Final Results

RNS Number : 4838H

Byotrol PLC

18 August 2016

 

Byotrol Plc

("Byotrol" or the "Company")

FINAL RESULTS

FOR THE YEAR ENDED 31 MARCH 2016

POSTING OF ANNUAL REPORT AND ACCOUNTS AND NOTICE OF AGM

Byotrol plc, the specialist anti-microbial technology company, is pleased to announce its final results for the 12 months ended 31 March 2016.

We last updated the market in early July; we are pleased to confirm that our final, audited results are in line with that update.  Highlights of the year include:

·      EBITDA loss before exceptionals of £449k versus £526k in the previous year

·      Sharply narrowed loss after tax of £532k (after all exceptionals and tax credits) versus a loss of £749k the previous year

·      Cash and cash equivalents of over £1mn, compared to £287k in the prior year

·      Continued moves to higher margin transactions, especially by way of licensing and development deals, including with KYORIN Pharmaceutical Co., Ltd (hand sanitisers in Japan), Rentokil Initial plc (hand sanitisers in UK washrooms) and Beaphar NA (surface care products for pet environments) in continental Europe

·      Further and expanded agreement to develop and commercialise long-lasting biocidal products for hard surfaces with Solvay Novecare, a world leader in specialty polymers and surfactants and a global business unit of the international chemical group Solvay SA ("Solvay").

We also confirm continued progress in the technical tests required for formal Environmental Protection Agency (EPA) approval of our surface sanitising products in the US, with an expected registration filing date in early December 2016.

Annual Report & Accounts for the year ended 31 March 2016 have today been posted to shareholders together with the Notice of Annual General Meeting, which will be held at 10am on 22 September 2016 at the offices of finnCap at 60 Broad Street, London EC2M 1JJ.

An electronic copy of the Annual Report and Accounts is also available from the Company's website: www.byotrol.co.uk.

Outlook

Trading for the current year to 31 March 2017 is proceeding to plan, with continued emphasis on higher margin contracts and customers.

As previously notified to shareholders, under the terms of the agreement with Solvay, Solvay will be making substantial payments to the Company.  All of those payments are fully committed and will be made in the second half of the current financial year.

David Traynor, Chief Executive of Byotrol plc comments:

"We are now showing progress in turning our low-margin, product sales business into a higher margin technology company.  We are very confident about our future."

Enquiries:

Byotrol plc                                                                                                                                    01925 742 000

David Traynor - Chief Executive

finnCap Ltd                                                                                                                    020 7220 0500 (Nominated Adviser & Broker)

Geoff Nash/Carl Holmes/James Thompson - Corporate Finance

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Notes to Editors:

Byotrol plc (BYOT.L), quoted on AIM, is a specialist developer of residual antimicrobial technologies, identifying, developing, formulating and commercialising cutting-edge antimicrobial solutions. 

 

Our patented suite of technologies deliver powerful broad-spectrum efficacy with residual performance optimised against commonly occurring and industry-specific pathogens 

 

Founded in 2005, the Company has developed the technology that creates easier, safer and cleaner lives

For more information, please go to www.byotrol.co.uk

Chairman's Statement

What is Byotrol?

Put simply: we are THE experts in long lasting and safe anti-microbial chemistry. A bold statement and one that is worth examining in detail. At this point let me emphasise that you will not see such a statement in our technical or commercial writings. The words that I have chosen, as within my statement generally and as always when talking to shareholders, are layman's words. Within our industry we would use vocabulary such as performance, efficacy, validation, protected claims, value proposition and positioning to name but a few. Words such as "safe" and "gentle" are not in our lexicon. You would be right to assume that I am not an industry practitioner and I am going to assume that most of my readers are not either, so please forgive me if I stick to my use of a layman's turn of phrase and rest assured that our Executive Directors would never let me talk in such terms to our clients or partners.

Nobody else, that we have met or heard of, can match our combination of safety and long lasting effectiveness. These are two very important attributes in a world where differentiation is the order of the day. Of course there are plenty of chemicals that will kill bugs for a long period of time but generally the rule is that the more effective they are then the more harm that they will cause to you and me. Byotrol's expertise and unique claims are centred on formulations that are effective and long lasting whilst at the same time being gentle and safe.

Our formulations are gentle to humans, and to pets for that matter. Dangerous or unpleasant chemicals in my mind have no place in the home and are a concern in the workplace for that matter, and this is where our gentle formulations come out so favourably. If you are in any doubt about the benefits that we can bring to the home and the workplace, may I suggest that you try this simple experiment. Apply an alcohol based hand sanitiser ten times a day for a week and experience first-hand (excuse the pun) the problem of chapped hands that nurses have to contend with. Anecdotally we have been told that the NHS has to buy more hand cream than ever to counteract this problem. To complete the experiment, use Byotrol Hand Sanitiser for a week. The comparison will speak for itself.

We hope that the NHS and other hospitals around the world will come to adopt alcohol free hand sanitisation as standard and there are signs of interest but old habits do change slowly in this environment.

Amongst the many thousands of chemical companies in the world, we are claiming to be the leaders, and possibly the only true experts, in the niche of 'long lasting and gentle'. Our opinion is backed by some very large companies around the world who want to co-operate with us and also by the excellent progress that we have made towards passing the Environmental Protection Agency's (EPA's) stringent tests. We are not aware of any government test in any country that is more challenging

Reading this report, you might have thought that my opening remarks applied to our scientific lead in the UK or maybe Europe but from the list of our current and future partners which I will set out later, I hope it is becoming apparent that we are the leaders worldwide in our chosen field. 

What we were

Over the past 10 years our unique selling point has not always been in great demand for the uses that were anticipated. For sure we have some very keen customers who trust us with their reputation to ensure absolute safety in their work or at home. We had thought that this was revolutionary and would be welcomed but frankly Byotrol was born about 10 years too early and adoption was slow.

Long lasting anti-microbial products were a novel concept for many consumers but I am pleased to say that the trend is now firmly in our favour. This is not just our opinion from a closeted position within our own laboratories. Our clients have conducted their own independent market research and as a result are keen to partner with us and put their resources behind our technology. They are voting with their chequebooks.

Where we are going

Our products are now fully compliant with the recent EU Regulatory changes and Byotrol is moving strongly into the commercialisation stage. We are a small company with less than 20 people and our budget is finite, so we are carrying out this stage in partnership with companies that have the appropriate resources, the expertise and the market reach. In doing so, we have to share the profit but the prize is many times what we could hope to manage on our own and comes sooner too.

I must emphasise that we are not just a technology company, outsourcing our products for others to sell. Our Executive Directors and management team have significant marketing and commercialisation expertise. Having these skills in-house greatly helps us to do the right deal with the right partner in each of our chosen markets, and to act as equals in negotiating the deals and in their execution. We punch way above our weight.

And the list of deals is getting longer every month. In February we updated the market on our progress and several of the deals that were under discussion at the time have now come to fruition, as described more fully in the CEO report.

Not all initiatives will end up with the magic inked signatures. For example, our efforts to introduce our surface products into the NHS are still not coming to fruition, although we are making encouraging headway with our hand sanitisers.

Last year we introduced our shareholders to our "Friday Afternoon" project which is a new hand sanitiser that complies with the latest EU Regulations. It showed great promise so we applied for a patent and talked to potential customers. The feedback was so good that this is now a priority for us and I am delighted that you can see a project happening almost in real time. We are booking revenue already and are currently applying for our second patent and further developing the technology.

There are two points that have come out of this exercise that our management would like me to highlight. The first is that our customers are talking more and more about non-alcohol hand sanitisers and we therefore have very good reason to believe that this will give us a favourable tail wind. The second point is that we have gone from concept to customer in a very quick time and at a very reasonable cost and this has been achieved against a backdrop of meeting all of our expectations in our other areas too, where there were defined project briefs. You may remember from last year that this particular product came about from the free thinking that we encourage in our laboratory and we considered it a very interesting extra bonus at the time. Now it is very much a part of our mainstream activity. The downside for our technical team is that we now strongly discourage them from going home early on Fridays.

Being a small company with rather large aspirations does mean that we will have to focus on our most promising income streams.  Some of our historic areas of concentration, especially within Professional must be considered as candidates either for sale or for alliances/joint ventures with third parties.

The upcoming Biocide Regulations (BPR) requirements will be demanding of our resources too and it does make sense to concentrate on our biggest bets. Complying with the new regime might very well dictate that we can realistically support no more than 3 technology platforms.

Leaving aside our legacy businesses, we have 3 big opportunities for the future. These are 1) our consumer surface care formula currently going through the EPA process; 2) our EU compliant consumer-targeted surface care formulation which we are marketing in conjunction with Solvay SA and 3) our new hand sanitiser. Each of these has the capability of being a large standalone business. Having three strings to our bow is a wonderful position to be in.

In each of the areas that I have highlighted above, we have an identifiable lead over competitors and this lead is likely to be maintained for some time. With our EPA claims we will be the only company in America to be able to make the long lasting claim for consumer products. With our Solvay formula we are compliant with all EU regulations and have superior cleaning claims. With our hand sanitiser we are also compliant with new EU regulations and will be one of only a very small number of suppliers of non-alcohol hand sanitisers in this country and many others.

Value and judgement

Our focus may be on the future but we continue to be judged to some extent by the financial results of the past. Our results do show a reduced loss from a year ago. Progress has been made but our historic markets are difficult and the regulatory changes have thrown up extra costs and absorbed management time and effort. Also a quality problem in our wipes supply chain that was specific to our old and now superseded wipes formulation at the end of their production run has not helped either.  Amongst this struggle we have to plan for the future.

My own view of our Company is that the future is all important and I would value the Company on that basis. This is very much the opposite of the view that past performance is a reliable indicator of future results. The past may be a good indicator of how the management have coped with an extremely difficult transition but actually the results say very little about our future prospects. It is akin to valuing a graduate on his future earnings capability rather than on the cost of his tuition. With this in mind I ask that you pay very close attention to our comments on the future and come and ask for more and yet more detail at our AGM.

Management and the Board

The Board of Directors is four strong which we have considered appropriate for a company of our size. We have elected for a balance between having a spread of expertise and keeping the overhead to a minimum. We are not paid generously (one shareholder last year suggested we should pay ourselves better!) but all Directors including the Non-Executives have been awarded Options which incentivise us to work for the benefit of the Company's Shareholders and employees. The Board all together, rather like turkeys wondering if they should be voting for Christmas, have to carefully consider our own skills and suitability for the next stage. The Company will be quite different in a year's time and it is right and proper that we equip the Board accordingly.

Currently we are actively spreading our net looking for new Non-Executives.  We are not looking for the usual suspects of accountants, financiers or retired Company men, but rather those leaders who have been successful in a similar field before, or know how to commercialise technology and to sell innovative products to either business or consumer customers. It can be difficult for a small company such as us to attract the right people but the stature of those that I have spoken to recently is a sign of just how interesting they regard our future prospects. I might add that if any shareholder reading this has a recommendation for a suitable Non-Executive then I am very happy to hear from them.

Brexit

After considerable thought, we see no change in any respect other than the currency fluctuations which, as an exporter, are currently in our favour. At some point in more than two years' time, the UK may or may not adopt different chemical regulations, but the regulations may change in any of our markets over that period of time and we are adept at managing change. The short answer is that for us it is very much business as usual.

AGM and Shareholders

I do encourage you to come and see us at our AGM. Last year we had some very searching questions and received some excellent free advice from experienced shareholders. We welcome the two-way communication and hope for even more questions this year. After 2 years of holding the AGM in our offices, which is definitely our preference, we have decided to hold this year's meeting in London in order to encourage those southern shareholders who would like to come but would otherwise be discouraged by the journey north.

In summary

If you take away only one message after reading this Chairman's Statement, then I would want you to appreciate that the past sales for Byotrol have been heavily weighted towards us selling directly to commercial customers, whereas we see our future as gaining several income streams from alliances with larger companies, some in commercial sectors but increasingly in the consumer markets, and also from an increasing geographical footprint. We are very optimistic about our future and I hope that you are too.

Nicholas Martel

Chairman

Chief Executive's Report

I am pleased to report that we have delivered to plan this year; our technical base has continued to strengthen, gross margins are still improving and we have added further alliances and partners to aid us in distribution and technical development. 

This has all been achieved without a rise in costs and against a background of continued regulatory change, particularly in the food manufacturing industry.

Financial Overview

Our results show our continued efforts to focus on higher margin business, on more efficient commercial structures and to de-emphasise many of the legacy products, businesses and initiatives from before the Company was restructured  in late 2013.

Financial highlights include:

·      Gross profit marginally increased to £1,154k on turnover of £2,648k (compared to turnover of £3,251k in the previous year)

·      Narrowed EBITDA loss of £469k (£449k before exceptionals) versus £526k the previous year

·      Sharply narrowed loss after tax of £532k (after all exceptionals and tax credits) versus a loss of £749k the previous year

·      Cash and cash equivalents of over £1m, compared to £287k in the prior year

Markets

Professional

Year on year revenues fell to £1,431k from £2,021k and gross profit to £419k from £562k.

This was a challenging year for our professional business, particularly in the food manufacturing industry, where new EU rules aimed at reducing biocide and pesticide build-ups in the food chain have now been introduced.  The industry has been forced to limit the use of quaternary ammonium compounds in food contact areas, which is one of the core ingredients of our formulations until recently (as it was for many of the chemical suppliers to the industry).  We have at substantial cost reformulated our products and have now received the key industry accreditation - M&S approval - to support our sales programme.  However, the outlook for this business is still uncertain as (1) sales fell substantially during the interregnum and (2) it is not yet clear whether our product offer is going to be competitive in price and performance terms.

Food service continues to perform satisfactorily, despite heavy price competition.  We still have an issue of scale compared to our competitors, including a narrow product and service offer, but the efficacy of our formulations - especially wipes - is such that we continue to make progress in these markets from our small base.

Sales into industrial markets remain steady, particularly into and around washroom areas, both in hand hygiene and surface care products.  We are expecting to expand our activities in these areas in the future.

We have now completed trials of our surface care products in the NHS, in alliance with ISS; and the results have been positive in comparison to existing products used in the NHS.  However, we have learnt that we still need longer term, more detailed data, ideally including clinical studies to generate the size of contracts needed to justify the sales effort.  The Board has now decided to postpone any further effort in healthcare - our limited resources can generate a better return elsewhere.

A main area of focus in the future will be the commercialisation of our newly-developed (and patented) hand hygiene formulations that, unlike first-generation Byotrol hand products, will meet the new and stringent standards of the BPR.  This initiative has led to two new alliances, namely:

·      A 5-year exclusive license on hand sanitising products with the Japanese pharmaceutical company KYORIN Pharmaceutical Co., Ltd, the core subsidiary of the Japanese healthcare group KYORIN, which reports annual sales in excess of Yen100bn.  This agreement is aimed at product launches in the Japanese professional medical care market in late 2016 with the consumer market to follow thereafter.

·      A short development contract in long-lasting hand sanitisers with Rentokil Initial plc to support their Ultraprotect range of products in (mostly) European countries, which, assuming successful test results, will then become a 3-year license agreement. This is a newly-developed formulation.

Petcare

Year on year revenues fell in the year to £690k from £938k and gross profit to £207k from £293k.

The first half of the year was hurt by one of our key customers going through a period of de-stocking, all as reported in our interims statement.  Sales since that point to said customer have not returned to previous levels, although there has been a marginal increase in H2 and indeed a further increase since year end

Towards the end of the year, we were pleased to sign up a new licensee in continental Europe for our new BPR-ready surface care products.  The licensee, Beaphar NA, headquartered in Holland is one of Europe's premier petcare brands.  We are very pleased to be in alliance with such a successful European business.

We have also made progress in pet grooming in continental EU, with a new customer HCP (France) now distributing our products in the French veterinary market.

Sales into our key retail customer Pets@Home remained strong in the year, as did exports to agents and customers in Japan, Singapore and France.

Consumer

This business segment is almost all licensing-based and is starting to perform very well.  Year on year revenues - and hence gross profit -  increased substantially in the year, from £292k to £528k. 

The consumer segment has been making excellent progress on all fronts in the year under review, and also in the period immediately following the year end

·      In June 2015 we completed a 10 year joint marketing and development agreement with Solvay Novecare, a world leader in specialty polymers and surfactants with an annual turnover in excess of Euro 2 billion and a subsidiary of the listed international chemical group Solvay SA ("Solvay"). This agreement was then further expanded in late July 2016.  It is built upon the joint development of anti-microbials for surface care, combining the best of Byotrol's long-lasting antimicrobial formulations and Solvay's world-leading polymer and surfactant technologies. The Company has already completed (and patented) one such product for the EU consumer market and is actively marketing it jointly with Solvay to customers.  Following the subsequent deal expansion, Byotrol is now pooling technical, commercial and sales resource with Solvay Novecare in targeting products at the worldwide consumer market and some professional markets.  The two parties will then be sharing gross profit from any jointly produced products, at a percent split that varies depending on market and product type.  As part of the agreement Solvay is making a substantial payment to Byotrol for the rights involved.

·      Our surface care formulations in the US continue to make excellent progress in the technical tests required for formal EPA approval.  We now expect to file the completed regulatory technical dossier in October this year.  This formulation sits outside our agreement with Solvay and is already generating considerable commercial interest in the US.

The year also saw continued healthy sales of our disinfecting trigger sprays in Tesco (via an ongoing license with Robert Mcbride plc), boosted by Tesco's refocus on its private label ranges. 

Boots hand sanitisers, powered by Byotrol, are also selling well.  Indeed our hand sanitising products are in general generating a healthy following - including amongst international sports teams and well-known sporting organisations, especially in cycling teams.  It is a source of pride that such high profile organisations and individuals are using our products, though also a source of frustration that we are not allowed to publicise it without substantial sponsorship payments to the organisations involved.

Our license in floor cleaning products in Nigeria, with PZ Cussons, has now matured and is not being renewed - market conditions for such products in Nigeria are not strong.

Technology and Regulatory Environment

Much of Byotrol's technical programme is driven by the need to stay in-line and ahead of the EU regulators as well as keeping the differentiated properties of our core technologies.  Our main technical efforts are in the following areas:

·      Some of our key ingredients continue to come under increasing pressure on their use, as our competitors are also experiencing. This has been managed by identifying new ways to deliver our anti-microbial residual performance on surfaces and hands - and patents are being filed as a result.

·      In our Professional (foods) business where another key ingredient has been captured by separate legislation that took the whole industry by surprise and which is now being challenged by the industry, albeit somewhat late.

·      Preparing for the ever-closer BPR and the submission of dossiers to support our products

·      Against this backdrop, over the last 2 years, the tech team has completely revamped our formulations to be EU compliant and we are now in the market seeking commercial opportunities across different sectors

·      The test method that Byotrol developed to measure residual anti-microbial efficacy with the support of British Standards Institute ( BSI), is now on the agenda to seek approval at the EU's European Test Committee level ( WG3), with our Senior Microbiologist co-opted on to the committee.

·      Real progress has continued to be made with our formulation in tests under US EPA conditions and a viable product is now close to reality.

·      Outside of our mainstream technical programme, we continue to probe innovation opportunities in peripheral activities such as seaweed and other alternative substances that might enhance our technical capability into the future

Financing

As reported fully in our interims statement, we completed a £1.3m (net of expenses) equity financing in September 2015 to strengthen the Company's balance sheet and to invest in the main strategic initiatives.  The financing also allowed the Company to pay down an expensive invoice discounting facility and invest in a new financing/operations system, including a new IT server.

Thornton Science Park

In January the Company moved from Daresbury to the Thornton Science Park, just north of Chester.  The site was until 2013 the Shell Technology Centre and was then acquired by the University of Chester.

We are delighted with our new state-of-the-art facilities, which includes best in class laboratories and workshops, all at very good value to the Company, plus ample room for expansion.  We are also benefitting from links with the university, including with academics (especially microbiology and mathematical modelling) and students (research work and laboratory manpower); it all adds to our positioning as a technology company.

Outlook

We are now having some success in turning our low-margin, product sale business into a higher margin technology company.  We will continue on this path, targeting development contracts and licensing fees for our technologies, particularly with global or super-regional companies with the resources to distribute and promote the resulting products.

The good news is that the markets in which we operate are huge, in the US$ billions - and growing (we estimate global growth in antibacterial products of over 3% per annum) and consumers and business users will continue to need protection from harmful microbes.  But suppliers and manufacturers in our industry are being increasingly controlled by expensive and complex regulations, so the barriers to entry are substantial.

As we progress, it is likely our income may appear a little lumpy, dependent on occasional, large one-off payments until we reach sustainable profitability through regular royalties and profit-shares.  The Board is therefore balancing a continued investment programme against a need to show regular improvement in our financial condition.  We believe we are managing this relatively well at present (3 years ago Byotrol reported a net loss of £1.7m on turnover of £2.1m and very low cash reserves).  We have come a long way since then - the financial outlook for FYE 2017 is already looking very promising, with substantial (already notified) cash-generating contracts already in place  and to be fully reflected in our H2 results in particular.  We are very confident about our future.

David Traynor

Chief Executive

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2016

		2016	2015
Notes		£	£
REVENUE	1	2,647,923	3,251,512
Cost of sales	1	(1,494,198)	(2,103,783)
		────────	────────
GROSS PROFIT		1,153,725	1,147,729
Administrative expenses excluding depreciation and amortisation	1	(1,570,614)	(1,565,254)
Share based compensation	18	(52,604)	(107,750)
		────────	────────
LOSS BEFORE INTEREST, DEPRECIATION, AMORTISATION AND TAX	2	(469,493)	(525,725)
Amortisation	9	(77,797)	(66,787)
Depreciation	8	(39,220)	(73,357)
Finance income	5	1,403	966
Finance costs	5	(84,378)	(84,207)
Research and development (R & D) tax credits	1	136,516	-
		────────	────────
LOSS BEFORE TAX		(532,969)	(748,660)
Taxation	6	-	-
		────────	────────
LOSS FOR THE FINANCIAL YEAR		(532,969)	(748,660)
		────────	────────
OTHER COMPREHENSIVE INCOME,NET OF TAX
Other comprehensive income which may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations		(542)	(3,284)
		────────	────────
Other comprehensive expenditure		(542)	(3,284)
		────────	────────
TOTAL COMPREHENSIVE LOSS FOR THE YEAR		(533,511)	(751,944)
		════════	════════
Basic and fully diluted loss per share - pence	7	(0.21)	(0.35)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

for the year ended 31 March 2016

			2016	2015
	Notes		£	£
ASSETS
Non-current assets
Property, plant and equipment	8		22,422	46,364
Other intangible assets	9		565,078	510,641
			────────	────────
			587,500	557,005
Current assets
Inventories	11		220,318	230,022
Trade and other receivables	12		783,881	926,890
Cash and cash equivalents	13		1,017,188	286,731
			────────	────────
			2,021,387	1,443,643
			────────	────────
			2,608,887	2,000,648
			════════	════════
LIABILITIES
Current liabilities
Trade and other payables	14		590,724	850,159
Convertible loan notes	15		359,975	-
			────────	────────
			950,699	850,159
			────────	────────
Non-current liabilities
Convertible loan notes	15		-	328,625
			────────	────────
			-	328,625
			────────	────────
Equity
Share capital	20		670,129	562,587
Share premium account			22,849,284	21,639,595
Merger reserve			1,064,712	1,064,712
Translation reserve			(46,248)	(45,706)
Convertible loan note reserve			69,301	69,301
Retained deficit			(22,948,990)	(22,468,625)
			────────	────────
TOTAL EQUITY			1,658,188	821,864
			────────	────────
TOTAL EQUITY AND LIABILITIES			2,608,887	2,000,648
			════════	════════

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ending 31 March 2016

	Share capital £	Share premium £	Merger reserve £	Translation reserve £	Convertible loan note reserve £	Retained earnings reserve £	Total equity £
At as 1 April 2014	458,420	20,586,758	1,064,712	(42,422)	69,301	(21,827,715)	309,054
Loss for the year	-	-	-	-	-	(748,660)	(748,660)
Exchange differences on translation of foreign operations	-	-	-	(3,284)	-	-	(3,284)
	───────	───────	───────	───────	───────	───────	───────
Total comprehensive loss for the year	-	-	-	(3,284)	-	(748,660)	(751,944)
Share issue	104,167	1,145,833	-	-	-	-	1,250,000
Share issue costs	-	(92,996)	-	-	-	-	(92,996)
Share based payments	-	-	-	-	-	107,750	107,750
	───────	───────	───────	───────	───────	───────	───────
Equity as at 31 March 2015	562,587	21,639,595	1,064,712	(45,706)	69,301	(22,468,625)	821,864
Loss for the year	-	-	-	-	-	(532,969)	(532,969)
Exchange differences on translation of foreign operations	-	-	-	(542)	-	-	(542)
	───────	───────	───────	───────	───────	───────	───────
Total comprehensive loss for the year	-	-	-	(542)	-	(532,969)	(533,511)
Share issue	107,542	1,290,504	-	-	-	-	1,398,046
Share issue costs	-	(80,815)	-	-	-	-	(80,815)
Share based payments	-	-	-	-	-	52,604	52,604
	───────	───────	───────	───────	───────	───────	───────
Equity as at 31 March 2016	670,129	22,849,284	1,064,712	(46,248)	69,301	(22,948,990)	1,658,188
	═══════	═══════	═══════	═══════	═══════	═══════	═══════

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2016

	2016	2015
	£	£
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year before tax	(532,969)	(748,660)
Adjustments for:
Share based payments	52,604	107,750
Depreciation	39,220	73,357
Amortisation	77,797	66,787
Impairment of intangible asset	7,222	-
Finance income	(1,403)	(966)
Finance costs	84,378	84,207
Changes in working capital
Decrease in inventories	9,704	48,329
(Increase) / decrease in trade and other receivables	143,009	(164,777)
Decrease in trade and other payables	(259,435)	(256,013)
	────────	────────
CASH USED IN OPERATING ACTIVITIES	(349,873)	(789,986)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property, plant and equipment	(15,278)	(1,041)
Payments to acquire intangible assets	(139,456)	(113,581)
Interest received	1,403	966
	────────	────────
NET CASH USED IN INVESTING ACTIVITIES	(153,331)	(113,656)
	────────	────────
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on issue of ordinary shares	1,398,046	1,250,000
Share issue costs	(80,815)	(92,996)
Interest paid	(53,028)	(65,152)
	────────	────────
NET CASH INFLOW FROM FINANCING	1,264,203	1,091,852
	────────	────────
Net increase/(decrease) in cash and cash equivalents	730,999	188,210
Cash and cash equivalents at the beginning of the financial year	286,731	98,521
Effect of foreign exchange rate changes	(542)	-
	────────	────────
Cash and cash equivalents at the end of the financial year	1,017,188	286,731
	════════	════════

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2016

1          SEGMENTAL INFORMATION

Revenue recognised in Consolidated Statement of Comprehensive Income is analysed as follows:

	2016	2015
	£	£
Product sales	2,070,407	2,931,805
Royalty and licensing income	577,516	314,707
Other revenue	-	5,000
	────────	─────────
Revenue	2,647,923	3,246,512
	════════	════════

The Group considers the Group's revenue lines to be split into three reportable segments; being Professional (including food service, food manufacturing, industrial and health), Consumer and Pet.  This disclosure correlates with the information which is presented to the Group's Chief Decision Maker, the Board.  The Group's revenue, result before taxation and net assets were all derived from its principal activities.

Segmental information is presented using Group policies.

	Continuing operations
	Professional		Consumer	Pet		Total
Year ended 31 March 2016	£		£	£		£
REVENUE
United Kingdom	1,356,233		102,155	402,294		1,860,682
North America	16,241		375,000	-		391,241
Rest of World	58,096		50,366	287,538		396,000
	────────		────────	────────		────────
Total revenue	1,430,570		527,521	689,832		2,647,923
Cost of sales	(1,011,313)		-	(482,885)		(1,494,198)
	────────		────────	────────		────────
Gross profit	419,257		527,521	206,947		1,153,725
	════════		════════	════════
Centrally incurred income and expenditure not attributable to individual segments:
Administrative costs						(1,570,614)
Depreciation and amortisation						(117,018)
Share-based payments						(52,604)
Finance income						1,403
Finance costs						(84,378)
Research and development (R & D) tax credits						136,517
						────────
Loss before tax						(532,969)
						════════

Included within the revenues of the Professional segment is revenue of £439,544 relating to customer A (2015: £NIL) and £242,939 relating to customer B (2015: £343,536).  Included within the revenues of the Pet segment is revenue of £360,789 relating to customer C (2015: £372,368) and £89,115 from customer D (2015: £71,211).

	Continuing operations
	Professional	Consumer	Pet	Total
Year ended 31 March 2015	£	£	£	£
REVENUE
United Kingdom	1,811,812	226,009	716,194	2,754,015
North America	50,550	-	-	50,550
Rest of World	159,033	65,756	222,158	446,947
	────────	────────	────────	────────
Total revenue	2,021,395	291,765	938,352	3,251,512
Cost of sales	(1,485,870)	-	(644,913)	(2,103,783)
	────────	────────	────────	────────
Gross Profit	562,525	291,765	293,439	1,147,729
	════════	════════	════════
Central income and expenditure not attributable to individual segments:
Administrative costs				(1,565,254)
Depreciation and amortisation				(140,144)
Share-based payments				(107,750)
Finance income				966
Finance costs				(84,207)
				────────
Loss before tax				(748,660)
				════════

Geographical segments

The Group's operations are located in the United Kingdom. 

The following table provides an analysis of the Group's assets and liabilities, where identifiable, by segment.

	Professional	Pet	Consumer	Total
Year ended 31 March 2016	£	£	£	£
External revenue	1,430,570	689,832	527,521	2,647,923
Segment current assets	1,229,969	491,219	300,199	2,021,387
Segment current liabilities	318,991	153,588	118,145	590,724
	════════	════════	════════	════════
	Professional	Pet	Consumer	Total
Year ended 31 March 2015	£	£	£	£
External revenue	2,021,395	938,352	291,765	3,251,512
Segment current assets	909,163	425,254	109,226	1,443,643
Segment current liabilities	527,098	246,546	76,515,	850,159

2          LOSS BEFORE TAX

Loss before tax is stated after charging / (crediting):

	2016	2015
	£	£
Loss before tax is stated after charging / (crediting):
Amortisation	77,798	66,786
Depreciation of property, plant and equipment	39,220	73,358
(Profit) / Loss on sale of property, plant and equipment	-	(1,042)
Auditor's remuneration
- as auditor	23,000	22,500
- other services	14,500	13,000
Research & development costs	361,040	351,474
Research and development (R & D) tax credits	136,516	-
Stock write-off (exceptional)	20,000	-
Operating lease costs - office rent	31,018	40,796
Impairment of trade receivables	4,426	-
Foreign exchange differences	(19,680)	(23,741)
	════════	════════

During the period there was a quality issue in the supply chain of our wipes business which involved a write-off of damaged stock which could not be recovered from suppliers or insurers with this classed as an exceptional item within cost of sales.

Amounts payable to Mazars LLP and their associates (2015: Mazars LLP) in respect of both audit and non-audit services:       

	2016	2015
	£	£
Audit Services
-    Statutory audit of parent and consolidated financial statements	23,000	22,500
Other Services
Audit of subsidiaries where such services are provided by Mazars LLP and their associates	10,000	10,000
Other services	4,500	3,000
	────────	─────────
	37,500	38,950
	════════	════════

3              PARTICULARS OF EMPLOYEES

The average number of staff employed by the Group, including Executive Directors, during the financial period amounted to:

	2016	2015
	No	No
Executive Directors	2	2
Research and development	6	6
Administration and sales	8	10
	────────	─────────
	16	18
	════════	════════

The aggregate payroll costs, including Directors' emoluments, of the above were:

	2016	2015
	£	£
Wages and salaries	855,665	731,527
Social security costs	96,991	75,806
Other pension costs	23,585	25,559
	────────	────────
	976,241	832,892
	════════	════════

4          DIRECTORS' EMOLUMENTS

          The Directors' aggregate emoluments in respect of qualifying services were:

	2016	2015
	£	£
Emoluments receivable	229,000	170,919
	────────	────────
Total emoluments	229,000	170,919
	════════	════════

          The emoluments of the highest paid director were:

	2016	2015
	£	£
Emoluments receivable	101,000	95,000
	────────	────────
	101,000	95,000
	════════	════════

 Number of Directors accruing benefits under money purchase scheme

	2016	2015
	Number	Number
	-	-

The Directors remuneration report can be found on pages 14 to 16.

5              FINANCE (COST) / INCOME

	2016	2015
	£	£
Loan interest	-	(6,375)
Convertible loan interest	(63,750)	(57,055)
Invoice discounting interest	(20,628)	(20,777)
	────────	─────────
Interest payable	(84,378)	(84,207)
	════════	════════
Bank interest receivable	1,403	966
	════════	════════

6              INCOME TAX

	2016 £	2015 £
Corporation tax at 20% (2015: 21%)	-	-
Research and development tax credits received	-	-
Adjustment in respect of prior periods	-	-
	────────	─────────
Total current tax	-	-
Deferred tax	-	-
	────────	─────────
	-	-
	════════	════════

There is no tax charge as the Group has made losses in both the current and the previous year.  At 31 March 2016 the Group had an unrecognised deferred tax asset relating to unutilised trading losses and other temporary differences of £3,768,667 (2015: £3,666,486).

The charge for the year can be reconciled to the loss per the Consolidated Statement of Comprehensive Income as follows:

	2016 £	2015 £
Loss for the year	(532,969)	(748,660)
Income tax credit		-
	────────	─────────
Loss on ordinary activities before tax	(532,969)	(748,660)
	════════	════════
Tax at the UK corporation tax rate of 20% (2015: 21%)	(106,594)	(157,218)
Expenses not deductible for tax purposes	4,413	1,205
Unrecognised, unrelieved tax losses	102,181	156,013
	────────	─────────
Total tax	-	-
	════════	════════

7              LOSS PER SHARE

	2016	2015
	£	£
Loss on ordinary activities after taxation	(532,969)	(748,660)
	════════	════════
Weighted average number of shares (No)
For basic and fully diluted loss per ordinary share	250,699,942	211,450,294
	════════	════════
Loss per ordinary share - basic and fully diluted	(0.21)p	(0.35)p
	════════	════════

The weighted average number of shares and the loss for the year for the purposes of calculating the fully diluted earnings per share are the same as for the basic loss per share calculation.  This is because the outstanding share options and warrants would have the effect of reducing the loss per ordinary share and would, therefore, not be dilutive under the terms of IAS 33.

8              PROPERTY, PLANT & EQUIPMENT

Group - 2016	Leasehold Improvements	Computer equipment	Plant and Machinery	Total
	£	£	£	£
Cost
At 1 April 2015	-	37,010	225,686	262,696
Additions	-	968	14,309	15,277
	────────	────────	────────	────────
At 31 March 2015	-	37,978	239,995	277,973
	════════	════════	════════	════════
Depreciation
At 1 April 2015	-	35,913	180,418	216,331
Charge for the year	-	671	38,549	39,220
	────────	────────	────────	────────
At 31 March 2016	-	36,584	218,967	255,551
	════════	════════	════════	════════
Net Book Value		1,394	21,028	22,422
At 31 March 2016	-
	════════	════════	════════	════════

Group - 2015	Leasehold Improvements	Computer equipment	Plant and Machinery	Total
	£	£	£	£
Cost
At 1 April 2014	22,647	64,711	282,964	370,322
Additions	-	1,041	-	1,041
Disposals	(22,647)	(28,742)	(57,278)	(108,667)
	────────	────────	────────	────────
At 31 March 2015	-	37,010	225,686	262,696
	════════	════════	════════	════════
Depreciation
At 1 April 2014	22,647	62,440	166,555	251,642
Charge for the year	-	2,217	71,140	73,357
On disposals	(22,647)	(28,742)	(57,278)	(108,667)
	────────	────────	────────	────────
At 31 March 2015	-	35,915	180,417	216,332
	════════	════════	════════	════════
Net Book Value
At 31 March 2015	-	1,095	45,269	46,364
	════════	════════	════════	════════

9              OTHER INTANGIBLE ASSETS

Group - 2016	Development costs	Patents and licences	Total
	£	£	£
Cost
At 1 April 2015	153,037	629,727	782,764
Additions	93,299	46,158	139,457
	────────	────────	────────
At 31 March 2016	246,336	675,885	922,221
	════════	════════	════════
Amortisation
At 1 April 2015	6,333	265,790	272,123
Charge for the year	12,868	64,930	77,798
Impairment	-	(7,222)	(7,222)
	────────	────────	────────
At 31 March 2016	19,201	337,942	357,143
	════════	════════	════════
Net Book Value
At 31 March 2016	227,135	337,943	565,078
	════════	════════	════════

The Directors, having reviewed the Company's patent base, have concluded that all patents are still of use in the business and therefore no impairment has been made.

Group - 2015	Development costs	Software intangibles	Patents and licences	Total
		£	£	£
Cost
At 1 April 2014	84,437	42,946	584,746	712,129
Additions	68,600	-	44,981	113,581
Disposals	-	(42,946)	-	(42,946)
	────────	────────	────────	────────
At 31 March 2015	153,037	-	629,727	782,764
	════════	════════	════════	════════
Amortisation
At 1 April 2014	-	42,946	205,336	248,282
Charge for the year	6,333	-	60,454	66,787
On disposals	-	(42,946)	-	(42,946)
	────────	────────	────────	────────
At 31 March 2015	6,333	-	265,790	272,123
	════════	════════	════════	════════
Net Book Value
At 31 March 2015	146,704	-	363,937	510,641
	════════	════════	════════	════════

Company			2016 Patents and  Licences	2015 Patents and licences
			£	£
Cost
At 1 April			629,727	584,746
Additions			46,158	44,981
			────────	────────
At 31 March			675,885	629,727
			════════	════════
Amortisation
At 1 April			265,790	205,336
Charge for the year			64,930	60,454
On disposals			(7,222)	-
			────────	────────
At 31 March			337,942	265,790
			════════	════════
Net Book Value
At 31 March			337,943	363,937
			════════	════════

The intangible assets relate to the development of patents and also to the acquisition of the Byofresh licence.

10           INVESTMENTS IN SUBSIDIARIES

COMPANY	Shares in  Subsidiary  Undertakings	Shares in  Subsidiary  Undertakings
	2016	2015
	£	£
At 1 April 2015	2,480,311	2,480,311
Additions relating to share options issued to employees	27,097	58,759
Impairment	-	(58,759)
	────────	────────
At 31 March 2016	2,507,408	2,480,311
	════════	════════

In the prior year, the Company determined that, due to the trading losses incurred by the subsidiaries of the Company, it was reasonable to reflect an impairment in the value of short term loans and trading advances made to its subsidiaries by the Company. 

Details of all subsidiary undertakings included in the consolidated financial statements are as follows:

	Country of incorporation	Holding	Proportion of voting rights and shares held	Nature of business
Byotrol Technology Limited	England	Ordinary share capital	100%	Anti-microbial products
Byotrol Inc	United States	Ordinary share capital	100%	Anti-microbial products
Byotrol Consumer Products	England	Ordinary share capital	100%	Anti-microbial products

11           INVENTORIES

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Raw materials and consumables	36,124	76,147	-	-
Finished goods and goods for resale	184,194	153,875	-	-
	────────	────────	────────	────────
	220,318	230,022	-	-
	════════	════════	════════	════════

Included above are inventories of £ Nil (2015: £ Nil) carried at net realisable value.  During the year, there was a quality issue in the supply chain of our wipes business which resulted in an unrecovered write-off of damaged stock of £20,000.

The cost of Inventories expensed, included in the Consolidated Statement of Comprehensive Income as Cost of Sales is £1,286,833 (2015: £1,788,823).

No earlier write downs were reversed during the current or preceding period.

12           TRADE AND OTHER RECEIVABLES

	Group	Group	Company	Company
	2016	2015	2016	2015
	£	£	£	£
Trade receivables	486,143	697,492	-	-
Tax repayable	-	-	24,307	10,251
Amount owed by group undertakings	-	-	723,508	-
Other receivables	212,419	16,409	7,263	7,263
Prepayments and accrued income	85,319	212,989	34,558	22,333
	────────	────────	────────	────────
	781,881	926,890	789,636	39,847
	════════	════════	════════	════════

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.  The Group had 67days of revenue outstanding in trade receivables as at 31 March 2016 (2015: 53 days).  Included within trade receivables is £98,711 (2015: £51,497) denominated in US dollars and £13,371 (2015: £NIL) denominated in Euros.

The Group's maximum exposure to credit risk equates to the carrying value of cash held on deposit and trade and other receivables.

The Group's credit risk is primarily attributable to trade receivables.  The amounts presented in the consolidated statement of financial position are net of allowances of £30,285 (2015: £25,859) for doubtful receivables.  This allowance has been based on the knowledge of the financial circumstances of individual receivables at the reporting date.  The Group has some concentration of credit risk with some exposure to two major customers whose year end balances totalled £137,428 (2014: £219,638).  The majority of the exposure is spread over a number of counterparties and customers.

	Group		Company
	2016 £	2015 £	2016 £	2015 £
Impairment brought forward	25,859	75,780	-	-
Amounts written off	-	(49,921)	-	-
Amounts recovered	(23,525)	-	-	-
Impairment charge	27,951	-	-	-
	────────	────────	────────	────────
Impairment carried forward	30,285	25,859	-	-
	════════	════════	════════	════════

The age profile of the net trade receivables for the Group at the year end was as follows:

Debt age - "days overdue"

2016	Current	0-30 Days	31-60 Days	61-90 Days	91-120 days	Over 120 Days	Total
Not impaired	294,214	51,882	70,203	6,134	162	63,548	486,143
Impaired	-	-	-	-	-	30,285	30,285
	_____________	_____________	_____________	_____________	_____________	_____________	_____________
Trade receivables Value (£)	294,214	51,882	70,203	6,134	162	93,833	516,428
	=============	=============	=============	=============	=============	=============	=============
%	61	10	15	1	0	13	100
	=============	=============	=============	=============	=============	=============	=============

2015	Current	0-30 Days	31-60 Days	61-90 days	91-120 days	Over 120 days	Total
Not impaired	430,479	91,029	107,677	26,766	29,462	12,079	697,492
Impaired	-	-	-	-	-	25,859	25,859
	_____________	_____________	_____________	_____________	_____________	_____________	_____________
Trade receivables Value (£)	430,479	91,029	107,677	26,766	29,462	37,938	723,351
	=============	=============	=============	=============	=============	=============	=============
%	62	13	15	4	4	2	100
	=============	=============	=============	=============	=============	=============	=============

External trade receivables are generally on 30 to 90 day terms and are not considered to carry any significant risk of impairment as at the year end date.

As at 31 March 2016 there was £191,929 (2015: £175,984) worth of trade receivables overdue but not impaired.

12        CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash held by the Group and Company.  The carrying amount of the asset approximates the fair value.

Cash held by the Group is with government supported UK based banks £1,004,407 (2015: £273,574) and a limited amount £12,781 (2015: £13,156) with one US bank. All amounts held by the Company are with government supported UK based banks.

13        TRADE AND OTHER PAYABLES

	Group	Group	Company		Company
	2016	2015	2016		2015
Current:	£	£	£		£
Trade payables	369,899	497,326	132,885		34,317
Invoice discounting facility	73,716	157,266	-		-
Other payables	-	-	-		1,849
Other taxes	31,437	72,536	8,615		15,381
Accruals and deferred income	115,672	123,031	50,400		72,810
	────────	────────	────────	────────
	590,724	850,159	191,900	124,357
	════════	════════	════════	════════

In both the Group and Company, the carrying amount of trade and other payables approximates to their fair values.

Included in trade payables is £23,305 (2015: £32,951) denominated in US dollars and £6,693 (2015:£NIL) denominated in Euros.

Byotrol Technology Limited, a 100% subsidiary, is party to an invoice discounting arrangement.  The invoice discounting facility is secured by a fixed charge debenture on the assets of the Byotrol Technology Limited.  Byotrol plc has provided a cross guarantee to Byotrol Technology Limited to support the invoice discounting facility. This arrangement ceased on 28^th April 2016.

The age profile of the net trade and other payables for the Group at the year end was as follows:

Payables age - "days past due" at balance sheet date

2016	Current	0-30 Days	31-60 Days	61-90 days	91-120 days	Over 120 Days	Total
Trade payables value (£)
	212,045	130,577	11,583	9,916	0	5,778	369,899
	=============	=============	=============	=============	=============	=============	=============
%	57	35	3	3	0	2	100
	=============	=============	=============	=============	=============	=============	=============
Invoice discounting facility	73,716	-	-	-	-	-	73,716
	=============	=============	=============	=============	=============	=============	=============
Convertible loan notes	359,975	-	-	-	-	-	359,975
	=============	=============	=============	=============	=============	=============	=============

2015	Current	0-30 Days	31-60 Days	61-90 days	91-120 days	Over 120 Days	Total
Trade payables value (£)
	92,460	350,038	45,403	3,688	0	5,737	497,326
	=============	=============	=============	=============	=============	=============	=============
%	18	71	9	1	0	1	100
	=============	=============	=============	=============	=============	=============	=============
Invoice discounting facility	157,266	-	-	-	-	-	157,266
	=============	=============	=============	=============	=============	=============	=============
Convertible loan notes	328,625	-	-	-	-	-	328,625
	=============	=============	=============	=============	=============	=============	=============

14        BORROWINGS

	Group	Group	Company		Company
	2016	2015	2016		2015
	£	£	£		£
Current:
Convertible loan notes	359,975	-	359,975		-
	==============	==============	==============		==============
Non-current:
Convertible loan notes	-	328,625			328,625
	==============	==============	==============	==============

The Company issued 380 10% convertible bonds of £1,000 each, totalling a value of £380,000 on 20^th December 2013.  The bonds mature three years from the issue date at their nominal value of £380,000 or can be converted into shares at the holder's option at any time up to the maturity date at the rate of 18,315 shares per £1,000.  The values of the liability component and the equity conversion component were determined at the issuance of the bond.

The fair value of the liability component was calculated using a market interest rate that would be available to the Company for an equivalent non-convertible bond.  The residual amount, representing the value of the equity conversion option, is included in shareholders' equity in other reserves.

The convertible bond recognised in the balance sheet is calculated as follows:

	Group	Group	Company	Company
	2016	2015	2016	2015
	£	£	£	£
Proceeds of issue of convertible loan note	380,000	380,000	380,000	380,000
Equity component	(69,301)	(69,301)	(69,301)	(69,301)
	────────	────────	────────	────────
Liability component at date of issue	310,699	310,699	310,699	310,699
Interest charged cumulative	125,276	55,926	125,276	55,926
Interest paid cumulative	(76,000)	(38,000)	(76,000)	(38,000)
	────────	────────	────────	────────
Liability component at 31 March	359,975	328,625	359,975	328,625
	════════	════════	════════	════════

At 31 March 2016, the carrying value of the liability component of the convertible loan note is considered to approximate its fair value.

15        FINANCIAL INSTRUMENTS

Details of the methods adopted for the categorisation and measurement of financial assets and liabilities are set out in the accounting policies.

Foreign currency risk

The Group operates in a number of markets across the world and is exposed to foreign exchange risk arising from various currency exposures in particular, with respect to the US dollar.  The Group is exposed to foreign currency risk arising from recognised assets and liabilities as well as commitments arising from future trading transactions.  Although the countries that the Group trades with have relatively stable economies, management has set up a policy which requires Group companies to manage their foreign exchange risk against their functional currency by closely monitoring spot rate to balance inflows and outflows.  A sensitivity analysis of the Group's foreign exchange exposure is not presented as the risk is considered to be insignificant.

Interest rate risk

The Group's principal interest-bearing financial instrument is the convertible loan note (note 15).  This instrument requires interest to be paid at a fixed rate of 10% per annum.  The Group is also exposed to minimal interest rate risk arising on cash and cash equivalent balances and bank loans and overdrafts in the prior year. The Group does not consider that it is significantly exposed to interest rate risk, either in the current or prior year, and therefore an interest rate sensitivity analysis is not presented.

Fair values of financial liabilities and financial assets

The fair values based upon the market value or discounted cash flows of financial liabilities and financial assets, held in the Group was not materially different from their book values.

Liquidity risk

All of the Group's financial instruments have been classified as current with the exception of its convertible loan note which is repayable (if not converted) within the following three years.  The Group's ability and approach to manage its liquidity position is set out in its going concern accounting policy. 

16        COMMITMENTS UNDER OPERATING LEASES

The minimum lease payments under non-cancellable operating lease rentals are in aggregate as follows:

	Group	Group	Company		Company
	2016	2015	2016		2015
	£	£	£		£
Amounts due:
Within one year	65,137	55,456	65,137		-
In second to fifth years inclusive	77,558	-	77,558		-
More than five years	-	-	-		-
	────────	────────	────────	────────
	142,695	55,456	142,695	-
	════════	════════	════════	════════

Operating lease payments represent rentals payable by the Group and the Company for its office property. laboratory facilities and office equipment.  The office property and laboratory lease is negotiated for a term of two years and the office equipment is for a term of five years.  The office property and laboratory facilities can be terminated before the end of the term with a three-month notice period.

17        SHARE BASED PAYMENTS

The Company has granted equity settled share options to certain directors and employees.  The exercise price is equal to or more than market value of the shares at the date of grant.  The vesting period is two years.  If the options remain unexercised after a period of ten years from the date of grant the options expire.

Details of the share options and warrants outstanding during the year are as follows:

	2016		2015
	Number of share options	Weighted average exercise price (in p)	Number of share options	Weighted average exercise price (in p)
Outstanding at beginning of year	24,722,500	7.10	8,210,000	14.40
Share options granted during the year	4,300,000	3.50	16,662,500	3.50
Share options lapsed during the year	(2,260,000)	8.06	(150,000)	3.50
	────────	────────	────────	────────
Outstanding at the end of the year	26,762,500	6.45	24,722,500	7.10
	════════	════════	════════	════════

The number of options exercisable at 31 March 2016 is 1,680,000 (2015: 2,240,000).

The Group recognised the following expenses related to share based payments:

	2016	2015
	£	£
Charged to Consolidated Statement of Comprehensive Income	52,604	107,750
	════════	════════

The fair value of options granted under the employee option schemes is measured using the Black-Scholes model.

Grant date	New Grants  3 December 2015
Share price at grant date	3.25p
Exercise price	3.5p
Number of employees	7
Share options granted	4,050,000
Vesting period (years)	1
Expected volatility	43.7%
Option life (years)	10
Expected life (years)	7
Risk free rate	1.06
Expected dividends expressed as a dividend yield	0
Fair value per option	1.42p

The options outstanding at 31 March 2016 had a weighted average exercise price of 5.90 p (2015: 7.10p) and a weighted average remaining contractual life of 5.7 years (2015: 7.8 years).

The aggregate of the estimated fair values of the options granted in the year is £333,250  (2015: £ 333,250).

At 31 March 2016 there were options outstanding over 26,762,500 (2015: 24,722,500) ordinary shares of 0.25p each which are exercisable at prices in the range from 3.5p to 79.5p under the company's various share option schemes exercisable at various times until 3 June 2023.

Expected volatility was based upon the historical volatility over the expected life of the schemes.  The expected life is based upon historical data and has been adjusted based on management's best estimates for the effects of non-transferability, exercise restrictions and behavioural considerations.

18        RELATED PARTY TRANSACTIONS

Directors

Fees for Directors' services are set out in the Directors' Remuneration Report and in Note 4 to the financial statements. 

Fees for Mr Martel are paid to Martel Northern Limited and amounted to £24,000 (2015: £24,000). Expenses are paid direct to Mr Martel and amounted to £5,607 (2015: £NIL).  The amounts outstanding at the year end totalled £6,000 (2015: £18,000).  Convertible loan note interest for Mr Martel (non-beneficial) is paid to Maunby Nominees and amounted to £5,000 (2015: £5,000).

Fees for Dr Medinger are paid to Medinger Associates and amounted to £24,000 (2015: £24,000). Expenses are paid direct to Dr Medinger and amounted to £2,354 (2015: £NIL).  The amounts outstanding at the year end totalled £12,000 (2015: £30,000).  Convertible loan note interest for Dr Medinger is paid direct to Dr Medinger and amounted to £3,000 (2015: £3,000).

Expenses are paid direct to Dr Francis and amounted to £3,994 (2015: £1,026). The amounts outstanding at the year end totalled £NIL (2015: £3,150).

Expenses are paid direct to David Traynor and amounted to £918 (2015: £NIL). The amounts outstanding at the year end totalled £NIL (2015: £NIL).  Convertible loan note interest for David Traynor is paid direct to Mr Traynor and amounted to £5,000 (2015: £5,000).

Key management personnel

The Board is of the opinion that the key management personnel are the Executive Directors & Non-Executive Directors.  In addition to their salaries the Group also provides certain non cash benefits to the Executive Directors.  The total compensation comprised:

	2016	2015
	£	£
Short term benefits	230,482	170,918
Share based payments	25,507	49,587
	────────	────────
Total	255,989	220,505
	════════	════════

19        SHARE CAPITAL

		2016	2015
Authorised:
375,057,945 (2015: 375,057,945) Ordinary shares of 0.25p each	937,645		937,645
	════════		════════

The Ordinary Shares have full equal voting rights, equal participation in dividends, equal participation in distribution on winding up with no redemption rights.

		No	£
Issued and fully paid Ordinary Shares (par value 0.25 pence):
At 1 April 2015	225,034,769		562,587
Shares issued	43,016,796		107,543
	────────		────────
At 31 March 2016	268,051,565		670,130
	════════		════════

Capital management

The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade in the foreseeable future.  The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.

The Group considers its capital to include share capital, share premium, merger reserve and the retained deficit.  The Group has no external debt.

The Group has no long-term gearing ratio target as it believes that it currently has no assets on which to secure funding.

Reserves

The nature and purpose of each of the reserves included within equity is as follows:

·      Share capital represents the nominal value of ordinary shares issued and fully paid.

·      Share premium represents the excess of funds raised from the placing of equity shares over the nominal value of the shares after deducting directly attributable placing costs.

·      The merger reserve was established in respect of previous acquisitions, which qualify for Section 131 merger relief.

·      The translation reserve represents the cumulative gains and losses on the translation of the Group's net investment in its overseas subsidiary.

·      The convertible loan note reserve is the equity component for the convertible loan notes issued by the Group, see note 15.

·      Retained deficit represent accumulated losses to date.

20        ULTIMATE CONTROLLING PARTY

The Company is listed on AIM.  It has no single ultimate controlling party.

 

END

 

 

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