Ilika plc
Fast-tracking materials
discovery
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Ilika plc
Kenneth Dibben House
Enterprise Road
University of Southampton Science Park
Chilworth
Southampton
SO16 7NS
United Kingdom
E info@ilika.com
T +44 (0)23 8011 1400
F +44 (0)23 8011 1401
www.ilika.com
Ilika plc
Annual Report and
Accounts 2013
Ilika plc invents, tests and selects
materials in the laboratory that
can be selected for scale-up and
everyday commercial use.
Our strengths
> Validated technology platform protected
by globally granted patents
> Proven ability to attract blue-chip
multinational commercialisation partners
from high growth markets
> Innovative business model that combines
low-risk product development revenue
with substantial upside from licensing
Ilika at a glance
Business Review
1 Overview
2
4 Meeting market requirements
6 Commercial engagement
Chairman’s statement
8
10 Chief Executive’s review
13 Financial review
Corporate Governance
14 Board of Directors
16 Directors’ report
18 Corporate governance statement
20 Corporate social responsibility
22 Independent auditor’s report
Financial Statements
23 Consolidated statement of
comprehensive income
24 Consolidated balance sheet
25 Consolidated cash flow statement
26 Consolidated statement of
changes in equity
27 Notes to the consolidated
financial statements
44 Company balance sheet
45 Company cash flow statement
46 Company statement of changes in equity
47 Notes to the financial information
49 Corporate directory
Corporate directory
Company number
7187804
Directors
Executive
Non-Executive
Secretary
Registered office
Graeme Purdy
Stephen Boydell
Brian Hayden
Jack Boyer (Chairman)
Clare Spottiswoode
Prof. William Wakeham
Stephen Boydell
Kenneth Dibben House
Enterprise Road
University of Southampton Science Park
Chilworth
Southampton
SO16 7NS
Website
www.ilika.com
Advisers
Independent auditors
Nominated adviser and broker
Registrars
Public relations
BDO LLP
Arcadia House
Maritime Walk
Ocean Village
Southampton
SO14 3TL
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Walbrook PR Ltd
4 Lombard Street
London
EC3V 9HD
49 Ilika plc
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Ilika focuses on two key sectors:
> Energy where Ilika assesses materials
for their greater capacity for energy
storage and conversion efficiency,
for example in batteries
> Electronics where materials created by
Ilika rapidly improve the performance
and efficiency of a range of electronic
components, such as digital memory
devices and sensors
Scan here for more
information on our
business
For more information,
visit our website at:
www.ilika.com
01 Ilika plc
Annual Report and Accounts 2013
GovernanceFinancial Statements
Ilika at a glance
Ilika’s unique process is far quicker and more efficient than traditional materials
discovery processes.
Ilika uses high-throughput, or combinatorial, techniques which involve the rapid
synthesis of a large number of different structurally related materials
in a few automated steps.
How we generate growth
Rapid discovery of
new materials
Early engagement
of large multinational
partners which
co- fund the route to
commercialisation
Existing commercial
agreements underpin
revenue, strong
pipeline in place, IP
value amplification
opportunities
Our key differentiators
High throughput materials discovery
> 10–100x faster and more reliable than traditional discovery methods
> Creates output equivalent to 100s of individual materials
> Unique patent-protected platform
> Rapid identification of materials suitable for industrial scale-up
Combinatorial synthesis
Ilika’s High Throughput Physical
Vapour Deposition (‘HT-PVD’) facility
can deposit large numbers of films
of different composition in one
automated experimental run. The
deposition of all elements occurs
simultaneously and the composition
profile can be carefully varied across
the substrate in a controlled manner.
Characterisation/screening
Large numbers of samples are
screened and characterised using
automated, high throughput
techniques. Unique sample
arrays allow the many different
compositions synthesised to be
analysed in a rapid manner for
specific, sought-after, behaviours.
Informatics
A range of specialised,
in-house software controls the
instrumentation associated with
our workflows and also enables
the rapid, simultaneous collection
of large datasets which are then
processed, analysed and presented
so that meaningful conclusions
about material properties can
be drawn.
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Shipments of fuel cells continue to
be dominated by proton exchange
membrane ('PEM') technology,
which grew 87 percent in
2011 compared to 2010. The
technology is dependent on
platinum containing electrodes,
which are the most expensive
components in the fuel cells.
It is widely recognised that cost reduction
of these electrodes is necessary to enable
widespread commercialisation of PEM
technology.
Ilika’s proprietary low cost catalysts have
been tested by an independent fuel cell
testing company and material transfer
agreements are now in place with the
global top three automotive manufacturers.
The market for lithium-ion
batteries is being driven today
by demand for consumer
electronics, but the car
makers are also adopting the
technology for hybrid electric
vehicles.
In order to deliver the fuel economy
benefits of hybrid and electric vehicles,
batteries are required which can store
energy in a small volume, but can also
charge and discharge rapidly while
remaining safe.
Ilika has worked with Toyota since 2008
on the development of novel battery
chemistries that can fulfill
these objectives.
Key products
Fuel cell catalysts
Solid-state
batteries
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Annual Report and Accounts 2013
GovernanceFinancial Statements
Meeting market requirements
> In most developed countries, 1/3
of total domestic energy demand
is required for transport
applications
> Hydrocarbons used for transport
fuel have an attractive energy
density, making them difficult to
replace with low-carbon
alternatives
> Battery technology is the most
widely used method of storing
low-carbon portable energy,
currently mainly in consumer
electronics, but also to an
increasing extent for hybrid and
electric vehicles.
QUESTION
How much energy can a battery hold?
The most widely sold batteries are the
lead-acid batteries used to power
start-motors in motor cars. These hold
60–75 Wh/L (watt-hours per litre, or
energy per standard volume), which is
about 1/100th of the energy contained
in a similar volume of petrol or diesel.
Lithium-ion batteries can pack more
energy into the same volume and hold
about four times the amount of energy
stored in the same volume of lead acid
battery, but this is still only about
1/25th of the energy stored in the
same volume of hydrocarbon.
QUESTION
Are batteries safe to use in a car?
There have been incidents of batteries
catching fire in consumer electronics,
electric vehicles and, in the full glare of
publicity, in high profile new aircraft.
Although these incidents are rare, they
are very costly for manufacturers
because of the damage to corporate
reputation, the cost of product recall
and the loss of market share. There are
many more vehicle fires due to petrol
tanks exploding during accidents
and engines catching fire, but car
manufacturers are keen to go to
extreme lengths to ensure the safety
of batteries in hybrid and electric
vehicles. This is one of the principal
reasons for Toyota’s interest in solid-
state battery technology.
QUESTION
How can the capacity of a battery
be improved?
The amount of energy that can be
contained in a battery can only
be significantly improved by changing
the materials from which the battery
is made. A battery is a package of cells
controlled by a battery management
system. Each cell is a sealed unit
containing two electrodes in a
common electrolyte, usually separated
by a polymer separator. Much of the
development work related to batteries
is concerned with the improvement of
the ability of the electrode materials to
hold charge, which defines the capacity
of the battery. Solid-state batteries can
also result in higher energy densities
by replacing the separator and liquid
electrolyte with a thin solid electrolyte.
QUESTION
What will batteries look like in
the future?
Substantial progress has been made in
recent years in the miniaturisation of
batteries since the commercialisation
of lithium-ion batteries. However, the
term 'lithium-ion' is an umbrella term
covering many different material types.
Work is still ongoing to refine and
improve lithium-ion technology. Ilika is
working on these improvements with
some of the world’s leading materials
suppliers and battery manufacturers.
However, orders of magnitude
improvements in battery capacity will
only be achieved by radical new
concepts such as lithium-air designs,
which are currently in their infancy.
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05 Ilika plc
Annual Report and Accounts 2013
GovernanceFinancial StatementsWhy energy storage is important...
Commercial engagement
Market requirement:
>> >Higher energy density
>> >Faster charge and
discharge times
Solution:
> Advanced electrode and
electrolyte materials for
lithium-ion batteries
Status:
>> >Partnered with Toyota
since 2008
> Seven contract renewals
> Potential for licensing into
different markets and to
additional partners
Market for lithium-ion batteries
The 2012 market size for lithium-ion
batteries was $11 billion, with growth
largely driven by portable consumer
electronics. In 2012, many of the
hybrid electric vehicle manufacturers
switched from nickel metal hydride
technology to lithium-ion batteries.
This switch has given new impetus
to the market growth because even
a small market for hybrid and electric
vehicles will be a very large market
for batteries.
Lithium-ion supply chain
Japan’s dominance of the lithium-ion
battery market peaked in 2000, when
85 percent of lithium-ion batteries
were produced there. Since then China
and, more rapidly, Korea, have been
gaining market share. In 2012, Korean
companies held about 40 percent of
the market while Japanese companies
held 36 percent, with China holding
the rest. The growth of the market has
attracted large chemical companies
from around the world, including the
US and Europe, to the supply chain.
Customer relationships
Ilika now has customer relationships
with materials manufacturing
companies, battery manufacturers and
automotive original equipment
manufacturers ('OEMs'). Toyota has
sold by far the most hybrid vehicles
through the success of its Prius model,
and is regarded by the industry as the
“Ilika’shigh-throughput
techniquesareessential
toovercomesomeofthe
technologicalbarrierswe
faceinthedevelopment
ofleadingedge
technologies.”
MrOkajima,ProjectManagerat
Toyota’sFrontier&Advanced
EngineeringStrategyDept
leader in this sector. Ilika has had a very
productive commercial relationship
with Toyota since 2008 and holds joint
patents on some of the novel materials
and production methods that have
been jointly invented.
IP commercialisation
In 2012 Ilika secured a £4.6 million
placing to commercialise the jointly-
held IP in solid-state batteries. Since
then, Ilika has made strong progress
with the selection and testing of
optimum material combinations, the
deposition of active electrochemical
cell structures and testing of cell
performance. Grant funding for the
scale-up facility has been secured,
creating a clear pathway for
prototyping and technology transfer
to a manufacturing partner.
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07 Ilika plc
Annual Report and Accounts 2013
GovernanceFinancial StatementsDeveloping leading-edge technologies
Chairman’s
statement
Jack Boyer
Chairman
“ As we move into the new
financial year we are confident
that we have firmly established a
strong base to continue to grow
the business. We have a strong IP
portfolio and a number of joint
development agreements with
major partners that continue to
make good progress.”
These are our third set of full year results as a public company.
During the year we have seen significant operational progress
with our IP development programmes and this is outlined in
the Chief Executive’s review. We also experienced a number of
challenges during the period, including delays with a number of
potential contracts and the decision by Energizer to close one of
its business units, which impacted on our development
collaboration. This has been reflected in the reduced revenues
for the Company and has, no doubt, had a significant impact on
our share price.
Notwithstanding the above, we believe that the Company’s
strong relationships with existing development partners should
mean that contracts which were delayed in 2013 will be
converted or replaced in 2014. Furthermore, the Company
generated a significant number of new leads with major
companies during the period. This should allow us to continue
to broaden our commercial pipeline, further diversify our global
customer base and deliver significant financial growth over the
coming years.
A compelling enterprise
08 Ilika plc
Annual Report and Accounts 2013
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Operational highlights
> Grant of patents protecting core
high throughput technology
platform in US, Japan and Canada
> Progression of proprietary low-cost
fuel cell catalyst development,
including:
– Investment of £150,000 by Carbon
Trust to support
commercialisation activities
– Grant of patents in US and Japan
– Delivery of kg-scale quantity for
OEM trials
> Completion of initial phase of
solid-state battery development,
including:
– Selection and testing of optimum
material combinations
– Deposition of active
electrochemical cell structures
– Testing of cell performance
> Streamlining operations through
disposal of wound-care business
and consolidation of activities to
one base in Southampton
> Focusing business development
activities and implementing
operational cost reductions to yield
renewed growth in the coming
financial year.
Financial highlights
> Revenues down 46 percent to
£1.00 million (2012: £1.85 million)
> Gross profit margin up to
44.1 percent (2012: 43.9 percent)
> Loss before tax increased
£3.5 million (2012: £2.4 million)
> Loss per share unchanged at 0.07p
(2012: 0.07p)
> Cash, cash equivalents and bank
deposits of £1.9 million (as at
30 April 2012: £5.3 million)
Turnover percentage by geographical market: (%)
Asia
Europe
US
2013
78
13
9
2012
86
1
13
Disposal of non-core wound care
business
In December 2012 we disposed of our
wound care operations allowing us to
focus on our core activities of developing
energy conversion and storage materials.
This resulted in a reduction in overheads
and the discontinued revenues in the
7 months to 30 December 2012
of £0.10 million (2012: £0.16 million)
which are not included in the reported
figures below. I would also like to thank
Dr. Werner Braun, who has been a
Director of Ilika since May 2007, for his
contribution to the Company over the
years. Dr. Braun, who has extensive
experience in the medical device sector,
has stepped down at the end of his fixed
term in office following the disposal
of Altrika.
Financial results
In line with the guidance provided in our
statement from 16 April 2013, revenues
from continuing operations for the year
ended 30 April 2013 fell to £1.00 million
(2012: £1.85 million), for the reasons
explained above. Revenue in the year
does not include any grant income
(2012: £0.17 million) as the Carbon Trust
funding was provided as a direct equity
investment of £0.15 million rather than
as a grant.
Gross profit reduced to £0.44 million
(2012: £0.81 million) and with
administrative expenses increasing
to £4.0 million (2012: £3.4 million) as
a result of increased research and
development activities, and zero grant
income (2012: £0.17 million), we
recorded an increased loss before tax on
continuing operations of £3.5 million
(2012: £2.4 million), resulting in a loss per
share of 0.07p (2012: Loss of 0.07p).
Cash
As at 30 April 2013, the Group’s cash
position was £1.9 million (2012: £5.3
million). Post period end, we raised an
additional £709,000 through a share
placing which, coupled with securing and
commencing a number of contracts with
customers presently being finalised will
provide sufficient cash to fund our
requirements for the foreseeable future.
Additionally, this placing has improved
our shareholder register with new
investors whose investment horizons are
better aligned with our long-term
corporate objectives.
Outlook
Although last year’s financial results did
not meet market expectations, the new
financial year has already seen the
conversion of one of the delayed
contracts and we hope to see other
opportunities convert throughout the
year. Whilst development work in Japan
remains the largest contributor to
revenues and we are encouraged by a
strong pipeline of opportunities through
our recently appointed business
development director based in Frankfurt,
Germany, as well as further
opportunities in the US.
The development of our solid-state
battery technology, co-developed with
Toyota, for man-portable applications
has progressed through the first phase
of the programme in-line with our
expectations and we have submitted a
proposal to the US army for the funding
of technology to full development
and whilst this assessment process is
ongoing we are also exploring additional
commercial support for the technology
in the consumer electronics and
automotive sectors.
Finally I would like to thank the staff and
Board for their hard work over the last
year and their undoubted contribution to
the growth of the business. I look forward
to reporting on the developments of the
Group over the coming year.
Jack Boyer
Chairman
12 July 2013
A compelling enterprise
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Annual Report and Accounts 2013
GovernanceFinancial Statements
Chief Executive’s
review
Graeme Purdy
Chief Executive
“ This year has been one in which
Ilika’s portfolio of technology
and intellectual property has
matured in a number of key
markets around the globe.”
Our strategy
The Company’s business strategy is
to use our HTT process to discover
and commercialise novel materials
for integration into products with
high value end-markets.
Focusing on delivery
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This year has been one in which Ilika’s
portfolio of technology and intellectual
property ('IP') has matured in a number
of key markets around the globe.
The company’s IP can be divided into
2 broad categories: 1) its platform
technology for high throughput
materials development and 2) the
IP defining the materials, which have
been developed using that platform.
At the start of our last financial year,
in May 2012, the Company received
confirmation that its patent
applications covering its core PVD
patents had been granted in the US,
Canada and Japan. The PVD technology
was originally developed at the
University of Southampton prior to the
spin out of the Company in 2004. This
technology has underpinned much of
the materials innovation which the
Company has undertaken since its
formation and still provides the means
by which the majority of the new
materials being developed are initially
made. Hence, in securing granted
patents for this technology, the
Company has secured the foundations
for continued future growth.
The Company considers its core
technology in high-throughput
techniques to be a key differentiator
from other providers of materials
innovation. Ilika monetises this core
technology through the development
of the materials developed using that
platform. Hence, continued progress
made in securing IP, which defines
the materials generated using the
platform, and commercialising those
materials is important to the Company.
This past year has seen important
milestones achieved across the
Company’s portfolio, but particularly
in the key area of energy storage
and conversion.
The energy conversion materials, which
are the most mature in Ilika’s portfolio,
include the low-cost fuel cell electrode
materials. Reducing the cost of fuel cell
technology is widely acknowledged as
a key priority for enabling its adoption
for both transport and stationary
applications. Ilika’s materials are
suitable for use in so-called PEM fuel
cells, which are of primary interest to
transport applications. PEM fuel cell
technology is also being used for
stationary power applications,
particularly for domestic power in
Japan. 40 percent of the cost of a PEM
fuel cell stack is currently associated
with the use of platinum as the
electrocatalyst. Platinum is a scarce
precious metal and therefore its price
is sensitive to supply and demand
pressures. In 2012, the price of
platinum varied between £28 and
£35/g. At a typical loading of 11 g/kW,
this means that an 80 kW fuel cell,
which might be suitable for a small car,
requires £2,500–£3,000 of platinum.
In comparison, the total cost of buying
an internal combustion engine lies
in the range £500–£1,000. Ilika’s
electrocatalysts cost 1/3 of the price,
on a $/kW basis, of platinum-based
equivalents. In September 2012,
Ilika received a ca. £150,000 equity
investment from the Carbon Trust
to allow Ilika to complete the
commercialisation of this technology.
Since then, Ilika’s patents covering its
technology have been granted in the
US and Japan. In addition, Ilika’s
development partner, ITRI of Taiwan,
has delivered the first 1 kg of the
catalyst for testing, primarily with
OEMs in US and Japan, where Ilika has
strong patent coverage. Materials
transfer agreements have been put in
place and initial samples have been
made available for confirmatory
testing at the OEMs. Initial feedback is
encouraging and further testing is
expected in this financial year.
In April 2012 Ilika announced that it
had completed an equity round to fund
the co-development of its solid-state
battery technology, which it had
co-developed with Toyota. Technical
progress through Phase I of its
development programme has been
as expected, with optimisation of
cell-based data continuing. An open
channel of communication has been
maintained with the US army, who
expressed a strong interest in
accessing this technology for man-
portable applications. Ilika is also
pursuing commercial support for the
technology from the consumer
electronics and automotive sector.
Developing leading-
edge high-throughput
development processes
Partnering with companies
committed to developing
and commercialising
jointly developed products
Using high-throughput
processes to invent
patentable functional
materials
Focusing on delivery
11 Ilika plc
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GovernanceFinancial Statements
Chief Executive’s
review continued
Toyota is actively supporting Ilika
within the automotive sector by
co-presenting in June 2013 at a
technology summit, the Advanced
Automotive Battery Conference
in Strasbourg.
An important streamlining of the
business was completed in the last
financial year. In December 2012, Ilika’s
wholly-owned biomedical subsidiary,
Altrika, was disposed of. The transaction
involved the transfer of the cell-based
burns treatment products Myskin®
and Cryoskin® as well as the staff
and facilities in Sheffield. The high-
throughput polymer platform was
retained and operations were
consolidated in Southampton. The
transaction had a net positive effect
on Ilika’s balance sheet and allowed
Ilika to focus on its activities in the
energy and electronics sector. At the
end of his term as Non-Executive
Director, Dr. Werner Braun, stepped
down from Ilika’s Board in June 2013.
Dr. Braun has particular expertise in
the marketing of medical devices
through his executive role at Biotronik.
The split of Ilika’s revenues across the
globe continues to have an emphasis
in Japan, with 78 percent coming from
Japan, 9 percent from US and 13
percent from Europe. In 2012, deal
timelines and conversion rates
deteriorated, causing the drop in
reported revenues initially flagged in
Ilika’s trading update in April 2013.
Since then, the policy of quantitative
easing pursued in Japan appears to
have renewed corporate confidence,
leading to an improved robustness in
commercial outlook. Ilika’s core
customer base has continued to renew
relationships, as demonstrated by the
contract renewals announced in
December 2012 and February 2013.
Further renewals of these relationships
are expected in 2013. The Company
has expectations of growth of the
contribution of revenues from both
the USA and Europe. The front end of
the emerging opportunities in Europe
was shown by the announcement of
a new customer in the field of battery
materials optimisation in April 2013.
The need for improved energy storage
and conversion continues to be
a strong business driver for Ilika,
which fits well with the Company’s
core capabilities in being able to
deliver optimised materials within
accelerated timelines.
Graeme Purdy
Chief Executive
12th July 2013
A year of progress
May 2012
Patent protection of core
technology platform in US
January 2013
Expansion of facilities
April 2013
May 2013
Patent protection of core
technology platform in Japan
May 2012 – April 2013
Progression of low-cost fuel cell
catalyst commercialisation
December 2012
Streamlining of operations
Completion of initial phase of solid-
state battery development
May 2013
Reinforcement and broadening of
shareholder base
12 Ilika plc
Annual Report and Accounts 2013
Financial review
Stephen Boydell
Finance Director
“ Revenue generated
from European based
customers increased
to 13 percent from
1 percent in 2012.”
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Revenue from continuing activities for
the year ended 30 April 2013 was
£1.04 million (2012: £1.85 million).
Discontinued revenues generated in
the wound care business of Altrika in
the seven months to December 2012
were £0.10 million (2012: £0.16 million).
There was no grant income recognised
in the period for continuing operations
as the Carbon Trust supported the
company’s fuel cell catalyst programme
by way of a direct equity investment
of £0.15 million (2012: grant income
£0.17 million).
Revenues relate to the payments made
by Ilika’s partners for research and
development activities. Japan-based
customers continue to fund the
majority of the Group’s projects, but
the appointment of a German-based
business development resource at the
end of last financial year helped to
increase the revenue generated
from European based customers to
13 percent of the total from 1 percent
in 2012.
Gross margin on customer funded
programmes has remained at around
44 percent for the year. Administration
expenses have increased from
£3.37 million in 2012 to £4.02 million
in 2013. An accounting adjustment
for a share-based payment calculation
is included within administration
expenses. In 2012 there was a share-
based payment charge of £0.2 million,
whilst in 2013, because a number of
options lapsed in the year, there was a
credit of £0.25 million. The underlying
increase in administration expenses in
the year, after taking into account for
this accounting adjustment, is
therefore £1.1 million.
The vast majority of this increase
relates to the company’s increased
research and development
expenditure, primarily on its own
funded solid-state battery project,
but also on the grant body supported
projects like the low-cost fuel cell
catalyst material and the company’s
contribution to shared development
programmes with customers. Total
spend on research and development
projects, including depreciation on
assets attributable to these projects,
was £2.4 million in 2013, up from
£1.7 million in 2012. The balance of
the administrative expenses increase
relates to expanded business
development activity and the one-off
costs associated with the company’s
laboratory expansion to increase
capacity and accommodate staff and
equipment transferred from the
Altrika business.
The increase in internally funded
research and development activity,
coupled with the support from the
Carbon Trust by way of equity
investment rather than by grant, has
resulted in a significantly increased
Research and Development tax credit
up from £0.1 million in 2012 to
£0.24 million in 2013.
Investment in facilities expansion in
the year was £0.2 million and spend
on laboratory and IT equipment was
£0.4 million (2012: total spend on fixed
assets £0.2 million). Fixed assets with a
net book value of £20,000 were disposed
of with the sale of the Altrika business.
The year end cash position was £1.9
million (2012: £5.3 million). With the
group restructuring and investment
in facilities now complete, this cash
balance, together with the contracts
currently being finalised and the post
year end placing, is sufficient to fund
the company’s cash requirement for
the foreseeable future.
Steve Boydell
Finance Director and Company
Secretary
12 July 2013
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Annual Report and Accounts 2013
GovernanceFinancial Statements
Board of Directors
1
3
2
4
6
14 Ilika plc
Annual Report and Accounts 2013
5
7
Jack Boyer
1
Chairman
Mr. Boyer joined Ilika as Chairman in
2004. He is also chairman of iQur Ltd and
a non-executive director of FTSE 250
companies Mitie plc and Laird plc and
chairs the Remuneration Committee of
the latter. He previously founded and
was the CEO of pan-European
engineering group TCG, an Executive
Director at Goldman Sachs and a
management consultant at Bain & Co.
Mr. Boyer was educated at Stanford
University (B.A. Hons), the London School
of Economics (M.Sc.) and INSEAD (MBA).
Mr. Boyer is a Council member of the
Engineering and Physical Sciences
Research Council, the Higher Education
Funding Council for England’s Research
Excellence Framework main panel for
physical sciences and deputy Chairman of
Godolphin & Latymer School in London.
2 Graeme Purdy
Chief Executive
Graeme was appointed to head-up the
Company from the beginning of May
2004, just before completion of the
Company’s seed round of funding. He led
the Company through 2 successful
rounds of venture funding before
floating the Company on AIM in 2010.
Prior to joining Ilika, Graeme was Chief
Operating Officer of a high-technology
company in the Netherlands and before
that worked internationally in a variety of
technical and commercial roles for Shell.
Graeme holds a master’s degree in
Chemical Engineering from Cambridge
and an MBA from INSEAD business school
in France. Graeme is a Chartered Engineer
and a Sainsbury Management Fellow.
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3 Prof. Brian Hayden
Chief Scientific Officer
Brian is currently on secondment to Ilika
from the University of Southampton,
where he is Professor of Physical Chemistry.
He is a pioneer of surface science and has a
strong track record in running successful
industrial collaborations.
Brian has published in excess of 100
papers in the fields of surface science,
surface electrochemistry and
fundamental aspects of heterogeneous
catalysis and electrocatalysis. He is a
Fellow of the Royal Society of Chemistry
and regular speaker at conferences.
4 Stephen Boydell
Finance Director
Having qualified with Deloittes in 1996,
Stephen held a number of acquisition,
treasury and group reporting roles at
both Hays plc and then AGI Media before
becoming Finance Director of Healthy
Direct, a successful Guernsey-based
group of companies. He was
instrumental in the restructuring of that
group and its subsequent trade sale to a
competitor. He joined Ilika in 2009 as
Finance Director and Company Secretary.
Stephen studied Economics at
Nottingham University and is a Fellow of
the Institute of Chartered Accountants.
5 Dr. Werner Braun
Non-Executive Director
Having received a PhD in plasma and laser
physics from the Technical University in
Munich for research work performed at
the Max Planck Institute for Plasma
Physics, Dr. Braun initially worked for
Messer Griesheim before joining Biotronik
as VP of Marketing and Sales.
Over a period of 14 years, Dr. Braun
played a key role in growing Biotronik
from an early stage company to a global
provider of medical devices for use in
cardiology and cardiosurgery.
Following spells as General Manager of
Chiron Adatomed and VP of Marketing
and Sales for Medtronic Europe, Middle
East and Africa, Dr. Braun returned to
Biotronik in 2001 to become Managing
Director, further developing the
Company’s market expansion to
become Europe’s largest privately-held
medical device company in the
cardiovascular arena. On 30 June 2013,
Dr. Braun stepped down at the end of
his fixed term of office.
6 Clare Spottiswoode CBE
Non-Executive Director
Ms. Spottiswoode’s career started as an
economist with the Treasury before
establishing her own software company.
She is perhaps best known as Director
General of Ofgas where she oversaw
the transformation of the gas industry
from a monopoly into a deregulated,
competitive industry. In November 2006
she was appointed as the Policyholder
Advocate for Aviva, responsible for
ensuring that around 1 million
withprofits policyholders received a fair
share of the £5–£6 billion inherited
estate. Policyholders received more than
double the only previous reattribution
settlement.
Ms. Spottiswoode currently chairs Gas
Strategies Limited and Flowgroup and is
a Non-Executive Director of G4S, the
Payments Council and Enquest Oil.
Awarded a CBE for services to industry in
1999, she holds degrees from Cambridge
and Yale Universities and an honorary
doctorate from Brunel.
7 Prof. Sir William Wakeham
Non-Executive Director
Prof. Sir William Wakeham retired as
Vice-Chancellor of the University of
Southampton in September 2009. He
studied Physics at Exeter University at
both undergraduate and doctoral level.
In 1971 he took up a lectureship in the
Chemical Engineering Department at
Imperial College London becoming
Head of Department in 1988. By 1999
he was Pro-Rector (Research), Deputy
Rector and Pro-Rector (Resources) at
Imperial College. He oversaw the
College’s merger with a series of
medical schools and stimulated its
entrepreneurial activities. A Fellow,
Senior Vice-President and International
Secretary of the Royal Academy of
Engineering, a Fellow of the Institution
of Chemical Engineers, the Institution
of Engineering and Technology, the
Institute of Physics and the Portuguese
Academy of Engineering. He holds
honorary degrees from Universidade
Nova Lisboa and the Universities of
Lisbon, Exeter, Southampton,
Southampton Solent, Loughborough
and Portsmouth. He is a Fellow
of Imperial College London and
was knighted in 2009 for services
to Chemical Engineering and
Higher Education.
15 Ilika plc
Annual Report and Accounts 2013
Business ReviewFinancial Statements Directors' report
Graeme Purdy
Chief Executive
“ The principal activity
of Ilika and the Group
is the discovery and
development of novel
materials for mass
market applications.”
The Directors present their report and
the audited financial statements
for Ilika plc (‘Ilika’) and its subsidiaries
('the Group’) for the year ended
30 April 2013.
Principal activities
The principal activity of Ilika and
the Group is the discovery and
development of novel materials for
mass market applications.
Business review
A detailed review of the business, its
results and future direction, together
with the key performance indicators
of turnover by geographical market, is
included in the Chairman's and Chief
Executive’s review.
Directors
The Directors who served on the Board
of Ilika during the year and to the date
of this report were as follows:
Executive
Mr. S. Boydell (Financial Director
and Company Secretary)
Prof. B. E. Hayden (Chief Scientific
Officer)
Mr. G. Purdy (Chief Executive)
Non-Executive
Mr. J. B. Boyer (Chairman)
Dr. W. Braun – resigned 30 June 2013
Ms. C. Spottiswoode CBE
Prof. Sir W. Wakeham
Details of the Directors’ remuneration
and share options are shown in note 5
of these accounts.
The Group maintained Directors’ and
officers’ liability insurance cover
throughout the period.
Principal risks and uncertainties
Commercial risk
The Group is subject to competition
from competitors who may develop
more advanced and less expensive
alternative technology platforms,
both for existing materials and for
those materials currently under
development. The Group is largely
dependent on its partners to
commercialise the end-products
containing the Group’s materials.
Financial risk
The Group is reliant on a small number
of significant customers and partners.
Termination of these agreements could
have a material adverse affect on the
Group’s results or operations or
financial condition. The Group expects
to incur further operating losses as
progress on development programmes
continue. There can be no assurance
that the Group will ever achieve
significant revenues or profitability.
Intellectual property risk
The Group faces the risk that
intellectual property rights necessary
to exploit research and development
efforts may not be adequately secured
or defended. The Group’s intellectual
property may also become obsolete
before the products and services can
be fully commercialised.
Regulatory risk
The Group’s materials and products are
subject to various European and other
legislative and regulatory
requirements. Regulatory issues could
lead to delays in development which
take time and investment to resolve.
Post balance sheet events
On 22 May 2013, 100,000 Convertible
Preference Shares were converted to
Ordinary Shares and 2,375,000 Ordinary
Shares were issued for a total
consideration of £712,500 with total
issue costs incurred of £3,500.
Supplier payment policy
It is the Group’s policy to settle debts
with its creditors on a timely basis,
taking best advantage of the terms and
conditions offered by each supplier. As
at 30 April 2013, the number of
creditor days outstanding for the
Group was 16 days (2012: 27 days).
Financial instruments
The Group’s principal financial
instrument comprises cash and this is
used to finance the Group’s operations.
The Group has various other financial
instruments such as trade credit
facilities that arise directly from its
operations. The Group places deposits
surplus to short-term working
requirements with a range of reputable
UK based banks and building societies.
These balances are placed at fixed
rates of deposit with maturities
between 1 and 9 months. See
note 18 for IFRS7 disclosure regarding
financial instruments.
16 Ilika plc
Annual Report and Accounts 2013
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Company
and enable them to ensure that the
financial statements comply with the
requirements of the Companies Act
2006. They are also responsible for
safeguarding the assets of the Company
and hence for taking reasonable steps for
the prevention and detection of fraud
and other irregularities.
Website publication
The Directors are responsible for
ensuring the Annual Report and the
financial statements are made
available on a website. Financial
statements are published on the
Group's website in accordance with
legislation in the United Kingdom
governing the preparation and
dissemination of financial statements,
which may vary from legislation in
other jurisdictions. The maintenance
and integrity of the Group's website is
the responsibility of the Directors. The
Directors' responsibility also extends to
the ongoing integrity of the financial
statements contained therein.
By order of the Board
Graeme Purdy
Chief Executive
12 July 2013
Results and dividends
The consolidated statement of
comprehensive income for the year is
set out on page 23. The Group’s loss for
the financial year after taxation was
£3.5 million (2012: £2.7 million).
The Directors do not recommend the
payment of a dividend.
Charitable and political donations
The Group made no charitable or
political donations during the year
(2012: Nil).
Research and development costs
In accordance with the policy outlined
in note 1, the Group incurred research
and development expenditure of
£1,773,000 in the year (2012:
£1,377,000). Commentary on the major
activities is given in the Chairman’s
statement and Chief Executive's review.
Auditors
All the current Directors have taken all
the steps that they ought to have taken
to make themselves aware of any
information needed by the Company’s
auditors for the purposes of their audit
and to establish that the auditors are
aware of that information. The
Directors are not aware of any relevant
audit information of which the
auditors are unaware.
A resolution to reappoint BDO LLP will
be proposed at the next Annual
General Meeting.
Substantial shareholdings
On 30 June 2013 the Company had
been notified of the following holdings
of more than 3 percent or more of the
issued share capital of the Company.
Directors’ responsibilities
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the
Directors have elected to prepare the
Group and Company financial
statements in accordance with
International Financial Reporting
Standards (‘IFRSs’) as adopted by the
European Union. Under company law
the Directors must not approve the
financial statements unless they are
satisfied that they give a true and fair
view of the state of affairs of the
Group and Company and of the profit
or loss of the Group and Company for
that period. The Directors are also
required to prepare financial
statements in accordance with the
rules of the London Stock Exchange for
companies trading securities on the
Alternative Investment Market (‘AIM’).
In preparing these financial statements,
the Directors are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• state whether they have been
prepared in accordance with IFRSs as
adopted by the European Union,
subject to any material departures
disclosed and explained in the
financial statements; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
Shareholder
No. of Ordinary Shares
% shareholding
IP Group
St Peter Port Capital
Henderson Global
Ruffer LLP
Mackin Holdings Inc
Southampton Asset Management
Charles Stanley Group plc
Legal and General
Artemis
Southern Fox
Wyvern
7,778,387
6,018,924
5,000,000
4,545,454
3,967,647
3,799,900
3,000,750
2,720,677
2,640,741
2,424,093
1,547,039
16.1
12.4
10.3
9.4
8.2
7.9
6.2
5.6
5.5
5.3
3.1
17 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Corporate
governance
statement
Jack Boyer
Chairman
“ The Board is accountable
to the Company’s
shareholders for good
corporate governance
and it is the objective
of the Board to attain
a high standard of
corporate governance.”
The Board is accountable to the
Company’s shareholders for good
corporate governance and it is the
objective of the Board to attain a high
standard of corporate governance. As an
AIM listed company full compliance
with the provisions of the UK Corporate
Governance Code published in May
2010 ('the Code’) is not a formal
obligation. The Company has not
sought to comply with the full
provisions of the Code, however it has
sought to adopt the provisions that are
appropriate to its size and organisation
and establish frameworks for the
achievement of this objective. This
statement sets out the corporate
governance procedures that are in place.
Board of Directors
The Board of Directors ('the Board’)
consists of a Non-Executive Chairman,
3 Executive Directors and for the year to
30 April 2013, 3 Non-Executive Directors.
The responsibilities of the Non-
Executive Chairman and the Chief
Executive Officer are clearly divided.
The Chairman is responsible for
overseeing the running of the Board,
ensuring that no individual or group
dominates the Board’s decision-making
and ensuring that the Non-Executive
Directors are properly briefed on
matters. Prior to each Board meeting,
Directors are sent an agenda and Board
papers for each agenda item to be
discussed. Additional information is
provided when requested by the Board
or individual Directors.
The Chief Executive Officer has the
responsibility for implementing the
strategy of the Board and managing
the day-to-day business activities of
the Group through his chairmanship of
the Executive Committee.
The Non-Executive Directors bring
relevant experience from different
backgrounds and receive a fixed fee for
their services and reimbursement of
reasonable expenses incurred in
attending meetings.
The Board retains full and effective
control of the Group. This includes
responsibility for determining the
Group’s strategy and for approving
budgets and business plans to fulfil
this strategy. The full Board ordinarily
meets bi-monthly.
The Company Secretary is responsible
to the Board for ensuring that Board
procedures are followed and that the
applicable rules and regulations are
complied with. All Directors have
access to the advice and services of the
Company Secretary, and independent
professional advice, if required, at the
Company’s expense. Removal of the
Company Secretary would be a matter
for the Board.
Performance evaluation
The Board has a process for evaluation
of its own performance which is
carried out annually.
Board Committees
As appropriate, the Board has
delegated certain responsibilities
to Board Committees as follows:
i) Audit Committee
The Audit Committee currently
comprises Clare Spottiswoode CBE
(Chairman), Professor Sir William
Wakeham and Jack Boyer.
The Committee monitors the integrity
of the Group’s financial statements and
the effectiveness of the audit process.
The Committee reviews accounting
policies and material accounting
judgements. The Committee also
reviews, and reports on, reports from
the Group’s auditors relating to the
Group’s accounting controls. It makes
recommendations to the Board on the
appointment of auditors and the audit
fee. It has unrestricted access to the
Group’s auditors. The Committee keeps
under review the nature and extent
of non-audit services provided by the
external auditors in order to ensure
that objectivity and independence
are maintained.
18 Ilika plc
Annual Report and Accounts 2013
ii) Remuneration Committee
Until 30 June 2013, the Remuneration
Committee comprised Dr. Werner Braun
(Chairman), Clare Spottiswoode CBE and
Jack Boyer. With the departure of Dr.
Werner Braun, Professor Sir William
Wakeham has joined the Committee
and Jack Boyer has become Chairman.
The Committee is responsible for
making recommendations to the Board
on remuneration policy for Executive
Directors and the terms of their service
contracts, with the aim of ensuring
that their remuneration, including any
share options and other awards, is
based on their own performance and
that of the Group generally.
iii) Nomination Committee
Until 30 June 2013, the Nomination
Committee comprised Jack Boyer
(Chairman), Professor Sir William
Wakeham and Dr. Werner Braun.
Dr. Werner Braun has been
replaced on the Committee by
Clare Spottiswoode CBE.
It is responsible for providing a formal,
rigorous and transparent procedure for
the appointment of new Directors to
the Board and reviewing the
performance of the Board each year.
Attendance at Board meetings
and committees
The Directors attended the following
Board and committee meetings
during the year:
Attendance
Mr. S. Boydell
Mr. J. B. Boyer
Dr. W. Braun
Prof. B. E. Hayden
Mr. G. Purdy
Ms. C. Spottiswoode
Prof. Sir W. Wakeham
Board
Audit
Nomination Remuneration
7/7
6/7
6/7
7/7
7/7
6/7
6/7
–
2/2
–
–
–
2/2
2/2
–
1/1
1/1
–
–
–
1/1
–
2/2
2/2
–
–
2/2
–
against material loss or claims of the
Group. The insured values and type of
cover are comprehensively reviewed
on a periodic basis.
Employment
The Board recognises its legal
responsibility to ensure the well-being,
safety and welfare of its employees
and maintain a safe and healthy
working environment for them and for
its visitors. A health and safety report
is reviewed at each Board meeting and
policies and procedures are
independently reviewed to ensure
compliance with best practice.
By order of the Board
Jack Boyer
Chairman
12 July 2013
Risk management and internal control
The Board is responsible for the
systems of internal control and for
reviewing their effectiveness. The
internal controls are designed to
manage rather than eliminate risk and
provide reasonable but not absolute
assurance against material
misstatement or loss. The Audit
Committee reviews the effectiveness
of these systems primarily by
discussion with the external auditor
and by considering the risks potentially
affecting the Group.
The Group does not consider it
necessary to have an internal audit
function due to the small size of the
administration function. Instead there
is a detailed Director review and
authorisation of transactions. The
annual audit by the Group auditor,
which tests a sample of transactions,
did not highlight any significant system
improvements in order to reduce risk.
The Group maintains appropriate
insurance cover in respect of actions
taken against the Executive Directors
because of their roles, as well as
19 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Corporate social
responsibility
Graeme Purdy
Chief Executive
“ We have formed an
Outreach Department
and have been working
collaboratively with
local schools and
colleges.”
Ilika continues to recognises the
importance of approaching its
responsibilities to corporate social
responsibility ('CSR') in a co-ordinated
and committed fashion and we aim to
ensure our approach to creating business
growth manages environmental and
social issues whilst delivering value for
the Company and continued benefit for
society. This statement acknowledges
our ambition to include CSR in all parts
of our business.
Overall responsibility for developing
and implementing our CSR policies on
social, ethical and environmental
matters and for reviewing their
effectiveness lies ultimately with the
Ilika Board. The Board regularly reviews
the scope of the Company strategy and
reports to stakeholders to ensure we
remain focused on the material issues
for the business.
Ilika’s policies and procedures, which
includes those related to CSR aspects are
well researched, clearly thought out and
communicated to all employees and
those connected with our activities to
ensure commitment and understanding
throughout the Company.
The Main areas of CSR at Ilika are:
• Values and ethics
• Health and safety
• Employee rights
• Contribution to society
• Environment and sustainability
Values and ethics
Ilika supports the principles of the
Universal Declaration of Human Rights
through its business practices. This
means that we support freedom from
torture, unjustified imprisonment
without fair trial and any other
oppression. In addition, we support the
right of any individual to have freedom
of expression and religion, political
representation or in respect of any
other matter. Accordingly, we will not
support or work with organisations
which fail to uphold basic human
rights within their influence, which are
involved in the manufacture or transfer
to an oppressive regime, or are involved
in the manufacture of equipment used
in the violation of human rights. We
will not work with organisations which
are involved in the funding or carrying
out of terrorist activities or which do
not conform to the most widely
accepted standards for minimum
labour rights or which do not cover the
use of under-age or forced labour.
Health and safety
We recognise our responsibility to
ensure the well-being, safety and
welfare of our staff and to maintain a
safe and healthy working environment
for everyone who is affected by our
activities. We understand that health
and safety has positive benefits for the
Company and that a commitment to a
high level of safety makes good
business sense. Health and safety is
considered at the highest level in the
Company with the ultimate
responsibility resting with the Board.
Employee rights
We uphold the dignity of the individual
by ensuring not only compliance with
the laws relating to employment rights,
equal opportunities and non-
discrimination but by going further to
ensure we provide a safe, supportive
and dignified working environment.
20 Ilika plc
Annual Report and Accounts 2013
Contribution to society: We have
formed an Outreach Department and
have been working collaboratively with
local schools and colleges to create a
one year programme of lectures,
competitions and laboratory visits for
children aged 16 years to 18 years. Our
programme will proactively support
and encourage the study and
enjoyment of science in general and
Chemistry in particular. In addition our
Outreach department provides careers
guidance for children wishing to enter
into the world of science and we have
provided 6 month and 12 month
placements to Masters students.
Outlook
For the year ahead, we have ambitious
plans to create a system whereby we
can monitor and quantify our energy
savings. We will continue to build upon
our CSR efforts and look forward to a
mutually rewarding year for our staff,
the company and all those affected by
our activities.
Contribution to society
Ilika accepts and acknowledges that we
have a corporate responsibility towards
society not only by paying taxes and
creating and maintaining jobs but also
by using our unique research skills to
develop knowledge, skills and products
which will ultimately benefit society.
We actively support and encourage the
study of science at all levels from
pre-GCSE through to doctorate level.
Environment and sustainability
Ilika continues to make a real and
sustainable positive impact on the
broader community by adopting
environmentally responsible policies and
operate in an environmentally conscious
manner. Our objective is to minimise the
impact of our business activity on the
environment wherever possible.
Our ongoing objectives are to:
• Consider environmental issues in all
of our decision making processes.
• Evaluate future energy usage to see
how we can use low energy
systems.
• Advise staff on the efficient use of
energy and other utilities.
• Reduce travel on business where
possible by the use of video and
telephone conferencing.
• Use the most environmentally
friendly mode of transport
consistent with business needs.
• Encourage use of bicycles by
offering our employees access to the
HMRC Workcycle scheme.
• Reduce overall the resources we use.
• Reduce waste by recycling or finding
other uses of by-products whenever
viable.
• Reduce our letters and
correspondence by using alternative
electronic mechanisms.
• Use either recycled or FSC paper for
all hard copy correspondence,
wherever possible.
• Consider environmental criteria
when choosing services and goods.
• Develop relationships with suppliers
and contractors so that we all
recognise our environmental
responsibilities.
• Fundamentally Ilika will reduce its
impact on the environment and ask
that its employees, suppliers and
customers do likewise.
Review
Highlights of the CSR work undertaken
in the year include:
Environment: Energy usage has been
fully reviewed in both our offices and
laboratories and has led to new
laboratory procedures which require
tighter co-ordination of the use of
equipment to ensure cost efficient use
of our resources. Improved equipment
usage scheduling has resulted in longer
periods of shut down thereby reducing
energy usage.
In our offices we have significantly
reduced the amount of copying and
printing undertaken and have set all
copying equipment to default to
double-sided, black and white copying.
Health and Safety: We have invested
in equipment and training to improve
working conditions and as a result of
our ongoing efforts, there were no
reportable injuries.
Values and ethics: We have requested
our suppliers’ CSR policies and
statements to ensure that they are
aligned with our core business
principles to carry out business
honestly, ethically and with respect for
the rights and interests of others. We
develop relationships with our suppliers
to improve quality and efficiency and
we settle our bills promptly.
21 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Independent auditor’s report to the
members of Ilika plc
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion the information given in the Directors’ report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Kim Hayward (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Southampton
United Kingdom
12 July 2013
BDO LLP is a limited liability partnership registered in England and Wales (with
registered number OC305127).
We have audited the financial statements of Ilika plc for the
year ended 30 April 2013 which comprise the consolidated
statement of comprehensive income, the consolidated
balance sheet, the parent company balance sheet, the
consolidated cash flow statement, the parent company cash
flow statement, the consolidated statement of changes in
equity, the parent company statement of changes in equity
and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law
and International Financial Reporting Standards ('IFRSs') as
adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a
body, in accordance with sections Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the statement of Directors’
responsibilities, the Directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices
Board’s ('APB’s') Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the
state of the Group’s and the parent company’s affairs as
at 30 April 2013 and of the Group’s loss for the year
then ended;
• the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
• the parent company financial statements have been
properly prepared in accordance with IFRSs as adopted by
the European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
22 Ilika plc
Annual Report and Accounts 2013
Consolidated statement of
comprehensive income
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating loss
Financial income
Financial expense
Loss before tax
Taxation
Loss for period on continuing activities
Loss for the period on discontinued activities
Loss for period/total comprehensive income attributable to owners of parent
Loss per share
Basic
Diluted
Continuing operations
Discontinued operations
Year ended 30 April
2013
£
2012
£
Notes
2 1,003,943
1,851,172
(561,584) (1,037,908)
442,359
813,264
(4,020,375) (3,367,519)
172,097
17,133
6
4 (3,560,883) (2,382,158)
67,437
(4,575)
16,251
(10,684)
(3,498,021) (2,376,591)
93,198
239,741
(3,258,280) (2,283,393)
(426,892)
(216,693)
(3,474,973) (2,710,285)
7
8
9
3
10
(0.07)
(0.07)
(0.06)
(0.01)
(0.07)
(0.07)
(0.06)
(0.01)
23 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Consolidated balance sheet
Company number 7187804
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Inventory
Trade and other receivables
Current tax receivable
Other financial assets – bank deposits
Cash and cash equivalents
Total current assets
Total assets
Issued capital and reserves attributable to owners of parent
Issued share capital
Share premium
Capital restructuring reserve
Retained earnings
Total equity
LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Other payables
Total liabilities
Total equity and liabilities
As at 30 April
2013
£
2012
£
Notes
9,425
11
12 1,105,706
61,863
1,380,257
1,115,131
1,442,120
13
14
9
–
577,505
230,000
15 1,455,092
407,970
16
34,135
660,943
125,470
4,000,000
1,299,072
2,670,567
6,119,620
3,785,698
7,561,740
19
475,354
472,638
8,823,770
8,677,106
6,486,077
6,486,077
(12,643,692) (8,916,868)
3,141,509
6,718,953
17
644,189
835,243
17
–
7,544
644,189
842,787
3,785,698
7,561,740
The notes on pages 27 to 48 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 12 July 2013.
Mr. J.B. Boyer
Chairman
12 July 2013
24 Ilika plc
Annual Report and Accounts 2013
Consolidated cash flow statement
Cash flows from operating activities
Loss before taxation continuing operations
Loss before taxation discontinued operations
Adjustments for:
Amortisation
Depreciation
Equity settled share-based payments
Loss on disposal of plant, property and equipment
Loss on disposal of intangible assets
Net financial income
Operating cash flow before changes in working capital, interest and taxes
Decrease in trade and other receivables
Decrease in inventory
Decrease in trade and other payables
Cash utilised by operations
Tax received
Net cash flow from operating activities
Cash flows from investing activities
Interest received
Purchase of intangible assets
Sale of discontinued operations
Sale of property plant and equipment
Purchase of property, plant and equipment
Decrease/(increase) in other financial assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of Ordinary Share capital
Share issue costs
Capital element of finance leases
Interest element of finance leases
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the start of the period
Cash and cash equivalents at the end of the period
25 Ilika plc
Annual Report and Accounts 2013
Year ended 30 April
2013
£
2012
£
(3,498,021) (2,376,591)
(459,164)
(216,693)
52,438
803,345
(251,851)
155
–
(62,862)
14,196
819,101
211,613
69
3,852
(5,567)
(3,173,489) (1,792,491)
87,318
–
(272,198)
74,734
34,135
(175,966)
(3,240,586) (1,977,551)
122,733
124,905
(3,115,681) (1,854,818)
59,055
16,251
–
(14,265)
50,000
–
–
25
(551,591)
(196,826)
2,544,908 (2,500,000)
2,102,372 (2,694,815)
149,380
–
(22,633)
(4,540)
4,899,991
(303,703)
(40,823)
(10,684)
122,207
4,544,781
(891,102)
1,299,072
(4,852)
1,303,924
407,970
1,299,072
Business ReviewGovernanceFinancial Statements Consolidated statement of changes in equity
Share
capital
£
Share
premium
account
£
Capital
restructuring
reserve
£
Total
attributable to
equity holders
of parent
£
Retained
earnings
£
As at 30 April 2011
Share-based payment
Issue of shares
Expenses of share issue
Loss and total comprehensive income
As at 30 April 2012
Share-based payment
Issue of shares
Loss and total comprehensive income
As at 30 April 2013
383,548 4,169,909 6,486,077 (6,418,196) 4,621,338
211,613
–
– 4,899,990
–
–
(303,703)
–
– (2,710,285) (2,710,285)
–
4,810,900
(303,703)
–
–
89,090
–
–
211,613
472,638
8,677,106
6,486,077 (8,916,868) 6,718,953
–
2,716
–
–
146,664
–
(251,851)
(251,851)
–
–
149,380
–
– (3,474,973) (3,474,973)
475,354 8,823,770 6,486,077 (12,643,692) 3,141,509
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value is credited to the share premium reserve.
Capital restructuring reserve
The capital restructuring reserve arises on the accounting for the share-for-share exchange. It represents the difference
between the value of the issued equity instruments of Ilika Technologies Limited immediately before the share-for-share
exchange and the equity instruments of Ilika plc along with the shares issued to effect the share-for-share exchange.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Group since inception of the business.
26 Ilika plc
Annual Report and Accounts 2013
Notes to the consolidated financial statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared on the basis of the accounting policies which apply for the financial year to 30
April 2013 and in accordance with the recognition and measurement criteria of International Financial Reporting Standards
('IFRSs') adopted by the European Union.
The individual financial statements of Ilika plc are shown on page 44 to 48.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company made up to the reporting date. Control is achieved where the Company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
Going concern
The financial statements are prepared on a going concern basis which the Directors believe continues to be appropriate. The
Group meets its day to day working capital requirements through existing cash resources which, at 30 April 2013, amounted
to £1,863,062. The Directors have prepared projected cash flow information for the period ending 12 months from the date
of their approval of these financial statements. On the basis of this cash flow information the Directors believe that the
Group will be able to continue to trade for the foreseeable future.
(a) New standards, amendments to standards or interpretations adopted early
In the current year, there were no new or revised standards or interpretations that have been adopted and affected the
amounts reported in the financial statements.
(b) New standards, amendments to standards or interpretations not yet applied
The following standards, interpretations and amendments, which have not been applied in these financial statements, will or
may have an effect on the Group’s future financial statements:
International Accounting
Standards (IAS/IFRS)
IFRS 7
IFRS 9
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IAS 1
IAS 19
IAS 27
IAS 28
IAS 32
Disclosures – Transfers of Financial Assets (amendments)
Financial Instruments
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
Presentation of Items of Other Comprehensive Income (amendments)
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
Disclosures – Offsetting Financial Assets and Financial Liabilities
Effective date for
periods commencing
1 January 2013
1 January 2015
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2014
No other new standards or amendments are expected to have an effect on the Group.
Revenue comprises the fair value for the sale of goods and services, net of value added tax and is recognised as follows:
The following principal accounting policies have been applied consistently in dealing with items which are considered
material in relation to the financial information.
27 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements
Notes to the consolidated financial statements
continued
1 Accounting policies continued
Revenue
Sales of goods
Sales of equipment and skin based products are recognised when products are delivered to a customer, the customer has
accepted the products and collectability of the related receivables is reasonably assured.
Sales of services
Sales of research and development services are recognised in the accounting period in which the services are rendered, by
reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the
total services to be provided.
Leases
Where a Group company enters into a lease which entails taking substantially all the risks and rewards of ownership of an
asset, the lease is treated as a 'finance lease'. The asset is recorded in the balance sheet as property, plant and equipment and
is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Future instalments under such
leases, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element,
which is charged to the consolidated income statement, and the capital element which reduces the outstanding obligation
for future instalments. All other leases are accounted for as 'operating leases' and the rental charges are charged to the
consolidated income statement on a straight line basis over the life of the lease.
Financial income and financial expense
Financial income and financial expense is recognised in the income statement as it accrues, using the effective
interest method.
Pension and other post retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Share-based payment transactions
The Group issues equity-settled share-based payments to all employees. Equity-settled share-based payments are measured
at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest
and adjusted for the effect of market-based and non-market based vesting conditions.
The fair value of market-based options granted by the Group is measured by use of the stochastic valuation model taking into
account the following inputs: the exercise price of the option; the life of the option; the market price on the date of grant of
the option; the expected volatility of the share price; the dividends expected on the shares; and the risk free interest rate for
the life of the option.
The fair value of non market-based options granted by the Group is measured by use of the Black-Scholes pricing model
taking into account the following inputs: the exercise price of the option; the life of the option; the market price on the date
of grant of the option; the expected volatility of the share price; the dividends expected on the shares; and the risk free
interest rate for the life of the option. The expected life used in the model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Research and development expenditure
Expenditure on the research phase is charged to the income statement in the period in which it is incurred. Development
expenditure on new products is capitalised only once the criteria specified under IAS 38, Intangible Assets, have been met.
Prior to and during the year ended 30 April 2013, no development expenditure satisfied the necessary conditions of IAS 38.
Taxation
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised.
28 Ilika plc
Annual Report and Accounts 2013
1 Accounting policies continued
Foreign currency
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate
ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
of property, plant and equipment.
Depreciation is charged to the profit and loss statement on a straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. The estimated useful lives are as follows:
Leasehold improvements
Plant, machinery and equipment
Fixtures and fittings
lease term
3–5 years
3–5 years
Inventory
Inventory comprised the Group’s cell bank from which the Cryoskin® product is derived. Inventory was valued at the lower of
cost and net realisable value. Consumable stock items have been written off as an expense in the year incurred.
Impairment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment
losses are recognised in the income statement.
Intangible assets
Computer software
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised to administrative expenses using the straight line method over their estimated useful
lives (1–3 years).
Intellectual property
Acquired intellectual property is included at cost and is amortised to administrative expenses on a straight-line basis over its
useful economic life of 15 years.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument. The Group’s financial assets are all classified as loans and receivables and carried at
amortised cost. The Group’s financial liabilities are all classified as ‘other’ liabilities which are carried at amortised cost. Cash
and cash equivalents comprise cash balances and call deposits.
Government grants
Grants that compensate the Group for expenses incurred are recognised in the income statement on a systematic basis in
the same periods in which the expenses are recognised. Grant revenue is disclosed within other operating income. £16,899
was received in government grants in the year (2012: £293,297)
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call with the bank.
29 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Notes to the consolidated financial statements
continued
1 Accounting policies continued
Key sources of estimation uncertainty
The preparation of the Group’s financial statements, in accordance with IAS 1, Presentation of Financial Statements, requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities at the date of the Group’s financial statements. The
Group’s estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
• Revenue recognition
The Group’s revenue substantially comprised revenues from the provision of research and development services. The contacts
set out defined deliverables the achievement of which trigger milestone payments. Judgement is used to determine the stage
of completion and the point at which revenue is recognised.
• Share-based payments
The critical accounting estimates, assumptions and judgements underpinning the valuation of the option awards are
disclosed in note 23.
• Taxation
The current tax receivable is the expected tax receivable on the expenditure for the period using the tax rates and laws that
have been enacted or substantially enacted at the balance sheet date, and any adjustments to tax payable in respect of
previous years. The ultimate receivable may vary from the amounts provided and is dependent upon negotiations with the
relevant tax authorities.
2 Segment reporting
IFRS 8 requires the Group to report on operating segments on the same basis as that used by the chief operating decision
maker to assess the performance of the business segments and to allocate resources accordingly. For management purposes,
the Group is analysed by the geographical location of its customer base and business development directors have been
appointed to cover the Group’s three territories of focus, Asia, North America and Europe. Previously, segmentation analysis
was provided by the market categories, Energy, Electronics and Biomedical. The disposal of the Altrika wound care business
and the subsequent reorganisation meant that this segmentation basis was no longer appropriate.
The Group’s activities originate from the production, design and development of high throughput methods of material
synthesis, characterisation and screening. The Group has materials development programmes for a wide range of
applications including in the battery, fuel cell, hydrogen storage sectors as well as in capacitors, ferroelectrics, piezoelectrics
and memory materials.
Turnover
Analysis by geographical market:
By destination
Asia
Europe
North America
Continuing operations total
Discontinued operations – By destination – Europe
Year ended 30 April
2013
£
2012
£
785,989
131,617
86,337
1,003,943
97,475
1,581,200
22,452
247,520
1,851,172
160,072
1,101,418
2,011,244
A number of customers individually account for more than 10 percent of the total turnover of the Group. The revenues from
these companies are indicated below on a segment basis:
Turnover
Customer 1
Customer 2
Customers less than 10%
30 Ilika plc
Annual Report and Accounts 2013
Year ended 30 April
2013
£
654,918
–
446,500
2012
£
781,283
385,556
844,405
1,101,418
2,011,244
2 Segment reporting continued
The chief operating decision maker only reviews turnover by operating segment then reviews expenses and profit on an
aggregate basis. Therefore the segmental loss before tax information, along with the segmental total assets and liabilities
information has not been split out in this note.
The loss before tax per the management accounts is the same as the loss before tax on the consolidated statement of
comprehensive income with the exception of the share-based payment expense which is only calculated as a year end
adjustment. For details of the calculation see note 23. The total assets and liabilities per the management accounts are
the same as the consolidated balance sheet with the exception of the period end tax adjustment.
3 Discontinued operations
The results of the discontinued wound care division which have been included in the consolidated income statement
were as follows:
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating loss and loss before tax
Taxation
Loss for period on discontinued activities
Year ended 30 April
2013
£
2012
£
97,475
(97,248)
227
(233,819)
16,899
(216,693)
–
160,072
(149,861)
10,211
(590,531)
121,156
(459,164)
32,272
(216,693)
(426,892)
The net book value of assets sold along with the Altrika business equated to £73,000. Proceeds of disposal were £90,000
(£50,000 on disposal and deferred consideration of £40,000) less legal costs of £17,000.
4 Operating loss
This is arrived at after charging:
Research and development expenditure in the year
Depreciation
Amortisation of intangible assets
Auditors remuneration:
Fees payable to the Group’s auditor for the audit of the Group’s accounts
Fees payable to the Group’s auditor for other services:
– The Audit of the Group’s subsidiaries
– Other assurance services – interim review
– Tax services
Operating lease rentals
Share-based payment charge
Foreign exchange differences
Year ended 30 April
2013
£
2012
£
1,772,605
803,345
52,438
1,377,449
819,101
14,196
15,000
15,000
6,800
10,750
–
234,836
(251,851)
(2,464)
8,625
10,500
6,700
180,714
211,613
1,213
31 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Notes to the consolidated financial statements
continued
5 Employees
The average number of employees during the year, including Executive Directors, was:
Administration
Materials synthesis
Staff costs for all employees, including Executive Directors, consist of:
Year ended 30 April
2013
Number
2012
Number
9
30
39
9
27
36
Year ended 30 April
2013
£
2012
£
1,716,057
163,602
(252,939)
112,373
1,587,516
160,319
204,681
111,215
1,739,093
2,063,731
Wages and salaries
Social security costs
Share-based payment expense
Pension costs
The Directors’ costs consist of:
Year to 30 April 2013
G. Purdy
S. Boydell
B. Hayden
J. Boyer
W. Braun
W. Wakeham
C. Spottiswoode
Year to 30 April 2012
G. Purdy
S. Boydell
B. Hayden
J. Boyer
W. Braun
W. Wakeham
C. Spottiswoode
Basic
salary
£
Fees
£
Benefits
in kind
£
151,067
98,950
50,333
60,400
–
30,200
30,200
421,150
150,000
90,000
50,000
60,000
–
30,000
30,000
410,000
–
–
–
–
30,200
–
–
30,200
–
–
–
–
30,000
–
–
30,000
367
241
–
–
–
–
–
608
413
271
–
–
–
–
–
684
Total
short-term
benefits
£
151,434
99,191
50,333
60,400
30,200
30,200
30,200
451,958
150,413
90,271
50,000
60,000
30,000
30,000
30,000
440,684
Pension
£
Total
£
27,487
16,137
–
–
–
–
–
43,624
29,312
24,901
–
–
–
–
–
54,213
178,921
115,328
50,333
60,400
30,200
30,200
30,200
495,582
179,725
115,172
50,000
60,000
30,000
30,000
30,000
494,897
Share-based payment credit attributable to Directors in the year was £252,939 (2012: expense of £195,281).
Benefits in kind include critical illness cover.
32 Ilika plc
Annual Report and Accounts 2013
5 Employees continued
The unapproved share options of the Directors under the 'Ilika plc Executive Share Option Scheme 2010' are set out below:
G. Purdy
J. Boyer
B. Hayden
S. Boydell
W. Braun
W. Wakeham
C. Spottiswoode
2013
Number
2012
Number
1,050,000
1,050,000
525,000
117,600
65,100
65,100
50,100
1,800,000
1,800,000
900,000
205,200
115,200
115,200
100,200
The approved share options of the Directors in Ilika plc exchanged from share options in Ilika Technologies Limited. For
further details see note 23.
G. Purdy
S. Boydell
G. Purdy
J. Boyer
W. Braun
B. Hayden
2,112,900 options have lapsed in the period (2012: Nil).
6 Other operating income
Grant income
Sundry other income
7 Financial income
Income from short-term deposits
8 Financial expense
Interest on:
Finance leases
33 Ilika plc
Annual Report and Accounts 2013
2013
Number
760,700
90,000
2012
Number
760,700
90,000
2013
Number
2012
Number
136,200
540,200
20,000
59,300
136,200
540,200
20,000
59,300
Year ended 30 April
2013
£
–
17,133
17,133
2012
£
172,140
(43)
172,097
Year ended 30 April
2013
£
2012
£
67,437
16,251
Year ended 30 April
2013
£
2012
£
4,575
10,684
Business ReviewGovernanceFinancial Statements
Notes to the consolidated financial statements
continued
9 Taxation
(a) Tax on profit from ordinary activities
There is no taxation charge due to the losses incurred by the Group during the year. The taxation credit represents research
and development tax credit claims as follows:
Current tax on loss for the year
Adjustments to prior period
Year ended 30 April
2013
£
2012
£
230,000
9,741
125,470
–
239,741
125,470
(b) Factors affecting current tax charge
The tax assessed on the loss on ordinary activities for the period is different to the standard rate of corporation tax in the UK
of 24 percent (2012: 26 percent). The differences are reconciled below:
Loss on ordinary activities before tax
Loss on ordinary activities before tax multiplied by the standard rate of
corporation tax in the UK of 24% (2012: 26%)
Effects of:
Expenses not deductible for corporation tax
Research and development relief
Origination of unrecognised tax losses
Share options
Under provision in previous years
Total tax credit for the year
2013
£
2012
£
(3,714,714) (2,835,755)
(891,531)
(737,296)
89,901
(30,824)
662,899
(60,445)
(9,741)
25,922
(51,566)
579,818
57,652
–
(239,741)
(125,470)
Unrecognised deferred taxation
There are tax losses available for carry forward against future trading profits of approximately £11,415,000 (2012:
£9,953,000). A deferred tax asset in respect of these losses of approximately £2,740,000 (2012: £2,389,000) has not been
recognised in the accounts, as the full utilisation of these losses in the foreseeable future is uncertain.
10 Loss per share
Earnings per Ordinary Share have been calculated using the weighted average number of shares in issue during the relevant
financial periods. The weighted average number of equity shares in issue and the earnings, being profit after tax, are as follows:
Weighted average number of equity shares
Earnings, being profit after tax
Loss per share
Continuing operations
Discontinued operations
Year ended 30 April
2013
2012
47,431,258 38,525,718
£
£
(3,474,973) (2,710,285)
£
(0.07)
(0.06)
(0.01)
£
(0.07)
(0.06)
(0.01)
The loss attributable to Ordinary Shareholders and weighted average number of Ordinary Shares for the purpose of calculating the
diluted earnings per Ordinary Share are identical to those used for basic earnings per share. This is because the exercise of share
options would have the effect of reducing the loss per Ordinary Share and is therefore not dilutive under the terms of IAS 33. At 30
April 2013 there were 16,145,039 options outstanding (2012: 18,514,186 options outstanding) as detailed in notes 19 and 23.
34 Ilika plc
Annual Report and Accounts 2013
11 Intangible assets
Cost
As at 30 April 2011
Additions
Disposals
As at 30 April 2012
Disposals
As at 30 April 2013
Amortisation
As at 30 April 2011
Provided for the year
Disposals
As at 30 April 2012
Provided for the year
As at 30 April 2013
Net book value
As at 30 April 2011
As at 30 April 2012
As at 30 April 2013
Software
licences
£
Intellectual
property
£
Total
£
97,360
14,265
(8,707)
102,918
–
75,000
–
–
75,000
–
75,000
102,918
23,750
5,000
–
28,750
46,250
75,000
51,250
46,250
–
35,566
14,196
(8,707)
41,055
52,438
93,493
61,794
61,863
9,425
22,360
14,265
(8,707)
27,918
–
27,918
11,816
9,196
(8,707)
12,305
6,188
18,493
10,544
15,613
9,425
The amortisation charge of £52,438 (2012: £14,196) is included within administrative expenses.
12 Property, plant and equipment
Cost
As at 30 April 2011
Additions
Disposals
As at 30 April 2012
Additions
Disposals
As at 30 April 2013
Depreciation
As at 30 April 2011
Provided for the year
Disposals
As at 30 April 2012
Provided for the year
Disposals
As at 30 April 2013
Net book value
As at 30 April 2011
As at 30 April 2012
As at 30 April 2013
Leasehold
improvements
£
Plant,
machinery and
equipment
£
Fixtures and
fittings
£
Total
£
387,899
33,443
–
421,342
190,273
(59,557)
3,749,185
156,749
(17,112)
3,888,822
342,331
(98,856)
166,137
6,634
–
172,771
18,987
(22,046)
4,303,221
196,826
(17,112)
4,482,935
551,591
(180,459)
552,058 4,132,297
169,712 4,854,067
373,533
19,226
–
392,759
51,059
(49,716)
1,792,418
770,857
(13,165)
2,550,110
743,025
(80,207)
130,791
29,018
–
2,296,742
819,101
(13,165)
159,809
9,262
(27,740)
3,102,678
803,345
(157,662)
394,102 3,212,928
141,331 3,748,361
14,366
1,956,767
35,346
2,006,479
28,583
1,338,712
12,962
1,380,257
157,956
919,369
28,381 1,105,706
The net book value of plant, machinery and equipment includes an amount of £31,114 (2012: £44,650) in respect of assets
held under finance lease contracts.
There are no commitments for capital expenditure contracted but not provided for (2012: £Nil)
35 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements
Notes to the consolidated financial statements
continued
13 Inventory
Inventory
Inventory comprised the Group’s cell bank from which the Cryoskin® product was derived.
14 Trade and other receivables
Trade receivables
Prepayments and accrued income
Other receivables
15 Other financial assets – bank deposits
Amounts receivable within one year:
Sterling fixed rate deposits of greater than 3 months’ maturity at inception
16 Cash and cash equivalents
Current bank accounts
Short-term deposits with less than 3 months’ maturity
As at 30 April
2013
£
–
2012
£
34,135
As at 30 April
2013
£
79,049
289,066
209,390
2012
£
24,376
450,964
185,603
577,505
660,943
As at 30 April
2013
£
2012
£
1,455,092
4,000,000
As at 30 April
2013
£
2012
£
55,664
352,306
389,086
909,986
407,970
1,299,072
36 Ilika plc
Annual Report and Accounts 2013
17 Trade and other payables
Current
Trade payables
Other payables
Other taxes and social security costs
Lease purchase agreements
Accruals and deferred income
Non-current
Lease purchase agreements
Lease purchase agreements
Amounts payable
Within 1 year
In 1 year to 2 years
As at 30 April
2013
£
214,372
17,341
40,997
7,544
363,935
2012
£
367,669
15,223
44,441
22,633
385,277
644,189
835,243
As at 30 April
2013
£
–
2012
£
7,544
As at 30 April
2013
£
7,544
–
7,544
2012
£
22,633
7,544
30,177
Lease purchase agreements are secured on the related assets and carry interest at fixed rates. The total amount payable
under leases as at 30 April 2013 was £9,058 (2012: £35,853)
37 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements
Notes to the consolidated financial statements
continued
18 Financial instruments
The Group’s principal financial instruments comprise, lease financing arrangements, cash and short-term deposits as well as
other various items arising from its operations such as trade receivables and trade payables which are shown in the table
below. The main purpose of these instruments is to finance the Group’s working capital requirements as well as funding its
capital expenditure programmes. The Group does not enter into derivative transactions such as interest rate swaps or
forward exchange contracts.
Financial Assets
Loans and receivables
Trade receivables
Accrued income
Other receivables
Current bank accounts
Bank deposits
Short-term deposits
Total loans and receivables
Financial Liabilities
Other financial liabilities
Trade payables
Other payables
Other taxes and social security costs
Lease purchase agreements
Accruals
Total other financial liabilities (see note 17)
As at 30 April
2013
£
2012
£
79,049
78,977
284,390
55,664
1,455,092
352,306
24,376
211,262
185,603
389,086
4,000,000
909,986
2,305,478
5,720,313
214,372
17,341
40,997
7,544
363,935
367,669
15,223
44,441
30,177
252,760
644,189
710,270
The risks associated with these financial instruments are set out below.
Foreign currency risk
The Group buys goods and services in currencies other than Sterling. The Group’s non-Sterling liabilities and cash flows can be
affected by movements in exchange rates. These transactions are not significant and therefore no forward exchange
contracts have been entered into. It is Group policy not to engage in any speculative trading in financial instruments. Any risk
is mitigated by sales transactions being denominated in Sterling.
Credit risk
The Group’s credit risk is attributable to its trade receivables and banking deposits. The Group places its deposits with
reputable financial institutions to minimise credit risk. The maximum exposure to credit risk for each period is the amount
disclosed above as total loans and receivables. For the periods above there were no trade receivables which were past due or
impaired. Risk is further mitigated through the use of credit limits, but also through the nature of the customers, who, for the
most part, are large multinationals. There is no bad debt provision.
Liquidity risk
The Group’s policy is to maintain adequate cash resources to meet liabilities as they fall due. With the exception of its hire
purchase liabilities, which are disclosed in note 17, all other Group payable balances fall due for payment within 1 year. Cash
balances are placed on deposit for varying periods with reputable banking institutions to ensure there is limited risk of capital
loss. The Group does not maintain an overdraft facility.
Interest rate risk
The main risk arising from the Group’s financial instruments is interest rate risk. The Group placed deposits surplus to
short-term working capital requirements with a variety of reputable UK-based banks and building societies. These balances
are placed at floating rates of interest and deposits have maturities of 1 to 12 months. The Group’s cash and short-term
deposits are set out in note 16.
38 Ilika plc
Annual Report and Accounts 2013
18 Financial instruments continued
Fixed-rate financial liabilities comprises of a finance lease which expires in August 2013. It has a weighted average interest
rate of 13.4 percent The maturity profile is detailed in note 17. Floating-rate financial assets comprise cash on deposit and
cash at bank. Short-term deposits are placed with banks for periods of up to 12 months and are categorised as floating-rate
financial assets. Contracts in place at 30 April 2013 had a weighted average period to maturity of 75 days and a weighted
average annualised rate of interest of 2.01 percent
Interest rate risk sensitivity analysis
It is estimated that a change in base rate to zero would have increased the Group’s loss before taxation for the year to
30 April 2013 by approximately £15,000 (2012: £11,000).
It is estimated that an increase in base rate by 1 percent would decrease the Group’s loss before taxation for the year to
30 April 2013 by approximately £30,000 (2012: £15,000)
There is no difference between the book and fair value of financial assets and liabilities.
Capital management
The primary aim of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern, to
support its businesses and maximise shareholder value. The Group monitors its capital structure and makes adjustments as
and when it is deemed necessary and appropriate to do so using such methods as the issuing of new shares. At present, other
than finance leases, all funding is raised by equity. See note 1 for the fundraising that occurred during the year.
19 Share capital
Authorised
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433)
1,781,400 Convertible Preference Shares of £0.01 each
Allotted, called up and fully paid
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433)
1,661,400 Convertible Preference Shares of £0.01 each
As at 30 April
2013
£
2012
£
458,740
454,824
17,814
17,814
458,740
16,614
454,824
17,814
475,354
472,638
Share Rights
The Ordinary Shares and Preference Shares rank pari passu in all respects other than:
• The profits which the Group may determine to distribute in respect of any financial period shall be distributed only among
the holders of the Ordinary Shares. The Preference Shares shall not entitle the holders of them to any share in such
distributions.
• On a return of capital or assets on a liquidation, reduction of capital or otherwise the surplus assets of the Group
remaining after payment of its obligations shall be applied:
– First, in paying to the holders of the Preference Shares the amount paid thereon, being the amount equal to the par value
of the Preference Shares excluding any premium; and
– Secondly, the balance of such surplus assets shall belong to and be distributed amongst the holders of the Ordinary
Shares.
The Preference Share holders have the right, at any time, to convert the Preference Shares held to the same number of
Ordinary Shares.
On 22 May 2012, 5 December 2012 and 22 May 2013, 60,000, 60,000 and 100,000 respectively, £0.01 Convertible Preference
Shares were converted to £0.01 Ordinary Shares.
On 17 September 2012, 271,600 Ordinary Shares were issued for a total consideration of £149,380 and on 22 May 2013,
2,375,000 Ordinary Shares were issued for a total consideration of £712,500 and total issue costs incurred were £3,500.
39 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Notes to the consolidated financial statements
continued
19 Share capital continued
Share options and warrants
Employee related share options are disclosed in note 23. In addition to these, there were 107,300 non-employee share options
over Ordinary Shares of £0.01 at the year end. The Company’s brokers also have a warrant to subscribe to 130,100 Ordinary
Shares of £0.01.
10,147,059 warrants to subscribe to Ordinary Shares of £0.01 were issued on 14 May 2010 to investors who subscribed to the
placing as one warrant for each share subscribed and the Company’s brokers were issued with a warrant to subscribe to
392,157 Ordinary Shares of £0.01.
Notes to the consolidated financial statements
20 Operating leases
The total future minimum rent payable under non-cancellable operating leases is as follows:
Property
Within 1 year
In 1 to 2 years
In 2 to 5 years
As at 30 April
2013
£
2012
£
–
221,598
–
–
51,749
370,613
221,598
422,362
21 Pensions
The Group operates a defined contribution group personal pension scheme. The pension cost charge for the period
represents contributions payable by the Group to the scheme and amounted to £112,373 (2012: £111,215).
22 Related party transactions
The Directors consider that no one party controls the Group.
During the year ended 30 April 2013, the Company incurred costs of £226,724 (2012: £295,109) with the University of
Southampton in connection with research and development activities. The University of Southampton is the controlling
shareholder of Southampton Asset Management Limited, which has an interest in the Company. At 30 April 2013, the
amount unpaid in respect of these costs was £2,066 (2012: £6,606).
The Company incurred fees from the University of Southampton in respect of Prof. B. Hayden, a Director of the Company.
These amounts are included in the costs shown above.
23 Share-based payments expense and share options
Share-based payment expense
The Group has incentivised and motivated staff through the grant of share options under the Enterprise Management
Incentive ('EMI') scheme and through unapproved share option schemes.
The Group has recognised an expense to the consolidated statement of comprehensive income representing the fair value of
outstanding equity-settled share-based payment awards to employees. The fair values were charged to the consolidated
statement of total comprehensive income over the relevant vesting periods adjusted to reflect actual and expected vesting levels.
The Group has calculated the fair market value of options which had market-based performance conditions at the time of
grant, using the stochastic valuation model. Options with no market-based performance conditions at the time of grant, have
been valued using the Black-Scholes model.
At a meeting of the Remuneration Committee on 13 July 2011, it was agreed that the market-based performance criteria
applicable to the options which were granted in May 2010, be amended to reflect a series of Company specific financial and
commercial milestones.
At 30 April 2013, the following options, whose fair values have been fully charged to the consolidated statement of total
comprehensive income, were outstanding:
40 Ilika plc
Annual Report and Accounts 2013
23 Share-based payments expense and share options continued
Approved share options:
Date of grant
19 May 2004
29 June 2004
9 June 2005
30 March 2006
14 May 2007
15 January 2008
2 February 2009
1 December 2009
None of these options were exercised in the year.
Unapproved share options:
Date of grant
29 June 2004
1 December 2005
8 May 2006
11 July 2007
30 August 2007
11 November 2008
None of these options were exercised in the year.
Black-Scholes valuation
Outstanding:
At start of the period
Lapsed in the period
Granted during the period
At the end of the period
Number of
shares
Period of
option
Exercise price
per share
375,000
219,700
139,500
15,200
156,100
50,400
128,000
90,000
10 years
10 years
10 years
10 years
10 years
10 years
10 years
10 years
£0.10
£0.10
£0.10
£0.10
£0.80
£1.00
£0.80
£0.80
Number of
shares
273,100
280,000
115,500
195,500
151,600
40,000
Period of
option
Exercise price
per share
10 years
10 years
10 years
10 years
10 years
10 years
£0.10
£0.10
£0.10
£0.80
£0.10
£2.4283
Weighted average exercise price
Number
2013
£
2012
£
2013
2012
0.3612
0.7500
–
0.3436
0.3499 2,414,470 2,263,600
(108,947)
–
–
150,870
–
0.5300
0.3612 2,305,523 2,414,470
The exercise price of options outstanding at the end of the period ranged between £0.10 and £2.4283 and their weighted
average contractual life was 2.9 years (2012: 3.9 years). These share options are exercisable and must be exercised within 10
years from the date of grant.
The following information is relevant in the determination of the fair value of options granted under the equity-settled
share-based remuneration schemes under the Black-Scholes method.
Equity-settled:
Weighted average share price at date of grant/£
Exercise Price/£
Weighted average contractual life/years
Expected volatility
Expected dividend yield
Risk free interest rate
41 Ilika plc
Annual Report and Accounts 2013
Year to 30 April
2013
2012
–
–
–
–
–
–
0.53
0.53
9.7
10%
0%
0.5%
Business ReviewGovernanceFinancial Statements
Notes to the consolidated financial statements
continued
23 Share-based payments expense and share options continued
The volatility has been based on the average of the standard deviation of the daily historical share price of the Company since
its listing on the Alternative Investment Market in May 2010. The prior period volatility was based on the annualised average
of the standard deviation of the daily historical continuously compounded returns of the share price of three companies listed
on AIM which had a broadly similar technology risk profile to the Group. The risk free rate was assumed to be the yield to
maturity on a UK Gilt strip with the term to maturity equal to the expected life of the option.
Stochastic valuation
Outstanding:
At start of the period
Lapsed during the period
At the end of the period
Weighted average exercise price
2012
£
2013
£
Number
2013
2012
0.51
0.51
0.51
0.51 5,327,100 5,352,100
0.51 (2,264,200)
(25,000)
0.51 3,062,900 5,327,100
The exercise price of options outstanding at the end of the period was £0.51 (2012: £0.51) and their weighted average
contractual life was 8 years (2012: 9 years).
Ilika plc Executive Share Option Scheme 2010
At 30 April 2013 the following share options were outstanding in respect of the Ilika plc Executive Share Option Scheme 2010:
Date of grant
14 May 2010
1 February 2012
Number of
shares
50,000
115,923
Period of
option
Exercise price
per share
10 years
10 years
£0.51
£0.53
Members of staff in the Group have options in respect of Ordinary Shares in Ilika plc, which are conditional upon the
achievement of a series of financial and commercial milestones.
Ilika plc unapproved share options
At 30 April 2013 the following share options were outstanding in respect of Ilika plc unapproved share options:
Date of grant
14 May 2010
Number of
shares
Period of
option
Exercise price
per share
3,012,900
10 years
£0.51
Directors, Non-Executive Directors and founders of the Group were granted a total of 5,200,800 options in respect of
Ordinary Shares in Ilika plc. These options vested in 4 tranches. The first Tranche of 825,000 options were granted on 14 May
2010 with no performance conditions attached. The remaining 3 Tranches of 1,458,600 options were conditional upon the
achievement of a series of financial and commercial milestones. The second tranche of 1,458,000 vested in full, the third
Tranche lapsed and half of the fourth Tranche vested.
2,187,900 options lapsed in the year, no options were exercised. There are 5,252,500 options which were capable of being
exercised as at 30 April 2013.
The following information is relevant in the determination of the fair value of options granted under the equity-settled
share-based remuneration schemes operated by the Group under the stochastic valuation model.
42 Ilika plc
Annual Report and Accounts 2013
23 Share-based payments expense and share options continued
Expected Term. This is the most likely estimate of the period from grant until the exercise date. For these options, the
assumption of an expected term of part way between vesting and lapse for each option/tranche.
Expected Volatility. The normal approach is to look at the historical volatility of the share price over the most recent period that
is generally commensurate with the expected award term. However, this approach was not possible here given that the options
were granted on the date of the Company’s admission to AIM. In such cases, IFRS 2 allows the consideration of the historical
volatility of other similar entities to determine a proxy for the Company’s volatility. Similar entities, for the purpose of calculating
volatility, have been chosen as the constituents of the Company’s comparator Index. Volatility for each of these companies has
been calculated over both 3 and 6 years resulting in median volatilities of 46.7 percent and 42.3 percent respectively. A proxy
volatility of 45 percent (being midway between these two figures) has been used for valuing these options.
Expected Dividend Yield: as the Company does not pay, and is not currently expected to pay any dividends, the dividend yield
has been set to zero.
Risk-free Rate: calculated based on UK Gilts with a term commensurate with the expected term.
Share-based payment expense/(credit):
Black-Scholes calculation
Stochastic valuation
2013
£
2012
£
9,375
(261,226)
891
210,722
(251,851)
211,613
43 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Company Balance sheet of Ilika plc
Company number 7187804
ASSETS
Non-current assets
Investments in subsidiary undertaking
Current assets
Trade and other receivables
Total net assets
Equity
Issued share capital
Share premium
Retained earnings
LIABILITIES
Current liabilities
Trade and other payables
Total liabilities
Total equity and liabilities
As at 30 April
2013
£
2012
£
Notes
25
121,339
121,339
26 9,237,447
9,083,842
9,358,786
9,205,181
475,354
27
27 8,802,981
13,062
27
472,638
8,656,317
(14,345)
9,291,397
9,114,610
67,389
67,389
90,571
90,571
9,358,786
9,205,181
The notes on pages 47 to 48 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 12 July 2013.
Mr. J.B. Boyer
Chairman
12 July 2013
44 Ilika plc
Annual Report and Accounts 2013
Year ended 30 April
2013
£
2012
£
279,258
(184,948)
(251,851)
211,613
27,407
26,665
(153,605) (4,705,325)
82,372
(23,182)
(149,380) (4,596,288)
149,380
–
4,899,991
(303,703)
149,380
4,596,288
–
–
–
–
–
–
Company cash flow statement
Cash flows from operating activities
Profit/(loss) before tax
Adjustments for:
Equity settled share-based payments
Operating cash flow before changes in working capital, interest and taxes
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash utilised by operations
Cash flows from financing activities
Proceeds from issuance of Ordinary Share capital
Share issue costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the start of the period
Cash and cash equivalents at the end of the period
45 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements Company statement of changes in equity
As at 30 April 2011
Issue of shares
Expenses of share issue
Share-based payment
Loss and total comprehensive income
As at 30 April 2012
Issue of shares
Share-based payment
Profit and total comprehensive income
As at 30 April 2013
Share capital
£
Share
premium
account
£
Retained
earnings
£
Total
attributable to
equity holders
£
383,548 4,149,120
4,810,900
(303,703)
–
–
89,091
–
–
–
(41,011) 4,491,657
4,899,991
(303,703)
211,613
(184,947)
–
–
211,613
(184,947)
472,639 8,656,317
(14,345) 9,114,611
2,715
–
–
146,664
–
–
–
(251,851)
279,258
149,379
(251,851)
279,258
475,354 8,802,981
13,062 9,291,397
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value is credited to the share premium reserve.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of the Company since inception of the business.
46 Ilika plc
Annual Report and Accounts 2013
Notes to the Company financial statements
24 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs')
adopted by the European Union.
No Directors' report has been presented and the Directors' responsibilities in respect of these financial statements are set
out on page 17.
Taxation
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised.
Related party transactions
During the year the Company made recharges of costs to Ilika Technologies Limited of £578,288 (2012: £563,214) and
to Altrika Limited of £Nil (2012: £119,441). In addition the funds raised from the fundraising were transferred to Ilika
Technologies Limited. The balance outstanding at 30 April 2013 for Ilika Technologies limited was £9,227,579 (2012:
£9,075,927) and for Altrika Limited was £Nil (2012: £Nil).
Share-based payments
The critical accounting estimates, assumptions and judgements underpinning the valuation of the option awards are
disclosed in note 23.
Financial instruments
The accounting policy relating to financial instruments is disclosed in note 1.
Profit of the Parent Company
Profit in the year
No profit and loss account is presented for the Company as permitted by Section 408 of the Companies Act 2006.
The Company’s profit for the year was £279,258 (2012: £184,948).
Directors’ remuneration
The remuneration of the Directors is disclosed in note 5.
Auditors’ remuneration
Auditors’ remuneration is disclosed in note 4.
25 Investment in subsidiary undertaking
Investments in Group undertakings are stated at cost.
Ilika plc has a wholly-owned subsidiary, Ilika Technologies Limited. Ilika Technologies Limited (Incorporated in the UK) made a
loss for the year of £5,109,602 (2012: £1,949,515) and had net liabilities as at 30 April 2013 of £6,028,679 (2012: £919,078).
Shares in Group undertakings (at cost)
At 1 May 2012 and 30 April 2013
2013
£
2012
£
121,339
121,339
47 Ilika plc
Annual Report and Accounts 2013
Business ReviewGovernanceFinancial Statements
Notes to the Company financial statements
continued
26 Trade and other receivables
Prepayments
Other debtors
Amounts due from subsidiary undertakings
27 Share capital
Authorised
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433)
1,781,400 Convertible Preference Shares of £0.01 each
Allotted, called up and fully paid
45,874,033 Ordinary Shares of £0.01 each (2012: 45,482,433)
1,661,400 Convertible Preference Shares of £0.01 each (2012: 1,781,400)
As at 30 April
2013
£
2012
£
5,983
4,016
9,227,448
7,650
265
9,075,927
9,237,447
9,083,842
As at 30 April
2013
£
2012
£
458,740
17,814
454,824
17,814
458,740
16,614
454,824
17,814
475,354
472,638
Share Rights
The Ordinary Shares and Preference Shares rank pari passu in all respects other than:
• The profits which the Group may determine to distribute in respect of any financial period shall be distributed only among
the holders of the Ordinary Shares. The Preference Shares shall not entitle the holders of them to any share in such
distributions.
• On a return of capital or assets on a liquidation, reduction of capital or otherwise the surplus assets of the Group
remaining after payment of its obligations shall be applied:
– First, in paying to the holders of the Preference Shares the amount paid thereon, being the amount equal to the par value
of the Preference Shares excluding any premium; and
– Secondly, the balance of such surplus assets shall belong to and be distributed amongst the holders of the
Ordinary Shares.
The Preference Shareholders have the right, at any time, to convert the Preference Shares held to the same number of
Ordinary Shares.
On 22 May 2012, 5 December 2012 and 22 May 2013, 60,000, 60,000 and 100,000 respectively, £0.01 Convertible Preference
Shares were converted to £0.01 Ordinary Shares.
On 17 September 2012, 271,600 Ordinary Shares were issued for a total consideration of £149,380 and on 22 May 2013,
2,375,000 Ordinary Shares were issued for a total consideration of £712,500 and total issue costs incurred were £3,500.
48 Ilika plc
Annual Report and Accounts 2013
Ilika plc invents, tests and selects
materials in the laboratory that
can be selected for scale-up and
everyday commercial use.
Our strengths
> Validated technology platform protected
by globally granted patents
> Proven ability to attract blue-chip
multinational commercialisation partners
from high growth markets
> Innovative business model that combines
low-risk product development revenue
with substantial upside from licensing
Ilika at a glance
Business Review
1 Overview
2
4 Meeting market requirements
6 Commercial engagement
Chairman’s statement
8
10 Chief Executive’s review
13 Financial review
Corporate Governance
14 Board of Directors
16 Directors’ report
18 Corporate governance statement
20 Corporate social responsibility
22 Independent auditor’s report
Financial Statements
23 Consolidated statement of
comprehensive income
24 Consolidated balance sheet
25 Consolidated cash flow statement
26 Consolidated statement of
changes in equity
27 Notes to the consolidated
financial statements
44 Company balance sheet
45 Company cash flow statement
46 Company statement of changes in equity
47 Notes to the financial information
49 Corporate directory
Corporate directory
Company number
7187804
Directors
Executive
Non-Executive
Secretary
Registered office
Graeme Purdy
Stephen Boydell
Brian Hayden
Jack Boyer (Chairman)
Clare Spottiswoode
Prof. William Wakeham
Stephen Boydell
Kenneth Dibben House
Enterprise Road
University of Southampton Science Park
Chilworth
Southampton
SO16 7NS
Website
www.ilika.com
Advisers
Independent auditors
Nominated adviser and broker
Registrars
Public relations
BDO LLP
Arcadia House
Maritime Walk
Ocean Village
Southampton
SO14 3TL
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Walbrook PR Ltd
4 Lombard Street
London
EC3V 9HD
49 Ilika plc
Annual Report and Accounts 2013
Ilika plc
Fast-tracking materials
discovery
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Ilika plc
Kenneth Dibben House
Enterprise Road
University of Southampton Science Park
Chilworth
Southampton
SO16 7NS
United Kingdom
E info@ilika.com
T +44 (0)23 8011 1400
F +44 (0)23 8011 1401
www.ilika.com
Ilika plc
Annual Report and
Accounts 2013