REG - Ilika plc - Final Results
13/07/2023 07:00
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RNS Number : 8445F Ilika plc 13 July 2023
Ilika plc
("Ilika", the "Group". or the "Company")
Full Year Results
Ilika (AIM: IKA), a pioneer in solid-state battery technology, announces its
results for the year ended 30 April 2023 (the "Period").
During the Period, Ilika 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.
Operational highlights:
· Despatched first customer samples of Stereax M50s from UK
production facility
· Entered into memorandum of understanding with Cirtec Medical LLC
in which Ilika will develop and license Stereax technology to Cirtec for
manufacturing and commercialisation
· Awarded £2.8m of funding from the Faraday Battery Challenge to
lead an £8.2m programme to develop high-silicon anode Goliath batteries,
supported by BMW and WAE
· Continued technical progress with the Goliath development
programme, including increased cycle count, reduced operating temperature and
increased energy density
· Awarded and completed a six-month Goliath economic feasibility
study (BUS100), funded by the Automotive Transformation Fund (ATF), with
UK-Battery Industrialisation Centre (UK-BIC) to create a 100 MWh SSB facility
at UK-BIC
· Awarded and completed nine-month study of Goliath scale-up
equipment trials, supported with grant funding from the ATF
· Appointed Jason Stewart as CFO in January 2023
· Increased patent portfolio to 67 granted patents, with eight new
grants in the reporting period. Four additional international filings
submitted
Financial highlights:
· Turnover £0.7m (2022: £0.5m) with other income of £0.1m (2022:
£0m) giving a total income of £0.8m
· EBITDA loss adjusted for share-based payments for the year of
£7.0m (2022: EBITDA loss of £6.4m)
· Loss per share 4.61p (2022: 4.65p loss)
· Cash, cash equivalents and bank deposits of £15.9m (2022:
£23.4m)
Post-period end highlights:
· Despatched first revenue generating customer samples of Stereax
M50s and M300s from UK production facility
Outlook
Following shipment of the initial samples of Stereax M50s and M300s to
customers including Blink Energy, CubeWorks and Lura Health, the focus of the
Stereax team is on completion of the Cirtec contract and execution of the
associated tech transfer of Stereax technology. The terms of the intended
partnership is currently being finalised. Once the contract is in place, Ilika
will begin transfer of the equipment from its facility in the UK to enable the
process to be established quickly on a like-for-like basis at Cirtec's
facility in Lowell, MA. The process will be set up using the procedures
developed by Ilika in the UK with the expected shipment of batteries from
Cirtec in calendar year ('CY') 2024. Ilika intends to work together with
Cirtec and their customers to develop next generation Stereax batteries to
address an expanded portfolio of market sectors.
The Goliath programme will continue to deliver improved cell performance with
increasing capacity, cycle life and charge rates combined with elevated
safety. Ilika expects to deliver data showing lithium-ion energy density
equivalence by end-2023 and to share prototype cells with partners in H1
CY2024. In parallel with improved cell performance, Ilika will continue to
invest in equipment to increase its capacity to produce cells. Over the coming
12 months Ilika plans to invest c.£1.9m in capital equipment, from the funds
it raised in 2021 for this purpose.
Commenting on the results Ilika's Chairman, Keith Jackson, said: "Regarding
Stereax, we have built on the process qualification foundations laid in 2022
by delivering the first batches of Stereax batteries to customers in April
2023. This is a significant milestone for the team, which demonstrates our
focus on product commercialisation. Our business strategy has been exemplified
by entering into a memorandum of understanding with our US-based manufacturing
partner, Cirtec Medical. This will allow Ilika to focus on its core expertise
in technology development and licensing, while supporting the manufacturing
and commercialisation activities at Cirtec. Having now revised expectations
for the timelines required for Stereax commercialisation, we are in a strong
position to deliver on our plans going forward. There is a tremendous amount
of innovation taking place in the medical device sector, focussed on improving
treatments for chronic diseases and Stereax is strongly positioned to add
significant value to this effort."
"We are delighted to have been awarded a significant grant to support our
collaborations and the planned development work for our Goliath programme.
Stakeholders can be reassured that our programme was selected against a
backdrop of strong competition for funding, with our technical progress made
over the preceding year and support from well-recognised industrial partners
key to securing our selection. In parallel with the technology development, we
continue to plan and invest in industry-ready equipment to demonstrate the
robustness of our process for commercial scale-up. This is an exciting time
for the Goliath programme as we push towards the next phase of partner
evaluation in 2024, and our ultimate goal of large-scale deployment through
licensing."
Analyst Briefing
The management team will be hosting an in-person analyst briefing today, at
9.30am. Analysts who wish to attend should contact Lianne Applegarth at
Walbrook PR on +44(0)20 7933 8780 or email ilika@walbrookpr.com
(mailto:ilika@walbrookpr.com) to register.
Investor Presentation
An investor presentation will be held this afternoon at 4.30pm and will be
hosted through the digital platform, Investor Meet Company. Investors can
sign up to Investor Meet Company for free and add to meet Ilika plc via the
following
link: https://www.investormeetcompany.com/ilika-plc/register-investor
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.investormeetcompany.com_ilika-2Dplc_register-2Dinvestor&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=1OI9eWQUVfVpxZXWzxX2tPcSAmxw5YMa3-DImHWnbkA&m=22nIVAzynQ78VnYQ8pNvYLoiaC3r3JGnA0Gjs0X1HfI&s=GFcaJdt_WBmGcV6u2cZxJzgNoqqkh-ky8V45ELknGH8&e=)
or for more information please contact Walbrook PR at ilika@walbrookpr.com
(mailto:ilika@walbrookpr.com) .
For more information contact:
Ilika plc www.ilika.com (http://www.ilika.com/)
Graeme Purdy, Chief Executive Via Walbrook PR
Liberum Capital Limited (Nomad and Joint Broker) Tel: 020 3100 2000
Andrew Godber,
William Hall, Nikhil Varghese
Joh. Berenberg, Gossler & Co. KG (Joint Broker) Tel: 020 3207 8700
Matthew Armitt, Mark Whitmore, Detlir Elezi,
Mara Grasso
Walbrook PR Ltd Tel: 020 7933 8780 / Ilika@walbrookpr.com
Lianne Applegarth Mob: 07584 391 303
Nick Rome Mob: 07748 325 236
Tom Cooper Mob: 07971 221 972
About Ilika plc
Ilika specialises in the development of solid-state batteries. Its Stereax®
product line is designed for miniature medical devices and specialist internet
of Things (IoT) applications. Stereax® enables disruptive product designers
looking for an intrinsically safe, long life (1000s recharges), low leakage
(nA) and miniature power source in a rectangular form factor similar to ICs.
For more information about Ilika, please visit: https://www.ilika.com
(https://www.ilika.com) .
ILIKA plc
STRATEGIC REPORT
The Directors present their Strategic Report for the year ended 30(th) April
2023.
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 license 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, higher thermal tolerance and easier to recycle 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
batteries 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, including licensing the technology, for large
volume production.
Ilika has scaled-up its Stereax technology to a mid-scale manufacturing
facility. Initial deliveries of batteries were made in H1 CY 2023. Ilika has
entered into a memorandum of understanding ('MoU') for Cirtec Medical LLC to
manufacture Stereax under license. Ilika's Goliath programme is currently in
the first commercial phase, where product development is being supported by
grant-funded programmes and commercial collaborations.
To support Ilika's commitment to ESG, we have initiated an ESG Committee with
board-level leadership. Taking a risk-managed approach, all aspects of our
business are incorporating environmental sustainability, social responsibility
and appropriate corporate governance. ESG performance is reported at all
levels within the organisation and monitored at board level.
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.
· Faster charging.
· Increased energy density, reducing their size to up to half the
volume and weight for a given electrical charge.
· 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
consumer appliances and 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
Following substantial completion of Stereax process qualification in CY 2022,
Ilika demonstrated it was able to run the complete manufacturing process from
beginning to end and an understanding was gained of process stability and
reproducibility. Product qualification was initiated and initial revenue
generating samples of M50s and M300s were issued to customers.
In January 2023, Ilika announced it had broadened its relationship with Cirtec
Medical ('Cirtec'), an industry-leading strategic outsourcing partner of
complex medical devices including minimally invasive and active implantable
devices, by signing a memorandum of understanding ('MOU') which outlines the
transfer of Stereax mm-scale battery manufacturing to Cirtec's facility
in Lowell, Massachusetts, U.S.
The intent of the MOU is that Ilika will focus on advanced technology
development and IP licensing in support of Cirtec's manufacturing and
commercialisation activities. This partnership will reinforce Cirtec's ongoing
activities in system level miniaturisation for the medical device industry.
Benefits of this partnership, to Ilika, include:
· Further validation of Stereax's capabilities
· Manufacturing partnership delivering economy of scale and ability to
rapidly ramp production
· Expanded business development team bringing additional commercial
momentum
Since signing the MOU, Ilika and Cirtec have been finalising the detailed
terms of the contract. Once the contract is signed, Ilika will begin shipping
its Stereax manufacturing equipment to Cirtec's facility in Lowell,
Massachusetts US, to enable rapid commencement of operations. Once the process
is established at the Cirtec facility, full product qualification will be
carried out, involving 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.
As demand for Stereax ramps over the coming years, Cirtec intends to increase
Stereax production capacity.
Large Format Goliath Batteries
At Ilika's headquarters in Romsey, UK, Ilika is operating a pre-pilot line to
develop low-cost processes suitable for manufacturing solid-state batteries
several orders of magnitude larger than miniature Stereax batteries.
Over the course of the 2022/23 financial year, Ilika has made continued
technical progress with the Goliath development programme, including achieving
increased cycle count, reduced operating temperature and increased energy
density.
In January 2023, Ilika was awarded £2.8m of grant funding from the Faraday
Battery Challenge to lead a 24-month £8.2m programme (code-named HISTORY) to
develop high-silicon anode Goliath batteries to enable automotive level
performance. BMW Group ('BMW') and Williams Advanced Engineering ('WAE')
joined the programme's steering committee. In the project, llika is partnering
with Nexeon, one of the UK's leading manufacturers of silicon battery
materials, and experts from four of the UK's top academic Universities and
the Centre for Process Innovation to deliver an automotive industry-defined
SSB by programme end. Manufacturing consultants HSSMI will be working with the
other partners to deliver an SSB Life Cycle Analysis (LCA).
Project HISTORY follows on from Ilika's previous successful Faraday Battery
Challenge programmes which supported the development of the Goliath SSB
baseline cell and the construction of Ilika's pre-pilot line. Since those
initial developments, Ilika has been working with industry specialists on
scale-up activities in line with its industrialisation programme and expects
to deliver prototype automotive A-sample SSB's from its scaled pilot facility.
Goliath Manufacturing Scale-up
The Company's pilot line in Romsey is capable of producing 1kWh per week.
Ilika has started implementing its plans to scale up its current site to an
automated facility to support A-sample production. Ilika estimates it will
require a capacity of 30 kWh per week by 2025 for this purpose. The first
piece of automated equipment, a belt furnace, has been successfully
commissioned. Ilika has been assessing other equipment vendors of
production-intent equipment. In this regard, the Automotive Transformation
Fund (ATF) awarded Ilika funding to cover a nine-month study of Goliath
scale-up equipment trials, which Ilika has now completed.
In order to assess the possibility of further scale-up to 2 MWh/week with the
UK-Battery Industrialisation Centre (UK-BIC), Ilika was awarded a six-month
economic feasibility study (BUS100), also funded by the ATF.
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. The impact on global energy pricing and
specifically the UK energy market did have the potential to impact the Stereax
FAB which the Board mitigated through early interaction with Cirtec and the
outsourcing activity.
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 67 granted patents, as well as trade secrets in
solid-state batteries.
Quality Management System
Ilika has maintained its certification for ISO 9001:2015, which is the
world's most widely recognised Quality Management Software 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
The Company has also maintained its ISO 14001:2015 certification, which 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.
Environmental & Social Governance (ESG)
The Board takes a proactive approach to ESG matters looking to adopt the best
practice and recommendations from the Quoted Companies Alliance (QCA)
Corporate Governance Code. The Group is committed to achieving a real and
sustainable positive impact on the broader community by adopting
environmentally responsible policies so it can demonstrate a responsible and
balanced approach to corporate governance.
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.
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 Reduce cash burn to avoid a fundraise in 2023.
effectively and to promote long-term holdings. Investor Meet Company and Directors' Talk platforms to extend reach to retail
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 Indicators that link directly to the The Board undertook a business review and restructuring activity aligned to
and values and support their well-being whilst maintaining low turnover and company objectives. the Cirtec MoU.
high productivity rates
Twice yearly performance evaluations with objective setting and reviews.
Formal policies and procedures. An interim pay review for those staff below UK median wage reflecting the
inflationary environment in the UK.
Quarterly, all-company, update meetings.
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 ISO accreditations (9001 and 14001). Continued use of electricity
highest standards. to ensure green initiatives are raised and followed through. solely from renewable sources.
Implemented an electric vehicle salary sacrifice scheme.
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. MOU with Cirtec Medical for Stereax manufacturing.
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 below. 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 below
Statement of Comprehensive Income
Turnover
Turnover, all from continuing activities, for the year ended 30(th) April 2023
was £0.7m (2022: £0.5m). This includes £0.7m of grant income recognised
from four projects that the Company has in progress with Innovate UK (2022:
£0.4m from seven programmes). Non-grant turnover in the year was £0.0m
(2022: £0.0m).
Other Operating Income
The Company has benefitted from Research & Development Expenditure Credit
(RDEC) of £0.1m (2022: £0m).
Administrative expenses and losses for the period
Administrative costs for the year increased from £8.0m in 2022 to £9.0m in
2023. While direct R&D expenditure has reduced to £4.1m (2022: £4.8m).
The inflationary environment in the UK over the last 12 months has contributed
to the increase in cost leading to the acceleration of Stereax licencing
through the Cirtec MoU. Staff costs increased from £4.7m in 2022 to £5.2m in
2023 associated with the increase in the average number of staff employed from
64 to 72 which reflects the increase in operational activities of the Stereax
FAB and scale up of Goliath development.
Development costs £1.0m of were capitalised in the year compared to £0.8m in
2022. The share-based payment charge increased slightly from £430k in 2022 to
£442k in 2023, 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 £6.4m in 2022 to £7.0m in 2023.
Statement of financial position and cash flows
At 30(th) April 2023, current assets amounted to £19.1m (2022: £26m),
including cash, cash equivalents and bank deposits of £15.9m (2022: £23.4m).
The principal elements of the £7.5m decrease in net funds were:
· Operating cash outflow of £7.0m (2022: £6.4m)
· Capital expenditure on intangible development costs, plant,
property and equipment of £1.4m (2022: £4.8m) which mostly relates to the
capitalisation of Stereax R&D expenditure
· Increased recovery of R&D tax claims of £1.4m (2022: £0.3m)
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 ongoing 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. Current inflation forecasts have
been factored into the forward looking financial forecasts. The Board continue
to review spend at all levels of the business to identify efficiencies or cost
savings which can be deployed to mitigate the inflationary environment. The
Cirtec MOU will also lead, at the conclusion of the contract and commencement
of technology transfer, to a reduction of cost to the Company as the
responsibility for manufacturing is transferred to Cirtec.
By order of the Board
Keith
Jackson
Graeme Purdy
Chairman
CEO
12(th) July 2023
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 G. Purdy (CEO)
Mr S Boydell (FD and Company Secretary) (Resigned 15 July 2022)
Mr J Stewart (CFO) (Joined 3 January 2023)
Non-Executive
Prof. K Jackson (Chairman)
Mr. J Millard (Senior Independent Director)
Dr. M. Biddulph
Please note: Mr S Boydell resigned as Company Secretary as of 13(th) July 2023
and Mrs M Petitt is current Company Secretary.
Research and development costs
In accordance with the policy outlined in note 1, the Group incurred research
and development expenditure of £4,131,407 in the year (2022: £4,786,225). In
addition, amounts totalling £1,027,512 (2022: £807,331) 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.
Directors indemnities
The Company has made no qualifying third part indemnity provisions during the
year and no further provisions have been made at the date of this report.
Political Donations
The Company has made no political donations during the period.
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 2023, had the following
interests in the ordinary shares of the Company:
Number of shares
30th April 2022 30th April 2023
G Purdy 782,927 782,927
K Jackson 102,142 102,142
M Biddulph 16,071 16,071
J Millard - -
J Stewart - -
S Boydell resigned as director with effect from 15(th) July 2022. The table
below sets out the interests in ordinary shares of the Company held as at
15(th) July 2022 and 1(st) May 2022.
1st May 2022 15(th) July 2022
S Boydell 113,948 113,948
During the year, no Directors exercised options nor sold shares.
Substantial shareholdings
On 30 June 2023 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 18,590,225 11.70
Charles Schwab, New York (ND) 11,260,387 7.09
Schroder Investment Management 11,008,797 6.93
Janus Henderson Investors 8,885,213 5.59
Hargreaves Lansdown, stockbrokers (EO) 8,804,362 5.54
Post balance sheet events
There are no significant post balance sheet events from the 30(th) April 2023
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
Mandy Petitt
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 below. 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. The Committee engages external market leading
remuneration consultants to benchmark the current remuneration policy to
ensure that the shareholders interests are reflected in a balance package
offered to Board members.
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 and 50% CFO. 50% of the bonus is Delivery of exceptional performance against a series of financial, commercial
milestones. payable in cash and 50% is deferred into shares (using nominal cost options) and technology objectives.
performance related bonus 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
(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 using independent
remuneration consultants 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 2023 and 30(th) April 2022 was as follows:
Basic Benefits in kind Total Pension Total
salary Short term benefits
Bonus
£ £ £ £ £ £
Year to 30th April 2023
G Purdy 211,238 1,497 106,549 319,284 22,056 341,340
S Boydell* (to July 22) 33,576 204 - 33,780 2,686 36,466
J Stewart (from Jan 23) 51,600 7 13,773 65,380 2,146 67,526
K Jackson 69,424 - - 69,424 - 69,424
J Millard 35,233 - - 35,233 - 35,233
M Biddulph 35,233 - - 35,233 - 35,233
------ ------ ------ ------ ------ ------
436,304 1,708 120,322 558,334 26,888 585,222
------ ------ ------ ------ ------ ------
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
------ ------ ------ ------ ------ ------
*S Boydell resigned as Finance Director and Company Secretary leaving the
company in 15 July 2022.
Benefits in kind include critical illness cover.
Share options
The share options of the directors are set out below:
2022 2023 Exercise Price Performance Conditions
Unapproved Number Number Expiry date
G Purdy 75,810 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
2022 2023 Exercise Price Performance Conditions
Approved Number Number Expiry date
J Stewart - 300,000 52p August 2033 See note 4
S Boydell resigned as director with effect from 15(th) July 2022, with all
outstanding unexercised options, vested or unvested, lapsing at that date. The
table below sets out the share options that he held up until 15 July 2022
along with the 30(th) April 2022 comparative.
2022 15/07/22 Exercise Price Performance Conditions
Unapproved Number Number Expiry date
S Boydell 196,619 196,619 1p March 2030 See note 2
S Boydell 42,873 42,873 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
4) (a) Less than 52p - no vesting
(b) 56p - 25% of the shares subject to award will vest
(c) 65p - 75% of the shares subject to award will vest
(d) 69p - 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 £256,036
(2022: £314,204).
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 2023
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 above.
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, 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 Senior Non-Executive Director is responsible for providing a sounding
board to the Chair and to act as an intermediary for other directors and
stakeholders outside of the normal channels of communication.
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. The board undertakes
this through a reflective review process completed at the conclusion of each
Board meeting to ensure timely capture of any feedback and to allow for rapid
implementation of improvements in addition to a comprehensive annual
reflective review assessing the performance and understanding of the Board in
relation to key goals and stakeholder needs. All members of the Board engaged
freely and openly with the reviews and demonstrated the expected level of
commitment and held the appropriate level of skills, experience and expertise
to guide the business ad represent all stakeholder interests.
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. He 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.
Jason Stewart - Chief Financial Officer
Jason is a CIMA qualified accountant, senior Finance Director and Executive
joining Ilika in January 2023 bringing significant commercial experience in
the manufacturing sector. Most recently, Jason spent twelve years at Sunseeker
International in various senior roles including Interim CFO where he
successfully managed the company through the COVID-19 crisis, managing costs
and re-establishing production subsequent to the lockdown.
Prior to joining Sunseeker International Jason undertook roles across the
broad spectrum of finance including B&Q Ltd and Kerry Foods Ltd where he
completed his professional training. He brings with him a wealth of knowledge
across financial functions, with particular expertise in project appraisals,
performance management and business development.
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 - Senior Non-Executive Director
After an early career in engineering, Jeremy trained as a chartered accountant
in the late 1990s. 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. These committees are made up of Non Executive Directors to ensure
that they remain independent from the day to day operations of the Company.
The responsibilities of the individual committees are 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 are expected to attend all Board committees of which they are a
member and NED's are expected to dedicate a minimum of twelve days per annum
to the Company. During the year the Directors attended the following Board and
committees meetings during the year:
Attendance Board Audit Nomination Remuneration
Mr S. Boydell 1/1 - - -
Mr J Stewart 2/2 - - -
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 Board continues to improve the control of risk within the business through
the appointment of established experts who can bring relevant industry and
subject matter experience to develop better control environments. This has
been accomplished with the recruitment of a Sustainability, Quality and
Business Compliance Director, a Supply Chain Director with multiple years of
advanced and complex supply chains within the automotive industry, a Financial
Controller to provide additional financial review and an Operations Director
once again bringing a lifetime of experience from the automotive area. These
individuals bring developed control and risk management skills to provide
hands on experience to developing the Company and as an additional route for
the NED members of the Board to seek independent verification of the
improvements being made.
The Group maintains both a strategic and business risk register as dynamic
documents and as a route to track the developing risks to the Group. These
risk registers are used to manage and mitigate emerging and established risks
and escalate these to the appropriate level within the business to support a
timely response.
The Board has assessed the risk management activity of the Board and Group to
be appropriate for the business during its current phase of R&D and scale
up development activity.
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 2023
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. It is
responsible for providing oversight of the Company's financial reporting
process, the audit process, the system of internal controls including business
continuity, information technology, the identification and management of
significant risks and the Companies compliance with laws and regulations. Its
terms of reference and its current membership are outlined in the Corporate
Governance Statement.
The Committee is chaired by an independent director with significant
experience in finance and financial markets. The experience and background of
the individuals who make up the Audit Committee is detailed in the summary of
Board experience above.
The attendance of the individual members of the Audit Committee is detailed in
the summary of Board attendance as detailed above
Committee independence
The Audit Committee maintains its independence from the Group by being
composed exclusively of Non Executive Directors thus ensuring the Committee's
ability to effectively challenge the operations of the business. The Board is
satisfied that in doing so that the committee is inline with best practice and
that all members are independent.
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 2023, with all members present. The Committee
undertakes review of the principle risk matters and is responsible for making
recommendations to the Board in relation to appropriate mitigations and
control measures. The Committee reviews the risk matrix and verifies and
challenges the processes for identifying new and emerging risks and the
appropriateness of the risk severity rating.
The Committee considers the role of the independent auditors, their tenure and
their report in relation to the Audit of Ilika Plc and Ilika Technologies Ltd.
· The Committee reviews the performance of the external auditor and
considers their performance in relation to the requirements of internal and
external stakeholders.
· It considers the appropriateness of the auditor in respect of
objectivity and independence
· The Committee reviews the duration on the audit and time to
rotation of audit partner. BDO LLP were appointed as auditors of Ilika Plc and
its subsidiary companies in 2011 and the audit partner is due for rotation in
2025.
· The Committee gives appropriate consideration to the
reappointment of the external auditor or the needs to tender audit services.
Matters covered during the year ended 30 April 2023:
· July 2022: Audit completion meeting for the 2022 year-end audit,
o Review the financial forecast to support the Group's ability to account on
a going concern basis,
o Review of the auditor's report on the audit, including materiality levels
and any significant matters or specific recommendations from the auditor.
o Review of the annual report and financial statements to ensure they
represents a fair and balance portrayal of the Group's performance.
· January 2023: Half year report completion meeting. Approval of
the release of the Half Year report.
Auditor independence
The auditors supply only audit and assurance related services and do not
provide and non-audit consultation services. Any assurance services provided
are provided on an exceptional basis and reviewed by the Audit & Risk
Committee prior to engagement to ensure adherence to their independence. This
policy safeguards auditor objectivity and independence.
The external auditor may not undertake any work that may compromise its
independence or is otherwise prohibited by any law or regulation.
Payments made to the auditor are detailed in Note 3 to the financial
statements and can be found below.
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 2023 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 the 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 2023 which
comprise the Consolidated statement of comprehensive income, the Consolidated
balance sheet, the Consolidated cash flow statement, the Consolidated
statement of changes in equity, the 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 preparation
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 Directors' assessment of going concern through analysis
of the Group's cash flow forecast through to July 2024 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 and cost increase that would cause a cash shortage at any
point in Directors' post balance sheet assessment period. We also compared
the level of expenditure included in the forecasts and compared this to
previous periods.
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% (2022: 100%) of Group loss before tax
Coverage 100% (2022: 100%) of Group revenue
100% (2022: 100%) of Group total assets
2023 2022
Capitalisation of development expenditure
Key audit matters
Group financial statements as a whole
Materiality
£446K (2022: £412K) based on 5% (2022: 5%) of loss before tax.
Materiality
Group financial statements as a whole
£446K (2022: £412K) based on 5% (2022: 5%) of 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 2023 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.
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 considered the conditions under which development costs can be capitalised
battery technology. This is the third full period in which the associated under the accounting standards and checked that these conditions have been met
expenditure has been capitalised having been deemed to meet the criteria in in respect of the Stereax battery technology.
the accounting standards in the previous year.
Please refer to note 7 and accounting policies and key sources of estimation
and uncertainty in note 1.
We discussed with management the Group's processes for identifying the
There are a number of judgements involved in accounting for development relevant development costs. We reviewed the nature of the costs capitalised
expenditure, including whether the activities are appropriate for to check they were in line with our understanding of the work carried out in
capitalisation in accordance with the criteria of the applicable accounting the year.
standard, the allocation of the relevant costs to the Stereax battery project,
and the recoverability of the asset generated.
We agreed a sample of capitalised costs to underlying supporting documentation
to confirm the existence and accuracy of the costs. This included obtaining
Due to the level of judgement, there was also considered to be an inherent time records to corroborate the allocation of employee time spent on the
risk of management bias therefore this was considered to be an area of focus Stereax battery technology and inspecting employee contracts to check that
for our audit. 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 Group's accounting policy
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.
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
2023 2022 2023 2022
£ £ £ £
Materiality 446K 412K 223K 227K
Basis for determining materiality 5% of loss before tax 5% of loss before tax 50% of Group materiality 55% of Group materiality
Rationale for the benchmark applied 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
Group and the users of the financial statements in assessing financial consideration of significant component materiality levels.
performance.
Performance materiality 335k 308k 167k 170k
Basis for determining performance materiality 75% of materiality.
Rationale for the percentage applied for performance materiality Based on our risk assessment, together with our assessment of the Group's
control environment and previous low level of misstatements
Component materiality
For the purposes of our Group audit opinion, we set materiality for each
significant component of the Group, apart from the Parent Company whose
materiality is set out above, based on a percentage of 92% (2022: 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 £410k (2022: £390k). We further applied
performance materiality levels of 75% (2022: 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 £13k (2022: £8k). We also agreed to report
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
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 Statement of Directors' responsibilities, the
Directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, 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.
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:
Non-compliance with laws and regulations
Based on:
· Our understanding of the Group and the industry in which it
operates;
· Discussion with management and those charged with governance and
the Audit Committee;
· Obtaining and understanding of the Group's policies and
procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be the applicable
accounting framework, UK tax legislation and the AIM Listing Rules etc.
The Group is also subject to laws and regulations where the consequence of
non-compliance could have a material effect on the amount or disclosures in
the financial statements, for example through the imposition of fines or
litigations. We identified such laws and regulations to be the health and
safety legislation.
Our procedures in respect of the above included:
· Review of minutes of meetings of those charged with governance
for any instances of non-compliance with laws and regulations;
· Review of correspondence with regulatory and tax authorities for
any instances of non-compliance with laws and regulations;
· Review of financial statement disclosures and agreeing to
supporting documentation;
· Involvement of tax specialists in the audit;
· Review of legal expenditure accounts to understand the nature of
expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material
misstatement, including fraud. Our risk assessment procedures included:
· Enquiry with management and those charged with governance
including the Audit Committee regarding any known or suspected instances of
fraud;
· Obtaining an understanding of the Group's policies and procedures
relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
· Review of minutes of meetings of those charged with governance
for any known or suspected instances of fraud;
· Discussion amongst the engagement team as to how and where fraud
might occur in the financial statements;
· Assessing journal entries as part of our planned approach, with a
particular focus on journal entries to key financial areas such as intangible
assets and journals raised after the year end; and
· Considering significant management judgements, particularly in
relation to the capitalisation of intangible assets.
Based on our risk assessment, we considered the areas most susceptible to
fraud to be capitalisation of development costs and management override.
Our procedures in respect of the above included:
· Testing of the capitalisation of development costs (as
detailed in the KAM above);
· Testing of all material journals raised post year by agreeing to
supporting documentation, and considering if they had any impact on the year
to April 2023;
· Assessing significant estimates made by management for bias by
reference to external valuation reports in respect of the dilapidation
provisions.
We also communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members who were all deemed to have
appropriate competence and capabilities 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
(http://insite.bdo.co.uk/sites/audit/Documents/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, UKBDO 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 2023 2022
£ £
Turnover 2 702,018 496,103
Revenue 33,848 30,878
UK grants 668,170 465,225
Cost of sales (404,038) (218,794)
------- -------
Gross profit 297,980 277,309
Other Operating income 2 78,956 -
Total Administrative expenses
Administrative expenses (8,932,647) (7,966,807)
Share based payment charge (441,796) (429,686)
(9,374,443) (8,396,493)
------- -------
Operating loss 3 (8,997,507) (8,119,184)
Income from short term deposits 105,696 5,590
Interest payable (36,599) (31,299)
------- -------
Loss before tax (8,928,410) (8,144,893)
Taxation 5 1,632,455 1,016,331
------- -------
Loss for period / total comprehensive expense (7,295,955) (7,128,562)
------- -------
Loss per share from continuing operations 6
Basic (4.61)p (4.65)p
Diluted (4.61)p (4.65)p
The notes below form part of these financial statements.
Ilika plc
Consolidated balance sheet
Company number 07187804
As at 30(th) April
Notes 2023 2022
£ £
ASSETS
Non-current assets
Intangible assets 7 2,943,462 1,958,153
Property, plant and equipment 8 4,263,579 5,072,280
Right to use assets 9 630,999 891,254
------- -------
Total non-current assets 7,838,040 7,921,687
------- -------
Current assets
Trade and other receivables 10 1,938,555 1,594,326
Current tax receivable 5 1,261,082 1,016,822
Other financial assets - bank deposits 11 772,675 772,675
Cash and cash equivalents 12 15,100,956 22,626,280
------- -------
Total current assets 19,073,268 26,010,103
------- -------
Total assets 26,911,308 33,931,790
------- -------
Issued capital and reserves attributable to owners of parent
Issued share capital 16 1,590,628 1,582,342
Share premium 64,936,563 64,754,910
Capital restructuring reserve 6,486,077 6,486,077
Accumulated losses (48,241,057) (41,386,898)
------- -------
Total equity 24,772,211 31,436,431
------- -------
LIABILITIES
Current liabilities
Trade and other payables 13 1,271,083 1,407,398
Lease liabilities 9 260,836 223,644
------- -------
Total current liabilities 1,531,919 1,631,042
------- -------
Non-current liabilities
Lease liabilities 9 357,643 623,952
Provisions 14 249,535 240,365
------- -------
Total non-current liabilities 607,178 864,317
------- -------
Total liabilities 2,139,097 2,495,359
------- -------
Total equity and liabilities 26,911,308 33,931,790
------- -------
The notes below form part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 12(th) July
2023.
Mr. K Jackson
Chairman
Ilika plc
Consolidated cash flow statement
Year ended 30(th) April
2023 2022
£ £
Cash flows from operating activities
Loss before taxation (8,928,410) (8,144,893)
Adjustments for:
Amortisation 42,203 47,512
Depreciation 1,552,752 1,253,038
Equity settled share-based payments 441,796 429,686
(Profit) on disposal of plant property and equipment (750) (2,000)
Net financial (income) / expense (69,097) 25,709
------- -------
Operating cash flow before changes in working capital, interest and taxes (6,961,506) (6,390,948)
Decrease / (increase) in trade and other receivables (454,046) 279,221
Increase in trade and other payables (136,314) 34,188
Increase/ (decrease) in provisions 9,170 100,000
------- -------
Cash utilised by operations (7,542,696) (5,977,539)
Tax received 1,388,195 329,509
------- -------
Net cash flow used in operating activities (6,154,501) (5,648,030)
Cash flows from investing activities
Interest received 105,696 5,590
Purchase of intangible assets (1,027,512) (942,606)
Purchase of property, plant and equipment (373,980) (3,491,671)
Sale of property, plant and equipment 750 2000
Increase in other financial assets - (3,595)
------- -------
Net cash used in investing activities (1,295,046) (4,430,282)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital 189,939 24,833,468
Cost of share issue - (885,414)
Lease payments - capital (229,118) (209,371)
Lease payments - interest (36,598) (31,299)
------- -------
Net cash (used in) / from financing activities (75,777) 23,707,384
------- -------
Net (decrease) / increase in cash and cash equivalents (7,525,324) 13,629,072
Cash and cash equivalents at the start of the period 22,626,280 8,997,208
------- -------
Cash and cash equivalents at the end of the period 15,100,956 22,626,280
------- -------
The notes below 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 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-based payment - - - 441,796 441,796
Issue of shares 8,286 181,653 - - 189,939
Cost of share issue - - - - -
Loss and total comprehensive expense - - - (7,295,955) (7,295,955)
------ ------- -------- -------- --------
As at 30th April 2023 1,590,628 64,936,563 6,486,077 (48,241,057) 24,772,211
------ ------- -------- -------- --------
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 Ltd 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 below 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 in the notes below.
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 2023, amounted to £15,873,631
(2022:£23,398,955). 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.
Turnover
Turnover comprises the amount of consideration to which the entity expects to
be entitled for the sales of products or 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.
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, £1,027,512 (2022: £807,331) 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
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.
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.
Cash comprises cash on hand and demand deposits. Cash equivalents are
short-term, highly liquid investments that are readily convertible to known
amounts of cash and that are subject to an insignificant risk of changes in
value.
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 £1,027,512 lower.
Recoverability of development costs
The directors have considered the recoverability of the capitalised costs by
reference to third party market analysis and the MOU and contract discussions
with Cirtec 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 2023 2022
£ £
Analysis by geographical market:
By destination
Asia 20,451 -
Europe - 2,720
North America 553 28,158
UK 681,014 465,225
-------- --------
702,018 496,103
------- -------
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 2023 2022
£ £
Goods and services 33,848 30,878
UK Grants 668,170 465,225
-------- --------
702,018 496,103
------- -------
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 2023 2022
£ £
UK Grants 668,170 465,225
Customers less than 10% 33,848 30,878
-------- --------
702,018 496,103
------- -------
The Company benefitted from the UK Government Research & Development
Expenditure Credit (RDEC) during the year:
Year ended 30(th) April
Other Operating Income 2023 2022
£ £
RDEC 78,956 -
-------- --------
78,956 -
------- -------
3 Operating loss
Year ended 30(th) April
2023 2022
This is arrived at after charging: £ £
Research and development expenditure in the year 4,131,407 4,786,225
Depreciation of property, plant and equipment 1,292,497 1,024,624
Depreciation of right-of-use assets 260,255 228,414
Amortisation of intangible assets 42,203 47,512
Auditors remuneration:
Fees payable to the Group's auditor for the audit of the Group's 43,477 34,700
accounts
Fees payable to the Group's auditor for other services:
- The Audit of the Group's subsidiaries 9,773 7,800
- Audit assurance services 4,000 -
Foreign exchange differences 10,436 23,510
Share-based payment 441,796 429,686
------- -------
4 Employees
The average number of employees during the year, including executive
directors, was:
Year ended 30(th) April
2023 2022
Number Number
Administration 6 5
Materials synthesis 66 59
------ ------
72 64
------ ------
Staff costs for all employees, including executive directors, consist of:
Year ended 30(th) April
2023 2022
£ £
Wages and salaries 4,043,784 3,604,099
Social security costs 473,316 426,358
Share-based payment expense 441,796 429,686
Pension costs 280,021 223,669
------- -------
5,238,917 4,683,812
-------- --------
Included in the above are amounts totaling £935,669 (2022: £790,331) which
have been capitalised.
The total remuneration of the Directors of the Group was as follows:
Year ended 30(th) April
2023 2022
£ £
Wages and salaries 558,334 622,829
Pension costs 26,888 32,190
------- -------
Directors' emoluments 585,222 655,019
Social security costs 72,727 101,834
Share-based payment expense 256,036 314,204
------- -------
Key management personnel 913,985 1,071,057
------- -------
The Directors represent key management personnel and further details, are
given in the Directors' Remuneration Report. The highest paid director
received remuneration of £341,340 (2022: £285,892) including pension
contributions of £22,056 (2022: £21,046).
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
2023 2022
£ £
R&D tax credits 1,261,082 1,016,822
Adjustments to prior period 371,373 (491)
---- ----
1,632,455 1,016,331
------ ------
(b) Factors affecting current tax credit
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% up to April
2023 and 19% from April 2023 under the Small ring fenced profits rate (2022:
19%). The differences are reconciled below:
2023 2022
£ £
Loss on ordinary activities before tax (8,928,410) (8,144,893)
------ ------
Loss on ordinary activities before tax multiplied by the standard rate of
corporation tax in the UK of 19% (2022: 19%)
(1,696,398) (1,547,530)
Effects of:
Expenses not deductible for corporation tax 90,718 82,435
R&D relief (468,029) (175,267)
Origination of unrecognised tax losses 812,627 623,540
Adjustments to prior period (371,373) 491
------ ------
Total tax credit for the year (1,632,455) (1,016,331)
------ ------
5 Taxation (continued)
Unrecognised deferred taxation
There are tax losses available for carry forward against future trading
profits of approximately £40m (2022: £37.5m). A deferred tax asset in
respect of these losses, net of fixed asset timing differences of
approximately £9.1m (2022: £9.4m) has not been recognised in the accounts,
as the full utilisation of these losses in the foreseeable future is
uncertain.
6 Losses per share
Losses 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 losses, being loss after tax,
are as follows:
Year ended 30(th) April
2023 2022
No. No.
Weighted average number of equity shares 158,395,116 153,175,933
-------- --------
£ £
Losses after tax (7,295,955) (7,128,562)
------- -------
Pence Pence
Loss per share (4.61) (4.65)
------ ------
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted losses per ordinary
share are identical to those used for basic losses 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 2023, there were
6,978,331 options outstanding (2022: 6,673,840) as detailed in notes 16 and
20.
7 Intangible assets
Development expenditure Software Intellectual property Total
licences
£ £ £ £
Cost
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
Additions 1,027,512 - - 1,027,512
------ ------ ------ ------
As at 30th April 2023 2,820,495 269,850 75,000 3,165,345
Amortisation
As at 30(th) 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
Provided for the year - 42,203 - 42,203
------ ------ ------ ------
As at 30th April 2023 - 146,883 75,000 221,883
Net book value
As at 30(th) April 2022 1,792,983 165,170 - 1,958,153
------- ------ ------- ------
As at 30(th) April 2023 2,820,495 122,967 - 2,943,462
------- ------ ------- ------
The amortisation charge of £42,203 (2022: £47,512) is included within
administrative expenses.
Development expenditure has not yet been amortised awaiting full
commercialisation and completion of proposed technology transfer of the
Stereax business to Cirtec under licence.
8 Property, plant and equipment
Leasehold Plant, Fixtures and fittings Total
improvements machinery and equipment
£ £ £ £
Cost
As at 30(th) 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
Additions 1,400 478,450 3,946 483,796
Disposals - (119,716) - (119,716)
------ ------- ------ -------
As at 30th April 2023 393,759 8,896,875 106,914 9,397,548
------ ------- ------ -------
Depreciation
As at 30(th) 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
Provided for the year 78,728 1,190,945 22,824 1,292,497
Disposals - (119,716) - (119,716)
------ ------- ------ -------
As at 30th April 2023 159,592 4,907,488 66,889 5,133,969
------ ------- ------ -------
Net book value
As at 30(th) April 2022 311,495 4,701,882 58,903 5,072,280
------ ------- ------ -------
As at 30(th) April 2023 234,167 3,989,387 40,025 4,263,579
------ ------- ------ -------
At the year end, deposits totaling £223,751 (2022: £109,816) 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 £314,531 (2022: £163,523) as
disclosed in note 18.
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 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
Additions - - -
------ ------ ------
As at 30(th) April 2023 1,046,553 229,247 1,275,800
------ ------ ------
Depreciation
As at 1(st) May 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
Provided for the year 209,311 50,944 260,255
------ ------ ------
As at 30(th) April 2023 574,753 70,048 644,801
------ ------ ------
Net book value
As at 30(th) April 2022 681,111 210,143 891,254
------ ------ ------
As at 30(th) April 2023 471,800 159,199 630,999
------ ------ ------
Lease liabilities
2023 2022
£ £
As at 1(st) May 847,596 827,720
Additions - 229,247
Cashflows:
Lease payments (265,715) (240,670)
Interest expense 36,598 31,299
------ ------
As at 30(th) April 618,479 847,596
------ ------
Maturity analysis of lease payments:
As at 30(th) April
2023 2022
£ £
0-3 months 82,881 73,316
3-12 months 166,933 179,513
------ ------
Due in less than one year 249,814 252,829
1-2 years 205,000 262,569
2-5 years 191,250 396,250
------ ------
Lease payments 646,064 911,648
------ ------
10 Trade and other receivables
As at 30(th) April
2023 2022
£ £
Trade receivables 19,310 4,568
Prepayments 970,198 800,957
Other receivables 481,552 464,880
Accrued income 467,495 323,921
------ ------
1,938,555 1,594,326
------ ------
The ageing of trade receivables is as follows:
As at 30(th) April
2023 2022
£ £
0-29 days 19,310 4,568
------ ------
The accrued income of £467,495 (2022: £323,921) relates to performance
obligations satisfied but not invoiced, all of which is due to be settled
within the next twelve months. The increase in accrued income is due to the
level of grants underway at the current year end compared to the previous
year.
11 Other financial assets - bank deposits
As at 30(th) April
2023 2022
£ £
Short term deposits with more than three months' maturity 772,675 772,675
-------- --------
12 Cash and cash equivalents
As at 30(th) April
2023 2022
£ £
Current bank accounts 739,522 618,230
Short term deposits with less than three months' maturity 14,361,434 22,008,050
-------- --------
15,100,956 22,626,280
-------- --------
13 Trade and other payables
As at 30(th) April
2023 2022
£ £
Trade payables 294,143 687,948
Other payables 39,027 38,643
Other taxes and social security costs 92,639 112,516
Accruals and deferred income 845,274 568,291
-------- --------
1,271,083 1,407,398
-------- --------
The ageing of financial liabilities is as follows:
As at 30(th) April
2023 2022
£ £
0-29 days 680,278 597,388
30-59 days 85,549 138,082
60-89 days 383,180 323,556
90+ days 29,437 235,856
-------- --------
1,178,444 1,294,882
-------- --------
Within Accruals and deferred income is deferred income of £10,000 (2022:
£10,000) that represent unfulfilled performance obligations on grants and
product sales to be satisfied in the next twelve months.
14 Provisions
Leasehold
Dilapidations
£
As at 1(st) May 2022 240,365
Provided 9,170
------
As at 30(th) April 2023 249,535
--------
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. Given the low value of non-sterling transactions the Group
considers there to be a low exposure to foreign currency risk. 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
2023 was £10,436 (2022: £23,510).
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 2023 had a weighted
average period to maturity of 7 days (2022: 18 days) and a weighted average
annualised rate of interest of 2.73%. (2022: 0.07%)
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 2023 by
approximately £105,696 (2022: £6,000).
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 2023 by
approximately £158,699 (2022: £228,000).
There is no difference between the book and fair value of financial assets and
liabilities.
Capital management
The primary aim of the Group's capital management is to safeguard the Group's
ability to continue as a going concern, to support its businesses and maximise
shareholder value. The Group monitors its capital structure and makes
adjustments as and when it is deemed necessary and appropriate to do so using
such methods as the issuing of new shares. At present all funding is raised by
equity.
16 Share capital
As at 30(th) April
2023 2022
£ £
Authorised
158,474,367 (2022: 157,645,867) Ordinary Shares of £0.01 each 1,584,744 1,576,459
1,781,400 Convertible Preference Shares of £0.01 each 17,814 17,814
------ ------
Allotted, called up and fully paid
158,474,367 (2022: 157,645,867) Ordinary Shares of £0.01 each 1,584,744 1,576,459
588,400 Convertible Preference Shares of £0.01 each 5,884 5,884
------ ------
1,590,628 1,582,343
------ ------
Share Rights
The ordinary share and preference shares rank pari passu in all respects other
than:
· The losses 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.
During the year, a total of 828,500 options over Ordinary Shares of £0.01
each were exercised for a total consideration of £189,939.
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 £280,021 (2022: £223,669). Included
within other creditors is £37,429 (2022: £36,006) relating to outstanding
pension contributions.
18 Capital commitments
At 30(th) April, the group had capital commitments as follows:
2023 2022
£ £
Contracted for but not provided in these financial statements 314,531 163,523
------ ------
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.
Included within these statements, as shown in note 10 and note 26, are amounts
totalling £127,403 (2022: £0) relating to employee share option exercises
which were owed as at April 30 2023
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 2023, the following fully vested 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 78,375 10 years £0.21
24/01/19 629,483 10 years £0.182
19/03/20 730,000 10 years £0.255
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
24/01/2019 1,840,171 10 years £0.01
29/08/2019 268,125 10 years £0.01
Black Scholes valuation
Weighted Average Exercise Price Number
2023 2022 2023 2022
Outstanding: £ £
At start of the period 0.1840 0.1894 6,673,840 7,369,729
Granted in the period 0.3844 0.0100 1,579,140 327,497
Exercised in the period 0.2293 0.1050 (828,500) (933,886)
Lapsed in the period 0.2270 0.9093 (446,149) (89,500)
----- ----- -------- --------
At the end of the period 0.2213 0.1840 6,978,331 6,673,840
----- ----- -------- --------
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 7.1
years (2022: 7.5 years). These share options are exercisable and must be
exercised within 10 years from the date of grant.
20 Share-based payments expense and share options (continued)
Ilika plc Executive Share Option Scheme 2010
At 30(th) April 2023 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 78,375 10 years £0.21
24/01/19 390,500 10 years £0.182
09/07/19 238,983 10 years £0.295
19/03/20 730,000 10 years £0.255
10/02/21 239,500 10 years £2.240
26/01/23 1,153,786 10 years £0.52
All of the options have been valued using the Black-Scholes methodology, with
an expected volatility rate of between 37.7% and 100%, 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.
85,200 options lapsed in the year and 828,500 options were exercised.
Ilika plc unapproved share options
At 30(th) April 2023 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
26/03/20 988,821 10 years £0.01
26/03/20 60,000 10 years £0.255
22/09/20 81,575 10 years £0.01
10/02/21 137,303 10 years £0.01
22/09/21 42,105 10 years £0.01
07/02/22 197,985 10 years £0.01
26/01/23 419,754 10 years £0.01
360,949 options lapsed in the year.
There are 4,824,676 options which were capable of being exercised as at 30(th)
April 2023.
2023 2022
£ £
Share-based payment expense
Black Scholes calculation 441,796 429,686
------ ------
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
2023 2022
Notes £ £
ASSETS
Non-current assets
Investments in subsidiary undertaking 24 66,429,684 66,429,684
Amount due from subsidiary undertaking 25 218,525 195,658
------- -------
66,648,209 66,625,342
Current assets
Trade and other receivables 26 169,621 41,666
------- -------
Total assets 66,817,830 66,667,008
------- -------
Equity
Issued share capital 16 1,590,628 1,582,342
Share premium 64,915,773 64,734,120
Retained earnings 301,474 335,116
------- -------
66,807,875 66,651,578
LIABILITIES
Current liabilities
Trade and other payables 27 9,955 15,430
------- -------
Total liabilities 9,955 15,430
------- -------
Total equity and liabilities 66,817,830 66,667,008
------- -------
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
£475,438 (2022: loss of £390,600).
The notes on above form part of these financial statements.
These financial statements were approved and authorised for issue by the Board
of Directors on 12(th) July
2023.
Mr. K Jackson
Chairman
Year ended 30(th) April
2023 2022
£ £
Cash flows from operating activities
Loss before tax (475,438) (390,600)
Adjustments for:
Equity settled share-based payments 441,796 429,686
------ ------
Operating cash flow before changes in working capital, interest and taxes (33,642) 39,086
(Increase) in trade and other receivables (127,955) (18,275)
(Decrease) in trade and other payables (5,475) (396)
------ ------
Cash generated (used in)/from operations (167,072) 20,415
Cash flows from investing activities
(Increase) in amounts due from subsidiary undertaking (22,867) (768,468)
Investment in subsidiary company - (23,200,000)
------ ------
Net cash used in investing activities (22,867) (23,968,468)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital 189,939 24,833,468
Costs of share issue - (885,415)
------ ------
Net cash from financing activities 189,939 23,948,053
------ ------
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 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 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
Issue of shares 8,286 181,653 - 189,939
Cost of issue - - - -
Share-based payment - - 441,796 441,796
Loss and total comprehensive expense - - (475,438) (475,438)
------ -------- ------ ---------
As at 30th April 2023 1,590,628 64,915,773 301,474 66,807,875
------ --------- ------ ---------
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 form part of these 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 Ltd, of £66.4m (2022: £66.4m). 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, 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 Ltd. Ilika
Technologies Ltd (Incorporated in the UK) made a loss for the year of
£6,820,517 (2022: £6,737,962) and had net assets as at 30th April 2023 of
£24,394,019 (2022: £31,214,536).
2023 2022
Shares in Group undertakings (at cost) £ £
At 1st May 66,429,684 43,229,684
Additions - 23,200,000
------ ------
At 30(th) April 66,429,684 66,429,684
------ ------
24 Investment in subsidiary undertaking (continued)
The registered address of Ilika Technologies Ltd 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
2023 2022
£ £
Ilika Technologies Ltd 218,525 195,658
------ ------
26 Trade and other receivables
2023 2022
£ £
Other receivables 127,403 4,369
Prepayments 42,218 37,297
------ ------
169,621 41,666
------ ------
27 Trade and other payables
2023 2022
£ £
Trade payables 1,284 3,852
Accruals 8,671 11,578
------ ------
9,955 15,430
28 Related party transactions
During the year, the Company recharged costs totalling £229,734 (2022:
£243,606) to its subsidiary, Ilika Technologies Ltd. Amounts owed by Ilika
Technologies Ltd are disclosed in note 25 (2022: owed by Ilika Technologies
Ltd in note 25).
Included within these statements, as shown in note 10 and note 26, are amounts
totalling £127,403 (2022: £0) relating to employee share option exercises
which were owed as at April 30 2023.
Details of key management personnel and their compensation are given in note 4
and in the Directors' Remuneration Report
The directors consider that no one party controls the Company.
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