Annual Report 2023

In 2022 and 2023, as part of the LTI Plan, the company has awarded the Management Board with equity instruments consisting of RSUs and Stock Options with a vesting period of three years, with 1/3 vesting each year. For further details reference is made to the table “Number of RSUs and Stock Options awarded and outstanding to Management Board” below.

Number of RSUs and stock options awarded and outstanding to Management Board

Each Supervisory Board member is subject to a Supervisory Board Director agreement. All Stock Options under the 2022 Grant of Stock Options have vested on the date of issue of new shares on 18 April 2023 in completion of Pryme N.V.’s private placement process pursuant to the change of control clause in the Supervisory Board Director agreements on the basis of Infinity Recycling B.V. on that occasion having gained a controlling interest in the company as the managing director of both Circular Rotterdam B.V. (owning 27.5 % of the shares in Pryme N.V.) and Circular Plastics Coöperatief U.A. (owning 13.81 % of the shares in Pryme N.V.) and who together at such time reached a combined 41.31 % of the shares in Pryme N.V. Pursuant to the Supervisory Board Director agreements, each Supervisory Board member is entitled to exercise his Stock Options during any exercise window that the company opens on a regular basis during his tenure on the Supervisory Board.

Number of stock options outstanding and awarded to the Supervisory Board

In October 2022 Pryme entered into a sale and leaseback transaction of installation components. The total consideration amounts to € 8.2 million of which € 7.6 million was received in 2022. In 2023 € 0.5 million was received. The remaining receivable of € 0.1 million is expected to be received in 2024.

The cash flow 2022 (€ 0.5 million) of other non-current liabilities represents the net cash flow related to the recognition of liabilities for a concrete floor at Pryme One and a liability for ground lease payments related to the Amsterdam site minus redemption in 2022. In 2023 both liabilities have been partly redeemed.

The movement in government grants in 2023 relates to 1) the utilization of the ELECTRO government grant (€ 0.4 million negative) in the income statement, 2) the recognition under movements in working capital of the last 10% of the DEI government grant (€ 0.5 million positive) and 3) the amount government grants received in advance (€ 2.4 million), consisting of ELECTRO grant for € 2.3 million and DEI grant for € 37 thousand.
The full DEI government grant (€ 5.0 million) has been recognized and deducted from the book value of Plant and equipment, without impact on cash flows.

Going concern

As a start-up company Pryme management regularly assesses the entity’s ability to continue as a going concern. This assessment is based on the strategic and operational plans, the budget plan 2024, technology and market developments, liquidity and funding forecast 2024 - 1st half 2025 and assessment of other material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern. These uncertainties include the availability and prices of feedstock, energy prices, technology disruptions and changing sustainability requirements.


Based upon Pryme’s cash position as of 31 December 2023 (€ 8.2 million), the anticipated operational, investment and financing cash flows in 2024 (€ 3.2 million positive), and the first half of 2025 (€ 2.2 million negative), Pryme management assessed and satisfied itself that using the going concern assumption is appropriate. Pryme expects to have sufficient cash flow to meet the requirements for working capital and capital expenditures for at least 12 months after the signing date of these financial statements. The cash flows referred to above relate to Pryme's current operations (Pryme One) and organization.

Basis of Preparation

The consolidated financial statements of the Group have been prepared in accordance with the IFRS Accounting Standards-EU. For all periods up to and including the year ended 31 December 2022, the Group prepared its financial statements in accordance with local generally accepted accounting principles (Dutch GAAP). These financial statements for the year ended 31 December 2023 are the first the Group has prepared in accordance with the IFRS Accounting Standards-EU. Reference is made to note 7.2.3 for information on how the Group adopted the IFRS Accounting Standards-EU.

The consolidated and company financial statements have been prepared on a historical cost basis. The consolidated and company financial statements are presented in euros and all values are rounded to the nearest thousand (€ 000), except when otherwise indicated.

Application of new and revised standards and interpretations

The overview below shows the new and revised standards that have been issued with an effective date of 1 January 2024 and later. These standards will therefore be applied in the Annual report 2024 and later.

According to our assessment, these new IFRS standards will have no material impact on Pryme’s financial statements in the period of initial application.

Basis of consolidation

Financial information relating to Group companies and other legal entities controlled by Pryme N.V., has been consolidated in the financial statements of Pryme N.V. The consolidated financial statements have been prepared in accordance with the accounting principles of Pryme N.V.

Financial information relating to the Group companies is fully included in the consolidated financial statements, eliminating the intercompany relationships and transactions.

The subsidiaries included in the consolidation are:

• Pryme Management B.V., Rotterdam (100%)
• CCT Circular CleanTech B.V., Kapelle (100%);
• CCT International B.V., Antwerpen-Berchem (100%)
• CCT Circular CleanTech Amsterdam B.V., Amsterdam (100%)

Subsidiaries are entities controlled by the Group. Pryme controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the Consolidated financial statements from the date on which control commences until the date on which control ceases, using consistent accounting policies.

Summary of significant accounting policies

The Group’s significant accounting policies are described in the relevant individual notes to the Consolidated financial statements or otherwise stated below. These policies have been consistently applied to the years presented, unless otherwise stated.

The individual notes are listed in the table of contents.

Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.

An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Expected to be realised within twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle
• It is due to be settled within twelve months after the reporting period

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Foreign currencies

The Group’s consolidated financial statements are presented in euros, which is also the parent company’s functional currency. All subsidiaries report in euros.

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Cash flow statement

The cash flow statement has been prepared using the indirect method. The cash items disclosed in the cash flow statement comprise cash at banks and in hand except for deposits with a maturity longer than three months. Cash flows denominated in foreign currencies have been translated at average estimated exchange rates. Exchange differences affecting cash items are shown separately in the cash flow statement. Interest paid and received as well as income taxes are included in cash from operating activities. Transactions not resulting in inflow or outflow of cash, leases included, are not recognized in the cash flow statement. Payments of lease installments qualify as repayments of borrowings under cash used in financing activities and as interest charged under cash generated from operating activities.

First-time adoption of IFRS

Background

Pryme prepared its 2022 financial statements in the Netherlands under the application of Dutch GAAP, in accordance with Title 9, Book 2 of the Dutch Civil Code. For the financial year ended 31 December 2023 Pryme decided to apply the IFRS Accounting Standards-EU as adopted by the European Union for the consolidated financial statements.

This implies that the transition date from Dutch GAAP to IFRS Accounting Standards-EU is 1 January 2022. In this note we provide a reconciliation between the financial statements under the application of Dutch GAAP and IFRS Accounting Standards-EU with an explanation of the most important differences.

Approach

In general, a company is required to determine its IFRS accounting policies and apply these retrospectively to determine its opening balance sheet under IFRS. This is reflected in the following transition tables:

• Group reconciliation of equity as of 1 January 2022 (date of transition to IFRS)
• Group reconciliation of equity as of 31 December 2022
• Consolidated Statement of Profit and Loss for the year 2022
• Consolidated Statement of Changes in Equity for the year 2022
• Consolidated Statement of Cash Flows for the year 2022

These tables show the numbers as reported under Dutch GAAP and the (financial) effects of the conversion, based on the IFRS standards. An analysis showed that only the application of IFRS 16 (leases) requires (financial) adjustments to comply with IFRS:

Notes to conversion from Dutch GAAP to IFRS

Following an assessment of the relevant IFRS standards compared to Dutch GAAP it appeared that no adjustments are required to transition from Dutch GAAP to IFRS, except for IFRS 16 (Leases), IAS 12 (Income taxes), and IAS 20 (Grants).

In the notes to the (reconciliation) tables below, further information is provided regarding the reclassifications and remeasurements related to the conversion to IFRS as adopted.

Accounting principles

We refer to note 7.2.3 for the IFRS accounting policies applied in the (consolidated) financial statements 2023 and comparative numbers 2022.

Group reconciliation of equity as of 1 January 2022 (date of transition to IFRS):

Notes to the reconciliation of equity as of 1 January 2022:

Dutch GAAP uses an Operating and Finance Lease model, which differs from IFRS 16 that applies a single lessee accounting model. IFRS accounting is similar with the Finance lease accounting in Dutch GAAP. 

The main difference in the transition from Dutch GAAP to IFRS therefore relates to the Operating leases in place at Pryme. These leases encompass land, warehouse space, various offices, and various car leases. The right-of-use assets recognized as of 1 January 2022 amount to € 0.4 million. The related leasing liabilities recognized in 2022 under IFRS amount to € 0.4 million. 

Government grants under Dutch GAAP were reported as deferred income for the total amount granted (€ 5.0 million). Installments to be received after final settlement of the grant (€ 0.5 million) were recognized as a receivable. In order to better reflect the financial position and avoid inflated balance sheet positions, advance payments not yet received (€ 0.5 million) have been deducted from both the current receivables and deferred income. The grant qualifies as investment grant and therefore has been deducted from plant and equipment as of 31 December 2023 as the grant is considered final. 

The legal reserves have been reclassified to the general reserve as the related development costs are recognized in CCT International B.V. (Belgian subsidiary).

The weighted average incremental borrowing rate applied to leasing liabilities recognized in the statement of financial position at the date of initial application was 5,5%.

Group reconciliation of equity as of 31 December 2022:

Notes to the reconciliation of equity as of 31 December 2022:

Dutch GAAP uses an Operating and Finance Lease model, which differs from IFRS 16 that applies a single lessee accounting model. IFRS accounting is similar with the Finance lease accounting in Dutch GAAP. 

The main difference in the transition from Dutch GAAP to IFRS therefore relates to the Operating leases in place at Pryme. These leases encompass land, warehouse space, certain equipment at Pryme One, various offices, the ground lease of the Amsterdam site and various car leases. The right-of-use assets recognized in 2022 amount to € 3.8 million. The related leasing liabilities recognized in 2022 under IFRS amount to € 3.8 million. Property not used in the production process (€ 4.1 million) mainly relates to plant and equipment of the Amsterdam site and has been reclassified to Plant and equipment.

For the Government Grant adjustments please refer to the notes on the equity reconciliation as of 1 January 2022.

The legal reserves have been reclassified to the general reserve as the related development costs are recognized in CCT International B.V. (Belgian subsidiary).

In 2022, according to IAS 12 (income taxes), a deferred tax liability of € 1.0 million has been recognized related to the right-of-use assets and a deferred tax asset of € 1.0 million has been recognized related to leasing liabilities.

Consolidated Statement of Profit and Loss for the year 2022:

Notes to the Statement of Profit and Loss: 

The other employee related expenses are reclassified to Personnel costs to better reflect the total Personnel costs. 

The application of IFRS 16 requires recognizing operational lease in the balance sheet as right-of-use assets and leasing liabilities and translate leasing costs under Dutch GAAP (€ 0.6 million) into depreciation (€ 0.5 million) and interest expenses (€ 0.2 million) under IFRS. The balance (€ 51 thousand negative) increases the net loss. 

Consolidated Statement of Changes in Equity for the year 2022:

Notes to the Changes in Equity:

The impact of the application of IFRS 16 on the opening balance sheet as of 1 January 2022 amounted to € 5 thousand negative. The impact of the change in accounting principles on the net result of 2022 amounts to € 51 thousand negative. As of 31 December 2022, the cumulative impact of the conversion from Dutch GAAP to the IFRS Accounting Standards-EU on equity amounts to € 56 thousand negative.

Consolidated Statement of Cash Flows for the year 2022:

Notes to the Cash flows: 

The reclassifications and remeasurements in the Statement of Cash Flows mainly relate to the recognition in the balance sheet of the (operational) leases. In 2022 under Dutch GAAP these lease payments (€ 0.6 million, of which € 0.4 million repayment of the lease liability) were reported as other operating expenses and are converted into depreciation (€ 0.5 million) and interest expenses (€ 0.2 million). This results in a lower net income after taxes (€ 51 thousand). 

The plant and equipment funded by bank (equipment) financing, following a sale and lease back transaction, are not considered right-of-use assets (‘failed’ sale in terms of IFRS 15) and remain part of the non-current assets (€ 8.3 million). The capitalized interest in 2022 arising from bank financing of € 119 thousand was included in the purchase of property, plant, and equipment in the Dutch GAAP Statement of Cash Flows. This has been reclassified to “interest paid” in the IFRS Statement of Cash Flows. The repayment of the principal amount of the bank financing (€2 thousand) is disclosed under cash flow from financing activities.

Restatement (reclassification)

In 2020, effectively as of 31 December 2019, Pryme acquired various assets related to the development, design, and construction of a chemical recycling plant (Pryme One). At the end of 2023, the Pryme One installation was completed. The costs of a self-constructed installation have to be broken down into logical components with a similar depreciation term. This analysis and review of the total costs capitalized under machinery under construction revealed that € 2.7 million of the total amount of € 50.8 million should have been disclosed as an intangible asset (development costs).

The error has been corrected by reclassifying, retrospectively to 1 January 2022, an amount of € 2.7 million from property, plant, and equipment (Machinery under construction) to Intangible assets (Development costs). Reference is made to note 7.2.3 (Group reconciliation of equity as of 1 January 2022 and as of 31 December 2022).

The legal reserves have been reclassified to the general reserve as the related development costs are recognized in CCT International B.V. (Belgian subsidiary), as the legal reserve should not have been disclosed separately due to the fact that the development costs related to a subsidiary within the group.

The changes did not have an impact on the Statement of Profit and Loss 2022 and 2023 or the Group’s operating, investing, and financing cash flows.

The main financial risks identified by the Management Board to achieve Pryme’s objectives are elaborated below:

Based on the risk assessment, mitigating actions are put in place to manage these risks. Periodically the Management Board and the Supervisory Board update and review these risks and take appropriate action, if needed.

Capital structure

To Pryme capital management, capital includes issued capital, share premium and all other equity reserves attributable to the shareholders and the net debt position. The primary objective of the Group’s capital management is to maximise the shareholder value.

The Group’s objective when managing capital is to safeguard its ability to continue as a goin concern (see note 7.2.2) in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

Pryme’s funding strategy is directed at establishing and maintaining an optimal financing structure that takes into account the current asset base as well as the current and future investment plans. As a start-up company Pryme may fail to timely obtain the necessary equity, grants, or debt funding, which could prevent the company from continuing as a going concern and preventing the company from executing its strategy to roll-out the “proof of concept plant” Pryme One and start building larger plants. Pryme works actively to maintain and further expand the current funding base.

The Group manages its capital structure and aims to expand the gearing ratio, which is ‘net debt’ divided by total equity plus net debt. The Group’s policy is to move to a gearing ratio between 20% and 40%. Within net debt the Group includes interest bearing (leasing) loans and borrowings, trade and other payables, less cash and cash equivalents. Given the nature of the long-term asset base, the company needs a large proportion of long-term funding, either equity, financing, or hybrid funding.

To achieve this overall objective, the Group’s capital management, among other things, aims to ensure that it meets (financial) conditions attached to government grants, lease agreements and other interest-bearing loans and borrowings that define capital structure requirements. These agreements do not contain obligations to meet certain financial ratios.  There have been no breaches of the (financial) conditions in the current period.

No changes were made in the objectives, policies, or processes for managing capital during the years ending on 31 December 2023 and 31 December 2022.

The preparation of the Pryme consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures, and the disclosure of contingent assets and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities in future periods. Despite management’s best efforts to accurately estimate such amounts, future results could materially differ from those estimates.

The following management insights, estimates and assumptions, given the nature of Pryme’s activities, might have significant impact on the financial statements. The key elements of uncertainty in the estimates are as follows:

Estimates and assumptions related to impairment test of Pryme One

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation should be based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset. This information is not available.

The value in use calculation is based on a DCF model. The cash flows are derived from the budget 2024 and a forecast for the next 7 years. Pryme is not committed to significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows, production efficiency and cost level growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the CGU Pryme One are further explained in note 7.4.7.

Impairment test of intangible assets

Similar to the impairment testing for Pryme One the value in use value of the intangible assets (development costs) have been tested. Based on the anticipated revenues of Pryme One and the agreed upon Intellectual Property fees, the value in use exceeds the carrying value of the intellectual property. For further details we refer to note 7.3.1.

The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of Pryme. Such changes are reflected in the assumptions when they occur.

Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available. The main source of information are the interest rates charged on new contracts. Comparing these interest rates and international benchmark interest percentages for large, mature chemical companies, we notice that for Pryme as small start-up entity, the cost of (asset-backed) debt on average lies approximately 5% above the interest rate of Dutch government bonds with a duration of 10 years.

Anticipated duration of the leasing contract for the Pryme One site

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate. For the Pryme One site, the Group assumes to make use of the extension option for 5 years starting as of 1 March 2027 till 29 February 2032, unless the lessor gives notice of termination.
Pryme further assumes to continue the lease of the main components (a reactor, two extruders and a walking floor) of the installation. For further details regarding leasing, we refer to note 7.3.3.

In addition, the renewal options for leases of motor vehicles are not included as part of the lease term because the Group typically leases motor vehicles for not more than five years and, hence, is not exercising any renewal options. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

Useful life of Plant and Equipment Pryme One

The useful life of Pryme One is closely connected to the anticipated period the Pryme One installation will be used for testing and generating process data as input for the design, construction, and production process of future larger chemical recycling plants. Pryme Management assumes that the Pryme One plant will be used for 8 years until 29 February 2032, in line with the assumed duration of the lease contract of the Pryme One site.

Useful life of intangible assets

The useful life of the asset is estimated at 5 years (straight-line), taking into consideration the anticipated technological obsolescence (rapid changes in technology), which might reflect a reduction of the future economic benefits.

Valuation of the deferred tax asset

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.

Taking into account the lack of track record for Pryme to generate profits, the uncertainties surrounding the Pryme business model and activities and the significant period anticipated to recover these losses, Pryme only recognized a deferred tax asset up to the level of the deferred tax liability related to right-of-use assets recognized in the financial statements of 2023. 

For further details reference is made to note 7.3.13.

Residual value and provision for decommissioning Pryme One

Pryme has recognized a provision for decommissioning obligations associated with the Pryme One site and installation. Our assumptions and estimates are made in relation to discount rates, the expected cost to dismantle and remove the plant from the site and the expected timing of those costs.

The estimates and the underlying assumptions are reviewed on a regular basis. Adjustments are made in the period in which the estimates were reviewed, if the adjustment affects that period, or in the relevant period and the future periods if the adjustment affects both current and future periods.

Accounting policies

Intangible assets are stated at cost less accumulated amortization and impairment losses. Impairment testing is executed if an impairment trigger is identified. This is relevant if the carrying amount of the asset (or of the cash-generating unit to which the asset belongs) is higher than its recoverable amount. With regards to the determination as to whether an intangible asset is subject to an impairment, please refer to the note below.

Research costs are recognized in the consolidated profit and loss account. Expenditure on development projects is capitalized as part of the production cost if it is likely from both a commercial and technical perspective that the project will be successful (i.e.: if it is likely that economic benefits will be realized) and the cost can be determined reliably. The amortization of capitalized development costs commences at the time when the commercial production starts and takes place over the expected future useful life of the asset. The useful life of the asset is estimated at 5 years (straight-line).

Movements in intangible assets

The development costs encompass all efforts spent on:

• Intellectual property and know-how regarding the conversion of plastic waste into a form of (pyrolysis) oil, including (claims to) patents, trademarks, etc.
• All developed design, engineering (software), tools and equipment for the above process.
• All documentation of process modules, manufacturing methods and software programs.

Amortisation started on 1 January 2024, after commencing commercial production at plant Pryme One. The remaining amortization period is therefore 5 years. Impairment testing confirmed that the carrying value is below the recoverable amount.

No borrowing costs directly attributable to the development costs have been capitalized as part of the intangible asset.

Impairment development costs

The recoverable amount of the development costs (Cash Generating Unit (CGU) R&D and Intellectual Property is determined based on a value in use calculation using the expected license payments from Pryme One covering an eight-year period. This period is in line with the expected economic life of Pryme One. As a result of this analysis, management did not identify an impairment for this CGU. Reference is made to note 7.4.6.

Accounting policies

Property, plant, and equipment mainly comprises plant and equipment of Pryme One (Rotterdam), our labscale plant at Ghent University and property not used in production (Amsterdam site).

Plant and equipment are broken down into their components and carried at cost, net of accumulated straight-line depreciation and less any impairment losses. Borrowing costs that are directly attributable to the construction of the plant form part of the cost of Plant and equipment. This also applies to externally financed equipment reported under this section. Other borrowing costs are recognised as an expense. Costs encompass the initial cost plus other direct acquisition costs (duties and transport) and installation costs that can be allocated directly, such as design and engineering costs as well as hours of own employees and contractors. Investment grants are deducted from the costs.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item are expected and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Costs of repairs and maintenance that do not increase the future economic benefits are recognized as expenses.
To the extent that dismantling obligations exist at the end of the useful life, these estimated costs and any amendments thereto are included in the cost of the assets.  

Impairments expected at year-end of the reporting period are considered (see note 7.4.7).

Depreciation is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful economic lives as follows:

• Land:                                                  No depreciation
• Plant and equipment                       8 years
• R&D facility equipment                   4 years
• Office furniture and equipment     3-5 years

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and reported as an adjustment of the depreciation or amortization of the assets involved. In 2023 no such gains or losses are included in the consolidated statement of profit and loss.

Movements in property, plant, and equipment – owned assets

1)
The Amsterdam site (property, plant, and equipment not used in production process) mainly relates to plant and equipment and has been reclassified to plant and equipment.

2)
Due to the non-material amount of € 70 thousand this transfer was not reported separately in the Financial Statements 2022. In these Financial Statements the capital expenditures related to office improvements and furniture are reported separately.

3)
At the end of December 2023 the Pryme One installation has been completed and ready for operation. Therefore all capital expenditures (€ 47.1 million) have been transferred to plant and equipment.
The transferred amount contains € 0.6 million of capitalized interest related to the bank (equipment) financing, following the sale and lease back transaction in October 2022. Reference is made to note 7.3.9 for further details. The incremental borrowing rate applied for capitalization is 5.8%.

4)
As of 31 December 2023 the DEI subsidy, amounting to € 5.0 million, has been deducted from the related capital investments, resulting in a lower book value. Reference is made to note 7.7.10.

5)
Impairments relate to components which will not deliver future economic benefits, like a reactor that was part of an asset deal in 2020. These impairment losses are recognised in the Statement of Profit and Loss. Reference is made to note 7.4.7 regarding impairment testing.

The additions in machinery under construction of € 1.0 and € 13.3 million relate to the R&D facility at Ghent University (Belgium) and the Pryme One plant in Rotterdam, respectively. The additions include borrowing costs directly attributable to the construction of Pryme One. The amount of capitalized borrowing costs during the period amounts to € 0.5 million.
Depreciation starts after commencing commercial production at plant Pryme One as of 1 January 2024. The Lab installation (R&D equipment) in Ghent is in use and being depreciated as of 1 January 2023.

The property not used in production relates to the Amsterdam site. Pryme management has decided to sell Pryme's Amsterdam site. Reference is made to note 7.5.4 (subsequent events). Considering the market dynamics and offers received over the last two years, the plant and equipment of the Amsterdam site has been written down by € 2.3 million.

Accounting policies

Identification as lease contract

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for a consideration. Pryme applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities representing obligations to make lease payments and right-of-use assets representing the right to use the underlying assets. In line with the nature of its activities, Pryme has long-term land leases and leases of other non-current assets such as Plant and equipment and company cars. Most of the contracts contain extension options.

Some contracts contain both lease and non-lease components. Pryme allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements in general do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets cannot be used as security for borrowing purposes by Pryme.

Right-of-use assets

Pryme recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

• Plant and machinery                                                8 to 10 years
• Lab scale R&D equipment (Ghent University)      4 years
• Motor vehicles and other equipment                    3 to 5 years
• Office space                                                             1,5 to 4 years

Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If Pryme is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

In case the ownership of the leased asset transfers to Pryme at the end of the lease term, the cost reflects the exercise of a purchase option. The right-of-use assets are also subject to impairment. We refer to the accounting policies in note 7.4.7 (Impairment).

Leasing liabilities

At the commencement date of the lease, Pryme recognises leasing liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable.

Lease payments are allocated between a principal and interest expense. The interest expense is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The principal amount of the lease payment is deducted from the lease liability.

Some lease arrangements do contain an obligation to dismantle and remove the underlying asset, restore the site on which it is located or restore the underlying asset to a specified condition. To the extent that dismantling obligations exist at the end of the useful life, these estimated costs and any amendments thereto are included in the cost of the assets or decommissioning costs are expected to be offset against the proceeds of the materials disposed of.

Short-term leases and leases of low-value assets

Pryme applies the short-term lease recognition exemption to its short-term leases of equipment, cars, and office space i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets recognition exemption to leases of office equipment and software that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Incremental borrowing rate

The lease payments are mostly discounted using the incremental borrowing rate of Pryme. This is because the interest rate implicit in the lease can in most instances not be readily determined. The incremental borrowing rate is the rate that Pryme would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset, in a similar economic environment with similar terms, security and conditions.

As a basis for the calculation of the applicable discount rate, a risk-free rate is used, being the interest rate on Dutch government securities, plus 5 percentage points. The incremental borrowing rate for new leases in 2023 is set at 8.25%.

Movements in property, plant, and equipment – leased assets

Leasehold equipment includes the extruders, reactor, walking floor and some other equipment installed and in use at Pryme One, office space as well as some vehicles.

Movements of the carrying amounts of Right-of-use assets:

Pryme had non-cash additions to right-of-use assets and lease liabilities of €2.8 million in 2023 (€ 3.9 million in 2022). There are no future cash outflows relating to leases that have not yet commenced.

Lease commitments:

As of 31 December 2023, there are no material leases to which Pryme has committed, but which have not yet commenced.

Maturity analysis - Contractual undiscounted lease cash flows as of 31 December 2023:

The average weighted duration of the lease commitments is 229 months (19.1 years), which is relatively high due to the ground lease Amsterdam site running till 2067. The ground lease of the Amsterdam site and the lease of the Pryme One site account for respectively € 6.2 and € 4.4 million of the total contractual undiscounted lease cash flows.

Lease extension and termination options:

Pryme has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with Pryme’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

The lease agreement with Plant One Rotterdam (Pryme One site) offers the option to extend the lease term after the current term ending 28 February 2027. Currently Pryme has the intention to extend this lease with another five-year term up to and including 29 February 2032. After this date the lease can be continued for consecutive periods of one year, subject to termination by both lessee and lessor with a notice period of twelve months.

Therefore, there are no material undiscounted potential future lease payments relating to periods following the exercise date of extension options that is not already included in the lease term.

Accounting policies

Receivables and accrued income are initially valued at the fair value of the consideration to be received unconditionally, including transaction costs, if material. Receivables are subsequently valued at the amortized cost price. If there is no premium or discount and there are no transaction costs, the amortized cost price equals the nominal value of the accounts receivable.

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Provisions for bad debts are deducted from the carrying amount of the receivables from third-party customers.

Other receivables and prepaid expenses are valued at amortized cost.

Trade receivables, other receivables, and prepaid expenses

Taxes and social security charges:

Other receivables:

The receivables related to the sale and leaseback transaction will be collected once the last installment of the pledged equipment is paid to Pryme’s suppliers. The subsidy receivable amounts to 10% (€ 0.5 million) of the total DEI grant (€ 5.0 million) and will be received after final settlement of the DEI Grant by the RvO in 2024.

Authorized share capital:

In 2022 the authorized capital of the company was increased by € 3.735 to € 3.75 million and the nominal value per share was increased from € 0.001 to € 0.05 each. As of 31 December 2023, the authorized capital amounts to € 3.75 million, divided into 75,000,000 shares.

Ordinary shares issued and fully paid (nominal value):

The company has one class of ordinary shares which carry no right to fixed income. Each share confers the right to cast one vote at the company's general meeting.

Ordinary shares issued and fully paid (number of shares):

At the General Meeting of Shareholders on 27 June 2023 the Supervisory Board asked for and received authorization to issue 4.833.086 shares. This authorization may be used to issue shares under the LTI Plan.

Share premium reserve:

Nature and purpose of the share premium reserve

The Share Premium related to the issue of shares (Private Placement) comprises of the difference between the subscription price and the nominal value of the shares. All costs incurred related to the issue of shares are deducted from the proceeds of the issue of shares. In case of issuing ordinary shares related to the vesting of shares according to the Long-Term Incentive (LTI) Plan, the difference between the accrued Share-based Reserve and the nominal value of the shares is added to the Share Premium Reserve, less all costs incurred directly related to the issue of these shares.

General reserve:

Nature and purpose of the General reserve:

The movements in the General Reserve only relate to the appropriation of result.
The commitments related to the equity-settled share-based payments (LTI Plan) provided to Supervisory Board members, employees, and contractors, including key management personnel, as part of their remuneration, are recognized in the Share-based Payments Reserve. For further details with regards to the LTI Plan reference is made to note 7.3.8.

In 2023 and 2022 no dividends have been declared nor distributed.

Accounting policies

On initial recognition other non-current liabilities are recognized at fair value. After initial recognition other long-term liabilities are recognized at amortized cost, being the amount received considering premiums or discounts and transaction costs. This is usually the nominal value.

For the accounting treatment of long-term liabilities related to leasing and government grants we refer to respectively the paragraphs 7.3.3 and 7.3.11.

Non-current liabilities carried at amortized cost:

The Payables to banks relate to the monthly installments of leased equipment following a sale and leaseback transaction, which is further elaborated below.

Sale and leaseback transaction

In October 2022 Pryme entered into a sale and leaseback transaction related to the following equipment:

• 2 extruders
• Reactor
• Walking Floor

The financing-term of these assets is 102 months (8,5 years), and the interest rate amounts to 5,8%. The residual value is determined at 12,5% of the initial cost. The (bank)financing amounted to € 8.2 million of which € 7.6 million was collected in 2022. The remaining amount of € 0.6 million is received upon payment of the outstanding installments to the equipment suppliers. In 2023 € 0.5 million was collected and as of 31 December 2023 € 0.1 million is still pending. The cash flow effect of the sale and leaseback transaction during the current financial year therefor amounted to a cash inflow of € 0.5 million.

The reason for entering into this sale and leaseback transaction was improving Pryme’s financial structure and liquidity position. As security for the bank financing the legal ownership of the equipment remains with the lessor (bank). At the end of the lease term Pryme has three options: 1) return the equipment, 2) extend for 12 months or more or 3) purchase the equipment for 12,5% of the original purchase price.

Other non-current liabilities:

Other non-current liabilities concern the remaining monthly installments for a concrete floor at Pryme One and the overdue ground lease related to the Amsterdam site. The balance as of 31 December 2023 fully relates to the overdue ground lease. The repayment terms of the overdue ground lease as of 31 December 2022 comprises seven fixed bi-annual installments of € 54.395, due in January and July until full redemption. No interest costs apply.

In 2024 seven monthly installments of € 24.917 (no interest applicable) must be paid for the concrete floor. The current part of both liabilities, € 0.3 million in total, is disclosed under current liabilities.

Maturity analysis – Non-current liabilities undiscounted cash flows:

For a detailed analysis of risks arising from financial instruments please refer to the Financial Risk Management section (included under note 7.2.4).

Accounting policies

Government grants are recognised at nominal value where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as a deduction of the relevant expenses on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

For grants related to assets Pryme has chosen to reduce the carrying amount of the asset. The grant is then recognised in the Statement of Profit and Loss over the useful life of the depreciable asset by way of a reduced depreciation charge.

Grant amounts received in advance initially are presented as deferred income.

Government grants:

DEI Subsidy

In 2018 CCT Circular CleanTech BV, a 100% subsidiary of Pryme NV, applied for a DEI (Demonstration Energy Innovation) subsidy to financially support the construction of the innovative Pryme One installation. In March 2019 the “Rijksdienst voor Ondernemend Nederland (RvO)” granted a subsidy of € 5.0 million, based on total investment costs of € 18.8 million. The project originally had to be realized between 1 November 2018 and 31 December 2020. Based on bi-annually project progress reporting the subsidy period was extended to 31 October 2023.

Initially the subsidy payments received in advance were reported as deferred income. As of 31 December 2023, the total subsidy amount expected to be finally granted (€ 5.0 million) has been deducted from the eligible capital expenditures disclosed under Property, Plant and Equipment (note 7.3.2).
As of 31 December 2023, € 4.5 million has been received and a receivable for the remainder of € 0.5 million (10% of the total grant) has been recognized. Refer to note 7.3.5.

EU Horizon (ELECTRO Project)

In 2022 Pryme joined a consortium of 13 partners within the Project ELECTRO under the EU Horizon research and innovation program, which targets demonstration of innovative technology concepts that link the waste and petrochemical industries and provide sustainable, low-carbon and scalable circular solutions for olefin and polyolefin production. Both Pryme’s R&D center and Pryme’s first production site (Pryme One) in Rotterdam participate in the execution of the project activities.

Pryme’s role is to demonstrate on an industrial scale (TRL 7) the new application of proven technology, being an innovative modular extruder for optimal pre-treatment of plastic waste combined with an electrically heated reactor for the catalytic pyrolysis of plastic waste. The main product, pyrolysis oil, will be used as second-life feedstock for steam crackers operated by project partners. Apart from additional funding this project is an opportunity to further develop Pryme’s technology in close collaboration with subject matter experts at Ghent University and consortium partners and gain valuable insights in the requirements of the downstream market.

The project spend is expected to amount € 21.4 million until August 2026, among which Pryme’s share is the largest with an overall budgeted R&D and innovation cost of € 8 million. The EU financially supports the EU Horizon program. Pryme is eligible to receive a subsidy of up to € 4.8 million. In 2023 Pryme received an advance payment of € 2.3 million.

In 2023 Pryme incurred € 0.8 million eligible costs related to this project and the related subsidy amounted to € 0.4 million, which has been deducted from the following cost line line-items as follows:

Accounting policies

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.


The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.


Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.


Pryme offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets and liabilities:

Deferred tax liabilities (€ 1.6 million) have been recognized related to the right-of-use assets (leases) and plant and equipment (recognition plant and equipment decommissioning).

The unused tax losses as of 31 December 2023 amount € 25.8 million (31 December 2022: € 10.4 million), subject to an applicable effective tax rate in The Netherlands of 25,8%. According to the current Dutch tax law, unused tax losses may be compensated with future taxable profits for an indefinite period of time.

Until 2022, the deferred tax asset related to losses was prudently valued at nil, taking into account the lack of track record for Pryme to generate profits, the uncertainties surrounding the Pryme business model and activities, and the significant period anticipated to recover these losses. As of 2023 Pryme recognizes deferred tax assets up to the level of the deferred tax liabilities (€ 1.6 million) to reflect that Pryme will not be in a tax paying position in The Netherlands in the upcoming years. The deferred tax asset related to leasing liabilities respectively carry forward losses are valued at € 1.5 million and € 0.1 million. The unrecognized value at today's tax rate in The Netherlands (25.8%) of the non-capitalized deferred tax asset related to losses amounts to € 6.5 million.

Accounting policies

Pryme converts plastic waste into pyrolysis oil. Revenue from contracts with customers is recognised using the output method. According to the output method revenue is recognized based on direct measurements of the value of the goods transferred to the customer. The value of the goods is determined by the number of units (metric tons) delivered to the carrier nominated by the customer (FCA Plant conditions).

The volumes transferred are measured reliably and consistently by tank storage meters as well as through weighbridges for the road tankers. The consideration reflects the volumes measured against the prices per metric ton to which Pryme is entitled according to the agreements with customers. Revenue from contracts with customers according to the contractual conditions typically is recognized upon delivery of the pyrolysis oil (FCA). Generally, this will be upon delivery - measured by flowmeters - into the road tanker, usually nominated and paid for by the customer.

Revenue from contracts with customers:

In 2023 no sales were realized.

Pryme has agreed upon several contracts with customers committing the delivery of pyrolysis oil volumes at predetermined price formulas and within certain product specifications (composition pyrolysis oil). The consideration does neither encompass a financing component nor variable components apart from the pricing formula agreed upon. Invoices may be issued on a monthly basis, however recognition of sales is determined as per delivery.  

Segment information

Pryme’s current business activities are not organized on the basis of differences in related products and services or differences in geographical areas of operations. As such, management assesses that Pryme has a single reportable segment. In terms of the entity-wide disclosures the only material non-current assets present, concerns the intellectual property which is owned by CCT International B.V. (Belgium). Reference is made to note 7.3.1 for the further details.

Accounting policies

Short-term employee benefits: wages, salaries, costs for contractors, social security contributions, annual leave and sickness absenteeism, incentives and non-monetary benefits are recognized in the year in which the related services are rendered by employees and contractors. Contractor costs are reported under personnel costs if contractors perform similar work as own employees.

Termination benefits are payable when employment is terminated by Pryme before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Pryme recognizes termination benefits as soon as management has taken the decision to make someone redundant and has communicated the termination during the reporting period.

Accruals for expenses related to incentive plans are set-up in a systematic way where contractually obliged or where there is a past practice that has created a constructive obligation. For the accounting policies related to share-based payments and pensions, please refer to respectively note 7.3.8 and 7.4.4.

Capitalized personnel expenses are costs directly attributable to the construction of Pryme One or the development costs related to our lab-scale plant at Ghent University. Capitalized costs need to meet the recognition criteria and are capitalized as part of respectively the costs of plant & equipment and intangible assets.

The total remuneration of the Management Board amounts to € 0.7 million (2022: € 0.7 million). For further details refer to note 7.7.14.

Key management are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Within Pryme the members of the Management Board and the Supervisory Board are considered key management.

For further details regarding the LTI Plan, we refer to note 7.3.8.

Pension expenses

Contingent pension obligations related to guaranteed returns on pension plan assets in Belgium are not reported due to the low materiality. The minimum guaranteed return on these pension plan assets amounts to 2%. At the end of the financial year 2023 the pension plan assets amount to less than € 30 thousand and therefore the risk is considered not material.

Movements of number of own employees and contractors:

During the year under review, Pryme on average employed respectively engaged 31.5 (2022 :14.9) employees and contractors (in FTE).

Accounting policies

Operating expenses are recognized in the Statement of Profit and Loss when incurred. This is when services are received, or goods are consumed. In addition, operating expenses can result from a decrease in future economic benefits related to a decrease of an asset or an increase of a liability that has arisen and which can be measured reliably. Costs relating to business development projects are recognized in the year in which the costs are incurred.

Other operating expenses:

The Short-term lease expenses mainly consist of short-term equipment and storage space leases (< 12 months) and some low value leases. 

The Sales, General & Administration (SG&A) expenses are broken down below.

SG&A expenses: