REG - Ilika plc - Final Results
13/07/2022 07:00
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RNS Number : 2473S Ilika plc 13 July 2022
ILIKA plc
(The "Company" or the "Group")
Financial Statements for year ended 30(th) April 2022
Operational highlights:
Ilika has continued to develop and commercialise its thin-film Stereax®
miniature solid-state batteries for powering implantable medical devices and
industrial wireless sensors (IIoT) in hostile environments, as well as
progressing the development of its large-format Goliath cells for electric
vehicles (EV) and cordless appliances. Progress includes:
· Secured lease of a 1,600m(2) property for Stereax manufacturing
scale-up and installed a 340 m(2) clean room facility.
· Completed installation of Stereax manufacturing line on time and on
budget, despite significant global supply chain disruption and officially
opened it in December 2021.
· Substantially completed Stereax manufacturing process qualification.
· Continued to engage with portfolio of Stereax customers from IIoT and
medical device sector.
· Completed Goliath development collaborations with Faraday Battery
Challenge partners including Honda, JLR and McLaren.
· Continued technical progress with the Goliath development programme,
including increased cycle count, reduced operating temperature and increased
energy density.
· Completed Goliath scale up manufacturing design collaboration with
Comau (part of the Stellantis Group), funded by the Advanced Propulsion
Centre.
· Appointed senior additions to management team with Brendan
McCarthy (ex-BMW) as Goliath Operations Director and Robin Bell as VP Product
Development.
· Increased patent portfolio to 25 granted patents, with 2 new grants,
1 in the US and 1 in the UK. 5 additional international filings submitted.
Financial highlights:
· In July 2021, raised c.£25m through a combination of an equity
placing, a retail offer and an open offer
· Turnover £0.5m (2021: £2.3m)
· EBITDA Loss adjusted for share-based payments for the year £6.4m
(2021: £2.3m)
· Loss per share 4.65p (2021: 2.53p)
· Cash, cash equivalents and bank deposits of £23.4m (2021: £9.8m)
· In September 2021, commenced trading on the OTCQX Best Market in US
Outlook
Following the installation and commissioning of the Stereax manufacturing
facility, Ilika is focussed on qualifying the initial Stereax product for
commercial sales. This is expected to take until the end of calendar year
2022. Initial orders for Stereax are expected to be fulfilled in early
calendar year 2023. Ilika will continue to actively manage the deployment of
capital through this pre-commercialisation phase of Stereax. Further growth of
the Stereax business is expected to involve commercial partnerships to
transfer the technology to larger scale facilities under license. Regarding
Goliath, Ilika will build on the technical progress made to date, with a view
to reaching manufacturing readiness maturity by the end of 2023. In parallel
with maturing the product, Ilika will be deploying £5m of the capital it
raised in 2021 to increase the level of automation of its Goliath pilot line.
Following Goliath reaching manufacturing readiness in 2023, Ilika
anticipates implementing a scale-up to mega-factory scale in order to support
the initial stages of commercial roll-out of a small portfolio of electric
hyper and super car models. Additional financing would be required to realise
this mega-factory implementation, with potential sources of financing
including additional government grant funding, equity financing and investment
from strategic partners. The Board's confidence continues to build in the
commercial opportunity for Ilika's technology across the large markets it
addresses and this will provide a strong platform for future growth.
Commenting on the results Ilika's Chairman, Keith Jackson, said: "We have
continued to progress to plan with our Goliath battery with a focus on getting
the right mix of attributes in a battery for our target applications. We have
increased focus on a robust material supply chain and the environmental impact
of manufacture and recycling as critical success factors in the design of a
successful battery to reflect current economic, supply and environmental
concerns, which look set to continue indefinitely. As always, the team has
taken on these challenges and increased its strength through training,
consultants, partners and recruitment. Whilst this is not easy and there are
always risks and challenges, we are making good progress and look forward to
sustaining that in the coming year.
"Our Stereax batteries have a primary target application of safe, long lasting
embedded medical environments and IoT sensing in hostile environments as a
secondary market. There has been a lot of learning in the transition to the
new equipment to make the batteries faster and repeatably on the new
equipment, which generates additional protective IP. The medical market is a
good commercial and societal opportunity but will always have slower take up
due to the obvious effectiveness, safety and approval requirements. Given the
market dynamics and requirements we had to announce a delay in revenue
expectations. However, the medical market can provide revenues at a unit price
premium and, once secured, sustained for a long period as the same
requirements that make the market difficult to enter make it difficult to
change. Similarly to Goliath, the Stereax team continues to remain focussed
and understand the demands and activities required by the business."
For more information contact:
Ilika plc +44 (0)23 8011 1400
Graeme Purdy, Chief Executive
Steve Boydell, Finance Director
Liberum Capital Limited +44 (0) 20 3100 2000
Andrew Godber, Cameron Duncan,
William Hall, Nikhil Varghese
Joh. Berenberg, Gossler & Co. KG (Joint Broker) +44 (0) 20 3207 8700
Emily Morris, Detlir Elezi, Milo Bonser
Walbrook PR Ltd +44 (0)20 7933 8780 or ilika@walbrookpr.com (mailto:ilika@walbrookpr.com)
Lianne Applegarth Mob: +44 (0)7584 391 303
Nick Rome Mob: +44 (0)7748 325 236
Tom Cooper Mob: +44 (0)7971 221 972
ILIKA plc
STRATEGIC REPORT
The Directors present their Strategic Report for the year ended 30(th) April
2022.
Principal Activities
Ilika has continued to pursue its strategy of developing and commercialising
its cutting-edge solid-state batteries. The Company's mission is to rapidly
develop leading-edge IP, manufacture and sell solid-state batteries for
markets that cannot be addressed with conventional batteries due to their
safety, charge rates, energy density and life limits. We will achieve this
using ceramic-based lithium-ion technology that is inherently safe in
manufacture and usage, which differentiates our products from existing
batteries.
Business Strategy
The Group's revenue model involves three phases:
a) commercially-funded and grant-funded development of small quantities of
cells for customer evaluation on Company-operated pilot lines;
b) scale-up to mid-scale manufacturing facilities to demonstrate product and
process robustness, while also supporting initial commercialisation; and
c) commercial collaborations, potentially involving licensing the technology,
for large volume production.
Ilika has scaled-up its Stereax technology to a mid-scale manufacturing
facility. Initial revenue has been generated from sales of evaluation samples
from its Stereax pilot line and revenue growth is expected from commencement
of commercial sales in 2023. Ilika's Goliath programme is currently in the
first commercial phase, where product development is being supported by
grant-funded programmes and commercial collaborations.
Introduction to 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. Ilika's solid-state
batteries have a number of benefits over traditional lithium-ion batteries,
including the following:
· Non-flammable, which eliminates the need for containment packaging.
· 6 x faster charging.
· 2x increased energy density, making them half the volume and weight
for a given electrical charge.
· 10x longer storage without loss of charge.
Ilika has developed a roadmap and family of battery products, ranging from
miniature solid-state devices designed for powering wireless sensor
applications (Industrial IOT) and medical devices to large format cells for
automotive power.
Miniature Stereax batteries
Ilika's miniature Stereax cells are differentiated from other solid-state
technology through their selection of materials and an efficient, low
temperature evaporation process that is capable of higher manufacturing rates
than other existing solid-state routes. This results in the following benefits
relative to previous solid-state battery designs:
· Lower cost of manufacture through avoiding use of expensive
sputtering targets
· Long cycle life through use of a silicon anode
· Less encapsulation required
· High temperature resilience
The unique benefits of Stereax batteries have been optimised for medical
implants and industrial applications. Miniature Stereax batteries can enable
medical devices in a way that is currently not possible with conventional
lithium-ion batteries. Their compact, high-energy density and high power
characteristics make them useful for a range of medical implant applications
covering blood pressure monitoring to neuro-stimulation.
Stereax Manufacturing Scale-up and Commercialisation
During Ilika's 2020/21 financial year, a lease was secured on a 1,600m2
facility within five miles of Ilika's headquarters. After competitive tenders
for the construction of a 340m2 cleanroom within the facility were received, a
principal contractor was mobilised. Despite significant disruption to the
global supply chain, the manufacturing line was installed on time and on
budget and was officially opened in December 2021. This was followed by
process qualification activities, which are now substantially complete.
Process qualification involves running the complete manufacturing process from
beginning to end and assessing the process stability and reproducibility. The
proprietary parts of the Ilika process were higher risk to implement, as they
involved some customisation of standard equipment. Specifically, transferring
the operational parameters for depositing the optimum quality of cathode
material required a more extensive set of process tests than was anticipated.
As a result, timelines to stabilise the proprietary parts of the process have
been longer than expected and the commencement of the next phase of scale-up,
product qualification, started later in 2022 than was originally planned.
Product qualification involves producing batches of products for highly
accelerated life testing (HALT) and reliability testing. HALT is designed to
understand the failure modes of the product in case opportunities can be
identified to increase product robustness. Reliability testing involves
creating statistically relevant data sets to underpin the product
specification sheets. The initial phase of this activity is expected to
continue until the end of 2022 before initial samples will be issued to
customers. Ilika is actively managing the deployment of capital through this
pre-commercialisation phase. The testing and reliability programme will
continue into 2023 as product characterisation is extended into long term
robustness testing.
As demand for Stereax ramps over the coming years, a further step-up in
production capacity with a larger manufacturing partner is expected to be
required, when commercial collaboration through a licensing model may be more
appropriate.
Large Format Goliath Batteries
In July 2021 Ilika secured an equity investment of ca. £25m made up of a
placing, a retail offer and an open offer. Of this placing, £5m was earmarked
for investment in automating Ilika's pre-pilot line, in Romsey, UK to
support its portfolio of industrial collaborations. In this facility, Ilika
is developing low-cost printing processes suitable for manufacturing solid
state batteries several orders of magnitude larger than miniature Stereax
batteries.
At the beginning of the 2021/22 financial year, Ilika completed a portfolio of
three collaborative projects supported by the UK Government's Faraday
Battery Challenge. The projects were supported by £5.2m in grant funding
enabling work on rapid charging with Honda and Ricardo, battery packs for high
performance vehicles with McLaren and cost-effective routes for the mass
production of Goliath cells with JaguarLandRover.
In order to build on the foundations laid by the Faraday projects, £10m of
the £25m placing was ring-fenced to fund the development costs of maturing
Goliath cells to manufacturing readiness by the end of 2023. Over the course
of the 2021/22 financial year, the following technical progress has been made:
· Achieved 500 cycles without cell failure
· Demonstrated room temperature cycling
· Increased cathode utilisation in cell designs and increased capacity
· Reproduced baseline cell performance in reproducible batches
· Commenced cell mechanical robustness testing
Goliath Manufacturing Scale-up
The Company's pilot line in Romsey is capable of producing 1kWh per week.
Ilika has plans to scale up its current site to an automated facility
producing 10-40kWh per week, which it will start to implement in the 2022/23
financial year.
By the end of 2023, the Goliath minimum viable product is expected to be
manufacturing ready. Initially, manufacturing will be carried out on the
Company's pilot line, but the Company plans to build a mega-scale facility to
support the initial volume of production required by Ilika's automotive
partners. In September 2020, Ilika announced the signing of a framework
agreement with the UK Battery Industrialisation Centre (UKBIC) for the
production of Goliath solid state pouch cells. This stage of scale-up will
involve Ilika reaching 5 MWh per week to satisfy increasing customer demand.
Following that announcement, in April 2021, Ilika confirmed that it had
secured funding from the Advanced Propulsion Centre, for a 12-month
collaboration with Comau, part of the Stellantis Group, to scale up Ilika's
existing Goliath pre pilot line and deliver a mega-scale design for a
manufacturing line at a facility such as the UK-BIC. This design study was
successfully completed. Discussions with the UK Government and its agencies
are on-going regarding further grant funding to support the planned scale-up
activities. The Company will also explore other financing options to fund this
scale up, which may include investment from strategic partners and/or equity
financing
COVID-19 Impact and Response
In order to prioritise the safety of our staff, their families and our
customers for much of the reporting period, Ilika staff avoided non-essential
travel and maximised homeworking. Any employees falling into at-risk
categories and those showing COVID-19 symptoms followed self-isolation
procedures in line with UK Government directives.
Throughout the 2021/22 financial year, the Company's facilities remained open.
Through the implementation of risk assessments, enhanced cleaning and hygiene
procedures and social distancing we have maintained a safe working
environment.
War in Ukraine
The war in Ukraine has created inflationary pressures across the supply chain,
but there is no specific consumable or product from the region upon which
Ilika is particularly reliant.
Patent Position
Building Ilika's intellectual property portfolio in solid-state batteries has
continued to be a focus this year. Ilika believes its patents ring-fence and
protect critical IP to avoid competitors working around a single patent. Ilika
now maintains a portfolio of 25 granted patents, as well as trade secrets in
solid-state batteries.
Quality Management System
In November 2021, the annual independent audit of its Quality Management
System (QMS) was successful. ISO 9001 is the world's most widely recognised
QMS and helps organisations to meet the expectations and needs of their
customers. The certification promotes the development of continual
improvement, customer satisfaction, traceability and international best
practices.
Environmental Management System
In June 2022, the company received confirmation of its ISO 14001:2015
certification following an annual audit of its environmental management
system. ISO 14001:2015 is part of a family of standards developed by the
International Organisation for Standardisation. It specifies the requirements
for an environmental management system that an organisation can use to enhance
its environmental performance. The certification confirms that environmental
impact is being continuously monitored and improved.
Key performance indicators ('KPIs')
The Board monitors a small portfolio of KPIs, which define the progress being
made by the Group. Technical KPIs benchmark battery development milestones and
patent applications. Commercial KPIs link the technical development programmes
to the sales pipeline and engagement of commercialisation partners.
Operational KPIs ensure that overheads and cash resources are tightly
controlled.
The most important financial KPIs are the cash position, turnover and
profitability of the Group, which remain under constant focus and which are
considered in the financial review.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders and other matters in their
decision making. The Directors continue to have regard to the interests of the
Group's employees and other stakeholders, the impact of its activities on the
community, the environment and the Group's reputation for good business
conduct, when making decisions. In this context, acting in good faith and
fairly, the Directors consider what is most likely to promote the success of
the Group for its members in the long term. The Board regularly reviews the
Group's principal stakeholders and how it engages with them. This is achieved
through information provided by management and also by direct engagement with
stakeholders themselves.
During the year, the key decision taken by the Board was to invest in the
in-house scale up to volume manufacturing of Stereax batteries to meet the
initial commercial demand for applications in industrial condition monitoring
and miniature medical devices.
Section 172 Statement
Why engagement is important Engagement process Strategic decisions in the year
Investors
To communicate and secure support for our long-term strategic objectives AGM, analyst presentations, institutional investor presentations. Use of Decision to raise funds to support the scale up of the Goliath development
effectively and to promote long-term holdings. Investor Meet Company and Director's Talk platforms to extend reach to retail programme.
investors.
Trading on OTCQX best market to extend coverage to US retail investors.
Employees
To deliver our long-term strategic objectives. To promote our culture, purpose Transparent cascading Key Performance Measures that link directly to the Employee Assistance Programme provided offering various legal, financial and
and values and support their well-being whilst maintaining low turnover and company objectives. life coaching advice.
high productivity rates
Twice yearly performance evaluations with objective setting and reviews.
Formal policies and procedures.
Maintaining key operations throughout the year by promoting working from home
Quarterly, all-company, update meetings. and fully risk-assessed social-distancing policies in the labs and offices.
Community and environment
To ensure activities are socially and environmentally responsible and meet the Promotion of the employee-led "Green Champions", a cross-company working group Maintained and extended ISO accreditations (9001 and 14001) to new facilities.
highest standards. to ensure green initiatives are raised and followed through. Continued use of electricity solely from renewable sources.
Commenced an electric vehicle salary sacrifice scheme and undertook carbon
offset program to minimise carbon footprint.
Business relationships Engagement process Strategic decisions in the year
To enable balanced decisions which incorporate viewpoints of customers, Attendance at conferences and customer and supplier meetings. Appointment of a supply chain director.
suppliers and regulators and ensure Company's integrity, brand and
reputation are upheld.
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 33 to 50 The consolidated
financial statements are presented under international accounting standards in
conformity with the requirements of the Companies Act 2006. The financial
statements of the Company continue to be prepared in accordance with
International Financial Reporting Standards in conformity with the
requirements of the Companies Act 2006 and are set out on pages 51 to 55.
Statement of Comprehensive Income
Turnover
Turnover, all from continuing activities, for the year ended 30(th) April 2022
was £0.5m (2021: £2.3m). This includes £0.4m of grant income recognised
from four projects that the company has in progress with Innovate UK (2021:
£2.0m from seven programmes).
Non-grant turnover in the year was £0.1m (2021: £0.3m). This year the Group
has solely focussed on battery development and so turnover is associated with
the supply of battery samples for evaluation by customers.
Administrative expenses and losses for the period
Administrative costs for the year increased from £4.4m in 2021 to £8m in
2022. Approximately £2.5m of this increase was in research and development
spending, a significant proportion of which is staff costs associated with the
increase in the average number of staff employed from 51 to 64.
The facilities costs associated with the set up and running of the new
production facility also contributed to this increase and £0.8m of
development costs were capitalised in the year compared to £0.9m in 2021. The
share-based payment charge increased slightly from £420k in 2021 to £430k in
2022, due to an increased number of employees qualifying for the company's
share option scheme.
The underlying level of loss that is measured by Earnings Before Interest,
Tax, Depreciation and Amortisation and Share-based payments (adjusted EBITDA)
shows an increase in loss from £2.3m in 2021 to £6.4m in 2022.
Statement of financial position and cash flows
At 30(th) April 2022, current assets amounted to £26.0m (2021: £12.3m),
including cash, cash equivalents and bank deposits of £23.4m (2021: £9.8m).
The principal elements of the £13.6m increase in net funds were:
· Fundraise of £23.9m (net) in the year
· Operating cash outflow of £6.4m (2021: £2.3m);
· Capital expenditure on intangible development costs, plant, property
and equipment of £4.8m (2021: £2.7m) which mostly relates to the
establishment of the new Stereax manufacturing facility.
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 products and for those products currently under development.
The Group seeks to reduce this risk by continually assessing competitive
technologies and competitors. The Group seeks to commercialise its batteries
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 intellectual property.
Financial risk
The Group is reliant on a small number of significant customers, partners and
grant funding bodies. Termination of these agreements or grant polices could
have a material adverse effect on the Group's results or operations or
financial condition. The Group expects to incur further operating losses as
progress on development programmes continue.
The Group seeks to reduce this risk by broadening the number of customers and
partners and thereby reduce reliance on individual significant companies and
by leveraging its IP and resources over multiple projects. The Group applies
for Research and Development tax credits to help mitigate its investment in
these activities.
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 Group reduces this risk by contracting specialist patent agents and
attorneys with extensive global experience of patenting and licensing.
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 and a good working environment.
War in Ukraine risk
The war in Ukraine has created inflationary pressures across the supply chain,
but there is no specific consumable or product from the region upon which
Ilika is particularly reliant.
COVID-19 risk
The Group is not immune to the risks associated with COVID-19. The Group
continues to manage these circumstances with risk assessments and method
statements to ensure we provide a safe working environment in line with the
guidance set out specific to our industry, together with the latest UK
Government's guidance.
By order of the Board
Keith
Jackson
Graeme Purdy
Chairman
CEO
12(th) July 2022
ILIKA plc
DIRECTORS' 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) (Resigned 22 September 2021)
Mr G. Purdy (CEO)
Non-Executive
Prof. K Jackson (Chairman)
Mr. J Millard (Senior Independent Director)
Dr. M. Biddulph
Research and development costs
In accordance with the policy outlined in note 1, the Group incurred research
and development expenditure of £4,786,225 in the year (2021: £2,258,177).
In addition, amounts totalling £807,331 (2021: £939,709) were capitalised in
the year. 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 15 of the financial
statements.
Future developments
Information on the future developments of the business are included in the
Strategic Report on page 3
Dividends
The Directors do not recommend the payment of a dividend.
Directors' interests in ordinary shares
The directors, who held office at 30(th) April 2022, had the following
interests in the ordinary shares of the Company:
Number of shares
1st May 2021 30th April 2022
G Purdy 767,927 782,927
K Jackson 95,000 102,142
S Boydell 43,346 113,948
M Biddulph 12,500 16,071
J Millard - -
B Hayden resigned as director with effect from 22(nd) September 2021. The
table below sets out the interests in ordinary shares of the Company held as
at 22(nd) September 2021 and 1(st) May 2021.
1st May 2021 22(nd) September 2021
B Hayden* 33,500 41,500
* B Hayden had an interest in preference shares of the Company amounting to
426,300 at 22(nd) September 2021 when he resigned from the board and at 1(st)
May 2021.
DIRECTORS' REPORT (continued)
Directors' interests in ordinary shares (continued)
During the year, B Hayden exercised 8,000 share options in July 2021, G Purdy
exercised 30,000 share options in July 2021 and sold 15,000 ordinary shares in
February 2022 for proceeds of £21,525, S Boydell exercised 10,000 share
options in July 2021, 20,000 share options in February 2022 and 55,602 share
options in March 2022 and sold 15,000 ordinary shares in February 2022 for
proceeds of £21,525. Additionally, S Boydell exercised and sold 373,222
Long Term Incentive Plan share options in March 2022 for net proceeds of
£157,906.
Substantial shareholdings
On 2(nd) July 2022 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
GPIM Limited 13,742,150 8.7
Janus Henderson Group plc 8,565,108 5.4
Schroders plc 7,770,865 4.9
Herald Investments 7,507,283 4.8
Baillie Gifford & Co. 7,170,769 4.5
Post balance sheet events
There are no significant post balance sheet events from the 30(th) April 2022
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
ILIKA plc
DIRECTORS' REMUNERATION REPORT
Remuneration Committee
The Group's remuneration policy is the responsibility of the Remuneration
Committee (the 'Committee'). The terms of reference of the Committee are
outlined in the Corporate Governance Statement on page 16. The Committee
members are Keith Jackson (Chairman), Jeremy Millard and Monika Biddulph, all
of whom are independent non-executive directors. The Chief Executive Officer
and certain executives may be invited to attend Committee meetings to assist
with its deliberations, but no executive is present when their own
remuneration is being 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
proportion of the total remuneration package, in the form of bonus and share
options, is performance driven and has been constructed following consultation
with major shareholders.
Components of remuneration
Component Purpose and link to strategy Operation Performance metrics
Base salary To attract and retain talent. Reflecting individual's role, experience and performance. Base salaries are Take into account Group and individual performance, external benchmark
reviewed annually in January. information and internal relativities.
Benefits and Pension To offer market competitive package. Contribution to the executive director's individual money purchase scheme (at n/a
between 8% and 10% of base salary) and critical illness cover.
Short‑Term Incentive Plan - annual Rewards the achievement of short‑term financial and strategic project Maximum bonus of base salary: 100% CEO, 60% CSO and 40% CFO. 50% of the Delivery of exceptional performance against a series of financial, commercial
milestones. bonus is payable in cash and 50% is deferred into shares (using nominal cost and technology objectives.
performance related bonus options) for one year, subject to continued employment.
Long‑Term Incentive Plan - restricted share unit awards Incentivise, retain and reward the executive directors for successfully taking Ilika plc Long Term Incentive Plan 2018 (the "LTIP"), was adopted by Awards vest to the extent that challenging share price targets have been met.
the Company through the next stage of its growth. shareholders at the 2018 AGM
Single awards of share options with an exercise price of the nominal value of
the shares were made which will vest after three years.
Shareholding guidelines To increase shareholder alignment. 100% of the net of tax share awards which vest must be retained until the n/a
following guidelines are met:
CEO 300% of salary
CSO 250% of salary
CFO 150% of salary
Remuneration policy (continued)
(ii) Chairman and non-executive Director remuneration
The Chairman, Keith Jackson receives a fixed fee of £69,424 per annum. Jeremy
Millard and Monika Biddulph receive a fixed fee of £35,233 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(th) April 2022 and 30(th) April 2021 was as follows:
Basic Benefits in kind Total Pension Total
salary Short term benefits
Bonus
£ £ £ £ £ £
Year to 30th April 2022
G Purdy 210,459 720 53,667 264,846 21,046 285,892
S Boydell 139,298 476 20,546 160,320 11,143 171,463
B Hayden (to end Sept 21) 57,150 231 - 57,381 - 57,381
K Jackson 67,389 - - 67,389 - 67,389
J Millard 34,200 - - 34,200 - 34,200
M Biddulph 34,200 - - 34,200 - 34,200
------ ------ ------ ------ ------ ------
542,696 1,427 74,213 618,336 32,189 650,525
------ ------ ------ ------ ------ ------
Year to 30th April 2021
G Purdy 206,457 708 49,756 256,921 20,646 277,567
S Boydell 136,648 468 16,671 153,787 10,932 164,719
B Hayden* 91,169 139 12,979 104,287 - 104,287
K Jackson 66,107 - - 66,107 - 66,107
J Millard 33,550 - - 33,550 - 33,550
M Biddulph 33,550 - - 33,550 - 33,550
------ ------ ------ ------ ------ ------
567,481 1,315 79,406 648,202 31,578 679,780
------ ------ ------ ------ ------ ------
*B Hayden was employed by the University of Southampton in 2020. The amounts
disclosed in the table above relate to payments made directly to B Hayden. The
University of Southampton recharged employment costs of £40,323 to the
company in 2020/21 in respect of B Hayden.
Benefits in kind include critical illness cover.
Share options
The share options of the directors are set out below:
2021 2022 Exercise Price Performance Conditions
Unapproved Number Number Expiry date
G Purdy 105,810 75,810 1p August 2027 n/a
G Purdy 1,127,777 1,127,777 1p January 2029 See note 1
G Purdy 207,229 207,229 1p August 2029 n/a
G Purdy 606,014 606,014 1p March 2030 See note 2
G Purdy 65,812 65,812 1p September 2030 n/a
G Purdy 92,536 92,536 1p February 2031 See note 3
S Boydell 373,222 - 1p January 2029 See note 1
S Boydell 63,822 - 1p August 2029 n/a
S Boydell 196,619 196,619 1p March 2030 See note 2
S Boydell 21,780 - 1p September 2030 n/a
S Boydell 42,873 42,873 1p February 2031 See note 3
B Hayden resigned as director with effect from 22(nd) September 2021. The
table below sets out the share options that he held up until 22(nd) September
2021 along with the 30(th) April 2021 comparative.
2021 22/9/2021 Exercise Price Performance Conditions
Unapproved Number Number Expiry date
B Hayden 16,211 8,211 1p August 2027 n/a
B Hayden 712,394 712,394 1p January 2029 See note 1
B Hayden 60,896 60,896 1p August 2029 n/a
B Hayden 382,807 382,807 1p March 2030 See note 2
B Hayden 15,763 15,763 1p September 2030 n/a
B Hayden 44,494 44,494 1p February 2031 See note 3
Awards with performance conditions will vest on the achievement of the share
price targets, assessed over a three year performance period:
1) (a) Less than 27p - no vesting
(b) 27p - 25% of the shares subject to award will vest
(c) 36p - 75% of the shares subject to award will vest
(d) 54p - 100% of the shares subject to award will vest
2) (a) Less than 51p - no vesting
(b) 51p - 25% of the shares subject to award will vest
(c) 68p - 75% of the shares subject to award will vest
(d) 102p - 100% of the shares subject to award will vest
3) (a) Less than 336p - no vesting
(b) 336p - 25% of the shares subject to award will vest
(c) 448p - 75% of the shares subject to award will vest
(d) 672p - 100% of the shares subject to award will vest
Awards will vest between points (b) and (c) and between (c) and (d) on a
straight-line basis.
Share based payment charge attributable to directors in the year was £314,204
(2021: £343,733).
Keith Jackson
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 UK adopted international
accounting standards. 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 for that period.
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 UK adopted
international accounting standards 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
12(th) July 2022
ILIKA plc
CORPORATE GOVERNANCE STATEMENT
We confirm that our governance structures and practices are in agreement with the provisions of the Quoted Companies Alliance (QCA) Corporate Governance Code (2018) for small and mid-size quoted companies. Our statement of compliance with the 10 principles of the QCA Corporate Governance Code is set out below and on our website: https://www.ilika.com/investors/corporate-governance
Principle Disclosure
Establish a strategy and business model which promotes long-term value for Business strategy outlined on page 3.
shareholders.
Seek to understand and meet shareholder needs and expectations. See the "Meeting the needs and objectives of shareholders" section in
Corporate Governance Statement.
Take into account wider stakeholder and social responsibilities and their See the "Shareholder engagement" section in Corporate Governance Statement.
implications for long term success.
Embed effective risk management, considering both opportunities and threats, See risk management and internal control section in Corporate Governance
throughout the organisation. Statement.
Maintain the board as a well-functioning, balanced team led by the chair. See the "Board of directors" section in Corporate Governance Statement.
Ensure that between them the directors have the necessary up-to-date See the "Board experience" section in Corporate Governance Statement.
experience, skills and capabilities.
Evaluate all elements of board performance based on clear and relevant See the "Performance evaluation" section below in Corporate Governance
objectives, seeking continuous improvement. Statement.
Promote a corporate culture that is based on sound ethical values and See the "Promoting ethical values and behaviours" section in Corporate
behaviours. Governance Statement.
Maintain governance structures and processes that are fit for purpose and See the "Board Committees" section in Corporate Governance Statement.
support good decision making by the board.
Communicate how the company is governed by maintaining a dialogue with See the "Shareholder engagement" section in Corporate Governance Statement.
shareholders and other relevant stakeholders.
Shareholder engagement
The Board recognises the importance of communicating with its shareholders and
maintains dialogue with institutional shareholders and analysts, and
presentations are made when financial results are announced. The Group retains
the services of a professional financial public relations company, who assist
with ensuring the accurate and timely communication of relevant corporate,
financial and other regulatory news. The Annual General Meeting is the
principal forum for dialogue with private shareholders who are given the
opportunity to raise questions at the meeting, and to meet directors and
senior managers of the business who make themselves available after each
meeting. The Company aims to send out the notice of the Annual General
meeting at least 21 working days before the meeting and publish the results of
resolutions (which are usually voted on by a show of hands) in a Regulatory
News Statement after the relevant meeting. Shareholders also have access to
the Company's website and interactive Investor Meet Company web-based
presentations.
Meeting the needs and objectives of shareholders
The Board appreciates that the diverse shareholder base of the Group may have
differing objectives for their investment in the business, and therefore the
importance of ensuring that non-executive directors ("NED") have an up to date
understanding of these perspectives is well recognised. Directors will
therefore routinely engage with both institutional and private investors and
will seek out opinions on unusual or potentially controversial matters before
adopting policy changes or tabling shareholder resolutions. The Board will
always review written feedback reports from investors following financial
results "roadshows" and will always consider information received from
institutional voter advisory firms.
Promoting Ethical Values and Behaviours
The Board has primary responsibility for ensuring that the Group operates according to the highest ethical standards. The Directors believe that the main determinant of whether a business behaves ethically and with integrity is the quality of its people. The Directors have responsibility for ensuring that individuals employed by the Group demonstrate the highest levels of integrity. In addition, the Group has a formal Share Dealing Code.
Board of directors
The Board of directors (the 'Board') consists of a Non-Executive Chairman, two
Executive Directors and two 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, based on clear
and relevant objectives to ensure continuous improvement, which is carried out
annually.
Board experience
Keith Jackson - Non-Executive Chairman
Keith has had a wide ranging and successful career in companies varying from
start-ups to multinationals. He founded and grew an automotive control systems
company whose engine control systems are used on millions of vehicles
worldwide. Following the sale of the company to a major OEM, he joined Rolls
Royce Engines PLC where he worked as Chief Technology Officer (CTO) in the
electrical power and control systems group and later became the CTO at Meggitt
PLC.
Keith is now the Non-Executive Chairman Libertine FPE and a Professor at
Sheffield University's Automated Control and Systems Engineering department.
He also advises a number of companies on their technologies and strategy.
Keith is a Fellow of the Society of Automotive Engineers, a previous Rolls
Royce Engineering Fellow and Royal Aeronautical Society Fellow. e is a
Computer Science graduate from University College London.
Graeme Purdy - Chief Executive Officer
Graeme was appointed to head up Ilika in May 2004, just before completion of
the company's seed round of funding. He led the company through two successful
rounds of venture funding before floating the company on AIM in 2010.
Prior to joining Ilika, Graeme was Chief Operating Officer of a
high-technology company in the Netherlands and before that worked
internationally in a variety of technical and commercial roles for Shell.
Graeme holds a Master's degree in Chemical Engineering from Cambridge and an
MBA from INSEAD business school in France. Graeme is a Chartered Engineer and
a Sainsbury Management Fellow.
Stephen Boydell - Finance Director
Having qualified with Deloittes in 1996, Stephen held a number of acquisition,
treasury and group reporting roles at both Hays plc, a diversified commercial,
logistics and personnel group, and then AGI Media, a global creative packaging
group. He then became Finance Director of Healthy Direct, a successful
Guernsey- based group of companies, producing and supplying vitamins and
supplements to the UK market. He was instrumental in the restructuring of that
group and its subsequent trade sale to a competitor. He joined Ilika in 2009
as Finance Director and Company Secretary. Stephen studied Economics at
Nottingham University and is a Fellow of the Institute of Chartered
Accountants.
Monika Biddulph - Non-Executive Director
Monika has a wide range of experience in both the commercial and technical
aspects of an international technology business. Until 2018, Monika was a
member of the Senior Leadership Team IP Product Groups at Arm Holdings plc,
responsible for driving the execution of the product roadmaps across all lines
of business and central engineering, and previously holding various General
Manager and licensing roles in the business. Currently Monika is also a
Non-Executive Director on the board of D4t4 Solutions Plc and AFC Energy Plc.
She was previously NED at Linaro Limited, an open source software
organisation. Monika holds a PhD in Physics from the ETH Zurich.
Jeremy Millard - Non-Executive Director
Jeremy has over 20 years' investment banking experience and currently provides
corporate finance advice to clients in the science and deep technology sectors
via Iridium Corporate Finance Limited which he founded, prior to which he held
senior roles in a number of corporate finance houses including heading up the
technology practice at Rothschild in London. Jeremy is currently a
Non-Executive Director and Chairman of the audit committee of UK listed
company Omega Diagnostics Group plc (AIM: ODX), a Non-Executive Director of
private companies Blackbullion Ltd (EdTech) and CFPro Ltd (specialist
accounting services).
Board Committees
As appropriate, the Board has delegated certain responsibilities to Board
Committees as follows:
i) Audit Committee
The Audit Committee currently comprises Jeremy Millard (Chair), Professor
Keith Jackson and Dr. Monika Biddulph.
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 Professor Keith Jackson (Chairman),
Jeremy Millard and Dr. Monika Biddulph.
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 Professor Keith Jackson (Chairman), Jeremy
Millard and Dr. Monika Biddulph.
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 7/7 - - -
Prof. B. E. Hayden 4/4 - - -
Mr G. Purdy 7/7 - - -
Prof K Jackson 7/7 2/2 1/1 3/3
Jeremy Millard 7/7 2/2 1/1 3/3
Dr. Monika Biddulph 7/7 2/2 1/1 3/3
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
Keith Jackson
Chairman
12(th) July 2022
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has primary responsibility for ensuring that the financial
performance of the Group is properly measured and reported on. Its terms of
reference and its current membership are outlined in the Corporate Governance
Statement on page 16.
Matters covered by the Committee
The Committee, which is required to meet at least twice a year, met twice
during the year ended 30 April 2022, with all members present, and covered the
following matters:
· July 2021: audit completion meeting for the 2021 year-end audit,
including review of the valuation model to support Ilika plc's investment in
Ilika Technologies Limited, review of the financial forecast to support the
Group's ability to account on a going concern basis, review of the auditor's
report on the audit, and review of the annual report.
· January 2022: Half year report completion meeting. Approval of the
release of the Half Year report.
Auditor independence
The auditors do not supply any non-audit services and this policy safeguards
auditor objectivity and independence.
Internal audit function
The Group does not have an internal audit function, but the Committee
considers that this is appropriate, given the size and relative lack of
complexity of the Group. The Committee keeps this matter under review
annually.
Jeremy Millard
Chair of the Audit Committee
Independent auditor's report to the members of Ilika plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of
the Group's and of the Parent Company's affairs as at 30 April 2022 and of the
Group's loss for the year then ended;
• the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
• the Parent Company financial statements have been properly
prepared in accordance with UK adopted international accounting standards 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 Companies Act 2006.
We have audited the financial statements of Ilika Plc (the 'Parent Company')
and its subsidiaries (the 'Group') for the year ended 30 April 2022 which
comprise Consolidated statement of comprehensive income, the Consolidated
balance sheet, the Consolidated cash flow statement, the Consolidated
statement of changes in equity, the Company balance sheet, the Company cash
flow statement, the Company statement of changes in equity and notes to the
financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their financial
statements is applicable law and UK adopted international accounting standards
and, as regards the Parent Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are
further described in the
Auditor's responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors'
assessment of the Group and the Parent Company's ability to continue to adopt
the going concern basis of accounting included:
· Reviewing the Director's assessment of going concern through analysis
of the Group's cash flow forecast through to July 2023, including assessing
and challenging the assumptions underlying the forecasts by reference to
historic performance and our knowledge of future developments.
· Sensitising the forecasts further to ascertain the levels of revenue
decline that would cause a cash shortage at any point in management's post
balance sheet assessment period. We also compared the level of expenditure
included in the forecasts and compared this to previous periods to determine
if the forecasted cash burn is reasonable compared to prior years, and
reasonable considering the additional costs the business has incurred set up
the new production facility.
Independent auditor's report to the members of Ilika plc (continued)
Conclusions relating to going concern (continued)
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and the Parent Company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Overview
100% (2021: 100%) of Group loss before tax
Coverage 100% (2021: 100%) of Group revenue
100% (2021: 100%) of Group total assets
2022 2021
Capitalisation of development expenditure P P
Key audit matters
Group financial statements as a whole
Materiality
£412k (2021:£192m) based on 5% (2021: 5%) of the loss before tax
Materiality
Group financial statements as a whole
£412k (2021:£192m) based on 5% (2021: 5%) of the loss before tax
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
At 30 April 2022 the Group had two components whose transactions and balances
are included in the consolidated accounting records. Both components, being
Ilika plc and its subsidiary Ilika Technologies Limited, were considered to be
significant components and were subject to a full scope audit.
All work was carried out by the Group audit team.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Independent auditor's report to the members of Ilika plc (continued)
An overview of the scope of our audit (continued)
Key audit matters (continued)
Key audit matter How the scope of our audit addressed the key audit matter
Capitalisation of development expenditure The Group has capitalised development expenditure in relation to their Stereax We checked that the conditions in the accounting standards for capitalising
battery technology. development costs have been met in respect of the Stereax battery technology.
Please refer to note 7, and accounting policies and key sources of estimation
and uncertainty in note 1. There are a number of judgements involved in accounting for development We have discussed with management the Group's processes for identifying the
expenditure, including whether the activities are appropriate for relevant development costs. We reviewed the nature of the costs capitalised
capitalisation in accordance with the criteria of the applicable accounting to determine that these are development costs and not manufacturing or
standard, the allocation of the relevant costs to the Stereax battery project, research in nature by agreeing a sample costs to of underlying records to
and the recoverability of the asset generated. check if they were in line with our understanding of the work carried out in
the year.
Due to the level of judgement, there was also considered to be an inherent
risk of management bias therefore this was considered to be an area of focus We agreed a sample of capitalised costs to underlying supporting documentation
for our audit and a key audit matter. to confirm the existence and accuracy of the costs. This included obtaining
time records to corroborate the allocation of employee time spent on the
Stereax battery technology and inspecting employee contracts to check that
their stated job roles support their involvement in development activities.
Employee costs were also agreed to the underlying payroll records.
We assessed the ability of the asset to generate future economic benefits for
the business, which must at least exceed the carrying value of the intangible
asset. We have corroborated management's assessment to external market
information and expectations.
Key observations:
Based on the audit work performed we consider that development costs have been
capitalised appropriately and in accordance with the relevant accounting
standards.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Independent auditor's report to the members of Ilika plc (continued)
Our application of materiality (continued)
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements Parent Company financial statements
2022 2021 2022 2021
Materiality £412k £192k £227k £119k
Basis for determining materiality 5% of loss before tax 5% of loss before tax 55% of Group materiality 62% of Group materiality
Rationale for the benchmark applied We considered 5% of loss before tax to be a key performance benchmark for the We considered 5% of loss before tax to be a key performance benchmark for the Calculated as a percentage of Group materiality due to aggregated Calculated as a percentage of Group materiality due to aggregated
Group and the users of the financial statements in assessing financial Group and the users of the financial statements in assessing financial consideration of significant component materiality levels. consideration of significant component materiality levels.
performance. performance.
Performance materiality £308k £144k £170k £89k
Basis for determining performance materiality On the basis of our risk assessment, together with our assessment of the On the basis of our risk assessment, together with our assessment of the On the basis of our risk assessment, together with our assessment of the On the basis of our risk assessment, together with our assessment of the
Group's control environment and the limited number of known errors Group's control environment and the limited number of known errors Group's control environment and the limited number of known errors Group's control environment and the limited number of known errors
historically, our judgement is that performance materiality for the financial historically, our judgement is that performance materiality for the financial historically, our judgement is that performance materiality for the financial historically, our judgement is that performance materiality for the financial
statements should be 75% of materiality. statements should be 75% of materiality. statements should be 75% of materiality. statements should be 75% of materiality.
Component materiality
We set materiality for each component of the Group based on a percentage of
between 62% and 95% of Group materiality dependent on the size and our
assessment of the risk of material misstatement of that component. Component
materiality in respect of Ilika Technologies Limited was £390k.In the audit
of each component, we further applied performance materiality levels of 75% of
the component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £8k (2021:£4k). We also agreed to report
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Independent auditor's report to the members of Ilika plc (continued)
Other information
The Directors are responsible for the other information. The other information
comprises the information included in the Annual Report and Accounts other
than the financial statements and our auditor's report thereon. Our opinion on
the financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during
the course of the audit, we are required by the Companies Act 2006 and ISAs
(UK) to report on certain opinions and matters as described below.
Strategic report and Directors' report In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic report and the Directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the Strategic report and the Directors' report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the Directors'
report.
Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to
which 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.
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities in
respect of the annual report and accounts, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the Group's and the Parent Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Independent auditor's report to the members of Ilika plc (continued)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks that are
applicable to the Parent company and its subsidiary and determined that the
most significant frameworks which are directly relevant to specific assertions
in the financial statements are those that relate to the reporting framework,
rules of the London Stock Exchange for companies trading securities on AIM,
the Companies Act 2006 and relevant tax compliance regulations.
- We understood how the Parent Company and its subsidiary is complying
with those frameworks by making enquiries of, those responsible for legal and
compliance procedures and the Company Secretary.
- We had discussions with the Directors regarding known or suspected
instances of non-compliance with laws and regulations, including gaining an
understanding of where they considered there was a susceptibility to fraud.
- We reviewed board meeting minutes for any evidence of fraud or
non-compliance with laws and regulations including Companies Act 2006; AIM
listing requirements; financial reporting framework; health and safety;
taxation regulations; and any other regulatory agency.
We determined that the Parent Company and its subsidiary susceptibility
material misstatement and specifically where fraud may occur related to
management override, the inappropriate or incorrect recognition of revenue and
the capitalisation of development expenditure (assessed as a Key Audit Matter
above).
- We obtained an understanding of the processes and controls that the
Group and the Parent Company has established to address risks identified, or
that otherwise prevent, deter and detect fraud; and how directors monitor
that processes and controls.
- In response to the risk of management override of controls, we
identified and selected journal entries for testing, in particular any
material journal entries posted directly to revenue and cash, unusual
account combinations and journals posted by unexpected users. We also
performed additional random testing of any journals posted directly by the
Finance director. We agreed the journals to the relevant supporting
documentation(monthly reconciliations , invoices and accrual schedules) and
checked that they are valid, accurate and posted in the correct accounting
period
- We also performed an assessment on the appropriateness of key
judgements and estimates, for example the capitalisation of development costs
(the risks associated with the capitalisation of development costs has been
assessed as a Key Audit Matter above), which are subject to managements'
judgement and estimation, and could be subject to potential bias.
Independent auditor's report to the members of Ilika plc (continued)
Auditor's responsibilities for the audit of the financial statements
(continued)
As part of our testing, we made inquiries of the Directors regarding any non
compliance with laws and regulations and fraud that was identified during the
year. There were no matters that were communicated to the audit team that
would indicate non compliance of laws and regulations and fraud. We
communicated relevant identified laws and regulations and potential fraud
risks to all engagement team members and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we are
to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor's report.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and
the Parent Company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
Stephen Le Bas (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Southampton, UK
Date
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Ilika plc
Consolidated statement of comprehensive income
Year ended 30(th) April
Notes 2022 2021
£ £
Turnover 2 496,103 2,255,688
Revenue 30,878 230,453
UK grants 465,225 2,025,235
Cost of sales (218,794) (1,271,612)
------- -------
Gross profit 277,309 984,076
Total Administrative expenses
Administrative expenses (7,966,807) (4,405,622)
Share based payment charge (429,686) (419,591)
(8,396,493) (4,825,213)
------- -------
Operating loss 3 (8,119,184) (3,841,137)
Income from short term deposits 5,590 14,806
Interest payable (31,299) (9,694)
------- -------
Loss before tax (8,144,893) (3,836,025)
Taxation 5 1,016,331 308,962
------- -------
Loss for period / total comprehensive expense (7,128,562) (3,527,063)
------- -------
Loss per share from continuing operations 6
Basic (4.65)p (2.53)p
Diluted (4.65)p (2.53)p
The notes on pages 33 to 50 form part of these financial statements.
Ilika plc
Consolidated balance sheet
Company number 07187804
As at 30(th) April
Notes 2022 2021
£ £
ASSETS
Non-current assets
Intangible assets 7 1,958,153 1,063,059
Property, plant and equipment 8 5,072,280 2,305,183
Right to use assets 9 891,254 890,421
------- -------
Total non-current assets 7,921,687 4,258,663
------- -------
Current assets
Trade and other receivables 10 1,594,326 2,173,597
Current tax receivable 5 1,016,822 330,000
Other financial assets - bank deposits 11 772,675 769,080
Cash and cash equivalents 12 22,626,280 8,997,208
------- -------
Total current assets 26,010,103 12,269,885
------- -------
Total assets 33,931,790 16,528,548
------- -------
Issued capital and reserves attributable to owners of parent
Issued share capital 16 1,582,342 1,396,265
Share premium 64,754,910 40,992,933
Capital restructuring reserve 6,486,077 6,486,077
Accumulated losses (41,386,898) (34,688,022)
------- -------
Total equity 31,436,431 14,187,253
------- -------
LIABILITIES
Current liabilities
Trade and other payables 13 1,407,398 1,373,210
Lease liabilities 9 223,644 195,524
------- -------
Total current liabilities 1,631,042 1,568,734
------- -------
Non-current liabilities
Lease liabilities 9 623,952 632,196
Provisions 14 240,365 140,365
------- -------
Total non-current liabilities 864,317 772,561
------- -------
Total liabilities 2,495,359 2,341,295
------- -------
Total equity and liabilities 33,931,790 16,528,548
------- -------
The notes on pages 33 to 50 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 12(th) July
2022.
Mr. K Jackson
Chairman
Ilika plc
Consolidated cash flow statement
Year ended 30(th) April
2022 2021
£ £
Cash flows from operating activities
Loss before taxation (8,144,893) (3,836,025)
Adjustments for:
Amortisation 47,512 14,243
Depreciation 1,253,038 1,130,862
Equity settled share-based payments 429,686 419,591
(Profit)/ loss on disposal of plant property and equipment (2,000) 2,089
Net financial expense/(income) 25,709 (5,112)
------- -------
Operating cash flow before changes in working capital, interest and taxes (6,390,948) (2,274,352)
Decrease / (increase) in trade and other receivables 279,221 (293,067)
Increase in trade and other payables 34,188 173,777
Increase/ (decrease) in provisions 100,000 (29,305)
------- -------
Cash utilised by operations (5,977,539) (2,422,947)
Tax received 329,509 278,962
------- -------
Net cash flow used in operating activities (5,648,030) (2,143,985)
Cash flows from investing activities
Interest received 5,590 14,806
Purchase of intangible assets (942,606) (1,011,192)
Purchase of property, plant and equipment (3,491,671) (1,812,135)
Sale of property, plant and equipment 2,000 -
Increase in other financial assets (3,595) (6,880)
------- -------
Net cash used in investing activities (4,430,282) (2,815,401)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital 24,833,468 101,632
Cost of share issue (885,414) -
Lease payments - capital (209,371) (124,882)
Lease payments - interest (31,299) (9,694)
------- -------
Net cash from/(used in) financing activities 23,707,384 (32,944)
------- -------
Net increase / (decrease) in cash and cash equivalents 13,629,072 (4,992,330)
Cash and cash equivalents at the start of the period 8,997,208 13,989,538
------- -------
Cash and cash equivalents at the end of the period 22,626,280 8,997,208
------- -------
The notes on pages 33 to 50 form part of these financial statements.
Ilika plc
Consolidated statement of changes in equity
Share Capital Accumulated losses Total
Share premium restructuring reserve attributable to equity holders of parent
capital account
£ £ £ £ £
As at 30th April 2020 1,391,857 40,895,709 6,486,077 (31,580,550) 17,193,093
Share-based payment - - - 419,591 419,591
Issue of shares 4,408 97,224 - - 101,632
Loss and total comprehensive expense - - - (3,527,063) (3,527,063)
------ ------- -------- -------- --------
As at 30th April 2021 1,396,265 40,992,933 6,486,077 (34,688,022) 14,187,253
Share-based payment - - - 429,686 429,686
Issue of shares 186,077 24,647,391 - - 24,833,468
Cost of share issue - (885,414) - - (885,414)
Loss and total comprehensive expense - - - (7,128,562) (7,128,562)
------ ------- -------- -------- --------
As at 30th April 2022 1,582,342 64,754,910 6,486,077 (41,386,898) 31,436,431
------ ------- -------- -------- --------
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.
Accumulated losses
The accumulated losses reserve records the accumulated profits and losses of
the Group since inception of the business.
The notes on pages 33 to 50 form part of these financial statements.
Ilika plc
Notes to the consolidated financial statements
1 Accounting policies
Basis of preparation
These financial statements have been prepared in accordance with UK adopted
international accounting standards. 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 51 to 55.
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. The Company controls an investee if all three of the following elements
are present: power over the investee, exposure to variable returns over the
investee, and the ability of the investee to use its power to affect the
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control. 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
and bank deposits, which, at 30th April 2022, amounted to £23,398,955
(2021:£9,766,288). After due consideration of these forecasts and current
cash resources and bank deposits, 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.
After taking account of all the above factors the Directors believe that as
the market becomes more aware of the Company's 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
No new standards, interpretations and amendments adopted in the year have had
a material impact on the Group.
(b) New standards, amendments to standards or interpretations not yet applied
There are no new standards, interpretations or amendments not yet applied
which the directors anticipate will have a material impact on the Group.
Ilika plc
Notes to the consolidated financial statements (continued)
1 Accounting policies (continued)
Turnover
Turnover comprises the fair value for the sale of products and services, net
of value added tax and is recognised as follows:
Sales of goods
Sales of Stereax batteries are recognised upon despatch to the customer at
which point they have an obligation to pay in full and as such, control is
considered to transfer at that point. Invoices are raised at the point
purchase orders are made and subsequently upon delivery.
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. Submissions are made for pre-arranged time periods
with timing differences recognised within accrued or deferred income.
Financial income
Income from short term deposits 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 options to all employees. Equity-settled
share options are measured at fair value at the date of grant. The fair value
determined at the grant date of the equity-settled share options is expensed
on a straight-line basis over the vesting period. At each period end, the
directors re-assess the impact of non-market conditions and adjust the
estimated share-based payment appropriately.
The fair value of 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. Where required market-based vesting and other conditions are
also considered in determining the fair value of new options granted in the
year. 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.
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 profit or loss.
Ilika plc
Notes to the consolidated financial statements
1 Accounting policies (continued)
Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that costs incurred
on development projects are capitalised as intangible assets to the extent
that such expenditure is expected to generate future economic benefits.
Development expenditure is capitalised if, and only if, an entity within the
Group can demonstrate all of the following:
i. its ability to measure reliably the expenditure attributable to
the asset under development;
ii. the product or process is technically and commercially feasible;
iii. its future economic benefits are probable;
iv. its ability to use or sell the developed asset;
v. the availability of adequate technical, financial and other
resources to complete the asset under development; and
vi. its intention is to use or sell the developed asset.
During the year, £807,331 (2021: £939,709) of development expenditure has
been capitalised in line with IAS 38 as a result of the conditions being met
in respect of the Stereax battery project and the sales made in the year.
This capitalisation had commenced in April 2020.
Taxation
Companies within the group may be entitled to claim special tax allowances
under the SME scheme 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. Where companies are loss-making the company claims
tax credits on their surrenderable losses, with an appropriate receivable
recognised. A deferred tax asset is recognised for unclaimed tax credits
that are carried forward as deferred tax assets.
Tax credits claimed under the RDEC scheme are accounted for under IAS 20 as
government grants in line with the accounting policy noted above.
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.
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 2 - 5 years
Fixtures & fittings 3 - 5 years
Ilika plc
Notes to the consolidated financial statements
1 Accounting policies (continued)
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 profit or
loss.
Leases
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for leases of low value assets and leases with a duration of
twelve months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
Group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes: amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the group if it
is reasonably certain to exercise that option; and any penalties payable for
terminating the lease, if the term of the lease has been estimated on the
basis of termination option being exercised.
Right-of-use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for: lease
payments made at or before commencement of the lease, initial direct costs
incurred, and the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement, lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
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 (1-5 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.
Development expenditure
Development expenditure is capitalised at cost and is amortised to
administrative expenses on a straight-line basis over its useful economic life
of 10 years.
Ilika plc
Notes to the consolidated financial statements
1 Accounting policies (continued)
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 carried at amortised
cost. Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. 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.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Group are recognised at the proceeds received, net of direct
issue costs.
Provisions
Provisions are made where an event has taken place that gives the Group a
legal or constructive obligation that probably requires settlement by a
transfer of economic benefit, and a reliable estimate can be made of the
amount of the obligation.
Provisions are either charged as an expense to income statement or capitalised
within property, plant and equipment in the year that the Group becomes aware
of the obligation, and are measured at the best estimate at the balance sheet
date of the expenditure required to settle the obligation, taking into account
relevant risks and uncertainties.
When payments are made, they are charged to the provision carried in the
balance sheet.
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 judgements 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.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
Capitalisation of development costs
During the year, costs have been capitalised in respect of the Stereax battery
technology. The directors have determined that the conditions to capitalise
this associated expenditure have been met. Had these costs been considered
research rather than development expenditure then the intangible assets would
be £807,331 lower. Furthermore, the directors have considered the
recoverability of the capitalised costs by reference to third party market
analysis and determined that the amounts are recoverable.
Ilika plc
Notes to the consolidated financial statements
2 Segment reporting
The Group operates in one area of activity, namely the production, design and
development of solid-state batteries. 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 (with the UK further
split out below).
Year ended 30(th) April
Turnover 2022 2021
£ £
Analysis by geographical market:
By destination
Asia - 4,739
Europe 2,720 15,494
North America 28,158 72,299
UK 465,225 2,163,156
-------- --------
496,103 2,255,688
------- -------
An analysis of turnover by type, demonstrating the changing focus of
management from sales of services to sales of goods, is as follows:
Year ended 30(th) April
Turnover 2022 2021
£ £
Goods and services 30,878 230,453
UK Grants 465,225 2,025,235
-------- --------
496,103 2,255,688
------- -------
Customers might individually account for more than 10% of the total turnover
of the Group. The turnover from these companies are indicated below:
Year ended 30(th) April
Turnover 2022 2021
£ £
UK Grants 465,225 2,025,235
Customers less than 10% 30,878 230,453
-------- --------
496,103 2,255,688
------- -------
Ilika plc
Notes to the consolidated financial statements
3 Operating loss
Year ended 30(th) April
2022 2021
This is arrived at after charging: £ £
Research and development expenditure in the year 4,786,225 2,258,177
Depreciation of property, plant and equipment 1,024,624 1,054,743
Depreciation of right-of-use assets 228,414 76,119
Amortisation of intangible assets 47,512 14,243
Auditors remuneration:
Fees payable to the Group's auditor for the audit of the Group's 34,700 27,200
accounts
Fees payable to the Group's auditor for other services:
- The Audit of the Group's subsidiaries 7,800 7,800
Foreign exchange differences 23,510 53,056
Share-based payment 429,686 419,591
------- -------
4 Employees
The average number of employees during the year, including executive
directors, was:
Year ended 30(th) April
2022 2021
Number Number
Administration 5 5
Materials synthesis 59 46
------ ------
64 51
------ ------
Staff costs for all employees, including executive directors, consist of:
Year ended 30(th) April
2022 2021
£ £
Wages and salaries 3,604,099 2,716,700
Social security costs 426,358 302,659
Share-based payment expense 429,686 419,591
Pension costs 223,669 180,402
------- -------
4,683,812 3,619,352
-------- --------
Included in the above are amounts totaling £790,331 (2021: £827,452) which
have been capitalised.
Ilika plc
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
2022 2021
£ £
Wages and salaries 622,829 648,202
Pension costs 32,190 31,578
------- -------
Directors' emoluments 655,019 679,780
Social security costs 101,834 82,057
Share-based payment expense 314,204 343,733
------- -------
Key management personnel 1,071,057 1,105,570
------- -------
The Directors represent key management personnel and further details, are
given in the Directors' Remuneration Report. The highest paid director
received remuneration of £285,892 (2021: 277,567)
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
2022 2021
£ £
R&D tax credits 1,016,822 330,000
Adjustments to prior period (491) (21,038)
---- -----
1,016,331 308,962
------ ------
(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 19% (2021:
19%). The differences are reconciled below:
2022 2021
£ £
Loss on ordinary activities before tax (8,144,893) (3,836,025)
------ ------
Loss on ordinary activities before tax multiplied by the standard rate of
corporation tax in the UK of 19% (2021: 19%)
(1,547,530) (728,845)
Effects of:
Expenses not deductible for corporation tax 82,435 78,863
R&D relief (175,267) (163,310)
Origination of unrecognised tax losses 623,540 483,292
Adjustments to prior period 491 21,038
------ ------
Total tax credit for the year (1,016,331) (308,962)
------ ------
Ilika plc
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 £37.5m (2021: £30.3m). A deferred tax asset in
respect of these losses of approximately £9.4m (2021: £5.8m) 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
2022 2021
No. No.
Weighted average number of equity shares 153,175,933 139,273,884
-------- --------
£ £
Earnings, being loss after tax (7,128,562) (3,527,063)
------- -------
Pence Pence
Loss per share (4.65) (2.53)
------ ------
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 2022,
there were 6,673,840 options outstanding (2021: 7,369,729) as detailed in
notes 16 and 20.
Ilika plc
Notes to the consolidated financial statements
7 Intangible assets
Development expenditure Software Intellectual property Total
licences
£ £ £ £
Cost
As at 30(th) April 2020 45,943 63,092 75,000 184,035
Additions 939,709 71,483 - 1,011,192
------ ------ ------ ------
As at 30th April 2021 985,652 134,575 75,000 1,195,227
Additions 807,331 135,275 - 942,606
------ ------ ------ ------
As at 30th April 2022 1,792,983 269,850 75,000 2,137,833
Amortisation
As at 30(th) April 2020 - 42,925 75,000 117,925
Provided for the year - 14,243 - 14,243
------ ------ ------ ------
As at 30th April 2021 - 57,168 75,000 132,168
Provided for the year - 47,512 - 47,512
------ ------ ------ ------
As at 30th April 2022 - 104,680 75,000 179,680
Net book value
As at 30(th) April 2021 985,652 77,407 - 1,063,059
------- ------ ------- ------
As at 30(th) April 2022 1,792,983 165,170 - 1,958,153
------- ------ ------- ------
The amortisation charge of £47,512 (2021: £14,243) is included within
administrative expenses.
Development expenditure has not yet been amortised
Ilika plc
Notes to the consolidated financial statements
8 Property, plant and equipment
Leasehold Plant, Fixtures and fittings Total
improvements machinery and equipment
£ £ £ £
Cost
As at 30(th) April 2020 47,918 4,684,189 61,339 4,793,446
Additions 30,190 1,649,627 11,583 1,691,400
Disposals - (727,567) (22,611) (750,178)
------ ------- ------ -------
As at 30th April 2021 78,108 5,606,249 50,311 5,734,668
Additions 314,251 3,424,813 52,657 3,791,721
Disposals - (492,921) - (492,921)
------ ------- ------ -------
As at 30th April 2022 392,359 8,538,141 102,968 9,033,468
------ ------- ------ -------
Depreciation
As at 30(th) April 2020 6,687 3,065,415 50,730 3,122,832
Provided for the year 13,233 1,036,656 4,854 1,054,743
Disposals - (725,479) (22,611) (748,090)
------ ------- ------ -------
As at 30th April 2021 19,920 3,376,592 32,973 3,429,485
Provided for the year 60,944 952,588 11,092 1,024,624
Disposals - (492,921) - (492,921)
------ ------- ------ -------
As at 30th April 2022 80,864 3,836,259 44,065 3,961,188
------ ------- ------ -------
Net book value
As at 30(th) April 2021 58,188 2,229,657 17,338 2,305,183
------ ------- ------ -------
As at 30(th) April 2022 311,495 4,701,882 58,903 5,072,280
------ ------- ------ -------
At the year end, deposits totaling £109,816 (2021: £409,866) were paid in
respect of property, plant and equipment and are held in prepayments. These
will be transferred once the items have been received. Additionally, the
company has capital commitments totaling £163,523 (2021: £1,545,742) as
disclosed in note 18.
Ilika plc
Notes to the consolidated financial statements
9 Leases
The Group has leases for its premises in Romsey and Chandler's Ford and for an
item of equipment. These leases are accounted for by recognising a
right-of-use asset and a lease liability.
The lease liabilities have been measured at the present value of the
contractual payments due to the lessor over the lease terms using an
incremental borrowing rate of 4%, which is the group's estimate of the
discount rate applicable to a property and an equipment lease. The lease terms
have been determined to be 5 years, as this is the non-cancellable period
before the Group has the option of a break. There is no reasonable certainty
that the leases will continue beyond this point.
The right-of-use assets have been initially measured at the amount of the
lease liabilities. Subsequent to initial measurement the lease liabilities
increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for any lease payments made. Right-of-use assets
are depreciated on a straight-line basis over the remaining term of the
lease.
Plant and
Right-of-use assets Land and buildings equipment Total
£ £ £
Cost
As at 1(st) May 2020 320,053 - 320,053
Additions 726,500 - 726,500
------ ------ ------
As at 30(th) April 2021 1,046,553 - 1,046,553
Additions - 229,247 229,247
------ ------ ------
As at 30(th) April 2022 1,046,553 229,247 1,275,800
------ ------ ------
Depreciation
As at 1(st) May 2020 80,013 - 80,013
Provided for the year 76,119 - 76,119
------ ------ ------
As at 30(th) April 2021 156,132 - 156,132
Provided for the year 209,310 19,104 228,414
------ ------ ------
As at 30(th) April 2022 365,442 19,104 384,546
------ ------ ------
Net book value
As at 30(th) April 2021 890,421 - 890,421
------ ------ ------
As at 30(th) April 2022 681,111 210,143 891,254
------ ------ ------
Lease liabilities
2022 2021
£ £
As at 1(st) May 827,720 226,102
Additions 229,247 726,500
Cashflows:
Lease payments (240,670) (134,576)
Interest expense 31,299 9,694
------ ------
As at 30(th) April 847,596 827,720
------ ------
Ilika plc
Notes to the consolidated financial statements
9 Leases (continued)
Maturity analysis of lease payments:
As at 30(th) April
2022 2021
£ £
0-3 months 73,316 57,881
3-12 months 179,513 157,701
------ ------
Due in less than one year 252,829 215,582
1-2 years 262,569 202,829
2-5 years 396,250 483,819
------ ------
Lease payments 911,648 902,230
------ ------
10 Trade and other receivables
As at 30(th) April
2022 2021
£ £
Trade receivables 4,568 3,808
Prepayments 800,957 729,871
Other receivables 464,880 703,893
Accrued income 323,921 736,025
------ ------
1,594,326 2,173,597
------ ------
The ageing of trade receivables is as follows:
As at 30(th) April
2022 2021
£ £
0-29 days 4,568 3,808
------ ------
Included in other receivables is an amount of £50,000 (2021: £50,000) which
represents cash held in a separate bank account used as security against
dilapidation costs which were due at the end of one of the Group's property
lease. These works were largely complete as at 30(th) April 2020.
The accrued income of £323,921 (2021: £736,025) relates to performance
obligations satisfied but not invoiced, all of which is due to be settled
within the next twelve months. The decrease in accrued income is due to the
level of grants underway at the current year end compared to the previous
year.
Ilika plc
Notes to the consolidated financial statements
11 Other financial assets - bank deposits
As at 30(th) April
2022 2021
£ £
Short term deposits with more than three months' maturity 772,675 769,080
-------- --------
12 Cash and cash equivalents
As at 30(th) April
2022 2021
£ £
Current bank accounts 618,230 2,989,775
Short term deposits with less than three months' maturity 22,008,050 6,007,433
-------- --------
22,626,280 8,997,208
-------- --------
13 Trade and other payables
As at 30(th) April
2022 2021
£ £
Trade payables 687,948 822,405
Other payables 38,643 32,222
Other taxes and social security costs 112,516 76,493
Accruals and deferred income 568,291 442,090
-------- --------
1,407,398 1,373,210
-------- --------
The ageing of financial liabilities is as follows:
As at 30(th) April
2022 2021
£ £
0-29 days 597,388 768,277
30-59 days 138,082 228,490
60-89 days 323,556 52,484
90+ days 235,856 247,466
-------- --------
1,294,882 1,296,717
-------- --------
Within Accruals and deferred income is deferred income of £10,000 (2021:
£10,000) that represent unfulfilled performance obligations on grants and
product sales to be satisfied in the next twelve months.
Ilika plc
Notes to the consolidated financial statements
14 Provisions
Leasehold
Dilapidations
£
As at 1(st) May 2021 140,365
Provided 100,000
------
As at 30(th) April 2022 240,365
--------
Leasehold dilapidations relate to the estimated cost of returning two
leasehold properties to their original state at the end of the lease in
accordance with the lease terms. The provision in the year is in respect of
work that would need to be carried out to reinstate an existing leased
premise.
15 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. The Group has denominated some of it sales transactions in
non-sterling currencies. The foreign exchange loss recognised in the accounts
in the year to 30(th) April 2022 was £23,510 (2021: £23,056).
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 cash and cash equivalents, banking deposits
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 and are categorised as floating-rate
financial assets. Contracts in place at 30(th) April 2022 had a weighted
average period to maturity of 18 days (2021: 70 days) and a weighted average
annualised rate of interest of 0.07%. (2021: 0.08%).
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 2022 by
approximately £6,000 (2021: £15,000).
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 2022 by
approximately £228,000 (2021: £108,000).
There is no difference between the book and fair value of financial assets and
liabilities.
Ilika plc
Notes to the consolidated financial statements
15 Financial instruments (continued)
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.
16 Share capital
As at 30(th) April
2022 2021
£ £
Authorised
157,645,867 (2021: 139,038,172) Ordinary Shares of £0.01 each 1,576,459 1,390,382
1,781,400 Convertible Preference Shares of £0.01 each 17,814 17,814
------ ------
Allotted, called up and fully paid
157,645,867 (2021: 139,038,172) Ordinary Shares of £0.01 each 1,576,458 1,390,381
588,400 Convertible Preference Shares of £0.01 each 5,884 5,884
------ ------
1,582,342 1,396,265
------ ------
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 Shareholders have the right, at any time, to convert the
preference shares held to the same number of Ordinary Shares. There are no
further redemption rights.
In July 2021, 17,673,809 shares were issued for £24,743,333. During the year,
a total of 933,886 options over Ordinary Shares of £0.01 each were exercised
for a total consideration of £90,135.
Share options
Employee related share options are disclosed in note 20.
17 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 £223,669 (2021: £180,402). Included
within other creditors is £36,006 (2021: £29,105) relating to outstanding
pension contributions.
18 Capital commitments
At 30(th) April, the group had capital commitments as follows:
2022 2021
£ £
Contracted for but not provided in these financial statements 163,523 1,545,742
------ ------
Ilika plc
Notes to the consolidated financial statements
19 Related party transactions
The directors consider that no one party controls the Group.
Details of key management personnel and their compensation are given in note 4
and in the Directors' Remuneration Report on pages 12 to 14.
20 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.
At 30(th) April 2022, 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 Exercise
option Price per share
08/02/18 95,375 10 years £0.21
24/01/19 747,000 10 years £0.182
Unapproved share options:
Date of grant Number of shares Period of Exercise
option Price per share
15/08/2017 84,021 10 years £0.01
Black Scholes valuation
Weighted Average Exercise Price Number
2022 2021 2022 2021
Outstanding: £ £
At start of the period 0.1894 0.1158 7,369,729 7,396,182
Granted in the period 0.0100 1.1626 327,497 586,308
Exercised in the period 0.1050 0.2305 (933,886) (440,860)
Lapsed in the period 0.9093 0.2364 (89,500) (171,901)
----- ----- -------- --------
At the end of the period 0.1840 0.1894 6,673,840 7,369,729
----- ----- -------- --------
The exercise price of options outstanding at the end of the period ranged
between £0.01 and £2.24 and their weighted average contractual life was 7.5
years (2021: 8.3 years). These share options are exercisable and must be
exercised within 10 years from the date of grant.
Ilika plc
Notes to the consolidated financial statements
20 Share-based payments expense and share options (continued)
Ilika plc Executive Share Option Scheme 2010
At 30(th) April 2022 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
08/02/18 95,375 10 years £0.21
24/01/19 747,000 10 years £0.182
09/07/19 338,983 10 years £0.295
19/03/20 1,252,200 10 years £0.255
10/02/21 303,050 10 years £2.240
All of the options have been valued using the Black-Scholes methodology, with
an expected volatility rate of 37.7%, the interest rate being the bank of
interest base rate at the time of grant and an expected period to maturity of
3 years.
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.
89,500 options lapsed in the year and 437,062 options were exercised.
Ilika plc unapproved share options
At 30(th) April 2022 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
15/08/17 84,021 10 years £0.01
24/01/19 1,840,171 10 years £0.01
29/08/19 268,125 10 years £0.01
26/03/20 1,185,440 10 years £0.01
26/03/20 60,000 10 years £0.255
22/09/20 81,575 10 years £0.01
10/02/21 179,903 10 years £0.01
22/09/21 53,294 10 years £0.01
07/02/22 274,203 10 years £0.01
No options lapsed in the year.
There are 3,012,912 options which were capable of being exercised as at 30(th)
April 2022.
2022 2021
£ £
Share-based payment expense
Black Scholes calculation 429,686 419,591
------ ------
21 Company details
Ilika plc is a public limited company registered in England and Wales with
company number 07187804 and whose registered office is Unit 10a, The
Quadrangle, Premier Way, Romsey, England, SO51 9DL
Company Balance sheet of Ilika plc
Company number 07187804
As at 30(th) April
2022 2021
Notes £ £
ASSETS
Non-current assets
Investments in subsidiary undertaking 24 66,429,684 43,229,684
Amount due from subsidiary undertaking 25 195,658 -
------- -------
66,625,342 43,229,684
Current assets
Trade and other receivables 26 41,666 23,391
------- -------
Total assets 66,667,008 43,253,075
------- -------
Equity
Issued share capital 16 1,582,342 1,396,265
Share premium 64,734,120 40,972,144
Retained earnings 335,116 296,030
------- -------
66,651,578 42,664,439
LIABILITIES
Current liabilities
Trade and other payables 27 15,430 588,636
------- -------
Total liabilities 15,430 588,636
------- -------
Total equity and liabilities 66,667,008 43,253,075
------- -------
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
£390,600 (2021: loss of £381,017).
The notes on pages 54 to 55 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 12(th) July
2022.
Mr. K Jackson
Chairman
Year ended 30(th) April
2022 2021
£ £
Cash flows from operating activities
Loss before tax (390,600) (381,017)
Adjustments for:
Equity settled share-based payments 429,686 419,591
------ ------
Operating cash flow before changes in working capital, interest and taxes 39,086 38,574
(Increase)/decrease in trade and other receivables (18,275) 17,616
(Decrease) in trade and other payables (396) (47,228)
------ ------
Cash generated from operations 20,415 8,962
Cash flows from investing activities
(Increase) / decrease in amounts due from subsidiary undertaking (768,468) 4,889,406
Investment in subsidiary company (23,200,000) (5,000,000)
------ ------
Net cash used in investing activities (23,968,468) (110,594)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital 24,833,468 101,632
Costs of share issue (885,415) -
------ ------
Net cash from financing activities 23,948,053 101,632
------ ------
Net increase in cash and cash equivalents - -
Cash and cash equivalents at the start of the year - -
------ ------
Cash and cash equivalents at the end of the year - -
------ ------
Ilika plc
Company cashflow statement
The notes on pages 54 to 55 form part of these financial statements.
Ilika plc
Company statement of changes in equity
Share Total
Share premium Retained attributable to
capital account Earnings equity holders
£ £ £ £
As at 30th April 2020 1,391,857 40,874,920 257,456 42,524,233
Issue of shares 4,408 97,224 - 101,632
Share-based payment - - 419,591 419,591
Loss and total comprehensive expense - - (381,017) (381,017)
------ -------- ------ ---------
As at 30th April 2021 1,396,265 40,972,144 296,030 42,664,439
Issue of shares 186,077 24,647,391 - 24,833,468
Cost of issue - (885,415) - (885,415)
Share-based payment - - 429,686 429,686
Loss and total comprehensive expense - - (390,600) (390,600)
------ -------- ------ ---------
As at 30th April 2022 1,582,342 64,734,120 335,116 66,651,578
------ --------- ------ ---------
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.
The notes on pages 54 to 55 form part of these financial statements.
Ilika plc
Notes to the financial statements
22 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with UK adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006.
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.
Key sources of estimation and uncertainty
The company holds a significant investment in its subsidiary, Ilika
Technologies Limited, of £66.4m (2021: £43.2m). In assessing the carrying
value of this asset for impairment, the directors have exercised judgement in
estimating its recoverable amount. The determination of the valuation for this
asset is based on the discounted estimated future cash flows generated from
out-licensing transactions. The valuation is derived from a financial model
that evaluates a range of potential outcomes from what are considered the key
variables, including the probability of licensing agreements being signed, the
expected licensing terms that will be negotiated and the anticipated revenues
generated as a result. Given the level of headroom indicated by the
impairment review, the discount rate assumption is not considered to be
sufficiently sensitive to change to impact the conclusion of the review.
23 Directors' remuneration
The only employees of the Company are the directors. In respect of directors'
remuneration, the disclosures required by Schedule 5 to the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 are
included in the detailed disclosures in the audited section of the Directors'
Remuneration Report on pages 12 to 14, which are ascribed as forming part of
these financial statements.
24 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
£6,737,962 (2021: £3,146,046) and had net assets as at 30th April 2022 of
£31,214,536 (2021: £14,752,498).
2022 2021
Shares in Group undertakings (at cost) £ £
At 1st May 43,229,684 38,229,684
Additions 23,200,000 5,000,000
------ ------
At 30(th) April 66,429,684 43,229,684
------ ------
Ilika plc
Notes to the financial statements (continued)
24 Investment in subsidiary undertaking (continued)
The registered address of Ilika Technologies Limited is unit 10a, The
Quadrangle, Premier Way, Abbey Industrial Park, Romsey, SO51 9DL. The company
registration number is 05048795.
25 Amount due from subsidiary undertaking
2022 2021
£ £
Ilika Technologies Limited 195,658 -
------ ------
26 Trade and other receivables
2022 2021
£ £
Other receivables 4,369 3,369
Prepayments 37,297 20,022
------ ------
41,666 23,391
------ ------
27 Trade and other payables
2022 2021
£ £
Trade payables 3,852 4,272
Accruals 11,578 11,554
Amount due to subsidiary undertaking - 572,810
------ ------
15,430 588,636
28 Related party transactions
During the year, the Company recharged costs totalling £243,606 (2021:
£206,500) to its subsidiary, Ilika Technologies Limited. Amounts owed by
Ilika Technologies Limited are disclosed in note 25 (2021: owed to Ilika
Technologies Limited in note 27).
Details of key management personnel and their compensation are given in note 4
and in the Directors' Remuneration Report on pages 12 to 14.
The directors consider that no one party controls the Company.
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