre-tax discount rate that reflects
under that standard in relation to share-based payments, This share of the profit or loss is recognised in the ITM The directors are required to make judgements,
current market assessments of the time value of money
financial instruments, capital management, presentation Power’s profit or loss. Should any adjustments be estimates and assumptions about the carrying amounts
and the risks specific to the asset for which the estimates
of comparative information in respect of non-current necessary for changes in proportionate interest arising of assets and liabilities that are not readily apparent from
of future cash flows have not been adjusted.
assets, presentation of a cash-flow statement and certain from changes in ILE’s other comprehensive income, other sources. The estimates and associated assumptions
related party transactions. If the recoverable amount of an asset (or cash-generating ITM Power’s share of those changes would be recognised are based on historical experience and other factors that
unit) is estimated to be less than its carrying amount, in the other comprehensive income. Any distributions are considered to be relevant. Actual results may differ
Where required, equivalent disclosures are given in the the carrying amount of the asset (cash-generating unit) received will reduce the carrying amount of from these estimates.
consolidated financial statements. is reduced to its recoverable amount. An impairment the investment.
The estimates and underlying assumptions are reviewed
loss is recognised as an expense immediately, unless the
In accordance with S408 of the Companies Act 2006, on an on-going basis. Revisions to accounting estimates
relevant asset is carried at a revalued amount, in which
the company has taken the exemption from presenting SHARE OPTION CHARGES are recognised in the period in which the estimate is
case the impairment loss is treated as a revaluation
the parent company’s individual profit and loss account. revised if the revision affects only that period, or in the
decrease.
Equity-settled share-based payments to employees and period of the revision and future periods if the revision
The financial statements have been prepared on the
Where an impairment loss subsequently reverses, others providing similar services are measured at the affects both current and future periods. There were no
historical cost basis except for the re-measurement
the carrying amount of the asset (cash-generating unit) fair value of the equity instruments at the grant date. critical judgements that the directors have made in the
of certain financial instruments to fair value. The principal
is increased to the revised estimate of its recoverable The fair value excludes the effect of non-market-based process of applying the Company’s accounting policies.
accounting policies adopted are the same as those set out
amount, but so that the increased carrying amount does vesting conditions. Details regarding the determination
in note 3 to the consolidated financial statements except
not exceed the carrying amount that would have been of the fair value of equity-settled share-based transactions
as noted below.
determined had no impairment loss been recognised for are set out in note 24 of the Group financial statements.
the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised as income The fair value determined at the grant date of the
TA N G I B L E F I X E D A S S E T S
immediately, unless the relevant asset is carried at equity-settled share-based payments is expensed
a revalued amount, in which case the reversal of the on a straight-line basis over the vesting period,
Tangible fixed assets are stated at cost less accumulated
impairment loss is treated as a revaluation increase. based on the Group’s estimate of equity instruments
depreciation and any recognised impairment loss.
that will eventually vest (other than for market-based
Depreciation is charged so as to write off the cost, performance conditions). At each balance sheet date,
over their estimated useful lives, using the straight-line the Group revises its estimate of the number of equity
INVESTMENTS
method, on the following basis: instruments expected to vest as a result of the effect
of non-market-based vesting conditions.
Computer equipment 3 years Balances are stated at cost less a provision for any
permanent impairment in value. The impact of the revision of the original estimates, if any,
The gain or loss arising on the disposal or retirement of is recognised in profit or loss such that the cumulative
an asset is determined as the difference between the sales Investments are considered for any potential impairment
expense reflects the revised estimate, with a corresponding
proceeds and the carrying amount of the asset and is under the IAS 36 Impairment of Assets. Given that the
adjustment to equity reserves.
recognised in income. subsidiaries are in the early stages of commercial trade

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F I N A N C I A L S TAT E M E N T S

2. C R I T I C A L A C C O U N T I N G J U D G E M E N T S 4. TA N G I B L E F I X E D A S S E T S 5. I N TA N G I B L E A S S E T S

A N D K E Y S O U R C E S O F E S T I M AT I O N
COMPUTER
U N C E R TA I N T Y (C O N T I N U E D) EQUIPMENT SOFTWARE
£’000 £’000
K E Y S O U R C E S O F E S T I M AT I O N U N C E R TA I N T Y
COST COST
RECOVER ABILIT Y OF INVESTMENT
At 1 May 2020 197 At 1 May 2020 22
The Group tests the net recoverable amounts of assets Under IFRS 9 Financial Instruments, most of the company
annually for impairment, or more frequently if there are loans or subsidiary investments have been impaired to nil. ADDITIONS 8 Additions -
indicators of impairment. During the year, management With a net asset positions at the year-end, largely held
At 30 April 2021 205 At 30 April 2021 22
considered the recoverability of its investment in subsidiary in cash, the investment in ITM Power (Trading) Limited
companies, which are disclosed in note 6. The subsidiaries was partially impaired, and the associate investment
continue to trade, but currently are trading at a loss, in ITM Linde Engineering GmbH was left un-impaired.
which is seen as temporary by management.
DEPRECIATION AMORTISATION

At 1 May 2020 192 At 1 May 2020 7

3. S TA F F N U M B E R S A N D C O S T S Charge for the year 5 Charge for the year 7

At 30 April 2021 197 At 30 April 2021 14
2021 2020
NUMBER NUMBER

Monthly average number of persons employed 6 5

NET BOOK VALUE CARRYING AMOUNT
STAFF COSTS DURING THE YEAR 2021 2020
At 30 April 2020 5 At 30 April 2020 15
(INCLUDING DIRECTORS) NUMBER NUMBER
£’000 £’000 At 30 April 2021 8 At 30 April 2021 8
Wages and salaries 1,007 828
The amortisation period for externally purchased software
Social security costs 131 128
has been set at three years (in line with our policy for
Other pension costs 34 47 computer equipment).

 
1,172 1,003

REMUNERATION OF THE HIGHEST 2021 2020

PAID DIRECTOR NUMBER NUMBER
£’000 £’000

Aggregate emoluments 500 323

Money purchase pension contributions - 23

500 346

As at 30 April 2021 pension contributions of £2,000 (2020: £2,000) due in respect of the current year had not been paid over
to the scheme. These were paid over in the following month and within statutory deadlines.

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F I N A N C I A L S TAT E M E N T S

6. I N V E S T M E N T S Interest is charged annually upon intercompany loan ITM Power (Trading) Limited holds 100% of the ordinary
balances at a rate of 1% over the Bank of England base share capital of ITM Motive, a company which is
rate. During the year, previous intercompany debt has incorporated in England and its principal activity is that
been converted into equity in the following amounts: of the production of drivetrains for use with Hydrogen.
LOANS TO INVESTMENT IN INVESTMENT IN The company was dormant during the year.
SUBSIDAIARY SUBSIDAIARY ASSOCIATE TOTAL
UNDERTAKINGS UNDERTAKINGS SUBSIDIARY AMOUNT CONVERTED All of the above are registered at 2 Bessemer Park,
£’000 £’000 £’000 £’000 COMPANY £’000
Shepcote Lane, Sheffield, South Yorkshire, S9 1DZ.

COST ITM Power GmbH 3,579 The Company holds 100% of the ordinary share capital
of ITM Power GmbH, a company which is incorporated
At 1 May 2020 26,823 112,695 346 139,864 ITM Power (Trading) 32,699 in Germany and its principal activity is that of the sale
Limited of electrolysis equipment and hydrogen storage solutions.
Additions 20,546 - 535 21,081 Registered office: Am Muehlgraben 6, 35410 Hungen,
36,278 Germany.
Foreign exchange - - (27) (27)
The Company holds 100% of the ordinary share capital
Share options granted As in previous years, a provision for credit losses (IFRS 9) of ITM Power Inc, a company which is incorporated
- 354 - 354
to subsidiary employees has been made in recognition that the subsidiaries are in California and its principal activity is that of the sale
loss-making and therefore unlikely to be able to pay their of electrolysis equipment and hydrogen storage solutions.
50% share of profit or loss - - (595) (595) debt to the parent company in the near-term. Registered office: 2 Bessemer Park, Shepcote Lane,
Sheffield, S9 1DZ.
Transfers (36,278) 36,278 - - A further impairment of the investments has also been
undertaken in line with IAS 36 Impairment of Assets. The Company holds 100% of the ordinary share capital of
At 30 April 2021 11,091 149,327 259 160,677 The recoverable amount was estimated based on fair ITM Power Pty Limited, a company which is incorporated
value less costs to sell. The book value remaining on in Australia and its principal activity is that of the sale
PROVISIONS FOR investment in subsidiary undertakings reflects the net of electrolysis equipment and hydrogen storage solutions.
IMPAIRMENT assets available within ITM Power (Trading) Limited and Registered office: Unit 2 Level 1, 32 Main Street, Samford
ITM Power GmbH at the year-end, to the extent to which Village, Queensland, Australia 4520.
At 1 May 2020 26,823 84,367 - 111,190 they are deemed to be sufficiently highly liquid e.g. cash. The Company holds 100% of the ordinary share capital
The Company holds 100% of the ordinary share capital of Orkney Hydrogen Trading Limited, a company which
Movement in year 5,358 6,621 - 11,979
of ITM Power (Trading) Limited, a company which is incorporated in Scotland and its principal activity is that
Transfers (21,090) 21,090 - - is incorporated in England and Wales and its principal of the sale of hydrogen. The company was dormant during
activity is the development and manufacturing of the year. Registered office: Suite 2, Ground Floor, Orchard
At 30 April 2021 11,091 112,078 - 123,169 prototype products. Brae House, 30 Queensferry Road, Edinburgh, EH4 2HS

The Company holds 100% of the ordinary share capital The investment in associate is discussed in more detail
NET BOOK VALUE in note 12 to the consolidated financial statements but
of ITM Power (Newco) Limited, a company which is
incorporated in England and Wales and its principal relates to the investment in ITM Linde Electrolysis GmbH.
At 30 April 2020 - 28,328 346 28,674
activity is the retail sale of automotive fuel in specialised The Company holds 50% of the ordinary share capital
At 30 April 2021 - 37,249 259 37,508 stores. The company was incorporated in March and of ITM Linde Electrolysis GmbH, a company which is
remained dormant up until the year-end in anticipation incorporated in Germany and its principal activity is that
of activity during the next financial year. of the sale of large-scale electrolyser solutions. This was
The Company holds 100% of the ordinary share capital a new investment in the year with Linde Engineering
of ITM Power (Research) Limited, a company which is GmbH. Both parties have an equal share of the company,
incorporated in England and Wales and its principal although control is deemed to lie with Linde for the
activity is the research and development of scientific and purposes of consolidation as they appoint the Managing
engineering projects. The company was dormant during Director. ITM Power does have significant influence
the year. however, with representation on the Board of Directors,
and as such it is being equity accounted as an investment
in associate in these statements. Registered office:
Bodenbacher Str. 80, 01277 Dresden, Germany.

ITM ANNUAL REPORT 2021

 N OT E S TO T H E C O M PA N Y
F I N A N C I A L S TAT E M E N T S

7. D E B T O R S: A M O U N T S 9. P R O V I S I O N S
FA L L ING DUE WI T HIN EMPLOYERS NATIONAL
ONE YEAR INSURANCE ON SHARE OPTIONS

2021 2020 2020

£’000 £’000 £’000

Prepayments 318 314 BALANCE AT 30 APRIL 2020 (994)

Amounts recoverable from employees 1,771 - Provision created in the year (2,217)

Other debtors 28 61 Use of the provision 292

2,117 375 Release in the year -

BALANCE AT 30 APRIL 2021 (2,919)

The amounts recoverable from employees relate to the extent that employers’ national insurance can be recovered when
share options are exercised and will off-set the provision in note 9.
10. S H A R E C A P I TA L
& RESERVES
The movements on share capital and share premium accounts are disclosed in note 23 to the consolidated
financial statements.

The company’s other reserve is the profit and loss reserve which represents cumulative profits or losses,
8. T R A D E A N D O T H E R net of dividends paid and other adjustments.
PAYA B L E S
2021 2020
£’000 £’000

Trade creditors 119 228

11. R E L AT E D PA R T Y
TR ANSAC TIONS
Payroll creditors 33 21
The company has taken advantage of the exemption included in FRS101 “Related Party Disclosures” for wholly owned
Accruals and deferred income 459 348 subsidiaries not to disclose transactions with entities that are part of the Group qualifying as related parties.

611 597 The balance with ITM Linde Electrolysis GmbH is shown under Investment in associate in note 6 and the transactions making
up that amount are described more fully in note 12 to the consolidated financial statements. These were the only
transactions made with that entity in the year.

ITM ANNUAL REPORT 2021

I T M
P OW
E R PLC
A N N UA L R E P O R T
F O R T H E Y E A R E N D E D 30 A PR I L 2021
Company Registration Number: 05059407

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