REG - Provexis PLC - Preliminary Results <Origin Href="QuoteRef">PXSP.L</Origin> - Part 2
07/09/2017 07:07
- Part 2: For the preceding part double click ID:nRSG0460Qa
Notes
£ £
Cash flows from operating activities
Loss after tax (411,086) (440,731)
Adjustments for:
Profit on sale of fixed assets 4 (3,000) -
Finance income (890) (2,768)
Taxation 8 (14,445) (11,980)
Share-based payment charge 44,134 70,269
Changes in inventories (32,450) -
Changes in trade and other receivables (37,540) 3,623
Changes in trade and other payables 19,567 (334)
Net cash flow from operations (435,710) (381,921)
Tax credits received 5,408 15,822
Total cash flow from operating activities (430,302) (366,099)
Cash flow from investing activities
Proceeds from sale of fixed assets 3,000 -
Interest received 1,015 2,932
Total cash flow from investing activities 4,015 2,932
Cash flow from financing activities
Proceeds from issue of share capital 16 249,000 267,400
Total cash flow from financing activities 249,000 267,400
Net decrease in cash and cash equivalents (177,287) (95,767)
Opening cash and cash equivalents 189,636 285,403
Closing cash and cash equivalents 12,349 189,636
Consolidated statement of changes in equity
Sharecapital Share premium Warrantreserve Merger reserve Retained earnings Total equityattributable to owners of the parent Non-controlling interests Total equity
£ £ £ £ £ £ £ £
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
Share-based charges - - - - 44,134 44,134 - 44,134
Issue of shares - placing8 August 2016 93,333 130,667 - - - 224,000 - 224,000
Issue of shares - placing22 September 2016 10,417 14,583 - - - 25,000 - 25,000
Total comprehensiveexpense for the year - - - - (380,087) (380,087) (30,999) (411,086)
At 31 March 2017 1,750,818 16,648,471 26,200 6,599,174 (24,561,989) 462,674 (437,788) 24,886
Notes to the preliminary results for the year ended 31 March 2017
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
functional and presentational currency is pounds sterling and the financial
statements are rounded to the nearest £1.
The main activities of the Group are those of developing, licensing and
selling 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 2017 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 2016 have been
delivered to the Registrar of Companies and those for 2017 will be delivered
after the forthcoming AGM. The auditors have reported on the accounts for the
year ended 31 March 2017; their report was unqualified, and did not contain
statements under s498(2) or (3) Companies Act 2006.
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 2017 that comply with IFRS in September
2017.
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 2017.
These accounting policies are consistent with those applied in the year ended
31 March 2016, as amended to reflect any new Standards, amendments to
Standards and interpretations which are mandatory for the year ended 31 March
2017.
The Group has adopted the appropriate new interpretations and revised
Standards effective for the year ended 31 March 2017, which have not had a
material impact on the disclosures and presentation of the financial
statements.
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 7, Statement of cash flows on disclosure initiative
(effective for annual periods beginning on or after 1 January 2017)
· Amendments to IAS 12, 'Income taxes' on recognition of deferred tax
assets for unrealised losses (effective for annual periods beginning on or
after 1 January 2017)
· Amendments to IFRS 2, 'Share based payments', on clarifying how to
account for certain types of share-based payment transactions (effective for
annual periods beginning on or after 1 January 2018)
· IFRS 9, 'Financial Instruments' (effective for annual periods beginning
on or after 1 January 2018)
· IFRS 15, 'Revenue from contracts with customers' (effective for annual
periods beginning on or after 1 January 2018)
· Amendments to IFRS 15, 'Revenue from contracts with customers'
(effective for annual periods beginning on or after 1 January 2018)
· Annual improvements 2014-2016 (effective for annual periods beginning
on or after 1 January 2018)
· IFRIC 22, 'Foreign currency transactions and advance consideration'
(effective for annual periods beginning on or after 1 January 2018)
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, and the financial position of the Group, its cash flows
and liquidity position are 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 loss for the year of £411,086 (2016: £440,731) and expects to
make a further loss during the year ending 31 March 2018. The total cash
outflow from continuing operations in the year was £430,302 (2016: £366,099).
At 31 March 2017 the Group had cash balances of £12,349 (2016: £189,636).
On 4 June 2015 the Group announced 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 16.
On 10 May 2017 the Group announced it had raised proceeds of £350,000 via the
placing of 70,000,000 new ordinary shares of 0.1p each at a gross 0.50p per
share with investors. The placing shares were admitted to AIM on 16 May 2017.
On 31 July 2017 the Group announced it had raised proceeds of £322,100 via the
placing of 64,420,000 new ordinary shares of 0.1p each at a gross 0.50p per
share with investors. The placing shares were admitted to AIM on 4 August
2017.
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 has access to future equity financings, either through the Group's
existing PrimaryBid.com platform or through a separate equity fundraising with
the Company's shareholders, as potential additional sources of funding.
Based on the level of existing cash, projected income and expenditure, and
excluding the potential additional sources of funding, the directors are
satisfied that the Company and the Group have adequate resources to continue
in business for a period of more than twelve months from the date of approval
of the financial statements. If the potential additional sources of funding
are taken into account, the directors are satisfied that the Company and the
Group have adequate resources to continue in business for the foreseeable
future.
Accordingly the going concern basis has been used in preparing the 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.
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.
(iii) Revenue from sales to external customers is recognised when the
significant risks and rewards of ownership have been transferred to the buyer
in accordance with the customer terms. This is when goods are dispatched to
customers.
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.
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 reporting 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 statement of financial position 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 reporting 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.
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 17. 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 £133,314 (2016: £113,747) as disclosed in note 14.
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 March2017 Year ended31 March2016
£ £
Loss from continuing operations is stated after charging:
Research and development costs 187,163 192,236
Foreign exchange gains 377 8,865
Profit on disposal of fixed assets - plant and equipment 3,000 -
Equity-settled share based payment expense 44,134 70,269
The total fees of the Group's auditor, for services provided are analysed
below:
Year ended31 March2017 Year ended31 March2016
£ £
Audit services
Parent company 10,500 10,000
Subsidiaries 8,750 8,000
Tax services - compliance
Parent company 2,000 2,000
Subsidiaries 3,000 3,000
Other services
iXBRL services 2,000 2,000
Total fees 26,250 25,000
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 March2017 Year ended31 March2016
Research and development consultants 1 1
Directors 3 3
4 4
Their aggregate emoluments were:
Year ended31 March2017 Year ended31 March2016
£ £
Fees 220,008 212,510
Total cash settled emoluments 220,008 212,510
Share-based payment remuneration charge: equity settled 44,134 70,269
Total emoluments 264,142 282,779
6. Directors' remuneration
Year ended31 March2017 Year ended31 March2016
£ £
Directors
Aggregate emoluments 172,008 164,010
Company pension contributions - -
172,008 164,010
Share based payment remuneration charge: equity settled - 46,524
Total Directors' emoluments 172,008 210,534
Emoluments disclosed above include the following amounts in respect of the
highest paid director:
Year ended31 March2017 Year ended31 March2016
£ £
Aggregate emoluments 96,000 88,002
Share based payment remuneration charge: equity settled - 23,262
Total of the highest paid director's emoluments 96,000 111,264
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 March2017 Year ended31 March2016
£ £
Finance income
Bank interest receivable 890 2,768
890 2,768
8. Taxation
Year ended31 March2017 Year ended31 March2016
£ £
Current tax income - United Kingdom corporation tax
Research and development credit - current year 13,320 11,980
Research and development credit - in respect of prior periods 1,125 -
Taxation credit 14,445 11,980
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 March2017 Year ended31 March2016
£ £
Loss before tax 425,531 452,711
Loss before tax multiplied by thestandard rate of corporation tax in the UK of 20% (2016: 20%) 85,106 90,542
Effects of:
Expenses not deductible for tax purposes (8,827) (14,054)
Difference between depreciation and capital allowances - 283
Unutilised tax losses and other deductions arising in the year (68,934) (69,329)
Additional deduction for R&D expenditure 10,622 9,185
Surrender of tax losses for R&D tax credit refund (4,647) (4,647)
Adjustments in respect of prior years 1,125 -
Total tax credit for the year 14,445 11,980
At 31 March 2017 the Group UK tax losses to be carried forward are estimated
to be £18,893,000 (2016: £18,640,000).
Income tax asset receivable within one year 31 March2017 31 March2016
£ £
Corporation tax recoverable 26,425 17,388
26,425 17,388
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 17, 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
2017 2016
Loss and total comprehensive expensefor the year attributable to owners of the parent - £ 380,087 409,569
Weighted average number of shares 1,712,581,870 1,630,067,560
Basic and diluted loss per share - pence 0.02 0.03
The Group raised £672,100 via the placing of 134,420,000 new shares across two
placings in May and August 2017, as further detailed in note 21. The new
shares issued would change the weighted average number of shares in issue as
shown above for the year ended 31 March 2017, but they would not significantly
change the resulting loss per share calculations.
10. Intangible assets
Goodwill Development costs Total
£ £ £
Cost
At 1 April 2016 7,265,277 158,166 7,423,443
At 31 March 2017 7,265,277 158,166 7,423,443
Amortisation and Impairment
At 1 April 2016 7,265,277 158,166 7,423,443
At 31 March 2017 7,265,277 158,166 7,423,443
Net book value
At 31 March 2017 - - -
At 31 March 2016 - - -
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 - - -
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
Laboratory equipment Total
£ £
Cost
At 1 April 2016 68,725 68,725
Disposals (68,725) (68,725)
At 31 March 2017 - -
Depreciation
At 1 April 2016 68,725 68,725
Disposals (68,725) (68,725)
At 31 March 2017 - -
Net book value
At 31 March 2017 - -
At 31 March 2016 - -
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 - -
12. Inventories
31 March2017 31 March2016
£ £
Finished goods 32,450 -
32,450 -
There are no provisions included within inventories in relation to the
impairment of inventories (2016: £Nil).
During the year inventories of £9,533 (2016: £Nil) were recognised as an
expense within cost of goods.
13. Trade and other receivables
31 March2017 31 March2016
£ £
Amounts receivable within one year:
Trade receivables 1,251 -
Less: provision for impairment of trade receivables - -
Trade receivables - net 1,251 -
Other receivables 16,287 17,423
Total financial assets other than cashand cash equivalents classified as loans and receivables 17,538 17,423
Prepayments and accrued income 69,438 32,138
Total trade and other receivables 86,976 49,561
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 reporting date is the fair value of each class of receivable.
14. Trade and other payables
31 March2017 31 March2016
£ £
Trade payables 67,932 29,550
Accruals 60,157 80,326
Total financial liabilities measured at amortised cost 128,089 109,876
Other taxes and social security 5,225 3,871
Total trade and other payables 133,314 113,747
The directors consider that the carrying amount of these liabilities
approximates to their fair value.
All amounts shown fall due within one year.
15. Deferred tax
Deferred tax is calculated in full on temporary differences under the
liability method using a tax rate of 17% (2016: 18%).
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 £3,211,838 (2016: £3,356,723) have not been
recognised on the basis that their future economic benefit is not certain.
Assuming a prevailing tax rate of 17% (2016: 18%) when the timing differences
reverse, the unrecognised deferred tax asset comprises:
31 March2017 31 March2016
£ £
Depreciation in excess of capital allowances 1,334 1,158
Unutilised tax losses 3,210,504 3,355,565
3,211,838 3,356,723
16. Share capital
On 4 June 2015 the Company announced 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 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 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 existing 10 September 2013 warrant agreement with Darwin continues to be
in place under the new PrimaryBid.com arrangements.
The total fair value of the warrants, £26,200, has previously been held within
prepayments and in the warrants reserve within equity. During the year ended
31 March 2015 the prepayment was released in full against share premium.
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.
Allotted, called up and fully paid Ordinary0.1p shares Ordinary0.1p shares
£ number
At 31 March 2016 1,647,068 1,647,068,167
Issue of shares - placing 8 August 2016 93,333 93,333,340
Issue of shares - placing 22 September 2016 10,417 10,416,667
At 31 March 2017 1,750,818 1,750,818,174
On 2 August 2016 the Group announced 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, with no commissions or expenses payable. 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 Company's
annual report and accounts. On 15 September 2016, after the publication of the
Company's 2016 annual report and accounts, the Company duly announced it had
raised £25,000 via a placing of 10,416,667 new ordinary shares of
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