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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ilika Plc | LSE:IKA | London | Ordinary Share | GB00B608Z994 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.50 | 29.00 | 30.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Coml Physical, Biologcl Resh | 702k | -7.3M | -0.0459 | -6.43 | 46.9M |
From May 2019 to May 2024
TIDMIKA
RNS Number : 6032D
Ilika plc
08 July 2016
ILIKA plc
(The "Company" or the "Group")
Final Results
Financial Statements for year ended 30 April 2016
Ilika (AIM: IKA), the accelerated materials innovation company, announces its audited full-year results for the year ended 30 April 2016.
Operational highlights
-- Launch of Stereax(TM) M250 solid state battery -- Definition of roadmap covering future development pathways for Stereax -- Continuous improvement in yield and productivity of battery pilot line -- Grant of patents protecting Stereax technology -- Defence of patent position for fuel cell catalysts -- Award of grant for smart materials for electronic data storage -- Continuation of success in securing grants for aerospace alloys
-- Appointment of Mike Inglis, former Chief Commercial Officer of ARM Holdings, as Non-Executive Chairman
Financial highlights
-- Revenues GBP0.6m (2015: GBP1.1m) -- Loss for the year GBP3.5m (2015: GBP2.7m) -- Loss per share 5.2p (2015: 4.1p) -- Cash, cash equivalents and bank deposits of GBP3.0m (2015: GBP6.0m)
Commenting on the results Ilika's Chairman, Mike Inglis, said:
"Since my appointment as Non-Executive Chairman at the AGM last September, I have been very encouraged to see the technical progress and increased commercial focus at Ilika. The definition of a clear solid state battery roadmap and the launch of the Stereax M250 have been important milestones on the road to commercial success. Underpinning this product development has been a continued deployment of Ilika's high throughput platform on a focussed portfolio of materials development opportunities. I am looking forward to further progress in the year to come."
Ilika plc www.ilika.com Graeme Purdy, Chief Tel: 023 8011 1400 Executive Steve Boydell, Finance Director Numis Securities Limited Tel: 020 7260 1000 Oliver Cardigan / James Black / Paul Gillam Walbrook PR Ltd Tel: 020 7933 8780 / ilika@walbrookpr.com Paul McManus Mob: 07980 541 893 Natalie Bruce Mob: 07884 666 994
STRATEGIC REPORT
The Directors present their Strategic Report for the year ended 30 April 2016.
Principal activities
Ilika plc is the holding company for Ilika Technologies Limited, a pioneer in materials innovation and solid state battery technology. Ilika has a unique, patent protected high throughput technology platform which accelerates the discovery of new and patentable materials for identified end uses in the automotive, aeronautical and electronics sectors. Ilika has developed ground-breaking solid state battery technology to meet the demands of the Internet of Things (IoT).
Business Strategy
The Company's strategy is to use its processes to discover and commercialise novel materials for integration into products with high value end-markets. In order to ensure a high probability of commercial success, the Company prefers to develop these materials in collaboration with large multinational companies, which have the expertise to bring new products to market to address unmet needs in their sectors. The Company aims to create intellectual property (IP) such that it will benefit from commercialisation rewards associated with the ultimate generally adopted technology. The Company's objective is to have its materials integrated into market-leading products sold by leading commercialisation partners around the world. The Company generally expects these end-products to fit into or create end-markets worth in excess of $1 billion per year, in which the Directors believe a number of the Company's commercialisation partners are positioned to have a leading share.
The Company is pursuing its objectives through the following strategies:
-- Developing leading-edge high throughput development processes;
-- Partnering with companies committed to developing and globally commercialising jointly developed products;
-- Using high throughput processes to invent patentable functional materials; and -- Development of valuable products through the application of functional materials.
Operating Review
Solid State Batteries
Ilika has been working with solid state battery technology since 2008 and has developed a type of lithium-ion battery, which, instead of using liquid or polymer electrolyte, uses a ceramic ion conductor, making it particularly suitable for micro-battery applications. Battery technology is a key challenge in the electronics sector, with IoT being a key driver of growth and battery technology development.
IoT devices offer a different set of battery challenges compared to other electronic devices. They have similar pressures, such as cost and availability, but they also have some specific requirements:
-- Small size in both footprint and thickness -- Ability to be trickle charged -- Charged only when an energy harvester can get energy -- Longer life span to match those of sensors and MCUs -- Support wider temperature ranges
Ilika's solid state batteries have several benefits over currently available lithium-ion batteries:
-- 6x faster to charge -- Energy dense in a small footprint -- 10x lower leakage currents -- Non-flammable -- Can be integrated into IC components to reduce end device size
Battery Product Launch
In April 2016, Ilika launched its Stereax(TM) M250 solid state battery IP at the IDTechEx exhibition in Berlin. The battery is a miniaturised solid state battery for IoT devices and is designed to address the key challenge of always-on, self-charging and efficient energy. Ilika Stereax(TM) batteries use patented materials and processes enabling superior energy density per battery footprint, up to 40% improvement on current solid state solutions, and increased temperature range support to over 100degC, 30degC higher than existing solid state products. Ilika's batteries do not contain any free lithium which makes them more moisture resistant.
Ilika demonstrated the ability of its Stereax(TM) M250 battery to power a real IoT device. This device is a perpetual beacon for Smart Homes. It is an autonomous sensing device of minimal size which, fixed on a wall, measures temperature data at regular intervals and transmits the data using Bluetooth Low Energy to an app. The app displays temperature information as well as the battery's state of charge. This device, which is so small it can easily be forgotten, replicates sensors for Smart Homes, where the data could also be sent to a hub for automated heating or air-conditioning control.
Battery Roadmap
The Ilika Stereax(TM) roadmap focuses on three main battery requirements: miniaturisation, capacity in a small footprint and increased performance. The miniaturisation roadmap looks at increasingly smaller footprints at smaller currents (uAh), making them ideal for small sensor driven devices. The capacity roadmap increases the amount of energy for a given active footprint by utilising Ilika's patented stacking feature, which allows multiple cells to be stacked on top of one another. The performance roadmap focuses on higher energy density solutions that have additional requirements such as extended temperature range support.
Pilot Line Operation
Since announcing the commencement of pilot production in March 2015, Ilika has continued to operate the pilot line to produce batteries for demonstration purposes. The technical team has optimised the operational parameters to maximise the yield and performance of the batteries, allowing Ilika to release batches of batteries and performance data for evaluation by commercial partners. In addition, discussions have progressed with potential partners capable of manufacturing full production lines at industrial scale. These discussions have enabled the calculation of early cost estimates for the production of batteries at realistic production volumes.
Patent Position
In September 2015, Ilika announced it had received a Notice of Grant in China for its patent application supporting solid state batteries jointly filed with Toyota Motor Company in July 2011. This Notice in China followed the successful British grant in April 2014 and the Notice of Grant in Europe in July 2015. This joint filing resulted from collaborative work undertaken with Toyota, which commenced in 2008. This patent family is one of the two earliest filings of a growing portfolio of IP exemplifying Ilika's unique approach to solid state battery production using evaporation sources. The more recent applications in the portfolio contain both jointly-owned and solely owned IP.
Materials Portfolio Activities
Although solid state battery development accounted for about 75% of activity in the year, the Company was also active in the development of aerospace alloys and materials for electronics applications.
Aerospace Alloys
In September 2015, Ilika announced that it had been awarded the lead role in a GBP2.15m, three year Innovate UK grant funded project with BAE Systems, GKN, Reliance Precision Engineering and the University of Sheffield.
The project aims to develop a new generation of self-healing alloys suitable for additive manufacturing (AM) processes and to develop a metallic manufacturing process that takes advantage of the flexibility of AM and the precision of subtractive manufacturing. This will enable the manufacture of novel components with critical feature tolerances, meeting the challenges faced in the design of mechanisms for the aerospace industry with lower weight, greater structural integrity and enhanced functional performance.
In addition, Ilika continued in its role leading a GBP1.33 million three year Innovate UK funded project with Rolls Royce, Diamond Light Source and the University of Cambridge to develop new superalloy compositions for gas turbine engines with better thermal efficiency than current alloys. The alloys are designed to increase gas turbine performance, reducing CO(2) emissions and noise levels at take-off.
Electronic Materials
In February 2016, Ilika announced that it is taking part in a two-year project with Seagate and the University of Southampton ("UoS"), which has been awarded a GBP374k grant by Innovate UK. GBP194k of the grant will be used to fund project activities at Ilika.
Seagate are the market leaders in magnetic recording used in Hard Disk Drive ("HDD") technology, most commonly used in laptops. UoS has developed world class expertise in the area of nanophotonics, the interaction of nanometer-scale objects with light.
The objective of this project is to provide a demonstration of "2D materials" for HDD applications. 2D materials, sometimes referred to as single layer materials, are crystalline materials consisting of a single layer of atoms. In this project, materials with superior nanophotonic properties are being developed to achieve improved hard drive performance and reliability. These materials must operate at temperatures of up to 300 C for thousands of hours, requiring extremely robust nanomaterials that have specific photonic properties allowing light energy to be conducted.
Patent position
In January 2014, three international patent applications from the portfolio were filed under the Patent Co-operation Treaty based upon earlier British priority applications. These were published in July 2015 and are progressing through the international patent examination process.
In August 2015, Ilika announced that the European Patent Office (EPO) had upheld Ilika's opposition to a fuel cell catalyst patent from Brookhaven Science Associates (BSA). Certain claims of a granted European patent from BSA might have impacted upon Ilika's freedom to operate its own granted European patent. BSA manages Brookhaven National Laboratory (BNL) on behalf of the United States Department of Energy (US DOE). BNL is a US national laboratory, primarily funded by the Office of Science of the US DOE. Ilika had filed an Opposition against the BSA patent in February 2013 and oral proceedings took place before the Opposition Division in March 2015 at the European Patent Office (EPO) in the Netherlands. As a result of these proceedings, the BSA European patent was revoked. The EPO issued a notice in August 2015 that the opposition proceedings were now terminated with revocation of the patent as the time limit had expired for filing an appeal against the decision to revoke the patent.
Key performance indicators ('KPIs')
The board considers that the most important KPIs are technical and operational and relate to the sales pipeline and engagement of commercialisation partners resulting from the progress of the technical development programmes outlined above.
The most important financial KPIs are the cash position and the operating loss of the Group, which remain under constant focus and which are considered in the financial review.
FINANCIAL REVIEW
The Financial Review should be read in conjunction with the consolidated financial statements of the Company and Ilika Technologies Limited (together the 'Group') and the notes thereto on pages 24 to 40. The consolidated financial statements are presented under International Financial Reporting Standards as adopted by the European Union. The financial statements of the Company continue to be prepared in accordance with International Financial Reporting Standards as adopted by the EU and are set out on pages 41 to 44.
Statement of Comprehensive Income
Revenues
Revenue, all from continuing activities, for the year ended 30(th) April 2016 was GBP0.6m (2015: GBP1.1m). This includes GBP450k of grant income recognised from Innovate UK (2015: GBP384k), the majority of which relates to work together with the University of Cambridge, Diamond Light Source and Rolls Royce to develop new superalloy compositions for gas turbine engines.
The company has committed an increased proportion of its operational resource to the internally funded battery development programme in the year and as a consequence, has generated lower revenue from customers than in the prior year.
Administrative expenses and losses for the period
Total administrative costs for the year were slightly increased at GBP3.8m in 2016 relative to GBP3.6m in 2015. This increase is attributable to the increased spend on research and development in the year, particularly associated with the solid state battery development programme.
Combined cost of sales and administrative expenses were GBP4.1m in the year which is consistent with the GBP4.1m for 2015.
New options were granted in the year giving rise to a share based payment charge of GBP0.4m relative to GBP0.0m in 2015.
Loss on continuing activities before tax increased to GBP3.9m in 2016 from GBP3.0m in 2015. GBP0.5m of this increase is associated with the reduction in revenues and GBP0.4m is associated with the accounting adjustment share based payment charge.
Statement of financial position and cash flows
At 30 April 2016, net assets amounted to GBP3.4m (2015: GBP6.5m), including net funds of GBP3.0m (2015: GBP6.0m).
The principal elements of the GBP3.1m decrease over the year ended 30 April 2016 in net funds were:
-- Cash used in operations of GBP3.3m (2015: GBP2.5m); -- Purchase of plant, property and equipment of GBP0.1m (2015: GBP0.3m); -- Research and development tax credits received of GBP0.3m (2015: GBP0.3m).
Treasury policy and financial risk management
Credit risk
The Group follows a risk-averse policy of treasury management. Sterling deposits are held with one or more approved UK based financial institutions. The Group's primary treasury objective is to minimise exposure to potential capital losses whilst at the same time securing prevailing market rates.
Interest rate risk
The Group's cash held in current bank accounts is subject to the risk of fluctuating base rates. An element of the Group's financial assets is placed on fixed-term interest deposits.
Currency risk
During the year under review, the Group was exposed to Euro, Japanese Yen and US dollar currency movement as it engages business development staff in each of those territories. Additionally, a small element of expense and capital spend is denominated in these currencies. The Group has arranged for some of its programs, with customers based in these territories, to be denominated in these currencies to hedge against this exposure.
PRINCIPAL RISKS AND UNCERTAINTIES
Commercial risk
The Company 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 Company is largely dependent on its partners to commercialise the end-products containing the Company's materials.
The Company seeks to reduce this risk by continually assessing competitive technologies and competitors. The Company seeks to commercialise materials through multiple channels to reduce overreliance on individual partners and, in agreements with partners, it ensures that there are commercialisation milestones which must be met for the partner to retain the rights to commercialise the materials.
Financial risk
The Company is reliant on a small number of significant customers and partners. Termination of these agreements could have a material adverse effect on the Group's results or operations or financial condition. The Company expects to incur further operating losses as progress on development programmes continue. There can be no assurance that the Company will ever achieve significant revenues or profitability.
The Company seeks to reduce this risk by broadening the number of customers and partners and thereby reduce reliance on individual significant companies.
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.
The Company seeks to reduce this risk by employing in-house staff with extensive global experience of patenting and licensing using commercially available patent searching and landscaping software. External patent agents and attorneys are used to advise on the drafting and filing of patent applications.
Dependence on senior management and key staff
Certain members of staff are considered vital to the successful development of the business. Failure to continue to attract and retain such highly skilled individuals could adversely affect operational results.
The Group seeks to reduce this risk by offering appropriate incentives to staff through competitive salary packages and participation in long-term share option schemes.
By order of the Board
Mike Inglis Graeme Purdy Chairman CEO
7 July 2016
DIRECTORS' REPORT
The Directors present their report and the audited financial statements for Ilika plc ('Ilika') and its subsidiary (the 'Group') for the year ended 30(th) April 2016
Details of directors' remuneration and share options are given in the Directors' Remuneration Report.
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) (retired 30(th) September 2015)
Mr M. Inglis (appointed 10(th) July 2015, appointed Chairman 30(th) September 2015)
Ms. C Spottiswoode CBE
Prof. Sir W Wakeham
Prof. K Jackson
Research and development costs
In accordance with the policy outlined in note 1, the Group incurred research and development expenditure of GBP2,057,966 in the year (2015: GBP1,740,173). Commentary on the major activities is given in the Strategic Report.
Financial instruments
The use of financial instruments and financial risk management policies is covered in the Strategic Report and also in note 13 of the financial statements.
Dividends
The Directors do not recommend the payment of a dividend.
Political donations
The Group made no political donations during the year (2015: Nil).
Directors' interests in ordinary shares
The directors, who held office at 30 April 2016, had the following interests in the ordinary shares of the Company:
Hot Features
Premium
Number of shares
1st May 2015 30th April 2016
G Purdy 589,427 589,427
C Spottiswoode 45,454 45,454
S Boydell 9,090 9,090
M Inglis - 65,000
W Wakeham - -
B Hayden* - -
K Jackson - -
* B Hayden had an interest in preference shares of the Company amounting to 426,300 at 1 May 2015 and at 30 April 2016.
Between 30 April 2016 and the date of this report, there has been no change in the interests of directors in shares as disclosed in this report.
Substantial shareholdings
On 28 June 2016 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 % shareholding
shares
---------------------- --------------- --------------
Charles Stanley Group
plc 9,863,826 15.0
---------------------- --------------- --------------
Henderson Global 9,500,000 14.4
---------------------- --------------- --------------
IP Group plc 6,358,779 9.7
---------------------- --------------- --------------
Ruffer LLP 6,105,454 9.3
---------------------- --------------- --------------
Baillie Gifford &
Co. 4,956,616 7.5
---------------------- --------------- --------------
Richard Griffiths 2,574,836 3.9
---------------------- --------------- --------------
Southampton Asset
Management 2,349,900 3.6
---------------------- --------------- --------------
Herald Investment
Management 2,215,000 3.4
---------------------- --------------- --------------
Hargreave Hale 2,063,045 3.1
---------------------- --------------- --------------
Post balance sheet events
There are no significant post balance sheet events from the 30(th) April 2016 to the signing of this report.
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.
By order of the board
Steve Boydell
Company Secretary
DIRECTORS' REMUNERATION REPORT
This report is non-mandatory for AIM-quoted companies and has been produced on a voluntary basis. It includes and complies with the disclosure obligations of the AIM Rules.
Remuneration Committee
The Company's remuneration policy is the responsibility of the Remuneration Committee (the 'Committee'), which was established in May 2004. The terms of reference of the Committee are outlined in the Corporate Governance Statement on page 15. The members of the Committee are Mike Inglis (Chairman), Clare Spottiswoode, Prof Keith Jackson and Prof Sir William Wakeham.
The Chief Executive Officer and certain executives may be invited to attend meetings of the Committee to assist it with its deliberations, but no executive is present when his or her own remuneration is discussed.
Remuneration policy
(i) Executive remuneration
The Committee has a duty to establish a remuneration policy which will enable it to attract and retain individuals of the highest calibre to run the Group. Its policy is to ensure that the executive remuneration packages of executive directors and the fee of the Chairman are appropriate given performance, scale of responsibility, experience, and consideration of the remuneration packages for similar executive positions in companies it considers to be comparable. Packages are structured to motivate executives to achieve the highest level of performance in line with the best interests of shareholders. A significant element of the total remuneration package, in the form of bonus and share options, is performance driven.
Executive remuneration currently comprises a base salary, an annual performance-related bonus, a long term incentive plan, a pension contribution to the executive director's individual money purchase scheme (at between 8% and 10% of base salary) and critical illness cover. Salaries and benefits were last reviewed in January 2016 with increases taking effect from 1(st) January 2016, taking into account Group and individual performance, external benchmark information and internal relativities. The Company operates a discretionary bonus scheme for executive directors for delivery of exceptional performance against a series of financial, commercial and technology objectives. The maximum bonus payable for the year to 30(th) April 2016 was restricted to 50% of CEO base salary, 30% of CSO base salary and 20% of CFO base salary.
(ii) Chairman and non-executive Director remuneration
The Chairman, Mr Inglis receives a fixed fee of GBP65,000 per annum. Clare Spottiswoode, Prof Sir William Wakeham and Prof Keith Jackson received a fixed fee of GBP32,500 per annum. The fixed fee covers preparation for and attendance at meetings of the full Board and committees thereof. The Chairman and the executive directors are responsible for setting the level of non-executive remuneration. The non-executive directors are also reimbursed for all reasonable expenses incurred in attending meetings.
All remuneration policies will be reviewed regularly to maintain adherence with best market practice as appropriate.
Directors' remuneration
The aggregate remuneration received by directors who served during the year ended 30 April 2016 and 2015 was as follows:
Total
Basic Benefits Short
salary in kind Bonus term benefits Pension Total
GBP GBP GBP GBP GBP GBP
Year to 30 April
2016
G Purdy 190,000 671 30,000 220,671 30,000 250,671
S Boydell 120,260 423 10,181 130,864 17,181 148,045
B Hayden* 64,000 - 16,095 80,095 - 80,095
M Inglis 54,167 - - 54,167 - 54,167
J Boyer 25,500 - - 25,500 - 25,500
K Jackson 32,500 - - 32,500 - 32,500
W Wakeham 32,500 - - 32,500 - 32,500
C Spottiswoode 32,500 - - 32,500 - 32,500
------ ------ ------ ------ ------ ------
551,427 1,094 56,276 608,797 47,181 655,978
------ ------ ------ ------ ------ ------
Year to 30 April
2015
G Purdy 176,667 543 24,000 201,210 29,833 231,043
S Boydell 115,000 356 12,000 127,356 17,450 144,806
B Hayden* 60,270 - 12,000 72,270 - 72,270
J Boyer 61,200 - - 61,200 - 61,200
K Jackson 16,035 - - 16,035 - 16,035
W Wakeham 31,641 - - 31,641 - 31,641
C Spottiswoode 31,641 - - 31,641 - 31,641
------ ------ ------ ------ ------ ------
492,454 899 48,000 541,353 47,283 588,636
------ ------ ------ ------ ------ ------
*B Hayden is employed by the University of Southampton. The amounts disclosed in the table above relate to payments made directly to B Hayden. The University of Southampton recharged employment costs of GBP63,171 to the company in the year in respect of B Hayden. (2015: GBP55,873).
Share based payment charge attributable to directors in the year was GBP267,301 (2015: GBP7,080).
Benefits in kind include critical illness cover.
Share options
The share options of the directors are set out below:
2015 2016 Exercise
Unapproved Number Lapsed Granted Number Price Expiry date
G Purdy 136,200 - - 136,200 80p July 2017
G Purdy 1,050,000 - - 1,050,000 51p May 2020
G Purdy - - 872,727 872,727 1p September 2025
J Boyer 1,050,000 (1,050,000) - - 51p May 2020
B Hayden 59,300 - - 59,300 80p July 2017
B Hayden 525,000 - - 525,000 51p May 2020
B Hayden 177,900 - - 177,900 81.5p February 2025
B Hayden - - 527,272 527,272 1p September 2025
S Boydell 117,600 - - 117,600 51p May 2020
S Boydell - - 274,909 274,909 1p September 2025
W Wakeham 65,100 - - 65,100 51p May 2020
C Spottiswoode 50,100 - - 50,100 51p May 2020
M Inglis - - 120,000 120,000 68.75p September 2025
K Jackson - - 40,000 40,000 68.75p September 2025
Approved
G Purdy 26,500 - - 26,500 80p May 2017
G Purdy 245,300 - - 245,300 81.5p February 2025
S Boydell 90,000 - - 90,000 80p December 2019
S Boydell 154,600 - - 154,600 81.5p February 2025
Mr Purdy exercised no options in the year (2015 - 139,500).
Mike Inglis
Chairman of the remuneration committee
Statement of Directors' responsibilities in respect of the Annual Report and the Financial Statements
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').
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.
Going concern
The directors have prepared and reviewed financial forecasts. After due consideration of these forecasts and current cash resources, the directors consider that the Company and the Group have adequate financial resources to continue in operational existence for the foreseeable future (being a period of at least twelve months from the date of this report), and for this reason the financial statements have been prepared on a going concern basis.
By order of the Board
Graeme Purdy
Chief Executive
7 July 2016
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 (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 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 formulation of the overall strategy of the company, 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.
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, Professor Keith Jackson and Mike Inglis.
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
The Remuneration Committee comprised Mike Inglis (Chairman), Clare Spottiswoode CBE Professor Keith Jackson and Professor Sir William Wakeham.
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
The Nomination Committee comprised Mike Inglis (Chairman), Professor Sir William Wakeham, Professor Keith Jackson and 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 Mr S. Boydell 6/6 - - - Mr J. B. Boyer 3/3 1/1 1/1 1/1 Prof. B. E. Hayden 6/6 - - - Mr M Inglis 5/5 2/2 - 1/1 Mr G. Purdy 6/6 - - - Ms. C Spottiswoode 6/6 2/2 1/1 2/2 Prof. Sir W Wakeham 6/6 2/2 1/1 2/2 Prof K Jackson 6/6 2/2 1/1 2/2
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.
By order of the Board
Mike Inglis
Chairman
7(th) July 2016
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF ILIKA PLC
We have audited the financial statements of Ilika plc for the year ended 30(th) April 2016 which comprise the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity, the parent company balance sheet, the parent company cash flow statement, 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 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 Financial Reporting Council's (FRC'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 FRC'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 30(th) April 2016 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 strategic report and 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.
Malcolm Thixton (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Southampton
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Consolidated statement of comprehensive income
Year ended 30(th)
April
Notes 2016 2015
GBP GBP
Revenue 2 605,924 1,093,978
Cost of sales (336,281) (591,044)
------- -------
Gross profit 269,643 502,934
Administrative expenses (3,776,950) (3,555,188)
Share based payment charge (352,291) (33,648)
------- -------
Operating loss 3 (3,859,958) (3,085,903)
Income from short term
deposits 30,734 50,557
------- -------
Loss before tax (3,828,864) (3,035,346)
Taxation 5 357,896 333,647
------- -------
Loss for period / total
comprehensive income
attributable to owners
of parent (3,470,968) (2,701,699)
------- -------
Loss per share from continuing
operations 6
Basic (5.23)p (4.10)p
Diluted (5.23)p (4.10)p
Consolidated balance sheet
Company number 7187804
As at 30(th)
April
Notes 2016 2015
GBP GBP
ASSETS
Non-current assets
Intangible assets 7 15,595 30,119
Property, plant and equipment 8 399,324 560,698
------- -------
Total non-current assets 414,919 590,817
------- -------
Current assets
Trade and other receivables 9 517,695 496,985
Current tax receivable 5 375,000 304,122
Other financial assets
- bank deposits - 528,349
Cash and cash equivalents 10 2,997,412 5,479,035
------- -------
Total current assets 3,890,107 6,808,491
------- -------
Total assets 4,305,026 7,399,308
------- -------
Issued capital and reserves
attributable to owners
of parent
Issued share capital 14 663,911 663,748
Share premium 17,470,417 17,465,442
Capital restructuring
reserve 6,486,077 6,486,077
Retained earnings (21,213,507) (18,094,830)
------- -------
Total equity 3,406,898 6,520,437
------- -------
LIABILITIES
Current liabilities
Trade and other payables 11 748,128 728,871
Provisions 12 150,000 150,000
------- -------
Total liabilities 898,128 878,871
------- -------
Total equity and liabilities 4,305,026 7,399,308
------- -------
The notes on pages 24 to 40 form part of these financial statements
These financial statements were approved and authorised for issue by the Board of Directors on 7(th) July 2016.
Mr. M Inglis
Chairman
Consolidated cash flow statement
Year ended 30(th)
April
2016 2015
GBP GBP
Cash flows from operating
activities
Loss before taxation continuing
operations (3,828,864) (3,035,346)
Adjustments for:
Amortisation 14,524 12,736
Depreciation 257,274 324,556
Equity settled share-based
payments 352,291 33,648
Loss on disposal of plant,
property and equipment 1,049 -
Financial income (30,734) (50,557)
------- -------
Operating cash flow before
changes in working capital,
interest and taxes (3,234,460) (2,714,963)
(Increase) / decrease in trade
and other receivables (26,432) 79,918
Increase in trade and other payables 19,257 118,124
------- -------
Cash utilised by operations (3,241,635) (2,516,921)
Tax received 287,018 277,716
------- -------
Net cash flow from operating
activities (2,954,617) (2,239,205)
Cash flows from investing
activities
Interest received 36,456 45,958
Sale of property plant and equipment - 1,640
Purchase of property, plant and
equipment (96,949) (279,267)
Purchase of intangible assets - (42,062)
Decrease in other financial
assets 528,349 1,248,418
------- -------
Net cash from investing
activities 467,856 974,687
Cash flows from financing
activities
Proceeds from issuance of
ordinary share capital 5,138 1,413,586
------- -------
Net cash from financing
activities 5,138 1,413,586
------- -------
Net increase in cash and
cash equivalents (2,481,623) 149,068
Cash and cash equivalents
at the start of the period 5,479,035 5,329,967
------- -------
Cash and cash equivalents
at the end of the period 2,997,412 5,479,035
------- -------
Consolidated statement of changes in equity
Share Total
capital attributable
Share Capital to equity
premium restructuring Retained holders
account reserve earnings of parent
GBP GBP GBP GBP GBP
As at 30th April
2014 632,660 16,082,944 6,486,077 (15,426,779) 7,774,902
Share-based payment - - - 33,648 33,648
Issue of shares 31,088 1,382,498 - - 1,413,586
Loss and total comprehensive
income - - - (2,701,699) (2,701,699)
------ ------- -------- -------- --------
As at 30th April
2015 663,748 17,465,442 6,486,077 (18,094,830) 6,520,437
Share-based payment - - - 352,291 352,291
Issue of shares 163 4,975 - - 5,138
Loss and total comprehensive
income - - - (3,470,968) (3,470,968)
------ ------- -------- -------- --------
As at 30th April
2016 663,911 17,470,418 6,486,077 (21,213,508) 3,406,898
------ ------- -------- -------- --------
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
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") adopted by the European Union. The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. The policies have been consistently applied to all of the years presented.
The individual financial statements of Ilika plc are shown on page 41 to 44.
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 have been prepared on a going concern basis which assumes that the Company will have sufficient funds available to enable it to continue to trade for the foreseeable future. In making their assessment that this assumption is correct the Directors have undertaken an in depth review of the business, its current prospects, and cash resources as set out below.
The directors have prepared and reviewed financial forecasts. The Group meets its day to day working capital requirements through existing cash resources which, at 30th April 2016, amounted to GBP2,997,383. After due consideration of these forecasts and current cash resources, the directors consider that the Company and the Group have adequate financial resources to continue in operational existence for the foreseeable future (being a period of at least twelve months from the date of this report), and for this reason the financial statements have been prepared on a going concern basis.
The Directors have also considered the likely sales, contracts and announcements that the Company anticipate being able to make over the coming months, the current share price, levels of trading in the Company's shares and past history of raising funds with the Company's Brokers.
After taking account of all the above factors the Directors believe that as the market becomes more aware of the Company' prospects and the scale of the opportunities that the Company's technologies create the Company will continue to be able to raise any funds required to enable it to continue to trade and grow towards self-sufficiency.
Changes in accounting policies
(a) New standards, amendments to standards or interpretations adopted early
During the period ended 30(th) April 2016, there were no new or revised standards, amendments to 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 and have an effective date commencing after 1(st) May 2016, will or may have an effect on the Group's future financial statements:
Effective
International Accounting Standards date for
(IAS/IFRS) periods commencing
IFRS Financial Instruments 1 January
9 2018
IFRS Revenue from Contracts with 1 January
15 Customers 2018
IFRS Leases 1 January
16 2019
IAS Statement of Cash Flows (Amendments) 1 January
7 2017
IAS Income Taxes (Amendments) 1 January
12 2017
No other new standards or amendments are expected to have an effect on the Group.
Notes to the consolidated financial statements
1 Accounting policies (continued)
Revenue
Revenue comprises the fair value for the sale of services, net of value added tax and is recognised as follows:
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.
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.
Financial income
Financial income 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 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 and it is probable that future economic benefit will flow to the Group. Prior to and during the year ended 30(th) April 2016, no development expenditure satisfied the necessary conditions of IAS 38.
Notes to the consolidated financial statements
1 Accounting policies (continued)
Taxation
Companies within the group may be entitled to claim special tax allowances in relation to qualifying research and development expenditure (eg R&D tax credits). The group accounts for such allowances as tax credits, which means that they are recognised when it is probable that the benefit will flow to the group and that benefit can be reliably measured. R&D tax credits reduce current tax expense and, to the extent the amounts due in respect of them are not settled by the balance sheet date, reduce current tax payable. A deferred tax asset is recognised for unclaimed tax credits that are carried forward as deferred tax assets.
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 reporting 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 profit and loss account.
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 statement of comprehensive income on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment less their estimated residual value. The estimated useful lives are as follows:
Leasehold improvements lease term Plant, machinery and equipment 3 - 5 years Fixtures & fittings 3 - 5 years
Impairment
The carrying amounts of the Group's assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated at the present value of the future expected cashflows associated with the impaired asset.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account.
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).
Notes to the consolidated financial statements
1 Accounting policies (continued)
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. Deposits of over 3 months' maturity, judged at inception, are classified as Other Financial Assets.
Key sources of estimation and uncertainty
The preparation of the Group's financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses 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 contracts 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 18.
-- Taxation
The current tax receivable is the expected tax receivable on the research and development qualifying expenditure for the period using the tax rates and laws that have been enacted or substantively 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.
Notes to the consolidated financial statements
2 Segment reporting
The Group operates in one area of activity, namely the production, design and development of high throughput methods of material synthesis, characterisation and screening. The Group has materials development programmes addressing a wide range of applications including the solid state battery, aerospace alloys and electronic materials.
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.
Year ended 30(th)
April
Revenue 2016 2015
GBP GBP
Analysis by geographical market:
By destination
Asia 74,162 125,875
Europe 23,355 441,219
North America 7,702 142,351
UK Grants 500,705 384,533
------- -------
605,924 1,093,978
------- -------
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:
Year ended 30(th)
April
Revenue 2016 2015
GBP GBP
Customer 1 500,705 384,533
Customer 2 74,150 247,200
Customer 3 - 189,052
Customers less than 10% 31,069 273,193
-------- --------
605,924 1,093,978
------- -------
Notes to the consolidated financial statements
3 Operating loss
Year ended 30(th)
April
2016 2015
This is arrived at after charging: GBP GBP
Research and development expenditure
in the year 2,057,966 1,740,173
Depreciation 257,274 324,556
Amortisation of intangible
assets 14,524 12,736
Auditors remuneration:
Fees payable to the Group's
auditor for the audit of the
Group's accounts 19,700 19,700
Fees payable to the Group's
auditor for other services: 6,800 6,800
* The Audit of the Group's subsidiaries 21,518 -
* All other services
Operating lease rentals 204,578 202,964
Share-based payment 352,291 33,648
Foreign exchange differences 3,616 5,123
------- -------
4 Employees
The average number of employees during the year, including executive directors, was:
Year ended 30(th)
April
2016 2015
Number Number
Administration 8 8
Materials synthesis 27 23
------ ------
35 31
------ ------
Staff costs for all employees, including executive directors, consist of:
Year ended 30(th)
April
2016 2015
GBP GBP
Wages and salaries 1,813,849 1,641,465
Social security costs 183,594 153,801
Share-based payment expense 337,291 18,648
Pension costs 119,664 98,206
------- -------
2,454,438 1,912,120
-------- --------
Notes to the consolidated financial statements
4 Employees (continued)
The total remuneration of the Directors
of the Group was as follows:
Year ended 30(th)
April
2016 2015
GBP GBP
Wages and salaries 607,703 541,353
Pension costs 47,181 47,283
------- -------
Directors' emoluments 654,884 588,636
Social security costs 77,420 60,858
Share-based payment expense 267,301 7,080
------- -------
Key management personnel 999,605 656,574
-------- --------
The Directors represent key management personnel and further details are given in the Directors' Remuneration Report on pages 11 to 13.
5 Taxation (a) Tax on loss 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 30(th)
April
2016 2015
GBP GBP
Current tax on loss for the
year 329,473 304,122
Adjustments to prior period 28,423 29,525
------ ------
357,896 333,647
------ ------
(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 20% (2015: 21%). The differences are reconciled below:
2016 2015
GBP GBP
Loss on ordinary activities
before tax (3,828,864) (3,035,346)
------ ------
Loss on ordinary activities
before tax multiplied by the
standard rate of corporation
tax in the UK of 20% (2015:
21%) (765,773) (637,423)
Effects of:
Expenses not deductible for
corporation tax 71,179 8,022
R&D relief (329,473) (304,122)
Origination of unrecognised
tax losses 694,594 629,401
Under provision in previous
years (28,423) (29,525)
------ ------
Total tax credit for the year (357,896) (333,647)
------ ------
Notes to the consolidated financial statements
5 Taxation (continued)
Unrecognised deferred taxation
There are tax losses available for carry forward against future trading profits of approximately GBP17,009,000 (2015: GBP15,290,000). A deferred tax asset in respect of these losses of approximately GBP3,062,000 (2015: GBP3,058,000) has not been recognised in the accounts, as the full utilisation of these losses in the foreseeable future is uncertain.
6 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 loss after tax, are as follows:
Year ended 30(th)
April
2016 2015
No. No.
Weighted average number of
equity shares 66,378,114 65,895,078
-------- --------
GBP GBP
Earnings, being loss after
tax (3,470,968) (2,701,699)
-------- --------
Pence Pence
Loss per share (5.23) (4.10)
------ ------
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. At 30(th) April 2016 there were 6,988,112 options outstanding (2015: 5,414,848) as detailed in notes 14 and 18.
Notes to the consolidated financial statements
7 Intangible assets
Software Intellectual
licences property Total
GBP GBP GBP
Cost
As at 30(th) April
2014 27,918 75,000 102,918
Additions 42,062 - 42,062
Disposals (15,615) - (15,615)
------ ------ ------
As at 30(th)
April 2015 54,365 75,000 129,365
Disposals (8,072) (8,072)
------ ------ ------
As at 30(th)
April 2016 46,293 75,000 121,293
------ ------ ------
Amortisation
As at 30(th)
April 2014 27,125 75,000 102,125
Provided for
the year 12,736 - 12,736
Disposals (15,615) - (15,615)
------ ------ ------
As at 30(th)
April 2015 24,246 75,000 99,246
Provided for
the year 14,524 - 14,524
Disposals (8,072) - (8,072)
------ ------ ------
As at 30(th)
April 2016 30,697 75,000 105,698
------ ------ ------
Net book value
As at 30(th)
April 2014 793 - 793
------ ------ ------
As at 30(th)
April 2015 30,119 - 30,119
------ ------ ------
As at 30(th)
April 2016 15,595 - 15,595
------ ------ ------
The amortisation charge of GBP14,524 (2015: GBP12,736) is included within administrative expenses.
Notes to the consolidated financial statements
8 Property, plant and equipment
Plant,
Leasehold machinery and Fixtures
improvements equipment and fittings Total
GBP GBP GBP GBP
Cost
As at 30(th)
April 2014 561,750 4,180,326 169,712 4,911,788
Additions 5,750 271,439 2,078 279,267
Disposals - (25,688) - (25,688)
------ ------- ------ -------
As at 30(th)
April 2015 567,500 4,426,077 171,790 5,165,367
Additions - 96,949 - 96,949
Disposals - - (4,265) (4,265)
------ ------- ------ -------
As at 30(th)
April 2016 567,500 4,523,026 167,525 5,258,051
------ ------- ------ -------
Depreciation
As at 30(th)
April 2014 501,038 3,654,222 148,901 4,304,161
Provided for
the year 66,462 250,981 7,113 324,556
Disposals - (24,048) - (24,048)
------ ------- ------ -------
As at 30(th)
April 2015 567,500 3,881,155 156,014 4,604,669
Provided for
the year - 250,492 6,782 257,274
Disposals - - (3,216) (3,216)
------ ------- ------ -------
As at 30(th)
April 2016 567,500 4,131,647 159,580 4,858,727
------ ------- ------ -------
Net book value
As at 30(th)
April 2014 60,712 526,104 20,811 607,627
------ ------- ------ -------
As at 30(th)
April 2015 - 544,922 15,776 560,698
------ ------- ------ -------
As at 30(th)
April 2016 - 391,379 7,945 399,324
------ ------- ------ -------
There are no commitments for capital expenditure contracted but not provided for (2015 - GBPnil)
Notes to the consolidated financial statements
9 Trade and other receivables
As at 30(th) April
2016 2015
GBP GBP
Trade receivables 27,976 5,108
Prepayments 215,933 215,921
Other receivables 156,863 168,361
Accrued income 116,923 107,595
------ ------
517,695 496,985
------ ------
The ageing of trade receivables is as follows:
As at 30(th) April
2016 2015
GBP GBP
0-29 days 4,621 1,322
30-59 days 23,355 3,595
60-89 days - 191
90+ days - -
------ ------
27,976 5,108
------ ------
10 Cash and cash equivalents
As at 30(th) April
2016 2015
GBP GBP
Current bank accounts 127,018 220,843
Short term deposits with less
than three months' maturity 2,872,394 5,258,192
-------- --------
2,997,412 5,479,035
-------- --------
Notes to the consolidated financial statements
11 Trade and other payables
As at 30(th) April
2016 2015
GBP GBP
Trade payables 197,117 219,567
Other payables 14,654 15,845
Other taxes and social security
costs 44,976 40,079
Accruals 491,381 453,380
-------- --------
748,128 728,871
-------- --------
The ageing of financial liabilities is as follows:
As at 30(th) April
2016 2015
GBP GBP
0-29 days 390,618 384,869
30-59 days 61,039 45,613
60-89 days 21,495 20,000
90+ days 230,000 238,310
-------- --------
703,125 688,792
-------- --------
12 Provisions
Leasehold
Dilapidations
GBP
As at 1(st) May 2015 and at
30(th) April 2016 150,000
------
All provisions are due within one year.
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the lease in accordance with the lease terms.
Notes to the consolidated financial statements
13 Financial instruments
The risks associated with 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.
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
Liquidity risk
The Group's policy is to maintain adequate cash resources to meet liabilities as they fall due. All 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. 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 11. 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 30(th) April 2016 had a weighted average period to maturity of 30 days (2015: 32 days) and a weighted average annualised rate of interest of 0.7%. (2015: 0.8%)
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 30(th) April 2016 by approximately GBP31,000 (2015: GBP51,000).
It is estimated that an increase in base rate by 1 percent would decrease the Group's loss before taxation for the year to 30(th) April 2016 by approximately GBP42,000 (2015: GBP62,000)
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 all funding is raised by equity. See note 1 for the fundraising that occurred during the year.
Notes to the consolidated financial statements
14 Share capital
As at 30(th)
April
2016 2015
GBP GBP
Authorised
65,802,710 Ordinary Shares of
GBP0.01 each (2015: 65,736,416) 658,027 657,364
1,781,400 Convertible Preference
Shares of GBP0.01 each 17,814 17,814
------ ------
Allotted, called up and fully
paid
65,802,710 Ordinary Shares of
GBP0.01 each (2015: 65,736,416) 658,027 657,364
588,400 Convertible Preference
Shares of GBP0.01 each (2015:
638,400) 5,884 6,384
------ ------
663,911 663,748
------ ------
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 7(th) October 2015, 50,000 GBP0.01 convertible preference shares were converted to GBP0.01 ordinary shares.
Share options and warrants
Employee related share options are disclosed in note 18. In addition to these, there were 107,300 non employee share options over ordinary shares of GBP0.01 at the year end.
16,294 share options were converted into 16,294 GBP0.01 ordinary shares in the year for a total consideration of GBP5,138.
Notes to the consolidated financial statements
15 Operating leases
The group and company had no commitments under non-cancellable operating leases as at the current and preceding reporting date.
16 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 GBP119,664 (2015: GBP98,206).
17 Related party transactions
The directors consider that no one party controls the Group.
During the year ended 30(th) April 2016, the company incurred costs of GBP238,286 (2015: GBP245,576) 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 a 3.6% interest in the company. At 30(th) April 2016, the amount unpaid in respect of these costs was GBP8,295 (2015: GBP2,765).
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. Further details are given in the Directors' Remuneration Report on pages 11 to 13.
Details of key management personnel and their compensation are given in note 4 and in the Directors' Remuneration Report on pages 11 to 13.
18 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 options.
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.
Notes to the consolidated financial statements
18 Share-based payments expense and share options (continued)
At 30(th) April 2016, the following options, whose fair values have been fully charged to the consolidated statement of total comprehensive income, were outstanding:
Approved share options:
Exercise
Price per
Date of grant Number of shares Period of option share
14/05/07 156,100 10 years GBP0.80
15/01/08 22,400 10 years GBP1.00
02/02/09 58,000 10 years GBP0.80
01/12/09 90,000 10 years GBP0.80
14/05/10 26,100 10 years GBP0.51
01/02/12 39,634 10 years GBP0.53
Unapproved share options:
Exercise
Price per
Date of grant Number of shares Period of option share
11/07/07 195,500 10 years GBP0.80
11/11/08 40,000 10 years GBP2.4283
14/05/10 1,897,800 10 years GBP0.51
Black Scholes valuation
Weighted Average Number
Exercise Price
2016 2015 2016 2015
Outstanding: GBP GBP
At start of
the period 0.8341 0.4121 2,188,148 1,693,523
Granted in the
period 0.2567 0.8150 2,867,908 1,521,920
Exercised in
the period 0.2732 0.1038 (13,394) (423,250)
Lapsed in the
period 0.8032 0.1508 (85,750) (604,045)
----- ----- -------- --------
At the end of
the period 0.5021 0.8341 4,956,912 2,188,148
----- ----- -------- --------
The exercise price of options outstanding at the end of the period ranged between GBP0.01 and GBP2.4283 and their weighted average contractual life was 8.8 years (2015: 7.85 years). These share options are exercisable and must be exercised within 10 years from the date of grant.
Stochastic valuation
Weighted Average Number
Exercise Price
2016 2015 2016 2015
Outstanding: GBP GBP
At start of
the period 0.51 0.51 2,989,300 3,057,300
Exercised in
the period 0.51 0.51 (2,900) (68,000)
Lapsed during
the period 0.51 0.51 (1,062,500) -
---- ---- --------- ---------
At the end of
the period 0.51 0.51 1,923,900 2,989,300
---- ---- --------- ---------
The exercise price of options outstanding at the end of the period was GBP0.51 (2015: GBP0.51) and their weighted average contractual life was 5 years (2015: 6 years).
Notes to the consolidated financial statements
18 Share-based payments expense and share options (continued)
Ilika plc Executive Share Option Scheme 2010
At 30(th) April 2016 the following share options were outstanding in respect of the Ilika plc Executive Share Option Scheme 2010:
Exercise
Date of grant Number of shares Period of option Price per share
14/05/10 26,100 10 years GBP0.51
01/02/12 39,634 10 years GBP0.53
26/02/15 1,309,470 10 years GBP0.815
22/03/16 1,033,000 10 years GBP0.59
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.
85,750 options lapsed in the year and 13,394 options were exercised.
Ilika plc unapproved share options
At 30(th) April 2016 the following share options were outstanding in respect of Ilika plc unapproved share options:
Exercise
Date of grant Number of shares Period of option Price per share
11/07/07 195,500 10 years GBP0.80
11/11/08 40,000 10 years GBP2.4283
14/05/10 1,897,800 10 years GBP0.51
26/02/15 177,900 10 years GBP0.815
30/09/15 160,000 10 years GBP0.688
30/09/15 1,674,908 10 years GBP0.01
1,062,500 options lapsed in the year and 2,900 options were exercised.
There are 2,525,534 options which were capable of being exercised as at 30(th) April 2016.
2016 2015
GBP GBP
Share-based payment expense
Black Scholes calculation 352,291 33,648
----- -----
352,291 33,648
------ ------
Company Balance sheet of Ilika plc
Company number 7187804
As at 30(th)
April
2016 2015
Notes GBP GBP
ASSETS
Non current assets
Investments in subsidiary
undertaking 20 121,339 121,339
Amount due from subsidiary
undertaking 23 18,234,670 18,189,471
------- -------
18,356,009 18,310,810
Current assets
Trade and other receivables 21 2,518 6,218
------- -------
Total assets 18,358,528 18,317,028
------- -------
Equity
Issued share capital 663,911 663,748
Share premium 17,449,628 17,444,653
Retained earnings 108,683 75,276
------- -------
18,222,222 18,183,677
LIABILITIES
Current liabilities
Trade and other payables 136,306 133,351
------- -------
Total liabilities 136,306 133,351
------- -------
Total equity and liabilities 18,358,528 18,317,028
------- -------
The notes on page 44 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 7(th) July 2016.
Mr. M Inglis
Chairman
Company cashflow statement
Year ended 30(th)
April
2016 2015
GBP GBP
Cash flows from operating activities
Loss before tax (318,884) (887)
Adjustments for:
Equity settled share-based
payments 352,291 33,648
------ ------
Operating cash flow before
changes in working capital,
interest and taxes 33,407 32,761
Increase in trade and other receivables (41,500) (1,463,348)
Increase in trade and other payables 2,955 17,001
------ ------
Cash utilised by operations (5,138) (1,413,586)
Cash flows from financing activities
Proceeds from issuance of ordinary
share capital 5,138 1,413,586
------ ------
Net cash from financing activities 5,138 1,413,586
------ ------
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 Total
capital attributable
Share to
premium Retained equity
account earnings holders
GBP GBP GBP GBP
As at 30(th) April
2014 632,660 16,062,155 42,515 16,737,330
Issue of shares 31,088 1,382,498 - 1,413,586
Share-based payment - - 33,648 33,648
Profit and total comprehensive
income - - (887) (887)
------ ------ ------ -------
As at 30(th) April
2015 663,748 17,444,653 75,276 18,183,677
Issue of shares 163 4,975 - 5,138
Share-based payment - - 352,291 352,291
Profit and total comprehensive
income - - (318,884) (318,884)
------ ------ ------ -------
As at 30th April 2016 663,911 17,449,628 108,683 18,222,222
------ ------ ------ ------
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
19 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") adopted by the European Union.
Taxation, share based payments and financial instruments
For the relevant accounting policies please see note 1
Investments in subsidiary undertakings
Investments in subsidiary undertakings where the Company has control are stated at cost less any provision for impairment.
Profit of the parent company for 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 loss for the year was GBP318,884 (2015: loss of GBP887).
20 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 GBP3,152,084 (2015: GBP2,700,812) and had net liabilities as at 30th April 2015 of GBP14,683,985 (2015: GBP11,541,901).
2016 2015
Shares in Group undertakings
(at cost) GBP GBP
At 1st May 2015 and 30th April
2016 121,339 121,339
------ ------
21 Trade and other receivables
2016 2015
GBP GBP
Prepayments 2,518 6,218
--- ------
22 Prior year adjustment
The amount due from Ilika Technologies Limited was previously shown as a current asset, it has been reclassified to non current assets to reflect the fact that it will be repaid from future revenues that are expected to occur beyond the next twelve months.
23 Amount due from subsidiary undertaking
2016 2015
GBP GBP
Ilika Technologies Limited 18,234,670 18,189,471
------ ------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKODQPBKDFOK
(END) Dow Jones Newswires
July 08, 2016 02:00 ET (06:00 GMT)
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