REG - Provexis PLC - Preliminary Results <Origin Href="QuoteRef">NTR.L</Origin> - Part 3
29/10/2014 14:22
- Part 3: For the preceding part double click ID:nRSU7014Pb
(775,799)
SiS intercompany debt converted into equity by way of a capital contribution (448,163)
Intangible assets - goodwill at net book value (4,437,991)
Intangible assets - other fair value adjustments on acquisition (1,870,115)
Deferred tax 430,126
Profit for the year from discontinued operation 1,434,983
The value of the dividend in specie represents the fair value of SiS (Science
in Sport) Limited, which has been derived from the placing price of Science in
Sport plc at the time of the demerger, on admission.
11. Intangible assets
Goodwill Development costs Trademarks Patents / recipes / formulations Covenants not to compete Customer relationships Website development costs Total
£ £ £ £ £ £ £ £
Cost
At 1 April 2013 11,703,268 158,166 1,004,029 180,886 22,480 1,228,696 174,999 14,472,524
Additions - - - - - - 7,172 7,172
Demerger of SiS(Science in Sport) (4,437,991) - (1,004,029) (180,886) (22,480) (1,228,696) (182,171) (7,056,253)
At 31 March 2014 7,265,277 158,166 - - - - - 7,423,443
Amortisation andimpairment
At 1 April 2013 7,265,277 158,166 186,714 47,691 13,238 228,495 19,441 7,919,022
Charge for year - - 35,229 8,999 2,498 43,112 11,738 101,576
Demerger of SiS(Science in Sport) - - (221,943) (56,690) (15,736) (271,607) (31,179) (597,155)
At 31 March 2014 7,265,277 158,166 - - - - - 7,423,443
Net book value
At 31 March 2014 - - - - - - - -
At 31 March 2013 4,437,991 - 817,315 133,195 9,242 1,000,201 155,558 6,553,502
Cost
At 1 April 2012 11,642,165 132,621 1,004,029 180,886 22,480 1,228,696 9,514 14,220,391
Additions 61,103 25,545 - - - - 165,485 252,133
At 31 March 2013 11,703,268 158,166 1,004,029 180,886 22,480 1,228,696 174,999 14,472,524
Amortisation andimpairment
At 1 April 2012 4,603,398 38,546 81,027 20,696 5,745 99,158 2,218 4,850,788
Charge for year - - 105,687 26,995 7,493 129,337 17,223 286,735
Impairment 2,661,879 119,620 - - - - - 2,781,499
At 31 March 2013 7,265,277 158,166 186,714 47,691 13,238 228,495 19,441 7,919,022
Net book value
At 31 March 2013 4,437,991 - 817,315 133,195 9,242 1,000,201 155,558 6,553,502
At 31 March 2012 7,038,767 94,075 923,002 160,190 16,735 1,129,538 7,296 9,369,603
Development costs represent costs incurred in registering patents that meet
the capitalisation criteria set out in IAS 38, see also note 1.
12. Goodwill and impairment
Goodwill arising on consolidation represents the excess of the cost of an
acquisition over the fair value of the Group's share of the net assets of the
acquired subsidiary at the date of acquisition. The consolidated balance sheet
of the Group at the start of the prior year included goodwill relating to two
cash generating units (CGUs), Provexis, in respect of Fruitflow, and SiS.
SiS (Science in Sport) Limited, which was acquired by Provexis plc in June
2011, was demerged from Provexis by way of a capital reduction demerger with
effect from 9 August 2013 and the goodwill arising on the cost of its
acquisition in 2011 was reversed as part of the demerger.
For the Provexis CGU, a total non cash impairment loss of £2,781,499 was
recognised in the year ended 31 March 2013, made up of the existing £2,661,879
carrying value of the Provexis CGU, and the related £119,620 of intangible
assets, in respect of previously capitalised intangible development costs. At
the time the impairment loss was recognised the proposed demerger of SiS
(Science in Sport) Limited remained conditional inter alia upon the approval
of the Company's shareholders at a General Meeting, and the confirmation of
the Company's reduction of capital by the Court, hence for the purposes of IAS
36 it amounted to a future restructuring to which an entity was not yet
committed.
The carrying amount of goodwill is allocated to the CGUs as follows:
Goodwill carrying amount
Year ended 31 March 2014£ Year ended 31 March 2013£
Provexis SiS Total Provexis SiS Total
At start of year - 4,437,991 4,437,991 2,661,879 4,376,888 7,038,767
Additions - - - - 61,103 61,103
Impairment charge for year - - - (2,661,879) - (2,661,879)
Demerger of SiS(Science in Sport) - (4,437,991) (4,437,991) - - -
At end of year - - - - 4,437,991 4,437,991
Under IAS 36 the reversal of an impairment loss for goodwill is prohibited.
13. Plant and equipment
Leasehold improvements Fixtures, fittings, plant and equipment Laboratory equipment Motor vehicles Total
£ £ £ £ £
Cost
At 1 April 2013 230,956 659,045 147,145 11,527 1,048,673
Additions - 106,453 - - 106,453
Demerger of SiS(Science in Sport) (230,956) (691,402) - (11,527) (933,885)
At 31 March 2014 - 74,096 147,145 - 221,241
Depreciation
At 1 April 2013 58,706 198,528 147,145 9,374 413,753
Charge for the year 16,409 54,702 - 1,722 72,833
Demerger of SiS(Science in Sport) (75,115) (179,134) - (11,096) (265,345)
At 31 March 2014 - 74,096 147,145 - 221,241
Net book value
At 31 March 2014 - - - - -
At 31 March 2013 172,250 460,517 - 2,153 634,920
Leasehold improvements Fixtures, fittings, plant and equipment Laboratory equipment Motor vehicles Total
£ £ £ £ £
Cost
At 1 April 2012 219,247 410,395 147,145 11,527 788,314
Additions 11,709 251,925 - - 263,634
Disposals - (3,275) - - (3,275)
At 31 March 2013 230,956 659,045 147,145 11,527 1,048,673
Depreciation
At 1 April 2012 10,706 90,699 84,270 4,209 189,884
Charge for the year 48,000 109,548 24,999 5,165 187,712
Impairment - site closure - - 37,876 - 37,876
Disposals - (1,719) - - (1,719)
At 31 March 2013 58,706 198,528 147,145 9,374 413,753
Net book value
At 31 March 2013 172,250 460,517 - 2,153 634,920
At 31 March 2012 208,541 319,696 62,875 7,318 598,430
The carrying amount of fixtures, fittings, plant and equipment includes an
amount of £Nil (2013: £245,266) in respect of assets held under an asset loan
agreement.
14. Inventories
31 March2014 31 March2013
£ £
Raw materials - 503,093
Finished goods - 410,294
- 913,387
During the year inventories of £816,438 (2013: £1,746,504) were recognised as
an expense within cost of sales in discontinued operations.
15. Trade and other receivables
31 March2014 31 March2013
£ £
Amounts receivable within one year:
Trade receivables - 755,106
Less: provision for impairment of trade receivables - (32,233)
Trade receivables - net - 722,873
Other receivables 33,207 124,615
Total financial assets other than cashand cash equivalents classified as loans and receivables 33,207 847,488
Prepayments and accrued income 79,430 405,817
Total trade and other receivables 112,637 1,253,305
Trade receivables represent debts due for the sale of goods to customers. The
provision for impairment of receivables is estimated by the Group's management
based on prior experience.
The balance at 31 March 2014 of £112,637 is £1,140,668 less than the prior
year due predominantly to the demerger of SiS (Science in Sport) Limited in
August 2013.
Trade receivables are denominated in Sterling. The directors consider that the
carrying amount of these receivables approximates to their fair value. Trade
and other receivables are categorised as loans and receivables under IAS 39.
All amounts shown under receivables fall due for payment within one year.
The Group does not hold any collateral as security.
As at 31 March 2014 trade receivables of £Nil (2013: £125,319) were past due
but not impaired. They relate to customers with no default history. The ageing
analysis of these receivables is as follows:
31 March2014 31 March2013
£ £
Up to 3 months - 125,319
- 125,319
As at 31 March 2014 trade receivables of £Nil (2013: £32,233) were past due
and impaired. The amount of the provision as at 31 March was £Nil (2013:
£32,233).
Movements on the group provision for impairment of trade receivables are as
follows
31 March2014 31 March2013
£ £
At beginning of the year 32,233 32,101
Provided during the year 2,000 5,750
Unused amounts reversed - (5,618)
Demerger of SiS (Science in Sport) Limited (34,233) -
- 32,233
The movement on the provision for impaired receivables has been included in
administrative expenses within discontinued operations in the consolidated
statement of comprehensive income.
Other classes of financial assets included within trade and other receivables
do not contain impaired assets.
16. Cash and cash equivalents
31 March2014 31 March2013
£ £
Cash at bank and in hand 514,827 616,612
514,827 616,612
17. Trade and other payables
31 March2014 31 March2013
£ £
Trade payables 19,028 929,939
Other payables - 109,171
Accruals 85,313 680,805
Total financial liabilities measured at amortised cost 104,341 1,719,915
Other taxes and social security 3,871 67,654
Total trade and other payables 108,212 1,787,569
The directors consider that the carrying amount of these liabilities
approximates to their fair value.
All amounts shown fall due within one year.
18. Borrowings
31 March2014 31 March2013
£ £
Secured borrowings at amortised cost
Asset loan agreement at fixed rate - 226,645
- 226,645
Amounts due for settlement within 12 months - 64,774
Amounts due for settlement after 12 months - 161,871
- 226,645
The asset loan agreement at 31 March 2013 was provided in September 2012 by
HSBC Asset Finance (UK) Limited for SiS (Science in Sport) Limited, and it
ceased to be a liability of the Provexis Group when SiS (Science in Sport)
Limited was demerged from Provexis in August 2013.
19. Deferred tax
Deferred tax is calculated in full on temporary differences under the
liability method using a tax rate of 21% (2013: 23%).
Details of the deferred tax asset and liability are as follows:
Asset2014 Liability2014 Net2014 Asset2013 Liability2013 Net2013
£ £ £ £ £ £
Business combinations - - - - (450,789) (450,789)
Available losses - - - 110,348 - 110,348
Net tax assets / (liabilities) - - - 110,348 (450,789) (340,441)
No amounts in respect of deferred tax were recognised in the income statement
from continuing operations or charged / credited to equity for the current or
prior year.
At 31 March 2014 a deferred tax asset of £Nil (2013: £110,348) was recognised
in respect of tax losses in SiS and other temporary differences giving rise to
deferred tax assets where the directors believed it was probable that these
assets would be recovered. The directors made this assessment based on the
evidence available from projected budgets, forecasts of profitability and post
year end profitability of the entity.
Deferred tax assets amounting to £3,789,701 (2013: £4,030,256) have not been
recognised on the basis that their future economic benefit is not certain.
Assuming a prevailing tax rate of 21% (2013: 23%) when the timing differences
reverse, the unrecognised deferred tax asset comprises:
Year ended31 March2014 Year ended31 March2013
£ £
Depreciation in excess of capital allowances 22,981 23,068
Other short term timing differences 1,540 1,540
Unutilised tax losses 3,745,123 3,922,672
Share-based payments 20,057 82,976
3,789,701 4,030,256
20. Share capital
On 11 September 2013 the Company announced that it had signed a new 5 year
Equity Financing Facility ("EFF") with Darwin Strategic Limited ("Darwin").
The new facility, which is up to £10m, replaced the Company's existing EFF and
warrant agreements with Darwin, dated 7 November 2011, which have accordingly
been cancelled.
The new EFF agreement, dated 10 September 2013, provides the Company with a
facility which (subject to certain limited restrictions) can be drawn down at
any time over the 5 years ending on 9 September 2018. The timing and amount of
any draw down is at the discretion of Provexis. Provexis is under no
obligation to make a draw down and may make as many draw downs as its wishes,
up to the total value of the EFF, by way of issuing subscription notices to
Darwin. Following delivery of a subscription notice, Darwin will subscribe and
Provexis will allot to Darwin new ordinary shares of 0.1p each ("Ordinary
Shares").
The subscription price for any Ordinary Shares to be subscribed by Darwin
under a subscription notice will be at a 7.5% discount to an agreed reference
price determined during 5, 10 or 15 trading days following delivery of a
subscription notice (the "Pricing Period"). The length of the Pricing Period
is at the discretion of Provexis and is set at each relevant subscription
notice. Provexis is also obliged to specify in each subscription notice a
minimum price below which Ordinary Shares will not be issued.
EFF fee and warrant reserve
In consideration of Darwin agreeing to provide the EFF the Company agreed to:
(i) Pay a fee to Darwin amounting to approximately £35,000 by way of
an issue of 3,414,635 fully paid Ordinary Shares, at a gross 1.025p per share.
The contingent fee amounting to a maximum of £125,000 payable under the 7
November 2011 Equity Financing Facility was cancelled.
(ii) Enter into a new warrant agreement dated 10 September 2013 for
the grant to Darwin of warrants to subscribe for up to ten million Ordinary
Shares, such warrants to be exercisable at a price of 4.44 pence per share and
to be exercisable at any time prior to the expiry of five years following the
date of the new warrant agreement. The ten million warrants issued to Darwin
in conjunction with the September 2011 EFF were cancelled.
The warrants were measured at fair value at the date of grant using a
Black-Scholes model, with the following assumptions:
Date ofgrant Exercise price pence Number of warrants Share price at grant date pence Expected volatility Risk free rate Expected life years Fair value per share under warrantpence
11-Sep-13 4.44 10,000,000 0.915 75% 0.79% 5 0.262
An expected dividend yield of 0% was used in the above valuation.
The assumption made for the expected life of the warrants is not necessarily
indicative of the exercise patterns that may occur. The expected volatility
reflects the assumption that the historical volatility is indicative of future
trends, which may not necessarily be the actual outcome.
The total fair value of the warrants, £26,200, has been held on the balance
sheet within prepayments and in the warrants reserve within equity. The
prepayment will be released against share premium as the equity financing
facility is utilised. The warrants reserve will be released to share premium
when the warrants are exercised. If the warrants lapse then the reserve is
transferred to retained earnings.
Darwin or the Company may terminate the EFF in specified circumstances. The
issue of subscription notices is subject to specified pre-conditions. The
Company has provided warranties and indemnities to Darwin and affiliated
persons.
Share re-organisation and reduction of capital
In August 2013, following a general meeting held on 15 July 2013, the Company
undertook a share re-organisation and reduction of capital to facilitate the
demerger of SiS (Science in Sport) Limited.
The demerger was effected by Provexis returning to Provexis shareholders
capital in an amount equal to the market value of the ordinary shares of £1
each in the capital of SiS (Science in Sport) Limited as at 9 August 2013, the
demerger effective date. The return of capital to Provexis shareholders was
satisfied by the transfer by Provexis to Science in Sport plc of SiS (Science
in Sport) Limited's ordinary shares of £1 each, and the allotment and issue of
Science in Sport plc ordinary shares credited as fully paid to the holders of
Provexis ordinary shares who were registered on the Provexis share register at
5.00 p.m. on 6 August 2013, the demerger record time, in accordance with the
terms of the demerger agreement.
This involved:
(i) the allotment and issue of Science in Sport Cancellation Shares
credited as fully paid;
(ii) the cancellation of the Company's existing 0.9p deferred shares
of £3.6 million, followed by the cancellation of the Science in Sport
Cancellation Shares and the reduction of Provexis' share premium account,
which amounted to £8.5 million in aggregate;
(iii) the return of capital by Provexis to Provexis shareholders of an
amount equal to the market value of the SiS (Science in Sport) Limited
ordinary shares of £1 each. The return of capital to Provexis shareholders was
satisfied by the transfer by Provexis to Science in Sport plc of the SiS
(Science in Sport) Limited ordinary shares of £1 each held by Provexis, and
the allotment and issue of Science in Sport plc ordinary shares credited as
fully paid by Science in Sport plc to Provexis shareholders who were
registered on the Provexis share register at 5.00 p.m. on 6 August 2013, the
demerger record time, on the basis of one Science in Sport plc ordinary share
for every one hundred Provexis ordinary shares then held.
Science in Sport plc's share capital then comprised one ordinary share and
50,000 redeemable shares and, therefore, Provexis allotted and issued 50,000
redeemable shares in Provexis plc prior to the demerger becoming effective in
order to ensure that the share capital of Science in Sport plc mirrored as
nearly as may be the share capital of Provexis at the demerger record time.
Provexis shareholders continued to hold their existing shares in Provexis and,
immediately following the demerger, each Provexis shareholder held as nearly
as may be the same percentage of Provexis plc ordinary shares and Science in
Sport plc ordinary shares in each of Provexis and Science in Sport
respectively. Science in Sport plc was admitted to trading on AIM on 9 August
2013.
Full details of the demerger, share re-organisation and reduction of capital
were provided on 28 June 2013 in a circular to shareholders and in an AIM
admission document for Science in Sport plc. The circular and AIM admission
document are available to download from the Company's website
www.provexis.com.
Allotted, called up and fully paid Ordinary0.1p shares Deferred0.9p shares Science in Sport 0.1p CancellationShares Redeemable£1 shares Total
number number number number number
At 31 March 2013 1,518,650,979 401,724,366 - - 1,920,375,345
Demerger of SiS (Science in Sport)- issue redeemable shares - - - 50,000 50,000
Demerger of SiS (Science in Sport)- issue Science in Sport Cancellation Shares - - 1,518,650,979 - 1,518,650,979
Demerger of SiS (Science in Sport)- redeem redeemable shares - - - (50,000) (50,000)
Demerger of SiS (Science in Sport)- cancel deferred shares - (401,724,366) - - (401,724,366)
Demerger of SiS (Science in Sport)- cancel Science in Sport Cancellation Shares - - (1,518,650,979) - (1,518,650,979)
Issued on subscription - equity financing facility 31,000,000 - - - 31,000,000
Issued for equity financing facility fee 3,414,635 - - - 3,414,635
Issued on exercise of share options 1,750,000 - - - 1,750,000
At 31 March 2014 1,554,815,614 - - - 1,554,815,614
Ordinary0.1p shares Deferred0.9p shares Science in Sport 0.1p CancellationShares Redeemable£1 shares Total
£ £ £ £ £
At 31 March 2013 1,518,651 3,615,519 - - 5,134,170
Demerger of SiS (Science in Sport)- issue redeemable shares - - - 50,000 50,000
Demerger of SiS (Science in Sport)- issue Science in Sport Cancellation Shares - - 1,518,651 - 1,518,651
Demerger of SiS (Science in Sport)- redeem redeemable shares - - - (50,000) (50,000)
Demerger of SiS (Science in Sport)- cancel deferred shares - (3,615,519) - - (3,615,519)
Demerger of SiS (Science in Sport)- cancel Science in Sport Cancellation Shares - - (1,518,651) - (1,518,651)
Issued on subscription - equity financing facility 31,000 - - - 31,000
Issued for equity financing facility fee 3,415 - - - 3,415
Issued on exercise of share options 1,750 - - - 1,750
At 31 March 2014 1,554,816 - - - 1,554,816
Allotted, called up and fully paid Ordinary0.1p shares Deferred0.9p shares Total
number number number
At 31 March 2012 1,469,832,215 401,724,366 1,871,556,581
Issued on exercise of share options 4,000,000 - 4,000,000
Issued on subscription - equity financing facility 44,818,764 - 44,818,764
At 31 March 2013 1,518,650,979 401,724,366 1,920,375,345
Ordinary0.1p shares Deferred0.9p shares Total
£ £ £
At 31 March 2012 1,469,833 3,615,519 5,085,352
Issued on exercise of share options 4,000 - 4,000
Issued on subscription - equity financing facility 44,818 - 44,818
At 31 March 2013 1,518,651 3,615,519 5,134,170
During the year ended 31 March 2014 the Company issued ordinary shares of 0.1p
each as follows:
Date Reason for issue Shares issued
£ Number
17.09.13 Share subscription - equity financing facility 31,000 31,000,000
17.09.13 Share subscription - equity financing facility fee 3,415 3,414,635
22.11.13 Exercise of share options 1,750 1,750,000
36,165 36,164,635
During the year ended 31 March 2013 the Company issued ordinary shares of 0.1p
each as follows:
Date Reason for issue Shares issued
£ Number
27.04.12 Exercise of share options 4,000 4,000,000
23.05.12 Share subscription - equity financing facility 13,198 13,197,880
03.09.12 Share subscription - equity financing facility 31,620 31,620,884
48,818 48,818,764
21.Share options
In June 2005 the Company adopted a new share option scheme for employees ("the
Provexis 2005 share option scheme"). Under the scheme, options to purchase
ordinary shares are granted by the Board of Directors, subject to the exercise
price of the option being not less than the market value at the grant date.
The options typically vest after a period of 3 years and the vesting schedule
is subject to predetermined overall company selection criteria. In the event
that the option holder's employment is terminated, the option may not be
exercised unless the Board of Directors so permits. The options expire 10
years from the date of grant.
The Company undertook a reverse takeover of Provexis Natural Products Limited
("PNP", formerly Provexis Limited) in June 2005 through a share for share
exchange. Prior to the takeover the Company and PNP had granted EMI options
and unapproved options. Options granted by the Company prior to the takeover
remain subject to the same terms as contained in the individual share option
contracts under which they were originally granted. The PNP EMI options and
unapproved options were rolled over into options over the Company's ordinary
shares, and these replacement options remain subject to the same terms as
contained in the individual PNP share option contracts under which they were
originally granted.
Following the demerger of SiS (Science in Sport) Limited in August 2013
appropriate modifications were proposed to the exercise price of certain
outstanding EMI and unapproved share option awards under Provexis' share
option schemes. The proposed modifications were to reflect the reduction in
value of Provexis which arose from the share re-organisation, reduction of
capital and demerger of SiS (Science in Sport) Limited, calculated on a pro
rata basis immediately after the demerger using the respective market values
of Provexis plc and Science in Sport plc, net of Science in Sport plc's August
2013 placing ("the Demerger Modifications").
Details of the share re-organisation, reduction of capital, demerger of SiS
(Science in Sport) Limited and proposed option Demerger Modifications were
provided on 28 June 2013 in a circular to shareholders and in an AIM admission
document for Science in Sport plc, which are available to download from the
Company's website www.provexis.com.
As envisaged in the June 2013 circular to shareholders an advance assurance
was sought from HMRC to approve the variation in the exercise price arising
out of the reduction of capital and demerger for unexercised EMI options as at
9 August 2013, the demerger effective date. The advance assurance was not
successful, and the Company remains in dialogue with HMRC on this issue. On 20
August 2014 it was agreed that the modifications proposed to the exercise
price of certain outstanding awards under Provexis' share option schemes would
take immediate effect.
The fair values of the options granted during the year were estimated at the
date of grant in accordance with IFRS 2, using a Black-Scholes model.
At 31 March 2014 the number of ordinary shares subject to options granted over
the 2005 and prior option schemes were:
EMI options
31 March 2014 31 March 2013
Weighted average exercise price(pence) Weighted average share priceat date of exercise(pence) Number Weighted average exercise price(pence) Weighted average share priceat date of exercise(pence) Number
Outstanding at the beginning of the year 1.44 - 55,802,021 1.42 - 59,802,021
Granted during the year 0.97 - 20,635,000 - - -
Exercised during the year 0.90 1.98 (1,750,000) 0.90 2.00 (4,000,000)
Cancelled during the year 2.56 - (16,192,356) - - -
Outstanding at the end of the year 0.78 - 58,494,665 1.44 - 55,802,021
The exercise price of EMI options outstanding at the end of the year ranged
between 0.59p and 1.85p (2013: 0.9p and 6.28p) and their weighted average
contractual life was 6.0 years (2013: 3.9 years).
Of the total number of EMI options outstanding at the end of the year,
49,844,675 (2013: 44,552,031) had vested and were exercisable at the end of
the year. Their weighted average exercise price was 0.71 pence (2013: 1.09
pence).
Unapproved options
31 March 2014 31 March 2013
Weightedaverageexercise price(pence) Number Weightedaverageexercise price(pence) Number
Outstanding at the beginning of the year 2.30 34,269,627 2.28 34,269,627
Granted during the year 0.97 19,365,000 - -
Cancelled during the year 3.20 (1,488,782)
Outstanding at the end of the year 7.33 52,145,845 2.30 34,269,627
The exercise price of unapproved options outstanding at the end of the year
ranged between 0.59p and 1.85p (2013: 0.9p and 6.28p) and their weighted
average contractual life was 7.3 years (2013: 6.9 years).
Of the total number of unapproved options outstanding at the end of the year,
38,795,835 (2013: 10,919,617) had vested and were exercisable at the end of
the year. Their weighted average exercise price was 1.27 pence (2013: 1.23
pence).
Grant of options
The fair values of the options have been estimated at the date of grant using
a Black-Scholes model, using the following assumptions:
Tranche Date ofgrant Exercise price pence Number of options Share price at grant date pence Expected volatility Risk free rate Expected life years Fair value per share under option pence
1 06-Jun-07 2.875 17,304,347 2.75 78% 4.44% 10 1.42
2 29-Nov-07 3.38 2,751,479 3.00 65% 3.77% 10 1.06
3 26-Aug-08 0.9 44,166,575 0.87 65% 4.45% 10 0.585
4 01-Oct-08 0.9 12,000,000 0.725 65% 4.39% 10 0.485
5 17-Jun-11 2.8 51,300,000 2.00 88% 4.48% 10 1.17
6 27-Jun-13 1.475 40,000,000 1.475 88% 0.79% 10 0.785
An expected dividend yield of 0% has been used in all of the above
valuations.
The expected life of the options is based on historical data and is not
necessarily indicative of the exercise patterns that may occur. The expected
volatility reflects the assumption that the historical volatility is
indicative of future trends, which may not necessarily be the actual outcome.
The total charge for the year relating to employee share-based payment plans
was £391,191 (2013: £179,283) all of which related to equity settled
share-based payment transactions.
22. Reserves
Share premium reserve Warrant reserve Merger reserve Retained earnings Total attributable to equity holders of the parent Non-controlling interest Total reserves
£ £ £ £ £ £ £
At 31 March 2012 19,998,832 60,000 6,599,174 (20,225,740) 6,432,266 (218,732) 6,213,534
Loss for the year - - - (4,338,600) (4,338,600) (53,106) (4,391,706)
Share-based charges - - - 179,283 179,283 - 179,283
Issue of shares - exercise of share options 32,000 - - - 32,000 - 32,000
Issue of shares - equity financing facility 23 May 2012 230,504 - - - 230,504 - 230,504
Issue of shares - equity financing facility 3 September 2012 508,087 - - - 508,087 - 508,087
At 31 March 2013 20,769,423 60,000 6,599,174 (24,385,057) 3,043,540 (271,838) 2,771,702
Loss for the year - - - 488,353 488,353 (51,634) 436,719
Share-based charges - - - 391,191 391,191 - 391,191
Demerger of SiS (Science in Sport) - issue SiS cancellation shares (1,518,651) - - - (1,518,651) - (1,518,651)
Demerger of SiS (Science in Sport) - transfer to Science in Sport plc (3,370,275) - - - (3,370,275) - (3,370,275)
Warrants cancelled during the period - equity financing facility 2,038 (60,000) - - (57,962) - (57,962)
Warrants issued during the period - equity financing facility - 26,200 - - 26,200 - 26,200
Issue of shares - equity financing facility 11 September 2013 255,750 - - - 255,750 - 255,750
Issue of shares - equity financing facility fee 11 September 2013 31,585 - - - 31,585 - 31,585
Issue of shares - share options exercised 22 November 2013 14,000 - - - 14,000 - 14,000
At 31 March 2014 16,183,870 26,200 6,599,174 (23,505,513) (696,269) (323,472) (1,019,741)
The following describes the nature and purpose of each reserve within total
equity:
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value.
Warrant reserve The warrant reserve represents warrants issued as part of the Equity Financing Facility (see note 20).
Merger reserve The merger reserve arose on the reverse takeover in 2005 of Provexis Natural Products Limited (formerly Provexis Limited) by Provexis plc through a share for share exchange and on the issue of shares for the acquisition of SiS (Science in Sport) Limited in 2011.
Retained earnings Cumulative net gains and losses recognised in the consolidated statement of comprehensive income.
23. Pension costs
The pension charge represents contributions payable by the Group to
independently administered funds which for continuing operations during the
year ended 31 March 2014 amounted to £7,624 (2013, restated: £1,552). Pension
contributions payable but not yet paid at 31 March 2014 totalled £3,871, in
respect of pension contribution entitlements where employees had not yet
provided details of the funds to which the contributions should be made (2013:
£9,057).
24. Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases are as
follows:
31 March2014 31 March2013
£ £
Due within 1 year 8,151 189,403
Due between 1 year and 2 years - 151,342
Due between 2 years and 5 years - 186,762
8,151 527,507
Operating lease payments primarily represent rentals payable by the Group for
various offices. The leases have various terms, escalation clauses and renewal
rights typical of lease agreements for the class of asset.
25. Related party transactions
On 1 June 2010 the Company announced a long-term Alliance Agreement with DSM
Nutritional Products, which has seen the Company collaborate with DSM to
develop Fruitflow in all major global markets. DSM has invested substantially
in the manufacture, technology development, marketing and sale of Fruitflow
since the Alliance Agreement was signed. Provexis continues to contribute
scientific expertise and is collaborating in areas such as cost of goods
optimisation and regulatory matters. The financial model is based upon the
division of profits between the two partners on an agreed basis, linked to
certain revenue targets, following the deduction of the cost of goods and a
fixed level of overhead from sales. The Company is working closely with DSM in
various areas of the project. It is not possible to determine the financial
impact of the Alliance Agreement at this time.
DSM is classified as a related party of the Group in accordance with IAS 24 as
it holds shares in the Group. Further, K Rietveld is a director of the
Company, and a senior employee of DSM. The directors of Provexis (the
"Directors"), having consulted with Cenkos Securities Limited ("Cenkos
Securities"), the Company's nominated adviser, consider that the terms of the
Alliance Agreement are fair and reasonable insofar as Provexis's shareholders
are concerned. In providing advice to the Directors, Cenkos Securities has
taken into account the Directors' commercial assessments.
Revenue recognised by the Group under agreements with DSM amounted to £3,967
(2013: £34,351). At 31 March 2014 the Group was owed £Nil (2013: £23,009)
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