REG - Provexis PLC - Preliminary Results <Origin Href="QuoteRef">PXSP.L</Origin> - Part 2
07/09/2016 07:07
- Part 2: For the preceding part double click ID:nRSG1654Ja
89,375 - 89,375
Equity financing facilityfee - charge for year - - - - (35,000) (35,000) - (35,000)
Issue of shares - equity financing facility 29 April 2014 7,000 38,403 - - - 45,403 - 45,403
Issue of shares - equity financing facility 15 December 2014 23,030 101,970 - - - 125,000 - 125,000
Equity financingfacility - warrants chargedto share premium account - (26,200) - - - (26,200) - (26,200)
Total comprehensiveexpense for the year - - - - (435,598) (435,598) (52,155) (487,753)
At 31 March 2015 1,584,846 16,298,043 26,200 6,599,174 (23,886,736) 621,527 (375,627) 245,900
Share-based charges - - - - 70,269 70,269 - 70,269
Issue of shares - PrimaryBidplacing 9 July 2015 62,222 205,178 - - - 267,400 - 267,400
Total comprehensiveexpense for the year - - - - (409,569) (409,569) (31,162) (440,731)
At 31 March 2016 1,647,068 16,503,221 26,200 6,599,174 (24,226,036) 549,627 (406,789) 142,838
Notes to the preliminary results for the year ended 31 March 2016
1. Accounting policies
General information
Provexis plc is a public limited company incorporated and domiciled in the
United Kingdom (registration number 05102907). The address of the registered
office is Prospect House, Queens Road, Reading, Berkshire RG1 4RP, UK.
The main activities of the Group are those of developing and licensing the
proprietary, scientifically-proven Fruitflow heart-health functional food
ingredient for the global functional food sector.
Basis of preparation
The financial information set out in this release does not constitute the
Company's full statutory accounts for the year ended 31 March 2016 for the
purposes of section 434(3) of the Companies Act 2006, but it is derived from
those accounts that have been audited. Statutory accounts for 2015 have been
delivered to the Registrar of Companies and those for 2016 will be delivered
after the forthcoming AGM. The auditors have reported on those accounts; their
report was unqualified, and did not contain statements under s498(2) or (3)
Companies Act 2006 in either 2016 or 2015.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) as endorsed for the use in
the European Union, this announcement does not itself contain sufficient
information to comply with IFRS. The Company expects to publish full financial
statements for the year ended 31 March 2016 that comply with IFRS in September
2016.
The accounting policies set out below have been applied to all periods
presented in these Group financial statements and are in accordance with IFRS,
as adopted by the European Union, and International Financial Reporting
Interpretations Committee ('IFRIC') interpretations that were applicable for
the year ended 31 March 2016.
These accounting policies are consistent with those applied in the year ended
31 March 2015, as amended to reflect any new Standards, Amendments to
Standards and interpretations which are mandatory for the year ended 31 March
2016.
The following amendment has been adopted in the year however the Directors do
not consider it to have had a material effect on the Group financial
statements:
· Defined Benefit Plans: Employee Contributions: Amendments to IAS 19
The following standards, interpretations and amendments have been issued but
are not yet effective and will be adopted at the point they are effective:
· Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of
Depreciation and Amortisation (effective 1 January 2016)
· IFRS 15 Revenue from Contracts with Customers (effective 1 January
2018)
· IFRS 9 Financial Instruments (effective 1 January 2018)
· Disclosure Initiative: Amendments to IAS 1 Presentation of Financial
Statements (effective 1 January 2016)
The Directors do not expect that the adoption of these Standards and
Interpretations in future periods will have a material impact on the
consolidated financial statements of the Group. There are a number of
standards, interpretations and amendments to published accounts not listed
above which the directors consider not to be relevant to the Group.
Going concern
The Group's business activities together with the factors likely to affect its
future development are set out in the strategic report. The financial position
of the Group, its cash flows and liquidity position are also set out in the
strategic report. In addition note 2 to the financial statements includes the
Group's objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial instruments and
its exposure to credit and liquidity risk.
The Group made a total comprehensive loss for the year of £440,731 (2015:
£487,753) and expects to make a further loss during the year ending 31 March
2017. The total cash outflow from operations in the year was £381,921 (2015:
£404,776). At 31 March 2016 the Group had cash balances of £189,636 (2015:
£285,403).
On 4 June 2015 the Group announced that it had agreed significantly enhanced
financial terms for its long-term Alliance Agreement with DSM, involving a
reduction in the fixed level of overhead deduction from sales which
permanently decreased with effect from 1 January 2015, backdated, thus
increasing the profit share payable to the Company.
On 4 June 2015 the Group also announced that it had joined PrimaryBid.com
(www.primarybid.com), an online platform dedicated to equity crowdfunding for
AIM-listed companies which is further detailed in note 15. On 3 July 2015 the
Group announced that it had raised proceeds of £267,400 net of commission via
the placing of 62,222,223 new ordinary shares of 0.1p each at a gross 0.45p
per share with investors using the Primarybid.com platform. The placing shares
were admitted to AIM on 9 July 2015.
On 29 June 2016 the Group announced the launch of a high quality dietary
supplement product containing Fruitflow and Omega-3 which is being sold
initially from a separate, dedicated website www.fruitflowplus.com on a mail
order basis. The new dietary supplement product is expected to provide the
Group with an additional income and profit stream.
On 2 August 2016 the Group announced that it had raised proceeds of £224,000
via the placing of 93,333,340 new ordinary shares of 0.1p each at a gross
0.24p per share with investors. The placing shares were admitted to AIM on 8
August 2016.
On 2 August 2016 as part of the placing announcement the Group also announced
that the Company's Chairman Dawson Buck had given a stated intention to
subscribe to 10,416,667 shares at a subscription price of 0.24p totalling
£25,000, with his formal commitment to and payment for the subscription to
take effect in September 2016 immediately after publication of the Group's
annual report and accounts.
The directors have prepared projected cash flow information for a period of
more than twelve months from the date of approval of these financial
statements and have reviewed this information as at the date of these
financial statements.
The Group is seeking to maximise the commercial returns that can be achieved
from its Fruitflow technology, and the Group's cost base and its resources
continue to be very tightly managed.
The Group remains keen to minimise dilution to shareholders and it is focussed
on moving into profitability as Fruitflow revenues increase, but while the
Group remains in a loss making position it will need to raise working capital
on occasions.
The Group has access to future equity financings as potential additional
sources of funding, primarily through the Group's existing PrimaryBid.com
platform or by way of a separate equity fundraising with the Company's
shareholders. Based on its current level of cash it is expected that the Group
will need to raise further equity finance in the coming twelve months.
The Directors have concluded that the necessity to raise additional equity
finance represents a material uncertainty that casts significant doubt upon
the Group's ability to continue as a going concern and that should it be
unable to raise further funds, the Group may be unable to realise its assets
and discharge its liabilities in the normal course of business. However,
considering the success of previous fundraisings and the current performance
of the business, the Directors have a reasonable expectation of raising
sufficient additional capital to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the Group's financial statements.
Basis of consolidation
Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than one half of the voting rights. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
The consolidated financial information presents the results of the Company and
its subsidiaries, Provexis Nutrition Limited, Provexis Natural Products
Limited and Provexis (IBD) Limited as if they formed a single entity ('the
Group'). All subsidiaries share the same reporting date, 31 March, as Provexis
plc. All intra group balances are eliminated in preparing the financial
statements.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued and liabilities incurred
or assumed at the date of exchange. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective
of the extent of any non-controlling interest. The excess of the cost of
acquisition over the fair value of the Group's share of the identifiable net
assets acquired is recorded as goodwill. The direct costs of acquisition are
recognised immediately as an expense.
Non-controlling interest
Profit or loss and each component of other comprehensive income are attributed
to the owners of the parent and to the non-controlling interests. Total
comprehensive income is attributed to the owners of the parent and the
non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
Revenue
Revenue comprises the fair value received or receivable for exclusivity
arrangements, collaboration agreements, royalties and sales net of sales
rebates and excluding VAT and trade discounts.
The accounting policies for the principal revenue streams of the Group are as
follows:
(i) Exclusivity arrangements and collaboration agreements are recognised as
revenue in the accounting period in which the related services, or required
activities, are performed or specified conditions are fulfilled in accordance
with the terms of completion of the specific transaction.
(ii) Royalty income relating to the sale by a licensee of licensed product is
recognised on an accruals basis in accordance with the substance of the
relevant agreement and based on the receipt from the licensee of the relevant
information to enable calculation of the royalty due.
Segment reporting
The Group determines and presents operating segments based on the information
that internally is provided to the Chairman, who is the Group's 'chief
operating decision maker' ('CODM').
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's
other components. An operating segment's operating results are reviewed
regularly by the CODM to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete financial
information is available.
Segment results that are reported to the Group Board include items directly
attributable to a segment as well as those that can be allocated on a
reasonable basis.
Segment capital expenditure is the total cost incurred during the period to
acquire property, plant and equipment, and intangible assets.
Use of non-GAAP profit measure - underlying operating profit
The directors believe that the operating loss before share based payments and
exceptional items measure provides additional useful information for
shareholders on underlying trends and performance. This measure is used for
internal performance analysis. Underlying operating loss is not defined by
IFRS and therefore may not be directly comparable with other companies'
adjusted profit measures. It is not intended to be a substitute for, or
superior to IFRS measurements of profit.
Exceptional items are those material items which, by virtue of their size or
incidence, are presented separately in the Statement of Comprehensive Income
to give a full understanding of the Group's underlying financial performance.
Transactions which may give rise to exceptional items include the
restructuring of business activities and acquisitions. A reconciliation of
underlying operating profit to statutory operating profit is set out on the
face of the Statement of Comprehensive Income.
Intangible assets
Research and development
Certain Group products are in the research phase and others are in the
development phase. Expenditure incurred on the development of internally
generated products is capitalised if it can be demonstrated that:
● It is technically feasible to develop the product for it to be
sold;
● Adequate resources are available to complete the development;
● There is an intention to complete and sell the product;
● The Group is able to sell the product;
● Sale of the product will generate future economic benefits; and
● Expenditure on the project can be measured reliably.
The value of the capitalised development cost is assessed for impairment
annually. The value is written down immediately if impairment has occurred.
Development costs are not being amortised as income has not yet been realised
from the underlying technology. Development expenditure, not satisfying the
above criteria, and expenditure on the research phase of internal projects is
recognised in the statement of comprehensive income as incurred.
Patents and trade marks
The costs incurred in establishing patents and trade marks are either expensed
or capitalised in accordance with the corresponding treatment of the
development expenditure for the product to which they relate.
Non-current assets held for sale or distribution and disposal groups
Non-current assets and disposal groups are classified as held for sale when,
at the year end:
- they are available for immediate sale;
- management is committed to a plan to sell;
- it is unlikely that significant changes to the plan will be made or
that the plan will be withdrawn;
- an active programme to locate a buyer has been initiated;
- the asset or disposal group is being marketed at a reasonable price in
relation to its fair value; and
- a sale is expected to complete within 12 months from the date of
classification.
Non-current assets and disposal groups classified as held for sale are
measured at the lower of:
- their carrying amount immediately prior to being classified as held
for sale in accordance with the Group's accounting policy; and
- fair value less costs to sell.
Following their classification as held for sale, non-current assets (including
those in a disposal group) are not depreciated.
Impairment of assets
Assets that have a finite useful life but that are not yet in use and are
therefore not subject to amortisation or depreciation are tested annually for
impairment. Assets that are subject to amortisation are reviewed for
impairment annually and when events or circumstances suggest that the carrying
amount may not be recoverable, an impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable amount.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised immediately in the
statement of comprehensive income, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but so
that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the
asset in prior periods. A reversal of an impairment loss is recognised
immediately in the statement of comprehensive income, unless the relevant
asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase. Impairment losses on
goodwill are not reversed.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
calculated as follows:
Raw materials - cost of purchase on first in, first out basis.
Work in progress and finished goods - cost of raw materials and labour,
together with attributable overheads based on the normal level of activity.
Net realisable value is based on estimated selling price less further costs to
completion and disposal. A charge is made to the income statement for slow
moving inventories. The charge is reviewed at each balance sheet date.
Financial instruments
Financial assets
The Group's financial assets are comprised of 'trade and other receivables'
and 'cash and cash equivalents'. They are recognised initially at their fair
value and subsequently at amortised cost. The Group will assess at each
reporting date whether there is objective evidence that the financial asset is
impaired. If an asset is judged to be impaired the carrying amount of the
asset will be adjusted to its impaired valuation.
Financial liabilities
The Group's financial liabilities comprise 'trade and other payables' and
'borrowings'. These are recognised initially at fair value and subsequently at
amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
Government grants
Government grants are recognised when there is reasonable assurance that the
grant will be received and the Group will comply with all attached conditions.
Government grants are recognised in the statement of comprehensive income in
the same period to which the costs that they are intended to compensate are
expensed.
Taxation
Current tax is provided at amounts expected to be recovered or to be paid
using the tax rates and tax laws that have been enacted or substantively
enacted at the reporting date. When research and development tax credits are
claimed they are recognised on an accruals basis and are included as a
taxation credit.
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability on the balance sheet differs from its tax base,
except for differences arising on:
· The initial recognition of an asset or liability in a transaction which
is not a business combination and at the time of the transaction affects
neither accounting or taxable profit; and
· Investments in subsidiaries where the Group is able to control the
timing of the reversal of the difference and it is probable that the
difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profits will be available against which the
difference can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the balance sheet date and are
expected to apply when the deferred tax liabilities/(assets) are
settled/(recovered). Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· The same taxable Group Company; or
· Different Group entities which intend to settle current tax assets and
liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, on each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or
recovered.
Foreign currency translation
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at period end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the statement
of comprehensive income.
Benefits for Directors and consultants
(i) Share-based payment transactions
The Group operates an equity-settled, share-based compensation plan. Vesting
conditions are service conditions and performance conditions only. Where share
options are awarded to employees and others providing similar services, the
fair value of the options at the date of grant is charged to the statement of
comprehensive income over the vesting period. Non-market vesting conditions
are taken into account by adjusting the number of equity instruments expected
to vest at each reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the fair value of
the options when granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative charge is not adjusted for failure to
achieve a market vesting condition. If market related terms and conditions of
options are modified before they vest, the change in the fair value of the
options, measured immediately before and after the modification, is also
charged to the statement of comprehensive income over the remaining vesting
period. If non-market related terms and conditions of options are modified
before they vest, the number of instruments expected to vest at each reporting
date, and therefore the cumulative charge, is amended accordingly. Where
equity instruments are granted to persons other than employees and others
providing similar services, the statement of comprehensive income is charged
with the fair value of goods and services received.
The proceeds received when options are exercised, net of any directly
attributable transaction costs, are credited to share capital (nominal value)
and the remaining balance to share premium.
National insurance on share options
All employee option holders sign statements that they will be liable for any
employers national insurance arising on the exercise of share options.
Interest income
Interest income is recognised on a time-proportion basis using the effective
interest rate method.
Warrants
The Group has issued warrants to Darwin Strategic Limited, initially as part
of the Equity Financing Facility and with effect from June 2015 as part of
PrimaryBid.com. These warrants have been measured at fair value at the date of
grant using an appropriate options pricing model.
The fair value of the warrants had been held on the statement of financial
position within prepayments and in the warrants reserve within equity. The
prepayment was released in full against share premium in the year ended 31
March 2015. The warrants reserve will be released to share premium if the
warrants are exercised. If the warrants lapse then the reserve will be
transferred to retained earnings.
Benefits for Directors and consultants
Share-based payment transactions
The Group operates an equity-settled, share-based compensation plan. Where
share options are awarded to employees and others providing similar services,
the fair value of the options at the date of grant is charged to the statement
of comprehensive income over the vesting period. Non-market vesting conditions
are taken into account by adjusting the number of equity instruments expected
to vest at each reporting date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored into the fair value of
the options when granted. As long as all other vesting conditions are
satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative charge is not adjusted for failure to
achieve a market vesting condition. If market related terms and conditions of
options are modified before they vest, the change in the fair value of the
options, measured immediately before and after the modification, is also
charged to the statement of comprehensive income over the remaining vesting
period. If non-market related terms and conditions of options are modified
before they vest, the number of instruments expected to vest at each reporting
date, and therefore the cumulative charge, is amended accordingly. Where
equity instruments are granted to persons other than employees and others
providing similar services, the statement of comprehensive income is charged
with the fair value of goods and services received.
The proceeds received when options are exercised, net of any directly
attributable transaction costs, are credited to share capital (nominal value)
and the remaining balance to share premium.
National insurance on share options
All employee option holders sign statements that they will be liable for any
employers national insurance arising on the exercise of share options.
Interest income
Interest income is recognised on a time-proportion basis using the effective
interest rate method.
Warrants
The Group has issued warrants to Darwin Strategic Limited, initially as part
of the Equity Financing Facility and with effect from June 2015 as part of
PrimaryBid.com. These warrants have been measured at fair value at the date of
grant using an appropriate options pricing model.
The fair value of the warrants had been held on the statement of financial
position within prepayments and in the warrants reserve within equity. The
prepayment was released in full against share premium in the year ended 31
March 2015. The warrants reserve will be released to share premium if the
warrants are exercised. If the warrants lapse then the reserve will be
transferred to retained earnings.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
Estimates and judgements are continually made and are based on historic
experience and other factors, including expectations of future events that are
believed to be reasonable in the circumstances.
As the use of estimates is inherent in financial reporting, actual results
could differ from these estimates. The directors believe the following to be
the key areas of estimation and judgement:
(i) Research and development
Under IAS 38 Intangible Assets, development expenditure which meets the
recognition criteria of the standard must be capitalised and amortised over
the useful economic lives of intangible assets from product launch.
(ii) Share-based payments
The Group operates an equity-settled, share-based compensation plan. The
charge for share-based payments is determined based on the fair value of
awards at the date of grant partly by use of the Black-Scholes pricing model
which require judgements to be made regarding expected volatility, dividend
yield, risk free rates of return and expected option lives. The inputs used in
these pricing models to calculate the fair values are set out in note 16. An
element of the share-based payment charge also relies on certain assumptions
over the future performance of the share price which may not be met or may be
exceeded by the time the relevant awards vest.
2. Financial risk management
2.1 Financial risk factors
The Group's activities inevitably expose it to a variety of financial risks:
market risk (including currency risk, cash flow interest rate risk and fair
value interest rate risk), credit risk and liquidity risk.
It is Group policy not to enter into speculative positions using complex
financial instruments. The Group's primary treasury objective is to minimise
exposure to potential capital losses whilst at the same time securing
favourable market rates of interest on Group cash deposits using money market
deposits with banks. Cash balances used to settle the liabilities from
operating activities are also maintained in current accounts which earn
interest at variable rates.
(a) Market risk
Foreign exchange risk
The Group's largest contract, the long-term Alliance Agreement with DSM
Nutritional Products for Fruitflow, is primarily denominated in Euros. The
Alliance Agreement is underpinned by a financial model which 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.
DSM Nutritional Products seeks to sell Fruitflow in Euros, but its customers
for Fruitflow are world-wide and world-wide exchange rate fluctuations may
have an impact on the revenues accruing to DSM, and thus the profit share
accruing to the Group. The cost of goods for Fruitflow is primarily
denominated in and incurred in Euros.
Where customer or supplier transactions of more than £25,000 total value are
to be settled in foreign currencies consideration is given to settling the
sums to be received or paid through foreign exchange conversion at the outset
of the transactions to minimise the risk of adverse currency fluctuations.
Cash flow and fair value interest rate risk
The Group's interest rate risk arises from medium term and short term money
market deposits. Deposits which earn variable rates of interest expose the
Group to cash flow interest rate risk. Deposits at fixed rates expose the
Group to fair value interest rate risk.
The Group analyses its interest rate exposure on a dynamic basis throughout
the year.
(b) Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and
financial institutions as well as credit exposure in relation to outstanding
receivables. Group policy is to place deposits with institutions with
investment grade A2 or better (Moody's credit rating) and deposits are made in
sterling only. The Group does not expect any losses from non-performance by
these institutions. Management believes that the carrying value of outstanding
receivables and deposits with banks represents the Group's maximum exposure to
credit risk.
(c) Liquidity risk
Liquidity risk arises from the Group's management of working capital, it is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. Prudent liquidity risk management implies
maintaining sufficient cash and cash equivalents and management monitors
rolling forecasts of the Group's liquidity on the basis of expected cash
flow.
The Group had trade and other payables at the statement of financial position
date of £113,747 (2015: £114,081) as disclosed in note 13.
2.2 Capital risk management
The Group considers its capital to comprise its ordinary share capital, share
premium, warrant reserve, merger reserve and accumulated retained earnings as
disclosed in the consolidated statement of financial position.
The Group remains funded primarily by equity capital. The Group's objectives
when managing capital are to safeguard the Group's ability to continue as a
going concern in order to provide returns for equity holders of the Company
and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
3.Segmental reporting
The directors have determined that only one operating segment exists under the
terms of International Financial Reporting Standard 8 'Operating Segments', as
the Group is organised and operates as a single business unit and all
activities are based in the UK. The Group's reporting segment is determined
based on the Group's internal reporting to the Chief Operating Decision Maker
(CODM). The CODM has been determined to be the Chairman of the Board of
Directors as he is primarily responsible for the allocation of resources to
segments and the assessment of performance of the segments.
The CODM uses underlying operating profit/(loss) as the key measure of the
segments' results as it reflects the segments' underlying trading performance
for the financial period under evaluation.
Underlying operating profit/(loss) is a consistent measure within the Group
which measures the performance of the segment before share based payment
charges and exceptional items.
4. Loss from continuing operations
Year ended31 March2016 Year ended31 March2015
£ £
Loss from continuing operations is stated after charging:
Research and development costs 192,236 180,497
Foreign exchange gains / (losses) 8,865 (2,553)
Equity-settled share based payment expense 70,269 89,375
The total fees of the Group's auditor, for services provided are analysed
below:
Year ended31 March2016 Year ended31 March2015
£ £
Audit services
Parent company 10,000 13,000
Subsidiaries 8,000 12,000
Tax services - compliance
Parent company 2,000 2,000
Subsidiaries 3,000 3,000
Other services
iXBRL services 2,000 2,000
Total fees 25,000 32,000
5. Wages and salaries
The average monthly number of persons, including all directors, employed or
engaged under contracts for services by the Group during the year was as
follows:
Year ended31 March2016 Year ended31 March2015
Research and development consultants 1 1
Directors 3 3
4 4
Their aggregate emoluments were:
Year ended31 March2016 Year ended31 March2015
£ £
Fees 212,510 169,253
Total cash settled emoluments 212,510 169,253
Share-based payment remuneration charge: equity settled 70,269 54,375
Total emoluments 282,779 223,628
6. Directors' remuneration
Year ended31 March2016 Year ended31 March2015
£ £
Directors
Aggregate emoluments 164,010 149,253
Company pension contributions - -
164,010 149,253
Share based payment remuneration charge: equity settled 46,524 46,397
Total Directors' emoluments 210,534 195,650
Emoluments disclosed above include the following amounts in respect of the
highest paid director:
Year ended31 March2016 Year ended31 March2015
£ £
Aggregate emoluments 88,002 76,251
Share based payment remuneration charge: equity settled 23,262 23,198
Total of the highest paid director's emoluments 111,264 99,449
During the current year and the prior year the directors did not participate
in defined contribution pension schemes, and did not receive any benefits in
kind.
7. Finance income
Year ended31 March2016 Year ended31 March2015
£ £
Finance income
Bank interest receivable 2,768 5,077
2,768 5,077
8. Taxation
Year ended31 March2016 Year ended31 March2015
£ £
Current tax income
United Kingdom corporation tax - research and development credit 11,980 5,407
Taxation credit 11,980 5,407
The tax assessed for the year is different from the standard rate of
corporation tax in the UK. The differences are explained below:
Year ended31 March2016 Year ended31 March2015
£ £
Loss before tax 452,711 493,160
Loss before tax multiplied by thestandard rate of corporation tax in the UK of 20% (2015: 21%) 90,542 103,564
Effects of:
Expenses not deductible for tax purposes (14,054) (19,539)
Difference between depreciation and capital allowances 283 362
Unutilised tax losses and other deductions arising in the year (69,329) (69,487)
Additional deduction for R&D expenditure 9,185 4,351
Surrender of tax losses for R&D tax credit refund (4,647) (2,425)
Share scheme deduction - (11,419)
Total tax credit for the year 11,980 5,407
At 31 March 2016 the Group UK tax losses to be carried forward are estimated
to be £18,640,000 (2015: £18,100,000).
Income tax asset receivable within one year 31 March2016 31 March2015
£ £
Corporation tax recoverable 17,388 21,230
17,388 21,230
9. Earnings per share and diluted earnings per share
Basic earnings per share amounts are calculated by dividing the profit
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the financial year.
The loss attributable to equity holders of the Company for the purpose of
calculating the fully diluted loss per share is identical to that used for
calculating the basic loss per share. The exercise of share options, disclosed
in note 16, would have the effect of reducing the loss per share and is
therefore anti-dilutive under the terms of IAS 33 'Earnings per Share'.
Basic and diluted loss per share amounts are in respect of all activities.
Year ended Year ended
31 March 31 March
2016 2015
Loss and total comprehensive expensefor the year attributable to owners of the parent - £ 409,569 435,598
Weighted average number of shares 1,630,067,560 1,567,947,710
Basic and diluted loss per share - pence 0.03 0.03
There have been no transactions involving ordinary shares between the
reporting date and the date of approval of these financial statements which
would significantly change the earnings per share calculations shown above.
10. Intangible assets
Goodwill Development costs Total
£ £ £
Cost
At 1 April 2015 7,265,277 158,166 7,423,443
At 31 March 2016 7,265,277 158,166 7,423,443
Amortisation and Impairment
At 1 April 2015 7,265,277 158,166 7,423,443
At 31 March 2016 7,265,277 158,166 7,423,443
Net book value
At 31 March 2016 - - -
At 31 March 2015 - - -
Cost
At 1 April 2014 7,265,277 158,166 7,423,443
At 31 March 2015 7,265,277 158,166 7,423,443
Amortisation and Impairment
At 1 April 2014 7,265,277 158,166 7,423,443
At 31 March 2015 7,265,277 158,166 7,423,443
Net book value
At 31 March 2015 - - -
At 31 March 2014 - - -
Development costs represent costs incurred in registering patents that meet
the capitalisation criteria set out in IAS 38, see also note 1.
11. Plant and equipment
Fixtures, fittings, plant and equipment Laboratory equipment Total
£ £ £
Cost
At 1 April 2015 - 68,725 68,725
At 31 March 2016 - 68,725 68,725
Depreciation
At 1 April 2015 - 68,725 68,725
At 31 March 2016 - 68,725 68,725
Net book value
At 31 March 2016 - - -
At 31 March 2015 - - -
Fixtures, fittings, plant and equipment Laboratory equipment Total
£ £ £
Cost
At 1 April 2014 74,096 147,145 221,241
Disposals (74,096) (78,420) (152,516)
At 31 March 2015 - 68,725 68,725
Depreciation
At 1 April 2014 74,096 147,145 221,241
Disposals (74,096) (78,420) (152,516)
At 31 March 2015 - 68,725 68,725
Net book value
At 31 March 2015 - - -
At 31 March 2014 - - -
12. Trade and other receivables
31 March2016 31 March2015
£ £
Amounts receivable within one year:
Trade receivables - 240
Less: provision for impairment of trade receivables - -
Trade receivables - net - 240
Other receivables 17,423 18,750
Total financial assets other than cashand cash equivalents classified as loans and receivables 17,423 18,990
Prepayments and accrued income 32,138 34,358
Total trade and other receivables 49,561 53,348
Trade and other receivables do not contain any impaired assets. The Group does
not hold any collateral as security and the maximum exposure to credit risk at
the Consolidated Statement of Financial Position date is the fair value of
each class of receivable.
13. Trade and other payables
31 March2016 31 March2015
£ £
Trade payables 29,550 38,135
Accruals 80,326 72,075
Total financial liabilities measured at amortised cost 109,876 110,210
Other taxes and social security 3,871 3,871
Total trade and other payables 113,747 114,081
The directors consider that the carrying amount of these liabilities
approximates to their fair value.
All amounts shown fall due within one year.
14. Deferred tax
Deferred tax is calculated in full on temporary differences under the
liability method using a tax rate of 18% (2015: 21%).
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.
Deferred tax assets amounting to £3,356,723 (2015: £3,810,272) have not been
recognised on the basis that their future economic benefit is not certain.
Assuming a prevailing tax rate of 18% (2015: 21%) when the timing differences
reverse, the unrecognised deferred tax asset comprises:
Year ended31 March2016 Year ended31 March2015
£ £
Depreciation in excess of capital allowances 1,158 1,648
Unutilised tax losses 3,355,565 3,808,624
3,356,723 3,810,272
15. Share capital
On 4 June 2015 the Company announced that it had joined PrimaryBid.com
(www.primarybid.com), an online platform dedicated to equity crowdfunding for
AIM-listed companies.
PrimaryBid.com provides a new channel for the Company to raise equity from
investors, allowing investors to bid directly for new ordinary shares of 0.1p
each in the Company at prices of their choosing, subject to certain limited
restrictions.
PrimaryBid.com gives the Company ongoing access to an aggregated book of bids
submitted by prospective investors, with the Company having full discretion as
to whether or not to proceed with a share placing to raise capital through
PrimaryBid.com.
Should the Company wish to proceed with a share placing this is done by
issuing new shares, in order to satisfy any number of the bids presented
through the PrimaryBid.com platform. Shares may only be issued to the extent
that the Company has the requisite shareholder authorities to fulfil the
issuance. Full details can be found on www.primarybid.com.
In June 2015, as a result of the Company joining PrimaryBid.com, the Company's
existing 10 September 2013 Equity Financing Facility ('EFF') with Darwin
Strategic Limited was cancelled.
EFF fee and warrant reserve
In consideration of Darwin agreeing to provide the EFF in September 2013 the
Company agreed to:
(i) Pay a fee to Darwin amounting to approximately £35,000 by
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