Final Results
ILIKA plc
(The "Company" or the "Group")
Financial Statements for year ended 30 April 2013
Ilika (AIM: IKA), the advanced cleantech materials discovery company, announces its audited full year results for the year ended 30 April 2013.
Operational highlights
§ Grant of patents protecting core high throughput technology platform in USA, Japan and Canada
§ Progression of proprietary low cost fuel cell catalyst development, including:
o Investment of £150,000 by Carbon Trust to support commercialisation activities
o Grant of patents in USA and Japan
o Delivery of kg-scale quantity for OEM trials
§ Completion of initial phase of solid state battery development, including:
o Selection and testing of optimum material combinations
o Deposition of active electrochemical cell structures
o Testing of cell performance
§ Streamlining operations through disposal of wound-care business and consolidation of activities to one base in Southampton
§ Focussing business development activities and implementing operational cost reductions to yield renewed growth in coming financial year.
Financial highlights
§ Revenues down 46% to £1.00m (2012: £1.85m)
§ Gross profit margin up to 44.1% (2012: 43.9%)
§ Loss before tax increased £3.5m (2012: £2.4m)
§ Loss per share unchanged at 0.07p (2012: 0.07p)
§ Cash, cash equivalents and bank deposits of £1.9m (as at 30 April 2012: £5.3m)
Commenting on the results Ilika's Chairman, Jack Boyer, said:
"We believe that the Company's portfolio approach and our strong relationships with existing development partners, ensures that we are well positioned to benefit from the commercial success of products and materials developed using our high throughput techniques. We are also confident that the potential development contracts that were delayed in 2013 will be converted in 2014 and allow us to continue to broaden our commercial pipeline."
Ilika plc |
www.ilika.com |
Graeme Purdy, Chief Executive |
Tel: 023 8011 1400 |
Steve Boydell, Finance Director |
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Numis Securities Limited |
Tel: 020 7260 1000 |
Oliver Cardigan, Nominated AdviserJames Black, Corporate Broking |
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Walbrook PR Ltd |
Tel: 020 7933 8780 |
Paul McManus |
Mob: 07980 541 893 or paul.mcmanus@walbrookpr.com |
Paul Cornelius |
Mob: 07827 879 460 or paul.cornelius@walbrookir.com |
ILIKA plc
Financial Statements for year ended 30th April 2013
CHAIRMAN'S REVIEW
These are our third set of full year results as a public company. During the year we have seen significant operational progress with our IP development programmes and this is outlined in the Chief Executive's Review below. We also experienced a number of challenges during the period, including delays with a number of potential contracts and the decision by Energizer to close one of its business units, which impacted our development collaboration. This has been reflected in the reduced revenues for the Company and has, no doubt, had a significant impact on our share price.
Notwithstanding the above, we believe that the Company's strong relationships with existing development partners should mean that contracts which were delayed in 2013 will be converted or replaced in 2014. Furthermore, the Company generated a significant number of new leads with major companies during the period. This should allow us to continue to broaden our commercial pipeline, further diversify our global customer base and deliver significant financial growth over the coming years.
Disposal of non-core wound care business
In December 2012 we disposed of our wound care operations allowing us to focus on our core activities of developing energy conversion and storage materials. This resulted in a reduction in overheads and the discontinued revenues in the seven months to 30 December 2012 of £0.10m (2012: £0.16m) which are not included in the reported figures below. I would also like to thank Dr. Werner Braun, who has been a director of Ilika since May 2007, for his contribution to the Company over the years. Dr Braun, who has extensive experience in the medical device sector, has stepped down at the end of his fixed term in office following the disposal of Altrika.
Financial Results
In line with the guidance provided in our statement from 16 April 2013, revenues from continuing operations for the year ended 30 April 2013 fell to £1.00m (2012: £1.85m), for the reasons explained above. Revenue in the year does not include any grant income (2012: £0.17m) as the Carbon Trust funding was provided as a direct equity investment of £0.15m rather than as a grant.
Gross profit reduced to £0.44m (2012: £0.81m) and with administrative expenses increasing to £4.0m (2012: £3.4m) as a result of increased R&D activities, and zero grant income (2012: £0.17m), we recorded an increased loss before tax on continuing operations of £3.5m (2012: £2.4m), resulting in a loss per share of 0.07p (2012: Loss of 0.07p).
Cash
As at 30 April 2013, the Group's cash position was £1.9m (2012: £5.3m). Post period end, we raised an additional £709,000 through a share placing which, coupled with securing and commencing a number of contracts with customers presently being finalised will provide sufficient cash to fund our requirements for the foreseeable future. Additionally, this placing has improved our shareholder register with new investors whose investment horizons are better aligned with our long-term corporate objectives.
Outlook
Although last year's financial results did not meet market expectations, the new financial year has already seen the conversion of one of the delayed contracts and we hope to see other opportunities convert throughout the year. Whilst development work in Japan remains the largest contributor to revenues and we are encouraged by a strong pipeline of opportunities through our recently appointed business development director based in Frankfurt, Germany, as well as further opportunities in the US.
The development of our solid state battery technology, co-developed with Toyota, for man-portable applications has progressed through the first phase of the programme in-line with our expectations and we have submitted a proposal to the US army for the funding of technology to full development and whilst this assessment process is ongoing we are also exploring additional commercial support for the technology in the consumer electronics and automotive sectors.
Finally I would like to thank the staff and Board for their hard work over the last year and their undoubted contribution to the growth of the business. I look forward to reporting on the developments of the Group over the coming year.
Jack Boyer
Chairman
12th July 2013
ILIKA plc
Financial Statements for year ended 30th April 2013
CHIEF EXECUTIVE'S REVIEW
This year has been one in which Ilika's portfolio of technology and intellectual property (IP) has matured in a number of key markets around the globe. The company's IP can be divided into two broad categories: 1) its platform technology for high throughput materials development and 2) the IP defining the materials, which have been developed using that platform. At the start of our last financial year, in May 2012, the company received confirmation that its patent applications covering its core physical vapour deposition (PVD) patents had been granted in the USA, Canada and Japan. The PVD technology was originally developed at the University of Southampton prior to the spin out of the company in 2004. This technology has underpinned much of the materials innovation which the company has undertaken since its formation and still provides the means by which the majority of the new materials being developed are initially made. Hence, in securing granted patents for this technology, the company has secured the foundations for continued future growth.
The company considers its core technology in high throughput techniques to be a key differentiator from other providers of materials innovation. Ilika monetizes this core technology through the development of the materials developed using that platform. Hence, continued progress made in securing IP, which defines the materials generated using the platform, and commercializing those materials is important to the company. This past year has seen important milestones achieved across the company's portfolio, but particularly in the key area of energy storage and conversion.
The energy conversion materials, which are the most mature in Ilika's portfolio, include the low-cost fuel cell electrode materials. Reducing the cost of fuel cell technology is widely acknowledged as a key priority for enabling its adoption for both transport and stationary applications. Ilika's materials are suitable for use in so-called PEM fuel cells, which are of primary interest to transport applications. PEM fuel cell technology is also being used for stationary power applications, particularly for domestic power in Japan. 40% of the cost of a PEM fuel cell stack is currently associated with the use of platinum as the electrocatalyst. Platinum is a scarce precious metal and therefore its price is sensitive to supply and demand pressures. In 2012, the price of platinum varied between £28 and £35/g. At a typical loading of 11 g/kW, this means that an 80kW fuel cell, which might be suitable for a small car, requires £2,500-£3,000 of platinum. In comparison, the total cost of buying an internal combustion engine lies in the range £500-£1,000. Ilika's electrocatalysts cost 1/3 of the price, on a $/kW basis, of platinum-based equivalents. In September 2012, Ilika received a ca. £150,000 equity investment from the Carbon Trust to allow Ilika to complete the commercialization of this technology. Since then, Ilika's patents covering its technology have been granted in the USA and Japan. In addition, Ilika's development partner, ITRI of Taiwan, has delivered the first 1kg of the catalyst for testing, primarily with OEM's in USA and Japan, where Ilika has strong patent coverage. Materials transfer agreements have been put in place and initial samples have been made available for confirmatory testing at the OEM's. Initial feedback is encouraging and further testing is expected in this financial year.
In April 2012 Ilika announced that it had completed an equity round to fund the co-development of its solid state battery technology, which it had co-developed with Toyota. Technical progress through Phase I of its development program has been as expected, with optimization of cell-based data continuing. An open channel of communication has been maintained with the US army, who expressed a strong interest in accessing this technology for man-portable applications. Ilika is also pursuing commercial support for the technology from the consumer electronics and automotive sector. Toyota is actively supporting Ilika within the automotive sector by co-presenting in June 2013 at a technology summit, the Advanced Automotive Battery Conference in Strasbourg.
ILIKA plc
Financial Statements for year ended 30th April 2013
CHIEF EXECUTIVE'S REVIEW (continued)
An important streamlining of the business was completed in the last financial year. In December 2012, Ilika's wholly-owned biomedical subsidiary, Altrika, was disposed of. The transaction involved the transfer of the cell-based burns treatment products Myskin and Cryoskin as well as the staff and facilities in Sheffield. The high throughput polymer platform was retained and operations were consolidated in Southampton. The transaction had a net positive effect on Ilika's balance sheet and allowed Ilika to focus on its activities in the energy and electronics sector. At the end of his term as non-executive director, Dr. Werner Braun, stepped down from Ilika's board in June 2013. Dr. Braun has particular expertise in the marketing of medical devices through his executive role at Biotronik.
The split of Ilika's revenues across the globe continues to have an emphasis in Japan, with 78% coming from Japan, 9% from US and 13% from Europe. In 2012, deal timelines and conversion rates deteriorated, causing the drop in reported revenues initially flagged in Ilika's trading update in April 2013. Since then, the policy of quantitative easing pursued in Japan appears to have renewed corporate confidence, leading to an improved robustness in commercial outlook. Ilika's core customer base has continued to renew relationships, as demonstrated by the contract renewals announced on December 2012 and February 2013. Further renewals of these relationships are expected in 2013. The company has expectations of growth of the contribution of revenues from both the USA and Europe. The front end of the emerging opportunities in Europe was shown by the announcement of a new customer in the field of battery materials optimization in April 2013. The need for improved energy storage and conversion continues to be a strong business driver for Ilika, which fits well with the company's core capabilities in being able to deliver optimized materials within accelerated timelines.
Graeme Purdy
Chief Executive
12th July 2013
ILIKA plc
Financial Statements for year ended 30th April 2013
FINANCIAL REVIEW
Revenue from continuing activities the year ended 30th April 2013 was £1.04m (2012: £1.85m). Discontinued revenues generated in the wound care business of Altrika in the seven months to December 2012 were £0.10m (2012: £0.16m). There was no grant income recognised in the period for continuing operations as the Carbon Trust supported the company's fuel cell catalyst program by way of a direct equity investment of £0.15m (2012: grant income £0.17m).
Revenues relate to the payments made by Ilika's partners for research and development activities. Japan based customers continue to fund the majority of the Group's projects, but the appointment of a German based business development resource at the end of last financial year helped to increase the revenue generated from European based customers to 13% of the total from 1% in 2012.
Gross margin on customer funded programmes has remained at around 44% for the year. Administration expenses have increased from £3.37m in 2012 to £4.02m in 2013. An accounting adjustment for a share based payment calculation is included within administration expenses. In 2012 there was a share based payment charge of £0.2m, whilst in 2013, because a number of options lapsed in the year, there was a credit of £0.25m. The underlying increase in administration expenses in the year, after taking into account for this accounting adjustment, is therefore £1.1m.
The vast majority of this increase relates to the company's increased research and development expenditure, primarily on its own funded solid state battery project, but also on the grant body supported projects like the low cost fuel cell catalyst material and the company's contribution to shared development programmes with customers. Total spend on research and development projects, including depreciation on assets attributable to these projects, was £2.4m in 2013, up from £1.7m in 2012. The balance of the administrative expenses increase relates to expanded business development activity and the one-off costs associated with the company's laboratory expansion to increase capacity and accommodate staff and equipment transferred from the Altrika business.
The increase in internally funded research and development activity, coupled with the support from the Carbon Trust by way of equity investment rather than by grant, has resulted in a significantly increased Research and Development tax credit up from £0.1m in 2012 to £0.24m in 2013.
Investment in facilities expansion in the year was £0.2m and spend on laboratory and IT equipment was £0.4m (2012: total spend on fixed assets £0.2m). Fixed assets with a net book value of £20k were disposed of with the sale of the Altrika business.
The year-end cash position was £1.9m (2012: £5.3m). With the group restructuring and investment in facilities now complete, this cash balance, together with the contracts currently being finalised and the post year end placing, is sufficient to fund the company's cash requirement for the foreseeable future.
Steve Boydell
Finance Director and Company Secretary
12th July 2013
ILIKA plc
Financial Statements for year ended 30th April 2013
DIRECTORS' REPORT
The Directors present their report and the audited financial statements for Ilika plc ('Ilika') and its subsidiaries (the 'Group') for the year ended 30th April 2013.
Principal activities
The principal activity of Ilika and the Group is the discovery and development of novel materials for mass market applications.
Business review
A detailed review of the business, its results and future direction, together with the key performance indicators of turnover by geographical market, is included in the Chairman and Chief Executive's review.
Directors
The Directors who served on the board of Ilika during the year and to the date of this report were as follows:
Executive
Mr S Boydell (FD and Company Secretary)
Prof. B. E. Hayden (CSO)
Mr G. Purdy (CEO)
Non-Executive
Mr J. B. Boyer (Chairman)
Dr. W. Braun - resigned 30th June 2013
Ms. C Spottiswoode CBE
Prof. Sir W Wakeham
Details of the Directors' remuneration and share options are shown in note 5 of these accounts.
The Group maintained directors' and officers' liability insurance cover throughout the period.
Principal risks and uncertainties
Commercial risk
The Group is subject to competition from competitors who may develop more advanced and less expensive alternative technology platforms, both for existing materials and for those materials currently under development. The Group is largely dependent on its partners to commercialise the end-products containing the Group's materials.
Financial risk
The Group is reliant on a small number of significant customers and partners. Termination of these agreements could have a material adverse affect on the Group's results or operations or financial condition. The Group expects to incur further operating losses as progress on development programmes continue. There can be no assurance that the Group will ever achieve significant revenues or profitability.
ILIKA plc
Financial Statements for year ended 30th April 2013
DIRECTORS' REPORT (continued)
Intellectual property risk
The Group faces the risk that intellectual property rights necessary to exploit research and development efforts may not be adequately secured or defended. The Group's intellectual property may also become obsolete before the products and services can be fully commercialised.
Regulatory risk
The Group's materials and products are subject to various European and other legislative and regulatory requirements. Regulatory issues could lead to delays in development which take time and investment to resolve.
Post balance sheet events
On 22nd May 2013, 100,000 Convertible Preference Shares were converted to Ordinary Shares and 2,375,000 ordinary shares were issued for a total consideration of £712,500 with total issue costs incurred of £3,500.
Supplier payment policy
It is the Group's policy to settle debts with its creditors on a timely basis, taking best advantage of the terms and conditions offered by each supplier. As at 30th April 2013, the number of creditor days outstanding for the Group was 16 days (2012: 27 days).
Financial instruments
The Group's principal financial instrument comprises cash and this is used to finance the Group's operations. The Group has various other financial instruments such as trade credit facilities that arise directly from its operations. The Group places deposits surplus to short-term working requirements with a range of reputable UK based banks and building societies. These balances are placed at fixed rates of deposit with maturities between one and nine months. See note 18 for IFRS7 disclosure regarding financial instruments.
Results and dividends
The Consolidated Statement of Comprehensive Income for the year is set out on page 19. The Group's loss for the financial year after taxation was £3.5m (2012: £2.7m).
The Directors do not recommend the payment of a dividend.
Charitable and political donations
The Group made no charitable or political donations during the year (2012: Nil).
Research and development costs
In accordance with the policy outlined in note 1, the Group incurred research and development expenditure of £1,773k in the year (2012: £1,377k). Commentary on the major activities is given in the Chairman's review and Chief Executive review.
ILIKA plc
Financial Statements for year ended 30th April 2013
DIRECTORS' REPORT (continued)
Auditors
All the current directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Company's Auditors for the purposes of their audit and to establish that the Auditors are aware of that information. The Directors are not aware of any relevant audit information of which the Auditors are unaware.
A resolution to re-appoint BDO LLP will be proposed at the next Annual General Meeting.
Substantial shareholdings
On 30th June 2013 the Company had been notified of the following holdings of more than 3% or more of the issued share capital of the Company.
|
Shareholder |
No. of ordinary shares |
% shareholding |
|
IP Group |
7,778,387 |
16.1 |
|
St Peter Port Capital |
6,018,924 |
12.4 |
|
Henderson Global |
5,000,000 |
10.3 |
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Ruffer LLP |
4,545,454 |
9.4 |
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Mackin Holdings Inc |
3,967,647 |
8.2 |
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Southampton Asset Management |
3,799,900 |
7.9 |
|
Charles Stanley Group plc |
3,000,750 |
6.2 |
|
Legal and General |
2,720,677 |
5.6 |
|
Artemis |
2,640,741 |
5.5 |
|
Southern Fox |
2,424,093 |
5.3 |
|
Wyvern |
1,547,039 |
3.1 |
Directors' responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market ('AIM').
ILIKA plc
Financial Statements for year ended 30th April 2013
DIRECTORS' REPORT (continued)
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Group's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
By order of the Board
Graeme Purdy
Chief Executive
12th July 2013
ILIKA plc
Financial Statements for year ended 30th April 2013
CORPORATE GOVERNANCE STATEMENT
The Board is accountable to the Company's shareholders for good corporate governance and it is the objective of the Board to attain a high standard of corporate governance. As an AIM listed company full compliance with the provisions of the UK Corporate Governance Code published in May 2010 (the 'Code') is not a formal obligation. The Company has not sought to comply with the full provisions of the Code, however it has sought to adopt the provisions that are appropriate to its size and organisation and establish frameworks for the achievement of this objective. This statement sets out the corporate governance procedures that are in place.
Board of directors
The Board of directors (the 'Board') consists of a Non-Executive Chairman, three Executive Directors and for the year to 30th April 2013, three Non-Executive Directors.
The responsibilities of the Non-Executive Chairman and the Chief Executive Officer are clearly divided. The Chairman is responsible for overseeing the running of the board, ensuring that no individual or group dominates the Board's decision making and ensuring that the non-executive directors are properly briefed on matters. Prior to each Board meeting, directors are sent an agenda and Board papers for each agenda item to be discussed. Additional information is provided when requested by the Board or individual directors.
The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day to day business activities of the Group through his chairmanship of the executive committee.
The Non-Executive Directors bring relevant experience from different backgrounds and receive a fixed fee for their services and reimbursement of reasonable expenses incurred in attending meetings.
The Board retains full and effective control of the Group. This includes responsibility for determining the Group's strategy and for approving budgets and business plans to fulfil this strategy. The full Board ordinarily meets bi-monthly.
The Company Secretary is responsible to the Board for ensuring that Board procedures are followed and that the applicable rules and regulations are complied with. All directors have access to the advice and services of the Company Secretary, and independent professional advice, if required, at the Company's expense. Removal of the Company Secretary would be a matter for the Board.
Performance evaluation
The Board has a process for evaluation of its own performance which is carried out annually.
ILIKA plc
Financial Statements for year ended 30th April 2013
CORPORATE GOVERNANCE STATEMENT (continued)
Board Committees
As appropriate, the Board has delegated certain responsibilities to Board Committees as follows:
i) Audit Committee
The Audit Committee currently comprises Clare Spottiswoode CBE (Chairman), Professor Sir William Wakeham and Jack Boyer.
The Committee monitors the integrity of the Group's financial statements and the effectiveness of the audit process. The Committee reviews accounting policies and material accounting judgements. The Committee also reviews, and reports on, reports from the Group's auditors relating to the Group's accounting controls. It makes recommendations to the Board on the appointment of auditors and the audit fee. It has unrestricted access to the Group's auditors. The Committee keeps under review the nature and extent of non-audit services provided by the external auditors in order to ensure that objectivity and independence are maintained.
ii) Remuneration Committee
Until 30th June 2013, the Remuneration Committee comprised Dr Werner Braun (Chairman), Clare Spottiswoode CBE and Jack Boyer. With the departure of Dr Werner Braun, Professor Sir William Wakeham has joined the committee and Jack Boyer has become Chairman.
The committee is responsible for making recommendations to the Board on remuneration policy for Executive Directors and the terms of their service contracts, with the aim of ensuring that their remuneration, including any share options and other awards, is based on their own performance and that of the Group generally.
iii) Nomination Committee
Until 30th June 2013, the Nomination Committee comprised Jack Boyer (Chairman), Professor Sir William Wakeham and Dr Werner Braun. Dr Werner Braun has been replaced on the committee by Clare Spottiswoode CBE.
It is responsible for providing a formal, rigorous and transparent procedure for the appointment of new directors to the board and reviewing the performance of the board each year.
Attendance at Board meetings and committees
The Directors attended the following Board and committees meetings during the year:
|
Attendance |
Board |
Audit |
Nomination |
Remuneration |
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Mr S. Boydell |
7/7 |
- |
- |
- |
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Mr J. B. Boyer |
6/7 |
2/2 |
1/1 |
2/2 |
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Dr. W. Braun |
6/7 |
- |
1/1 |
2/2 |
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Prof. B. E. Hayden |
7/7 |
- |
- |
- |
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Mr G. Purdy |
7/7 |
- |
- |
- |
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Ms. C Spottiswoode |
6/7 |
2/2 |
- |
2/2 |
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Prof. Sir W Wakeham |
6/7 |
2/2 |
1/1 |
- |
ILIKA plc
Financial Statements for year ended 30th April 2013
CORPORATE GOVERNANCE STATEMENT (continued)
Risk management and internal control
The Board is responsible for the systems of internal control and for reviewing their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. The Audit Committee reviews the effectiveness of these systems primarily by discussion with the external auditor and by considering the risks potentially affecting the Group.
The Group does not consider it necessary to have an internal audit function due to the small size of the administration function. Instead there is a detailed Director review and authorisation of transactions. The annual audit by the Group auditor, which tests a sample of transactions, did not highlight any significant system improvements in order to reduce risk.
The Group maintains appropriate insurance cover in respect of actions taken against the Executive Directors because of their roles, as well as against material loss or claims of the Group. The insured values and type of cover are comprehensively reviewed on a periodic basis.
Employment
The Board recognises its legal responsibility to ensure the well-being, safety and welfare of its employees and maintain a safe and healthy working environment for them and for its visitors. A Health and safety report is reviewed at each Board meeting and policies and procedures are independently reviewed to ensure compliance with best practice.
By order of the Board
Jack Boyer
Chairman
12th July 2013
ILIKA plc
Financial Statements for year ended 30th April 2013
CORPORATE AND SOCIAL RESPONSIBILITY STATEMENT
Ilika continues to recognises the importance of approaching its responsibilities to corporate social responsibility (CSR) in a co-ordinated and committed fashion and we aim to ensure our approach to creating business growth manages environmental and social issues whilst delivering value for the Company and continued benefit for society. This statement acknowledges our ambition to include CSR in all parts of our business.
Overall responsibility for developing and implementing our CSR policies on social, ethical and environmental matters and for reviewing their effectiveness lies ultimately with the Ilika Board. The Board regularly reviews the scope of the Company strategy and reports to stakeholders to ensure we remain focussed on the material issues for the business.
Ilika's policies and procedures, which includes those related to CSR aspects are well researched, clearly thought out and communicated to all employees and those connected with our activities to ensure commitment and understanding throughout the company.
The Main areas of CSR at Ilika are:
· Values and ethics
· Health and safety
· Employee rights
· Contribution to society
· Environment and sustainability
Values and ethics
Ilika supports the principles of the Universal Declaration of Human Rights through its business practices. This means that we support freedom from torture, unjustified imprisonment without fair trial and any other oppression. In addition, we support the right of any individual to have freedom of expression and religion, political representation or in respect of any other matter. Accordingly, we will not support or work with organisations which fail to uphold basic human rights within their influence, which are involved in the manufacture or transfer to an oppressive regime, or are involved in the manufacture of equipment used in the violation of human rights. We will not work with organisations which are involved in the funding or carrying out of terrorist activities or which do not conform to the most widely accepted standards for minimum labour rights or which do not cover the use of under-age or forced labour.
Health and safety
We recognise our responsibility to ensure the well-being, safety and welfare of our staff and to maintain a safe and healthy working environment for everyone who is affected by our activities. We understand that health and safety has positive benefits for the company and that a commitment to a high level of safety makes good business sense. Health and safety is considered at the highest level in the Company with the ultimate responsibility resting with the Board.
Employee rights
We uphold the dignity of the individual by ensuring not only compliance with the laws relating to employment rights, equal opportunities and non-discrimination but by going further to ensure we provide a safe, supportive and dignified working environment.
Contribution to society
Ilika accepts and acknowledges that we have a corporate responsibility towards society not only by paying taxes and creating and maintaining jobs but also by using our unique research skills to develop knowledge, skills and products which will ultimately benefit society. We actively support and encourage the study of science at all levels from pre GCSE through to doctorate level.
Environment and sustainability
Ilika continues to make a real and sustainable positive impact on the broader community by adopting environmentally responsible policies and operate in an environmentally conscious manner. Our objective is to minimise the impact of our business activity on the environment wherever possible.
Our ongoing objectives are to:
· Consider environmental issues in all of our decision making processes.
· Evaluate future energy usage to see how we can use low energy systems.
· Advise staff on the efficient use of energy and other utilities.
· Reduce travel on business where possible by the use of video and telephone conferencing.
· Use the most environmentally friendly mode of transport consistent with business needs.
· Encourage use of bicycles by offering our employees access to the HMRC Workcycle scheme
· Reduce overall the resources we use.
· Reduce waste by recycling or finding other uses of by-products whenever viable.
· Reduce our letters and correspondence by using alternative electronic mechanisms.
· Use either recycled or FSC paper for all hard copy correspondence, wherever possible.
· Consider environmental criteria when choosing services and goods.
· Develop relationships with suppliers and contractors so that we all recognise our environmental responsibilities.
· Fundamentally Ilika will reduce its impact on the environment and ask that its employees, suppliers and customers do likewise.
Review
Highlights of the CSR work undertaken in the year include:
Environment: Energy usage has been fully reviewed in both our offices and laboratories and has led to new laboratory procedures which require tighter coordination of the use of equipment to ensure cost efficient use of our resources. Improved equipment usage scheduling has resulted in longer periods of shut down thereby reducing energy usage.
In our offices we have significantly reduced the amount of copying and printing undertaken and have set all copying equipment to default to double sided, black and white copying.
Health and Safety: We have invested in equipment and training to improve working conditions and as a result of our on-going efforts, there were no reportable injuries.
Values and ethics: We have requested our suppliers' CSR policies and statements to ensure that they are aligned with our core business principles to carry out business honestly, ethically and with respect for the rights and interests of others. We develop relationships with our suppliers to improve quality and efficiency and we settle our bills promptly.
Contribution to society: We have formed an Outreach Department and have been working collaboratively with local schools and colleges to create a one year programme of lectures, competitions and laboratory visits for children aged 16 years to 18 years. Our programme will proactively support and encourage the study and enjoyment of science in general and Chemistry in particular. In addition our Outreach department provides careers guidance for children wishing to enter into the world of science and we have provided 6 month and 12 month placements to Masters students.
Outlook
For the year ahead, we have ambitious plans to create a system whereby we can monitor and quantify our energy savings. We will continue to build upon our CSR efforts and look forward to a mutually rewarding year for our staff, the company and all those affected by our activities.
.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ILIKA PLC
We have audited the financial statements of Ilika plc for the year ended 30th April 2013 which comprise the consolidated statement of comprehensive income, the consolidated balance sheet, the parent company balance sheet, the consolidated cash flow statement, the parent company cash flow statement, the consolidated statement of changes in equity, the parent company statement of changes in equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company's members, as a body, in accordance with sections Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate
Opinion on financial statements
In our opinion:
· the financial statements give a true and fair view of the state of the Group's and the parent company's affairs as at 30th April 2013 and of the Group's loss for the year then ended;
· the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
· the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
· the parent company financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
Kim Hayward (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Southampton
United Kingdom
12th July 2013
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Consolidated statement of comprehensive income
|
|
Year ended 30th April
|
||
|
|
Notes |
2013 |
2012 |
|
|
|
£ |
£ |
|
|
|
|
|
|
Revenue |
2 |
1,003,943 |
1,851,172 |
|
Cost of sales |
|
(561,584) |
(1,037,908) |
|
|
|
------- |
------- |
|
Gross profit |
|
442,359 |
813,264 |
|
|
|
|
|
|
Administrative expenses |
|
(4,020,375) |
(3,367,519) |
|
|
|
|
|
|
Other operating income |
6 |
17,133 |
172,097 |
|
|
|
------- |
------- |
|
Operating loss |
4 |
(3,560,883) |
(2,382,158) |
|
|
|
|
|
|
Financial income |
7 |
67,437 |
16,251 |
|
Financial expense |
8 |
(4,575) |
(10,684) |
|
|
|
------- |
------- |
|
Loss before tax |
|
(3,498,021) |
(2,376,591) |
|
Taxation |
9 |
239,741 |
93,198 |
|
|
|
------- |
------- |
|
Loss for period on continuing activities |
|
(3,258,280) |
(2,283,393) |
|
|
|
|
|
|
Loss for the period on discontinued activities |
3 |
(216,693) |
(426,892) |
|
|
|
------- |
------- |
|
Loss for period / total comprehensive income attributable to owners of parent |
|
(3,474,973) |
(2,710,285) |
|
|
|
------- |
------- |
|
Loss per share |
10 |
|
|
|
Basic |
|
(0.07) |
(0.07) |
|
Diluted |
|
(0.07) |
(0.07) |
|
|
|
|
|
|
Continuing operations |
|
(0.06) |
(0.06) |
|
Discontinued operations |
|
(0.01) |
(0.01) |
|
|
|
------- |
------- |
|
|
|
|
|
Consolidated balance sheet
Company number 7187804
|
|
As at 30th April
|
||
|
|
Notes |
2013 |
2012 |
|
|
|
£ |
£ |
|
ASSETS |
|
|
|
|
Non current assets |
|
|
|
|
Intangible assets |
11 |
9,425 |
61,863 |
|
Property, plant and equipment |
12 |
1,105,706 |
1,380,257 |
|
|
|
------- |
------- |
|
Total non current assets |
|
1,115,131 |
1,442,120 |
|
|
|
------- |
------- |
|
Current assets |
|
|
|
|
Inventory |
13 |
- |
34,135 |
|
Trade and other receivables |
14 |
577,505 |
660,943 |
|
Current tax receivable |
9 |
230,000 |
125,470 |
|
Other financial assets - bank deposits |
15 |
1,455,092 |
4,000,000 |
|
Cash and cash equivalents |
16 |
407,970 |
1,299,072 |
|
|
|
------- |
------- |
|
Total current assets |
|
2,670,567 |
6,119,620 |
|
|
|
------- |
------- |
|
Total assets |
|
3,785,698 |
7,561,740 |
|
|
|
------- |
------- |
|
|
|
|
|
|
Issued capital and reserves attributable to owners of parent |
|
|
|
|
Issued share capital |
19 |
475,354 |
472,638 |
|
Share premium |
|
8,823,770 |
8,677,106 |
|
Capital restructuring reserve |
|
6,486,077 |
6,486,077 |
|
Retained earnings |
|
(12,643,692) |
(8,916,868) |
|
|
|
------- |
------- |
|
Total equity |
|
3,141,509 |
6,718,953 |
|
|
|
------- |
------- |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
17 |
644,189 |
835,243 |
|
|
|
|
|
|
Non current liabilities |
|
|
|
|
Other payables |
17 |
- |
7,544 |
|
|
|
------- |
------- |
|
Total liabilities |
|
644,189 |
842,787 |
|
|
|
------- |
------- |
|
Total equity and liabilities |
|
3,785,698 |
7,561,740 |
|
|
|
------- |
------- |
The notes on pages 23 to 44 form part of these financial statements
These financial statements were approved and authorised for issue by the Board of Directors on 12th July 2013.
Mr. J.B. Boyer
Chairman
Consolidated cash flow statement
|
|
Year ended 30th April
|
|||
|
|
|
2013 |
2012 |
|
|
|
|
£ |
£ |
|
|
Cash flows from operating activities |
|
|
|
|
|
Loss before taxation continuing operations |
|
(3,498,021) |
(2,376,591) |
|
|
Loss before taxation discontinued operations |
|
(216,693) |
(459,164) |
|
|
Adjustments for: |
|
|
|
|
|
Amortisation |
|
52,438 |
14,196 |
|
|
Depreciation |
|
803,345 |
819,101 |
|
|
Equity settled share-based payments |
|
(251,851) |
211,613 |
|
|
Loss on disposal of plant, property and equipment |
|
155 |
69 |
|
|
Loss on disposal of intangible assets |
|
- |
3,852 |
|
|
Net financial income |
|
(62,862) |
(5,567) |
|
|
|
|
------- |
------- |
|
|
Operating cash flow before changes in working capital, interest and taxes |
|
(3,173,489) |
(1,792,491) |
|
|
Decrease in trade and other receivables |
74,734 |
87,318 |
||
|
Decrease in inventory |
34,135 |
- |
||
|
Decrease in trade and other payables |
(175,966) |
(272,198) |
||
|
|
|
------- |
------- |
|
|
Cash utilised by operations |
|
(3,240,586) |
(1,977,551) |
|
|
|
|
|
|
|
|
Tax received |
|
124,905 |
122,733 |
|
|
|
|
------- |
------- |
|
|
Net cash flow from operating activities |
|
(3,115,681) |
(1,854,818) |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Interest received |
|
59,055 |
16,251 |
|
|
Purchase of intangible assets |
|
- |
(14,265) |
|
|
Sale of discontinued operations |
50,000 |
- |
||
|
Sale of property plant and equipment |
- |
25 |
||
|
Purchase of property, plant and equipment |
(551,591) |
(196,826) |
||
|
Decrease/(increase) in other financial assets |
|
2,544,908 |
(2,500,000) |
|
|
|
|
------- |
------- |
|
|
Net cash used in investing activities |
|
2,102,372 |
(2,694,815) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issuance of ordinary share capital |
|
149,380 |
4,899,991 |
|
|
Share issue costs |
|
- |
(303,703) |
|
|
Capital element of finance leases |
|
(22,633) |
(40,823) |
|
|
Interest element of finance leases |
|
(4,540) |
(10,684) |
|
|
|
|
------- |
------- |
|
|
Net cash from financing activities |
|
122,207 |
4,544,781 |
|
|
|
|
------- |
------- |
|
|
Net (decrease) /increase in cash and cash equivalents |
|
(891,102) |
(4,852) |
|
|
Cash and cash equivalents at the start of the period |
|
1,299,072 |
1,303,924 |
|
|
|
|
------- |
------- |
|
|
Cash and cash equivalents at the end of the period |
|
407,970 |
1,299,072 |
|
|
|
|
------- |
------- |
|
Consolidated statement of changes in equity
|
|
Share capital |
Share premium account |
Capital restructuring reserve |
Retained Earnings |
Total attributable to equity holders of parent |
|
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
As at 30th April 2011 |
383,548 |
4,169,909 |
6,486,077 |
(6,418,196) |
4,621,338 |
|
|
|
|
|
|
|
|
Share-based payment |
- |
- |
- |
211,613 |
211,613 |
|
Issue of shares |
89,090 |
4,810,900 |
- |
- |
4,899,990 |
|
Expenses of share issue |
- |
(303,703) |
- |
- |
(303,703) |
|
Loss and total comprehensive income |
- |
- |
- |
(2,710,285) |
(2,710,285) |
|
|
------ |
------- |
-------- |
-------- |
-------- |
|
As at 30th April 2012 |
472,638 |
8,677,106 |
6,486,077 |
(8,916,868) |
6,718,953 |
|
|
|
|
|
|
|
|
Share-based payment |
- |
- |
- |
(251,851) |
(251,851) |
|
Issue of shares |
2,716 |
146,664 |
- |
- |
149,380 |
|
Loss and total comprehensive income |
- |
- |
- |
(3,474,973) |
(3,474,973) |
|
|
------ |
------- |
-------- |
-------- |
-------- |
|
As at 30th April 2013 |
475,354 |
8,823,770 |
6,486,077 |
(12,643,692) |
3,141,509 |
|
|
------ |
------- |
-------- |
-------- |
-------- |
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value is credited to the share premium reserve.
Capital restructuring reserve
The capital restructuring reserve arises on the accounting for the share for share exchange. It represents the difference between the value of the issued equity instruments of Ilika Technologies Limited immediately before the share for share exchange and the equity instruments of Ilika plc along with the shares issued to effect the share for share exchange.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Group since inception of the business.
Notes to the consolidated financial statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared on the basis of the accounting policies which apply for the financial year to 30th April 2013 and in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") adopted by the European Union.
The individual financial statements of Ilika plc are shown on page 45 to 50.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to the reporting date. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Going concern
The financial statements are prepared on a going concern basis which the directors believe continues to be appropriate. The Group meets its day to day working capital requirements through existing cash resources which, at 30th April 2013, amounted to £1,863,062. The directors have prepared projected cash flow information for the period ending twelve months from the date of their approval of these financial statements. On the basis of this cash flow information the directors believe that the Group will be able to continue to trade for the foreseeable future.
(a) New standards, amendments to standards or interpretations adopted early
In the current year, there were no new or revised standards or interpretations that have been adopted and affected the amounts reported in the financial statements.
(b) New standards, amendments to standards or interpretations not yet applied
The following standards, interpretations and amendments, which have not been applied in these financial statements, will or may have an effect on the Group's future financial statements:
|
International Accounting Standards (IAS/IFRS) |
Effective date for periods commencing
|
||
|
IFRS 7 |
Disclosures - Transfers of Financial Assets (amendments) |
1 January 2013 |
|
|
IFRS 9 |
Financial Instruments |
1 January 2015 |
|
|
IFRS 10 |
Consolidated Financial Statements |
1 January 2013 |
|
|
IFRS 11 |
Joint Arrangements |
1 January 2013 |
|
|
IFRS 12 |
Disclosure of Interests in Other Entities |
1 January 2013 |
|
|
IFRS 13 |
Fair Value Measurement |
1 January 2013 |
|
|
IAS 1 |
Presentation of Items of Other Comprehensive Income (amendments) |
1 July 2012 |
|
|
IAS 19 |
Employee Benefits |
1 January 2013 |
|
|
IAS 27 |
Separate Financial Statements |
1 January 2013 |
|
|
IAS 28 |
Investments in Associates and Joint Ventures |
1 January 2013 |
|
|
IAS 32 |
Disclosures - Offsetting Financial Assets and Financial Liabilities |
1 January 2014 |
|
No other new standards or amendments are expected to have an effect on the Group.
Revenue comprises the fair value for the sale of goods and services, net of value added tax and is recognised as follows:
The following principal accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial information.
Revenue
Sales of goods
Sales of equipment and skin based products are recognised when products are delivered to a customer, the customer has accepted the products and collectability of the related receivables is reasonably assured.
Sales of services
Sales of research and development services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Leases
Where a Group company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a "finance lease". The asset is recorded in the balance sheet as property, plant and equipment and is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Future instalments under such leases, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element, which is charged to the consolidated income statement, and the capital element which reduces the outstanding obligation for future instalments. All other leases are accounted for as "operating leases" and the rental charges are charged to the consolidated income statement on a straight line basis over the life of the lease.
Financial income and financial expense
Financial income and financial expense is recognised in the income statement as it accrues, using the effective interest method.
Pension and other post retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Share-based payment transactions
The Group issues equity-settled share-based payments to all employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of market-based and non-market based vesting conditions.
The fair value of market-based options granted by the Group is measured by use of the stochastic valuation model taking into account the following inputs: the exercise price of the option; the life of the option; the market price on the date of grant of the option; the expected volatility of the share price; the dividends expected on the shares; and the risk free interest rate for the life of the option.
The fair value of non market-based options granted by the Group is measured by use of the Black-Scholes pricing model taking into account the following inputs: the exercise price of the option; the life of the option; the market price on the date of grant of the option; the expected volatility of the share price; the dividends expected on the shares; and the risk free interest rate for the life of the option. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Research and development expenditure
Expenditure on the research phase is charged to the income statement in the period in which it is incurred. Development expenditure on new products is capitalised only once the criteria specified under IAS 38, Intangible Assets, have been met. Prior to and during the year ended 30th April 2013, no development expenditure satisfied the necessary conditions of IAS 38.
Taxation
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Depreciation is charged to the profit and loss statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
|
Leasehold improvements |
lease term |
|
Plant, machinery and equipment |
3 - 5 years |
|
Fixtures & fittings |
3 - 5 years |
Inventory
Inventory comprised the Group's cell bank from which the Cryoskin® product is derived. Inventory was valued at the lower of cost and net realisable value. Consumable stock items have been written off as an expense in the year incurred.
Impairment
The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Intangible assets
Computer software
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised to administrative expenses using the straight line method over their estimated useful lives (1-3 years).
Intellectual property
Acquired intellectual property is included at cost and is amortised to administrative expenses on a straight-line basis over its useful economic life of 15 years.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. The Group's financial assets are all classified as loans and receivables and carried at amortised cost. The Group's financial liabilities are all classified as 'other' liabilities which are carried at amortised cost. Cash and cash equivalents comprise cash balances and call deposits.
Government grants
Grants that compensate the Group for expenses incurred are recognised in the income statement on a systematic basis in the same periods in which the expenses are recognised. Grant revenue is disclosed within other operating income. £16,899 was received in government grants in the year (2012: £293,297)
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call with the bank.
Key sources of estimation uncertainty
The preparation of the Group's financial statements, in accordance with IAS 1, Presentation of Financial Statements, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the Group's financial statements. The Group's estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
· Revenue recognition
The Group's revenue substantially comprised revenues from the provision of research and development services. The contacts set out defined deliverables the achievement of which trigger milestone payments. Judgement is used to determine the stage of completion and the point at which revenue is recognised.
· Share-based payments
The critical accounting estimates, assumptions and judgements underpinning the valuation of the option awards are disclosed in note 23.
· Taxation
The current tax receivable is the expected tax receivable on the expenditure for the period using the tax rates and laws that have been enacted or substantially enacted at the balance sheet date, and any adjustments to tax payable in respect of previous years. The ultimate receivable may vary from the amounts provided and is dependent upon negotiations with the relevant tax authorities.
2 Segment reporting
IFRS 8 requires the Group to report on operating segments on the same basis as that used by the chief operating decision maker to assess the performance of the business segments and to allocate resources accordingly. For management purposes, the Group is analysed by the geographical location of its customer base and business development directors have been appointed to cover the group's three territories of focus, Asia, North America and Europe. Previously, segmentation analysis was provided by the market categories, Energy, Electronics and Biomedical. The disposal of the Altrika wound care business and the subsequent reorganisation meant that this segmentation basis was no longer appropriate.
The Group's activities originate from the production, design and development of high throughput methods of material synthesis, characterisation and screening. The Group has materials development programmes for a wide range of applications including in the battery, fuel cell, hydrogen storage sectors as well as in capacitors, ferroelectrics, piezoelectrics and memory materials.
|
|
Year ended 30th April |
|
|
Turnover |
2013 |
2012 |
|
|
£ |
£ |
|
Analysis by geographical market: |
|
|
|
By destination |
|
|
|
Asia |
785,989 |
1,581,200 |
|
Europe |
131,617 |
22,452 |
|
North America |
86,337 |
247,520 |
|
|
------- |
------- |
|
Continuing operations total |
1,003,943 |
1,851,172 |
|
Discontinued operations - By destination - Europe |
97,475 |
160,072 |
|
|
------- |
------- |
|
|
1,101,418 |
2,011,244 |
|
|
------- |
------- |
|
|
|
|
A number of customers individually account for more than 10% of the total turnover of the Group. The revenues from these companies are indicated below on a segment basis:
|
|
Year ended 30th April
|
|
|
Turnover |
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Customer 1 |
654,918 |
781,283 |
|
Customer 2 |
- |
385,556 |
|
Customers less than 10% |
446,500 |
844,405 |
|
|
-------- |
-------- |
|
|
1,101,418 |
2,011,244 |
|
|
------- |
------- |
The chief operating decision maker only reviews turnover by operating segment then reviews expenses and profit on an aggregate basis. Therefore the segmental loss before tax information, along with the segmental total assets and liabilities information has not been split out in this note.
The loss before tax per the management accounts is the same as the loss before tax on the consolidated statement of comprehensive income with the exception of the share-based payment expense which is only calculated as a year end adjustment. For details of the calculation see note 23. The total assets and liabilities per the management accounts are the same as the consolidated balance sheet with the exception of the period end tax adjustment.
3 Discontinued operations
The results of the discontinued wound care division which have been included in the consolidated income statement were as follows:
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Revenue |
97,475 |
160,072 |
|
Cost of sales |
(97,248) |
(149,861) |
|
|
-------- |
-------- |
|
Gross profit |
227 |
10,211 |
|
|
|
|
|
Administrative expenses |
(233,819) |
(590,531) |
|
|
|
|
|
Other operating income |
16,899 |
121,156 |
|
|
-------- |
-------- |
|
Operating loss and loss before tax |
(216,693) |
(459,164) |
|
|
|
|
|
Taxation |
- |
32,272 |
|
|
-------- |
-------- |
|
Loss for period on discontinued activities |
(216,693) |
(426,892) |
The net book value of assets sold along with the Altrika business equated to £73k. Proceeds of disposal were £90k (£50k on disposal and deferred consideration of £40k) less legal costs of £17k.
4 Operating loss
|
|
Year ended 30th April
|
|
|
This is arrived at after charging: |
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Research and development expenditure in the year |
1,772,605 |
1,377,449 |
|
Depreciation |
803,345 |
819,101 |
|
Amortisation of intangible assets |
52,438 |
14,196 |
|
Auditors remuneration: Fees payable to the Group's auditor for the audit of the Group's accounts |
15,000 |
15,000 |
|
Fees payable to the Group's auditor for other services: - The Audit of the Group's subsidiaries - Other assurance services - interim review - Tax services |
6,800 10,750 - |
8,625 10,500 6,700 |
|
Operating lease rentals |
234,836 |
180,714 |
|
Share-based payment charge |
(251,851) |
211,613 |
|
Foreign exchange differences |
(2,464) |
1,213 |
|
|
------- |
------- |
5 Employees
The average number of employees during the year, including executive directors, was:
|
|
Year ended 30th April |
|
|
|
2013 |
2012 |
|
|
Number |
Number |
|
Administration |
9 |
9 |
|
Materials synthesis |
30 |
27 |
|
|
------ |
------ |
|
|
39 |
36 |
|
|
------ |
------ |
Staff costs for all employees, including executive directors, consist of:
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Wages and salaries |
1,716,057 |
1,587,516 |
|
Social security costs |
163,602 |
160,319 |
|
Share-based payment expense |
(252,939) |
204,681 |
|
Pension costs |
112,373 |
111,215 |
|
|
------- |
------- |
|
|
1,739,093 |
2,063,731 |
|
|
-------- |
-------- |
The directors' costs consist of:
|
|
Basic salary |
Fees |
Benefits in kind |
Total Short term benefits |
Pension |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Year to 30th April 2013 |
|
|
|
|
|
|
|
G Purdy |
151,067 |
- |
367 |
151,434 |
27,487 |
178,921 |
|
S Boydell |
98,950 |
- |
241 |
99,191 |
16,137 |
115,328 |
|
B Hayden |
50,333 |
- |
- |
50,333 |
- |
50,333 |
|
J Boyer |
60,400 |
- |
- |
60,400 |
- |
60,400 |
|
W Braun |
- |
30,200 |
- |
30,200 |
- |
30,200 |
|
W Wakeham |
30,200 |
- |
- |
30,200 |
- |
30,200 |
|
C Spottiswoode |
30,200 |
- |
- |
30,200 |
- |
30,200 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
421,150 |
30,200 |
608 |
451,958 |
43,624 |
495,582 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
|
|
|
|
|
|
|
Year to 30th April 2012 |
|
|
|
|
|
|
|
G Purdy |
150,000 |
- |
413 |
150,413 |
29,312 |
179,725 |
|
S Boydell |
90,000 |
- |
271 |
90,271 |
24,901 |
115,172 |
|
B Hayden |
50,000 |
- |
- |
50,000 |
- |
50,000 |
|
J Boyer |
60,000 |
- |
- |
60,000 |
- |
60,000 |
|
W Braun |
- |
30,000 |
- |
30,000 |
- |
30,000 |
|
W Wakeham |
30,000 |
- |
- |
30,000 |
- |
30,000 |
|
C Spottiswoode |
30,000 |
- |
- |
30,000 |
- |
30,000 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
410,000 |
30,000 |
684 |
440,684 |
54,213 |
494,897 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
Share based payment credit attributable to directors in the year was £252,939 (2012: expense of £195,281).
Benefits in kind include critical illness cover.
The unapproved share options of the directors under the "Ilika plc Executive Share Option Scheme 2010" are set out below:
|
|
2013 Number |
2012 Number |
|
G Purdy |
1,050,000 |
1,800,000 |
|
J Boyer |
1,050,000 |
1,800,000 |
|
B Hayden |
525,000 |
900,000 |
|
S Boydell |
117,600 |
205,200 |
|
W Braun |
65,100 |
115,200 |
|
W Wakeham |
65,100 |
115,200 |
|
C Spottiswoode |
50,100 |
100,200 |
The approved share options of the directors in Ilika plc exchanged from share options in Ilika Technologies Limited. For further details see note 23.
|
|
2013 Number |
2012 Number |
|
G Purdy |
760,700 |
760,700 |
|
S Boydell |
90,000 |
90,000 |
|
|
2013 Number |
2012 Number |
|
G Purdy |
136,200 |
136,200 |
|
J Boyer |
540,200 |
540,200 |
|
W Braun |
20,000 |
20,000 |
|
B Hayden |
59,300 |
59,300 |
2,112,900 options have lapsed in the period (2012 - nil).
6 Other operating income
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Grant income |
- |
172,140 |
|
Sundry other income |
17,133 |
(43) |
|
|
------ |
------ |
|
|
17,133 |
172,097 |
|
|
------ |
------ |
7 Financial income
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Income from short term deposits |
67,437 |
16,251 |
|
|
------ |
------ |
|
|
|
|
8 Financial expense
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Interest on: |
|
|
|
Finance leases |
4,575 |
10,684 |
|
|
------ |
------ |
9 Taxation
(a) Tax on profit from ordinary activities
There is no taxation charge due to the losses incurred by the Group during the year. The taxation credit represents R&D tax credit claims as follows:
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Current tax on loss for the year |
230,000 |
125,470 |
|
Adjustments to prior period |
9,741 |
- |
|
|
------ |
------ |
|
|
239,741 |
125,470 |
|
|
------ |
------ |
(b) Factors affecting current tax charge
The tax assessed on the loss on ordinary activities for the period is different to the standard rate of corporation tax in the UK of 24% (2012: 26%). The differences are reconciled below:
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Loss on ordinary activities before tax |
(3,714,714) |
(2,835,755) |
|
|
------ |
------ |
|
Loss on ordinary activities before tax multiplied by the standard rate of corporation tax in the UK of 24% (2012: 26%) |
(891,531) |
(737,296) |
|
Effects of: |
|
|
|
Expenses not deductible for corporation tax |
89,901 |
25,922 |
|
Other temporary differences not recognised |
|
- |
|
Plant, property and equipment temporary differences not recognised |
|
- |
|
R&D relief |
(30,824) |
(51,566) |
|
Origination of unrecognised tax losses |
662,899 |
579,818 |
|
Share options |
(60,445) |
57,652 |
|
Under provision in previous years |
(9,741) |
- |
|
|
------ |
------ |
|
Total tax credit for the year |
(239,741) |
(125,470) |
|
|
------ |
------ |
|
|
|
|
Unrecognised deferred taxation
There are tax losses available for carry forward against future trading profits of approximately £11,415,000 (2012: £9,953,000). A deferred tax asset in respect of these losses of approximately £2,740,000 (2012: £2,389,000) has not been recognised in the accounts, as the full utilisation of these losses in the foreseeable future is uncertain.
10 Loss per share
Earnings per ordinary share have been calculated using the weighted average number of shares in issue during the relevant financial periods. The weighted average number of equity shares in issue and the earnings, being profit after tax, are as follows:
|
|
Year ended 30th April
|
|
|
|
2013 |
2012 |
|
|
No. |
No. |
|
|
|
|
|
Weighted average number of equity shares |
47,431,258 |
38,525,718 |
|
|
-------- |
-------- |
|
|
|
|
|
|
£ |
£ |
|
Earnings, being profit after tax |
(3,474,973) |
(2,710,285) |
|
|
-------- |
-------- |
|
|
|
|
|
|
£ |
£ |
|
Loss per share |
(0.07) |
(0.07) |
|
|
|
|
|
Continuing operations |
(0.06) |
(0.06) |
|
Discontinued operations |
(0.01) |
(0.01) |
|
|
------ |
------ |
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for basic earnings per share. This is because the exercise of share options would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS 33. At 30th April 2013 there were 16,145,039 options outstanding (2012: 18,514,186 options outstanding) as detailed in notes 19 and 23.
11 Intangible assets
|
|
|
Software licences |
Intellectual property |
Total |
|
|
|
£ |
£ |
£ |
|
Cost |
|
|
|
|
|
As at 30th April 2011 |
|
22,360 |
75,000 |
97,360 |
|
Additions |
|
14,265 |
- |
14,265 |
|
Disposals |
|
(8,707) |
- |
(8,707) |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2012 |
|
27,918 |
75,000 |
102,918 |
|
Disposals |
|
- |
- |
- |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2013 |
|
27,918 |
75,000 |
102,918 |
|
|
|
------ |
------ |
------ |
|
Amortisation |
|
|
|
|
|
As at 30th April 2011 |
|
11,816 |
23,750 |
35,566 |
|
Provided for the year |
|
9,196 |
5,000 |
14,196 |
|
Disposals |
|
(8,707) |
- |
(8,707) |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2012 |
|
12,305 |
28,750 |
41,055 |
|
Provided for the year |
|
6,188 |
46,250 |
52,438 |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2013 |
|
18,493 |
75,000 |
93,493 |
|
|
|
------ |
------ |
------ |
|
Net book value |
|
|
|
|
|
As at 30th April 2011 |
|
10,544 |
51,250 |
61,794 |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2012 |
|
15,613 |
46,250 |
61,863 |
|
|
|
------ |
------ |
------ |
|
As at 30th April 2013 |
|
9,425 |
- |
9,425 |
|
|
|
------ |
------ |
------ |
The amortisation charge of £52,438 (2012: £14,196) is included within administrative expenses.
12 Property, plant and equipment
|
|
Leasehold improvements |
Plant, machinery and equipment |
Fixtures and fittings |
Total |
|
|
£ |
£ |
£ |
£ |
|
Cost |
|
|
|
|
|
As at 30th April 2011 |
387,899 |
3,749,185 |
166,137 |
4,303,221 |
|
Additions |
33,443 |
156,749 |
6,634 |
196,826 |
|
Disposals |
- |
(17,112) |
- |
(17,112) |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2012 |
421,342 |
3,888,822 |
172,771 |
4,482,935 |
|
Additions |
190,273 |
342,331 |
18,987 |
551,591 |
|
Disposals |
(59,557) |
(98,856) |
(22,046) |
(180,459) |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2013 |
552,058 |
4,132,297 |
169,712 |
4,854,067 |
|
|
------ |
------- |
------ |
------- |
|
Depreciation |
|
|
|
|
|
As at 30th April 2011 |
373,533 |
1,792,418 |
130,791 |
2,296,742 |
|
Provided for the year |
19,226 |
770,857 |
29,018 |
819,101 |
|
Disposals |
- |
(13,165) |
- |
(13,165) |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2012 |
392,759 |
2,550,110 |
159,809 |
3,102,678 |
|
Provided for the year |
51,059 |
743,025 |
9,262 |
803,345 |
|
Disposals |
(49,716) |
(80,207) |
(27,740) |
(157,662) |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2013 |
394,102 |
3,212,928 |
141,331 |
3,748,361 |
|
|
------ |
------- |
------ |
------- |
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
As at 30th April 2011 |
14,366 |
1,956,767 |
35,346 |
2,006,479 |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2012 |
28,583 |
1,338,712 |
12,962 |
1,380,257 |
|
|
------ |
------- |
------ |
------- |
|
As at 30th April 2013 |
157,956 |
919,369 |
28,381 |
1,105,706 |
|
|
------ |
------- |
------ |
------- |
The net book value of plant, machinery and equipment includes an amount of £31,114 (2012 - £44,650) in respect of assets held under finance lease contracts.
There are no commitments for capital expenditure contracted but not provided for (2012 - £nil)
13 Inventory
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Inventory |
- |
34,135 |
|
|
------ |
------ |
Inventory comprised the Group's cell bank from which the Cryoskin® product was derived.
14 Trade and other receivables
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Trade receivables |
79,049 |
24,376 |
|
Prepayments and accrued income |
289,066 |
450,964 |
|
Other receivables |
209,390 |
185,603 |
|
|
------ |
------ |
|
|
577,505 |
660,943 |
|
|
------ |
------ |
15 Other financial assets - bank deposits
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Amounts receivable within one year: |
|
|
|
Sterling fixed rate deposits of greater than three months' maturity at inception |
1,455,092 |
4,000,000 |
|
|
-------- |
------ |
16 Cash and cash equivalents
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Current bank accounts |
55,664 |
389,086 |
|
Short term deposits with less than three months' maturity |
352,306 |
909,986 |
|
|
-------- |
-------- |
|
|
407,970 |
1,299,072 |
|
|
-------- |
-------- |
17 Trade and other payables
Current
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Trade payables |
214,372 |
367,669 |
|
Other payables |
17,341 |
15,223 |
|
Other taxes and social security costs |
40,997 |
44,441 |
|
Lease purchase agreements |
7,544 |
22,633 |
|
Accruals and deferred income |
363,935 |
385,277 |
|
|
-------- |
-------- |
|
|
644,189 |
835,243 |
|
|
-------- |
-------- |
Non current
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Lease purchase agreements |
- |
7,544 |
|
|
------ |
------ |
Lease purchase agreements
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Amounts payable |
|
|
|
Within one year |
7,544 |
22,633 |
|
In one year to two years |
- |
7,544 |
|
|
------ |
------ |
|
|
7,544 |
30,177 |
|
|
------ |
------ |
Lease purchase agreements are secured on the related assets and carry interest at fixed rates. The total amount payable under leases as at 30th April 2013 was £9,058 (2012: £35,853)
18 Financial instruments
The Group's principal financial instruments comprise, lease financing arrangements, cash and short-term
deposits as well as other various items arising from its operations such as trade receivables and trade payables which are shown in the table below. The main purpose of these instruments is to finance the Group's working capital requirements as well as funding its capital expenditure programmes. The Group does not enter into derivative transactions such as interest rate swaps or forward exchange contracts.
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Financial Assets |
|
|
|
|
|
|
|
Loans and receivables |
|
|
|
Trade receivables |
79,049 |
24,376 |
|
Accrued income |
78,977 |
211,262 |
|
Other receivables |
284,390 |
185,603 |
|
Current bank accounts |
55,664 |
389,086 |
|
Bank deposits |
1,455,092 |
4,000,000 |
|
Short term deposits |
352,306 |
909,986 |
|
|
-------- |
-------- |
|
Total loans and receivables |
2,305,478 |
5,720,313 |
|
|
-------- |
-------- |
|
Financial Liabilities |
|
|
|
|
|
|
|
Other financial liabilities |
|
|
|
Trade payables |
214,372 |
367,669 |
|
Other payables |
17,341 |
15,223 |
|
Other taxes and social security costs |
40,997 |
44,441 |
|
Lease purchase agreements |
7,544 |
30,177 |
|
Accruals |
363,935 |
252,760 |
|
|
-------- |
-------- |
|
Total other financial liabilities (see note 17) |
644,189 |
710,270 |
|
|
-------- |
-------- |
The risks associated with these financial instruments are set out below.
Foreign currency risk
The Group buys goods and services in currencies other than sterling. The Group's non sterling liabilities and cash flows can be affected by movements in exchange rates. These transactions are not significant and therefore no forward exchange contracts have been entered into. It is Group policy not to engage in any speculative trading in financial instruments. Any risk is mitigated by sales transactions being denominated in Sterling.
Credit risk
The Group's credit risk is attributable to its trade receivables and banking deposits. The Group places its deposits with reputable financial institutions to minimise credit risk. The maximum exposure to credit risk for each period is the amount disclosed above as total loans and receivables. For the periods above there were no trade receivables which were past due or impaired. Risk is further mitigated through the use of credit limits, but also through the nature of the customers, who, for the most part, are large multinationals. There is no bad debt provision.
Liquidity risk
The Group's policy is to maintain adequate cash resources to meet liabilities as they fall due. With the exception of its hire purchase liabilities, which are disclosed in note 17, all other Group payable balances fall due for payment within one year. Cash balances are placed on deposit for varying periods with reputable banking institutions to ensure there is limited risk of capital loss. The Group does not maintain an overdraft facility.
Interest rate risk
The main risk arising from the Group's financial instruments is interest rate risk. The Group placed deposits surplus to short-term working capital requirements with a variety of reputable UK-based banks and building societies. These balances are placed at floating rates of interest and deposits have maturities of one to twelve months. The Group's cash and short-term deposits are set out in note 16.
Fixed-rate financial liabilities comprises of a finance lease which expires in August 2013. It has a weighted average interest rate of 13.4%. The maturity profile is detailed in note 17. Floating-rate financial assets comprise cash on deposit and cash at bank. Short-term deposits are placed with banks for periods of up to 12 months and are categorised as floating-rate financial assets. Contracts in place at 30th April 2013 had a weighted average period to maturity of 75 days and a weighted average annualised rate of interest of 2.01%.
Interest rate risk sensitivity analysis
It is estimated that a change in base rate to zero would have increased the Group's loss before taxation for the year to 30th April 2013 by approximately £15,000 (2012: £11,000).
It is estimated that an increase in base rate by 1 percent would decrease the Group's loss before taxation for the year to 30th April 2013 by approximately £30,000 (2012: £15,000)
There is no difference between the book and fair value of financial assets and liabilities.
Capital management
The primary aim of the Group's capital management is to safeguard the Group's ability to continue as a going concern, to support its businesses and maximise shareholder value. The Group monitors its capital structure and makes adjustments as and when it is deemed necessary and appropriate to do so using such methods as the issuing of new shares. At present, other than finance leases, all funding is raised by equity. See note 1 for the fundraising that occurred during the year.
19 Share capital
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Authorised |
|
|
|
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433) |
458,740 |
454,824 |
|
1,781,400 Convertible Preference Shares of £0.01 each |
17,814 |
17,814 |
|
|
------ |
------ |
|
Allotted, called up and fully paid |
|
|
|
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433) |
458,740 |
454,824 |
|
1,661,400 Convertible Preference Shares of £0.01 each |
16,614 |
17,814 |
|
|
------ |
------ |
|
|
475,354 |
472,638 |
|
|
------ |
------ |
Share Rights
The ordinary share and preference shares rank pari passu in all respects other than:
· The profits which the Group may determine to distribute in respect of any financial period shall be distributed only among the holders of the Ordinary Shares. The Preference Shares shall not entitle the holders of them to any share in such distributions
· On a return of capital or assets on a liquidation, reduction of capital or otherwise the surplus assets of the Group remaining after payment of its obligations shall be applied:
o First, in paying to the holders of the Preference Shares the amount paid thereon, being the amount equal to the par value of the preference shares excluding any premium; and
o Secondly, the balance of such surplus assets shall belong to and be distributed amongst the holders of the Ordinary Shares.
The Preference Share holders have the right, at any time, to convert the preference shares held to the same number of Ordinary Shares.
On 22nd May 2012, 5th December 2012 and 22nd May 2013, 60,000, 60,000 and 100,000 respectively, £0.01 convertible preference shares were converted to £0.01 ordinary shares.
On 17th September 2012, 271,600 ordinary shares were issued for a total consideration of £149,380 and on 22nd May 2013, 2,375,000 ordinary shares were issued for a total consideration of £712,500 and total issue costs incurred were £3,500.
Share options and warrants
Employee related share options are disclosed in note 23. In addition to these, there were 107,300 non employee share options over ordinary shares of £0.01 at the year end. The Company's brokers also have a warrant to subscribe to 130,100 Ordinary Shares of £0.01.
10,147,059 warrants to subscribe to Ordinary Shares of £0.01 were issued on 14th May 2010 to investors who subscribed to the placing as one warrant for each share subscribed and the Company's brokers were issued with a warrant to subscribe to 392,157 Ordinary Shares of £0.01.
20 Operating leases
The total future minimum rent payable under non-cancellable operating leases is as follows:
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Property |
|
|
|
Within one year |
- |
- |
|
In one to two years |
221,598 |
51,749 |
|
In two to five years |
- |
370,613 |
|
|
------ |
------ |
|
|
221,598 |
422,362 |
|
|
------ |
------ |
21 Pensions
The Group operates a defined contribution group personal pension scheme. The pension cost charge for the period represents contributions payable by the Group to the scheme and amounted to £112,373 (2012: £111,215).
22 Related party transactions
The directors consider that no one party controls the Group.
During the year ended 30th April 2013, the company incurred costs of £226,724 (2012: £295,109) with the University of Southampton in connection with research and development activities. The University of Southampton is the controlling shareholder of Southampton Asset Management Limited, which has an interest in the company. At 30th April 2013, the amount unpaid in respect of these costs was £2,066 (2012: £6,606).
The company incurred fees from the University of Southampton in respect of Prof B. Hayden, a director of the company. These amounts are included in the costs shown above.
23 Share-based payments expense and share options
Share-based payment expense
The Group has incentivised and motivated staff through the grant of share options under the Enterprise Management Incentive (EMI) scheme and through unapproved share option schemes.
The Group has recognised an expense to the consolidated statement of comprehensive income representing the fair value of outstanding equity-settled share-based payment awards to employees. The fair values were charged to the consolidated statement of total comprehensive income over the relevant vesting periods adjusted to reflect actual and expected vesting levels.
The Group has calculated the fair market value of options which had market based performance conditions at the time of grant, using the stochastic valuation model. Options with no market based performance conditions at the time of grant, have been valued using the Black-Scholes model.
At a meeting of the Remuneration Committee on 13th July 2011, it was agreed that the market based performance criteria applicable to the options which were granted in May 2010, be amended to reflect a series of company specific financial and commercial milestones.
At 30th April 2013, the following options, whose fair values have been fully charged to the consolidated statement of total comprehensive income, were outstanding:
Approved share options:
|
Date of grant |
Number of shares |
Period of option |
Exercise Price per share |
|
19/05/04 |
375,000 |
10 years |
£0.10 |
|
29/06/04 |
219,700 |
10 years |
£0.10 |
|
09/06/05 |
139,500 |
10 years |
£0.10 |
|
30/03/06 |
15,200 |
10 years |
£0.10 |
|
14/05/07 |
156,100 |
10 years |
£0.80 |
|
15/01/08 |
50,400 |
10 years |
£1.00 |
|
02/02/09 |
128,000 |
10 years |
£0.80 |
|
01/12/09 |
90,000 |
10 years |
£0.80 |
None of these options were exercised in the year.
Unapproved share options:
|
Date of grant |
Number of shares |
Period of option |
Exercise Price per share |
|
29/06/04 |
273,100 |
10 years |
£0.10 |
|
01/12/05 |
280,000 |
10 years |
£0.10 |
|
08/05/06 |
115,500 |
10 years |
£0.10 |
|
11/07/07 |
195,500 |
10 years |
£0.80 |
|
30/08/07 |
151,600 |
10 years |
£0.10 |
|
11/11/08 |
40,000 |
10 years |
£2.4283 |
None of these options were exercised in the year.
Black Scholes valuation
|
|
Weighted Average Exercise Price |
Number |
||
|
|
2013 |
2012 |
2013 |
2012 |
|
Outstanding: |
£ |
£ |
|
|
|
At start of the period |
0.3612 |
0.3499 |
2,414,470 |
2,263,600 |
|
Lapsed in the period |
0.7500 |
- |
(108,947) |
- |
|
Granted during the period |
- |
0.5300 |
- |
150,870 |
|
|
----- |
----- |
-------- |
-------- |
|
At the end of the period |
0.3436 |
0.3612 |
2,305,523 |
2,414,470 |
|
|
----- |
----- |
-------- |
-------- |
The exercise price of options outstanding at the end of the period ranged between £0.10 and £2.4283 and their weighted average contractual life was 2.9 years (2012: 3.9 years). These share options are exercisable and must be exercised within 10 years from the date of grant.
The following information is relevant in the determination of the fair value of options granted under the equity-settled share-based remuneration schemes under the Black-Scholes method.
|
|
Year to 30th April |
Year to 30th April
|
|
|
2013 |
2012 |
|
Equity-settled: |
|
|
|
|
|
|
|
Weighted average share price at date of grant / £ |
- |
0.53 |
|
|
|
|
|
Exercise Price / £ |
- |
0.53 |
|
|
|
|
|
Weighted average contractual life / years |
- |
9.7 |
|
|
|
|
|
Expected volatility |
- |
10% |
|
Expected dividend yield |
- |
0% |
|
Risk free interest rate |
- |
0.5% |
The volatility has been based on the average of the standard deviation of the daily historical share price of the company since its listing on the Alternative Investment Market in May 2010. The prior period volatility was based on the annualised average of the standard deviation of the daily historical continuously compounded returns of the share price of three companies listed on AIM which had a broadly similar technology risk profile to the Group. The risk free rate was assumed to be the yield to maturity on a UK Gilt strip with the term to maturity equal to the expected life of the option.
Stochastic valuation
|
|
Weighted Average Exercise Price |
Number |
||
|
|
2013 |
2012 |
2013 |
2012 |
|
Outstanding: |
£ |
£ |
|
|
|
At start of the period |
0.51 |
0.51 |
5,327,100 |
5,352,100 |
|
Lapsed during the period |
0.51 |
0.51 |
(2,264,200) |
(25,000) |
|
|
---- |
---- |
--------- |
--------- |
|
At the end of the period |
0.51 |
0.51 |
3,062,900 |
5,327,100 |
|
|
---- |
---- |
--------- |
--------- |
The exercise price of options outstanding at the end of the period was £0.51 (2012: £0.51) and their weighted average contractual life was 8 years (2012: 9 years).
Ilika plc Executive Share Option Scheme 2010
At 30th April 2013 the following share options were outstanding in respect of the Ilika plc Executive Share Option Scheme 2010:
|
Date of grant |
Number of shares |
Period of option |
Exercise Price per share |
|
14/05/10 |
50,000 |
10 years |
£0.51 |
|
01/02/12 |
115,923 |
10 years |
£0.53 |
Members of staff in the Group have options in respect of ordinary shares in Ilika plc, which are conditional upon the achievement of a series of financial and commercial milestones.
Ilika plc unapproved share options
At 30th April 2013 the following share options were outstanding in respect of Ilika plc unapproved share options:
|
Date of grant |
Number of shares |
Period of option |
Exercise Price per share |
|
14/05/10 |
3,012,900 |
10 years |
£0.51 |
Directors, non-executive directors and founders of the group were granted a total of 5,200,800 options in respect of ordinary shares in Ilika plc. These options vested in 4 tranches. The first Tranche of 825,000 options were granted on the 14th May 2010 with no performance conditions attached. The remaining 3 Tranches of 1,458,600 options were conditional upon the achievement of a series of financial and commercial milestones. The second tranche of 1,458,000 vested in full, the third Tranche lapsed and half of the fourth Tranche vested.
2,187,900 options lapsed in the year, no options were exercised. There are 5,252,500 options which were capable of being exercised as at 30th April 2013.
The following information is relevant in the determination of the fair value of options granted under the equity-settled share-based remuneration schemes operated by the Group under the stochastic valuation model.
Expected Term. This is the most likely estimate of the period from grant until the exercise date. For these options, the assumption of an expected term of part way between vesting and lapse for each option/tranche.
Expected Volatility. The normal approach is to look at the historical volatility of the share price over the most recent period that is generally commensurate with the expected award term. However, this approach was not possible here given that the options were granted on the date of the Company's admission to AIM. In such cases, IFRS 2 allows the consideration of the historical volatility of other similar entities to determine a proxy for the Company's volatility. Similar entities, for the purpose of calculating volatility, have been chosen as the constituents of the Company's comparator Index . Volatility for each of these companies has been calculated over both three and six years resulting in median volatilities of 46.7% and 42.3% respectively. A proxy volatility of 45% (being mid way between these two figures) has been used for valuing these options.
Expected Dividend Yield: as the Company does not pay, and is not currently expected to pay any dividends, the dividend yield has been set to zero.
Risk-free Rate: calculated based on UK Gilts with a term commensurate with the expected term.
|
|
2013 |
2012 |
|
|
£ |
£ |
|
Share-based payment expense/(credit): |
|
|
|
Black Scholes calculation |
9,375 |
891 |
|
Stochastic valuation |
(261,226) |
210,722 |
|
|
----- |
----- |
|
|
(251,851) |
211,613 |
|
|
------ |
------ |
Company Balance sheet of Ilika plc
Company number 7187804
|
|
|
As at 30th April |
|
|
|
Notes |
2013 £ |
2012 £ |
|
ASSETS |
|
|
|
|
Non current assets |
|
|
|
|
Investments in subsidiary undertaking |
25 |
121,339 |
121,339 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
26 |
9,237,447 |
9,083,842 |
|
|
|
------- |
------- |
|
Total net assets |
|
9,358,786 |
9,205,181 |
|
|
|
------- |
------- |
|
Equity |
|
|
|
|
Issued share capital |
27 |
475,354 |
472,638 |
|
Share premium |
27 |
8,802,981 |
8,656,317 |
|
Retained earnings |
27 |
13,062 |
(14,345) |
|
|
|
------- |
------- |
|
LIABILITIES |
|
9,291,397 |
9,114,610 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
67,389 |
90,571 |
|
|
|
------- |
------- |
|
Total liabilities |
|
67,389 |
90,571 |
|
|
|
------- |
------- |
|
Total equity and liabilities |
|
9,358,786 |
9,205,181 |
|
|
|
------- |
------- |
The notes on pages 48 to 50 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 12th July 2013.
Mr. J.B. Boyer
Chairman
|
|
Year ended 30th April
|
||
|
|
|
2013 |
2012 |
|
|
|
£ |
£ |
|
Cash flows from operating activities |
|
|
|
|
Profit / (loss) before tax |
|
279,258 |
(184,948) |
|
Adjustments for: |
|
|
|
|
Equity settled share-based payments |
|
(251,851) |
211,613 |
|
|
|
------ |
------ |
|
Operating cash flow before changes in working capital, interest and taxes |
|
27,407 |
26,665 |
|
|
|
|
|
|
Decrease/ (increase) in trade and other receivables |
(153,605) |
(4,705,325) |
|
|
(Decrease)/ increase in trade and other payables |
(23,182) |
82,372 |
|
|
|
|
------ |
------ |
|
Cash utilised by operations |
|
(149,380) |
(4,596,288) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Proceeds from issuance of ordinary share capital |
|
149,380 |
4,899,991 |
|
Share issue costs |
|
- |
(303,703) |
|
|
|
------ |
------ |
|
Net cash from financing activities |
|
149,380 |
4,596,288 |
|
|
|
------ |
------ |
|
Net increase in cash and cash equivalents |
|
- |
- |
|
Cash and cash equivalents at the start of the period |
|
- |
- |
|
|
|
------ |
------ |
|
Cash and cash equivalents at the end of the period |
|
- |
- |
|
|
|
------ |
------ |
Company cashflow statement
Company statement of changes in equity
|
|
Share capital |
Share premium account |
Retained Earnings |
Total attributable to equity holders |
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
As at 30th April 2011 |
383,548 |
4,149,120 |
(41,011) |
4,491,657 |
|
|
|
|
|
|
|
Issue of shares |
89,091 |
4,810,900 |
- |
4,899,991 |
|
Expenses of share issue |
- |
(303,703) |
- |
(303,703) |
|
Share-based payment |
- |
- |
211,613 |
211,613 |
|
Loss and total comprehensive income |
- |
- |
(184,947) |
(184,947) |
|
|
------ |
------ |
------ |
------- |
|
As at 30th April 2012 |
472,639 |
8,656,317 |
(14,345) |
9,114,611 |
|
|
|
|
|
|
|
Issue of shares |
2,715 |
146,664 |
- |
149,379 |
|
Share-based payment |
- |
- |
(251,851) |
(251,851) |
|
Profit and total comprehensive income |
- |
- |
279,258 |
279,258 |
|
|
------ |
------ |
------ |
------- |
|
As at 30th April 2013 |
475,354 |
8,802,981 |
13,062 |
9,291,397 |
|
|
------ |
------ |
------ |
|
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value is credited to the share premium reserve.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Company since inception of the business.
Notes to the financial information
24 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (''IFRSs'') adopted by the European Union.
No directors report has been presented and the directors responsibilities in respect of these financial statements are set out on pages 9 and 10.
Taxation
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Related party transactions
During the year the Company made recharges of costs to Ilika Technologies Limited of £578,288 (2012: £563,214) and to Altrika Limited of £nil (2012:£ 119,441). In addition the funds raised from the fundraising were transferred to Ilika Technologies Limited. The balance outstanding at the 30th April 2013 for Ilika Technologies limited was £9,227,579 (2012: £9,075,927) and for Altrika Limited was £nil (2012: £nil).
Share-based payments
The critical accounting estimates, assumptions and judgements underpinning the valuation of the option awards are disclosed in note 23.
Financial instruments
The accounting policy relating to financial instruments is disclosed in note 1.
Profit of the parent company
Profit in the year
No profit and loss account is presented for the Company as permitted by Section 408 of the Companies Act 2006. The Company's profit for the year was £279,258 (2012: £184,948).
Directors' remuneration
The remuneration of the Directors is disclosed in note 5.
Auditors' remuneration
Auditors' remuneration is disclosed in note 4.
Notes to the financial information
25 Investment in subsidiary undertaking
Investments in Group undertakings are stated at cost.
Ilika plc has a wholly owned subsidiary, Ilika Technologies Limited. Ilika Technologies Limited (Incorporated in the UK) made a loss for the year of £5,109,602 (2012: £1,949,515) and had net liabilities as at 30th April 2013 of £6,028,679 (2012: £919,078).
|
|
2013 |
2012 |
|
Shares in Group undertakings (at cost) |
£ |
£ |
|
|
|
|
|
At 1st May 2012 and 30th April 2013 |
121,339 |
121,339 |
|
|
------ |
------ |
26 Trade and other receivables
|
|
As at 30th April
|
|
|
|
2013 |
2012 |
|
|
£ |
£ |
|
|
|
|
|
Prepayments |
5,983 |
7,650 |
|
Other debtors |
4,016 |
265 |
|
Amounts due from subsidiary undertakings |
9,227,448 |
9,075,927 |
|
|
------ |
------ |
|
|
9,237,447 |
9,083,842 |
|
|
------ |
------ |
27 Share capital
|
|
As at 30th April |
|
|
|
2013 £ |
2012 £ |
|
Authorised |
|
|
|
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433) |
458,740 |
454,824 |
|
1,781,400 Convertible Preference Shares of £0.01 each |
17,814 |
17,814 |
|
|
------ |
------ |
|
Allotted, called up and fully paid |
|
|
|
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433) |
458,740 |
454,824 |
|
1,661,400 Convertible Preference Shares of £0.01 each (2012: 1,781,400) |
16,614 |
17,814 |
|
|
------ |
------ |
|
|
475,354 |
472,638 |
|
|
------ |
------ |
Share Rights
The ordinary share and preference shares rank pari passu in all respects other than:
· The profits which the Group may determine to distribute in respect of any financial period shall be distributed only among the holders of the ordinary shares. The preference shares shall not entitle the holders of them to any share in such distributions
· On a return of capital or assets on a liquidation, reduction of capital or otherwise the surplus assets of the Group remaining after payment of its obligations shall be applied:
o First, in paying to the holders of the preference shares the amount paid thereon, being the amount equal to the par value of the preference shares excluding any premium; and
o Secondly, the balance of such surplus assets shall belong to and be distributed amongst the holders of the ordinary shares
The preference share holders have the right, at any time, to convert the preference shares held to the same number of ordinary shares.
On 22nd May 2012, 5th December 2012 and 22nd May 2013, 60,000, 60,000 and 100,000 respectively, £0.01 convertible preference shares were converted to £0.01 ordinary shares.
On 17th September 2012, 271,600 ordinary shares were issued for a total consideration of £149,380 and on 22nd May 2013, 2,375,000 ordinary shares were issued for a total consideration of £712,500 and total issue costs incurred were £3,500.
This information is provided by RNS
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