Accelerated
materials
innovation
Annual Report and Accounts 2015
About Ilika
Ilika plc accelerates the
invention, testing and
selection of materials
that can be scaled-up
for commercial use.
Technology
Ilika accelerates the development of new materials for energy and
electronics applications through the use of its patented, high-throughput
techniques. Ilika’s technology enables functional materials to be
made, characterised and tested up to 100 times faster than traditional
techniques. Ilika has commercial partnerships with international
blue-chip companies.
Innovation
Ilika’s high-throughput technology creates large, robust datasets
that can be used to fully define the performance of families of materials.
This enhances the value of intellectual property and allows product
performance to be fully optimised. The techniques can be used to
support product improvement as well as radical new
product development.
Collaboration
Companies choose to work with Ilika in order to extend the
capabilities of their in-house R&D teams. This saves materials
development costs, reduces time to market and captures market
share, thereby increasing return on R&D investment. Partnering with
Ilika also reduces both business and technical risk, maximising the
likelihood of successful project outcomes.
www.ilika.com
Overview
01 Highlights 2015
02 At a glance
04 Development projects
Strategic Report
08 Strategic review
10 Financial review
11 Principal risks and uncertainties
Governance
12 Board of Directors
14 Directors’ report
16
19
Directors’ remuneration report
Statement of Directors’
responsibilities
20 Corporate governance statement
22 Corporate and social
responsibility statement
24 Independent auditor’s report
Financial Statements
25 Consolidated statement of
comprehensive income
26 Consolidated balance sheet
27 Consolidated cash flow
statement
28 Consolidated statement of
changes in equity
29 Notes to the consolidated
financial statements
42 Company balance sheet
43 Company cash flow statement
44 Company statement of
changes in equity
45 Notes to the Company
financial statements
ibc Corporate directory
Highlights 2015
Operational highlights
§ Grant of two patents covering methods for producing solid-state batteries
§ 25 fold increase in solid-state battery size achieved
§ Official opening of pilot line by Rt. Hon Greg Clark MP, in Southampton
§ Proof of concept contract win with European partner for development
of batteries for WSN
§ Commencement of solid-state battery pilot production leading to
– 20 times larger deposition area of key battery materials
– 5 times increase in materials deposition rate
§ Case study information released relating to aerospace alloy
development work carried out with Rolls Royce and Boeing
§ Board strengthened with the appointment as NEDs of Keith Jackson,
CTO of Meggitt plc and Mike Inglis, former Chief Commercial Officer of
ARM Holdings plc
Financial highlights
Revenue
Loss per share
+4%
Revenues up 4% to £1.09m
(2014: £1.05m)
-24%
Loss per share has reduced by
24% to 4.10p (2014: 5.37p)
Loss for the year
Cash balance
-4%
Loss for the year reduced by 4%
to £2.7m (2014: £2.8m)
£6.0m
Cash balance at period end
£6.0m (2014: £7.1m)
“ The Company has made substantial progress this year in scaling
up its proprietary solid-state battery technology. This operational
progress has gone hand in hand with commercial discussions with
OEM’s and supply chain partners interested in integrating Ilika’s
battery technology into Internet of Things (‘IoT’) devices. ”
Jack Boyer, Chairman
Commenting on the results
01
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 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 for
the energy and
electronics sectors
Early engagement
of large multinational
partners which
co-fund the route to
commercialisation
Development
agreements driving
revenue growth and
providing a strong
product pipeline
Significant milestones
2004
2006
2007
2008
2010
May:
A round venture capital
funding secured
February:
Operations expanded
to current location
on Southampton
Science Park
February:
Toyota becomes a
partner for
development of
battery materials
September:
B round venture capital
funding secured
October:
Shell becomes a partner
for development
of hydrogen storage
technology
May:
Successful IPO on
London Stock
Exchange
July:
Announcement of
Fuel Cell programme
with a major vehicle
manufacturer
May:
Ilika Technologies
Ltd founded and
seed-round secured
August:
First commercial
customer, Asahi
Kasei, secured
02
Ilika plc | Annual Report and Accounts 2015 Discovery
The production of a new material
has traditionally been a slow and
arduous process, taking between
7 and 10 years to move from an
initial discovery through to the
first commercial prototype.
Ilika’s High-Throughput Physical
Vapour Deposition (‘HT-PVD’)
proprietary technology platform
delivers rapid new material discovery
up to 100 times faster than traditional
methods. The HT-PVD facility can
deposit large numbers of films of
different composition in one
automated experimental run.
Patented technology ensures that
the deposition of all elements
occurs simultaneously and that the
composition profile can be carefully
varied across the substrate in a
controlled manner. This process
enables hundreds of materials to
be made in a single, automated
operation and subsequently
analysed in a rapid manner for
specific, sought-after behaviours.
Ilika’s high-throughput process has
the additional attraction of enabling
materials to be rapidly scaled up
for commercial application once
the requisite chemical and physical
properties have been achieved.
Partnerships
Ilika collaborates with multinational
partners on joint research and
development projects, using its
proprietary high-throughput
processes to develop new patentable
functional materials. These materials
are then used to develop new
products or improve existing
product performance.
By working in collaboration,
business and technical risk is
reduced and Ilika is able to target
market areas where minimum
potential for infringement exists and
to fully define the surrounding area
for patent protection.
Ilika is able to generate candidate
materials for targeted scale-up
for its partners in a much reduced
development time, generating
significant value for its customers
by helping them increase R&D
return on investment and reduce
the time to market for new and
improved products.
Ilika’s high-throughput process
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 and support the
submission of patents to protect any
new materials discovered.
2011
2012
2013
2014
2015
May:
First year results
delivered in line with
analyst’s expectations
April:
Successful Placing
on London Stock
Exchange
January:
Completion of 200m2
laboratory facility
expansion
January:
World’s first in
solid-state battery
technology
March:
Commencement of
solid-state battery
pilot production
October:
New contracts with two
of the world’s largest
aerospace companies
May:
UK patent grants for
solid-state battery
methodology
03
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Development projects
Although Ilika’s high-throughput technology platform is capable of addressing many
materials development challenges, the Company has chosen to address only those
market opportunities offering the strongest return on investment.
Solid-state batteries
At a glance
§ Market requirement: compact batteries that are
safe, charge rapidly and last longer
§ Solution: solid-state lithium-ion
§ Status:
– single cell battery that can be manufactured
as a stack
– partnering discussions in progress with
battery manufacturers
§ Plan for 2015:
§ scale-up to production prototypes
– enter into product integration projects
– initiate discussions for a licensing deal
Ilika is perhaps best known for its pioneering work
in developing solid-state battery technology.
The solid-state batteries developed by Ilika are a type
of lithium-ion batteries in which the usual liquid or polymer
electrolyte has been replaced by a ceramic ion-conductor.
This results in a clear set of benefits relative to standard
lithium ion technology, including:
§ Faster charging (6 times faster)
§ Increased energy density (2 times energy for the
same volume)
§ Increased cycle life (up to 10 years, compared to 2)
§ Low leakage currents (nano Amps)
§ Non flammability
Commencement of solid-state battery pilot production
Since officially opening the pilot line for the production
of solid-state batteries, the Company’s technical team
has carried out a series of operational tests to ensure the
equipment meets the set of technical targets required
for solid-state battery production. Having deposited
the constituent materials required for forming batteries,
the Company has now progressed to depositing arrays
of battery structures.
Operational parameters of the pilot line are currently being
optimised to maximise the yield and performance of the
batteries. The Company continues to be on track to release
batches of batteries and performance data for evaluation
by commercial partners in 2015.
Update on patents for solid-state batteries
Ilika has applied for patent coverage of the process it uses
to make its solid-state batteries. Two patent applications,
of which Ilika announced the successful British grant in
May 2014, are part of the patent families that cover Ilika’s
proprietary vapour deposition processes used in producing
solid-state batteries directly from the elements. Ilika has
received a Communication of Intention to Grant in Europe
for one of its patent applications and a Notice of Allowance
in the United States for another. Both patent applications
were jointly filed with Toyota Motor Company on 21 July 2011.
Further new international patent applications have also
recently been filed under the Patent Co-operation Treaty
(‘PCT’) based upon earlier British priority applications.
It is the Company’s intention to apply for patents in all
significant economic jurisdictions.
04
Ilika plc | Annual Report and Accounts 2015 Markets and applications – Micro-batteries
The scalable, stacked cell architecture, which Ilika can produce, enables the simple fabrication of cells over a wide range
of sizes. Ilika intends initially to produce micro-battery prototypes designed for powering wireless sensors, commonly
referred to as the ‘Internet of Things’, which is a rapidly growing segment expected to create an addressable market
for micro-batteries in excess of £1 billion by 2017. The battery architecture will subsequently be scaled-up, using the same
process but with faster fabrication rates, to produce devices suitable for the largest markets for lithium-ion batteries in
wearables and consumer electronics, including mobile phones.
Smart Homes
Transport
Wearables
Many homes and buildings in
countries outside of northern
Europe are fitted with HVAC
(heating ventilation and air
conditioning) systems which
are significant energy users. The
efficiency of these systems can
be significantly increased and the
energy costs reduced, by using
sensors to control the distribution
of heating and cooling. The
installation cost of the sensors can
be significantly reduced if they are
autonomous. This means that they
are wireless devices which are
powered by an energy harvesting
device, such as a photovoltaic
panel. Ilika’s solid-state batteries
are particularly suited to this
application, ensuring that energy
is stored and available to power
the sensor when the energy
harvester is not functioning
(for example, at night).
There is a continuous drive to
reduce the weight of both road
vehicles and aeroplanes to reduce
both manufacturing cost and
fuel costs. Coupled with this is
the trend towards increased
monitoring of vehicle systems
and the immediate environment
around the vehicle. This
monitoring is currently achieved
with cabled sensors, which are
expensive to install and contribute
significantly towards vehicle
weight. The increased reliability
and reduced energy budget of
wireless communication protocols
has meant that interest in the
concept of autonomous sensors is
steadily increasing.
The wearables market is one
of the most rapidly growing
segments of consumer
electronics. There is an expanding
range of wearable devices,
principally for applications
focused on health and fitness
monitoring and communication.
Practically all of these devices
require battery power. The main
requirements for batteries are
high volumetric energy density
and a battery life that exceeds
the life of the wearable device.
05
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Development projects continued
High Entropy Alloys
Ilika and Boeing have recently collaborated on an investigation of high entropy
alloys to establish if this class of materials offers promising structural phases
which merit further investigation and if high-throughput thin films techniques
are comparable to the standard bulk approach. The high-throughput work was
carried out in a two-month period. In that period 2,548 systematically varying
compositions were made and characterised. Finally, some bulk samples were
prepared using traditional ingot preparation methods for selected
compositions, which gave equivalent results to the thin film alloys.
Corrosion-resistant Alloys
Currently chromium and cadmium are widely used in the automotive and
aerospace industries as corrosion-resistant coatings. However, the EU has
banned their use as part of its Restriction of Hazardous Substances Directive
and aerospace companies are seeking alternative materials with the same
innovative characteristics. Ilika has been collaborating with a number of
aerospace companies to develop new innovative materials to improve
efficiency and environmental performance within this sector.
Superalloys
Gas turbine engine development for the aerospace industry continues to strive
for improved fuel efficiency, reduced emissions and a reduction in noise at
take-off. This development effort demands materials, which can tolerate
increasingly high operating temperatures while retaining their mechanical
strength. Nickel-based superalloys are widely used in gas turbines, however, the
scope for further developing them is diminishing and therefore the rate of
improvement of aeroengine technology is decreasing. Ilika, the University of
Cambridge and Rolls Royce are investigating alternative lightweight alloy systems,
which may also be able to operate under high temperatures, handle greater
stresses and remain in service for longer.
Hydrogen Storage Alloys
Hydrogen is considered by some analysts to be a promising energy carrier in
the long term and its pollution-free conversion into energy by fuel cells is a very
attractive feature. However, one of the key technical hurdles to be overcome for
the adoption of hydrogen, is its safe and energy-efficient storage within
compact containers and converting it into electricity cheaply. Ilika believes the
answer to effective hydrogen storage lies in the use of metal hydrides, (metal
alloys which have reacted with hydrogen to form a stable solid). Ilika has a
strong patent position in these materials, which it is seeking to commercialise.
06
Ilika plc | Annual Report and Accounts 2015 Tuneable Dielectrics
A worldwide leader in the design, manufacture and sale of passive electronic
components has worked together with Ilika to deliver improved tunable
dielectric thin film materials using Ilika’s high-throughput synthesis and
screening technology platform. The rapidly growing consumer electronics
market is driving the need for capacitors with improved performance resulting
in reduction of parts count, board space and power consumption for electronic
devices such as smart phones etc.
Metal Gates for Dielectrics
The rapid improvement in the performance of CMOS devices over the last
40 years has only been possible due to the ever reducing dimensions of the
key components within them. However, the continued ‘scaling’ of such devices
is limited by the performance of the dielectric material within the transistor.
Therefore, alternative metal gate materials compatible with higher dielectric
constants must be considered for future CMOS devices. Ilika has been working
together with Applied Materials to achieve this goal.
Piezoelectrics
Currently the piezoelectric material of choice is PZT (lead zirconium titanate).
However, the EU has now outlawed the use of PZT in its Restriction of
Hazardous Substances Directive, prohibiting the use of lead in electronic
materials and manufacturers have been tasked with developing
piezoelectrically active materials which do not contain lead. Working in
collaboration with CeramTec, Ilika used its HT-PVD platform to find potential
replacement materials for PZT.
Fuel Cell Catalysts
Sales of fuel cells continue to be dominated by proton exchange membrane
(‘PEM’) technology, which grew six fold over the last four years. The technology
is dependent on platinum containing electrodes, which are the most expensive
components in the fuel cells. To enable widespread commercialisation of PEM
technology, it is important to reduce the cost of these electrodes and Ilika’s
palladium alloy electro-catalysts have the potential to be 70 percent cheaper
than platinum electro-catalysts on a cost/performance basis. OEM trials
commenced in 2014. Patents defining this technology have been granted in the
USA, Japan and Europe securing the intellectual property in the three major
geographical markets.
07
Ilika plc | Annual Report and Accounts 2015OverviewStrategic ReportCorporate GovernanceFinancial Statements Strategic review
Ilika plc is the holding company for Ilika Technologies Limited,
the advanced materials innovation company.
Our Strategy
Developing
leading-edge
high-throughput
development
processes
Partnering with
companies committed
to developing and
globally
commercialising
jointly developed
products
Using
high-throughput
processes to invent
patentable functional
materials
The Directors present their
Strategic review for the year
ended 30 April 2015.
Principal activities
Ilika plc is the holding company
for Ilika Technologies Limited, the
advanced materials innovation
company. Ilika accelerates the
discovery of new and patentable
materials using its unique, patent
protected, high-throughput
process for identified end uses in
the energy and electronics sectors.
This process enables hundreds
of scalable materials to be made
in a single, automated operation
and subsequently tested for key
properties. The process can be
applied to many market sectors,
but Ilika’s recent focus has been in
the field of solid-state batteries.
Business strategy
The Company’s strategy is to
use its processes to discover and
commercialise novel materials
for integration into products with
high value end-markets. In order
to ensure a high probability of
08
commercial success, the Company
prefers to develop these materials in
collaboration with large multinational
companies, which have the expertise
to bring new end products to
market to address unmet needs
in their sectors. On occasion, the
Company has joint development
programmes, which contribute
to competing technologies (for
instance, battery versus fuel cell
technology). Thereby, the Company
aims to create intellectual property
such that it will benefit from
commercialisation rewards associated
with the ultimate generally adopted
technology (or technologies). The
Company’s objective is to have its
materials integrated into market-
leading products sold by leading
commercialisation partners around
the world. The Company generally
expects these end-products to fit
into or create end-markets worth
in excess of $1 billion per year,
in which the Directors believe
a number of the Company’s
commercialisation partners are
positioned to have a leading share.
The Company is pursuing
its objectives through the
following strategies:
§ Developing leading-edge
high-throughput development
processes;
§ Partnering with companies
committed to developing and
globally commercialising jointly
developed products;
§ Using high-throughput processes
to invent patentable functional
materials; and
§ Applying improved functional
materials to the development of
valuable products.
Operating review
The Company undertook a number
of commercial and grant funded
programmes in the year, but a
significant part of the research and
development effort in the year was
focused on its lead programme, the
development of a solid-state battery.
Ilika plc | Annual Report and Accounts 2015 Solid-state batteries
The mass-market commercialisation
of solid-state batteries will be a
step change in the evolution of
battery technology; enabling
lighter, non-flammable batteries
which contain the same energy in
half the volume, while charging up
to 6 times faster than the highest
performance lithium-ion incumbents.
The Company has been developing
a proprietary solid-state battery
chemistry and fabrication process,
facilitating the scale-up manufacture
of the next generation of solid-state
lithium-ion batteries. It has used
its unique processing abilities to
successfully turn a set of optimised
high-performance materials into
solid-state batteries with the
following key advantages:
§ A simple fabrication process;
§ Mechanical stability; and
§ Stackable cells (necessary for
building larger capacity batteries).
Battery production progress
In July 2014 the Company announced
that it had succeeded in increasing
the cross-sectional area and the
energy capacity of the cells by
more than 25 times the energy
capacity of the cells it had previously
manufactured on its development
workflow. These new cells have similar
characteristics, albeit on a larger
scale, to the smaller devices. These
cells have now been deposited over
an area of 64mm2, which is a footprint
suitable for wireless sensor network
(‘WSN’) and wearable applications.
The pilot line for the production of
prototype batteries successfully
completed its factory acceptance
test in September 2014 and was
then shipped from the fabricators
in Finland to Southampton where
it was officially opened by The Rt.
Hon. Greg Clark MP, Minister for
Universities, Science and Cities
in November 2014. In March
2015, the Company announced
commencement of pilot production
of solid-state batteries. At this point,
the Company was able to confirm that
the rate of deposition of materials,
which is a key factor in establishing
the price point of the resulting
batteries, had been increased 10
fold relative to the rate of deposition
of materials previously achieved
on the Company’s development
workflow over an area 20 times
larger, therefore delivering a 200 fold
productivity increase. Deposition
rates of 2 microns/hour, which
compare favourably to commercially
available solid-state micro-batteries,
have already been achieved.
Significant increases in deposition
rates are anticipated as the pilot
line’s capabilities are tested
further. Operational parameters
of the pilot line are currently being
optimised to maximise the yield
and performance of the batteries.
Battery patent application progress
In May 2014 Ilika announced that
2 of its patent applications, filed
jointly with Toyota, had been granted
in the UK. The patents cover the
vapour deposition processes used
to produce solid-state batteries
directly from the elements. These
represent a key part of the family
of patents and patent applications
covering the complete methodology
for producing solid-state batteries.
In March 2015, Communication of
Intention to Grant in Europe for 1
of these patent applications and a
Notice of Allowance in the United
States for the other, was received.
Other materials development
programmes
Superalloys
Another significant area of activity
in the year for Ilika has been the
development of aerospace alloys.
Gas turbine engine development for
the aerospace industry continues to
strive for improved fuel efficiency,
reduced emissions and a reduction in
noise at take-off. This development
effort demands materials, which can
tolerate increasingly high operating
temperatures while retaining their
mechanical strength. Nickel-based
superalloys are widely used in
gas turbines, however, the scope
for further developing them is
diminishing and therefore the rate
of improvement of aeroengine
technology is decreasing. Ilika, the
University of Cambridge and Rolls
Royce are investigating alternative
lightweight alloy systems, which may
also be able to operate under high
temperatures, handle greater stresses
and remain in service for longer.
Key performance indicators (‘KPIs’)
The Board considers that the
most important KPIs are technical
and operational and relate to
the progress of the technical
development programmes outlined
above leading to the engagement
of commercialisation partners.
The most important financial KPIs are
the cash position and the operating
loss of the Group, which remain
under constant focus and which are
considered in the financial review.
09
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Interest rate risk
The Group’s cash held in current
bank accounts is subject to the risk of
fluctuating base rates. An element of
the Group’s financial assets is placed
on fixed-term interest deposits.
Currency risk
During the year under review,
the Group was exposed to Euro,
Japanese Yen and US Dollar currency
movement as it engages business
development staff in each of those
territories. Additionally, a small
element of expense and capital spend
is denominated in these currencies.
The Group has arranged for some
of its programmes, with customers
based in these territories, to be
denominated in these currencies
to hedge against this exposure.
Financial review
The Financial Review should
be read in conjunction with the
consolidated financial statements of
the Company and Ilika Technologies
Limited (together ‘the Group’)
and the notes thereto on pages 29
to 41. The consolidated financial
statements are presented under
International Financial Reporting
Standards (‘IFRSs’) as adopted by
the European Union. The financial
statements of the Company continue
to be prepared in accordance with
IFRSs as adopted by the EU and
are set out on pages 42 to 46.
Statement of Comprehensive
Income
Revenues
Revenue, all from continuing activities,
for the year ended 30 April 2015 was
£1.09 million (2014: £1.05 million).
This includes £384,000 of grant
income recognised from Innovate
UK (2014: £94,000), the majority
of which relates to work together
with the University of Cambridge,
Diamond Light Source and Rolls
Royce to develop new superalloy
compositions for gas turbine engines.
Payments made by the Company’s
European-based partners for
research and development activities
increased from 33 percent of total
revenues in 2014 to 40 percent in
2015 whilst those for US-based and
Asian-based partners reduced from
19 percent and 38 percent to 13
percent and 12 percent respectively.
Administrative expenses and losses
for the period
Total administrative costs for the
year were slightly increased at
£3.59 million in 2015 relative to
£3.57 million in 2014. An accounting
adjustment for a share-based
payment calculation is included
within administration expenses. In
2015, because of the granting of
a number of new options, there
was an increase in the share-based
payment charge of £0.02 million.
10
Depreciation and amortisation
charges reduced from £557,000
in 2014 to £325,000 in 2015.
This reduction was offset with
some one-off costs associated
with the recruitment of a new
Non-Executive Director to
the Board and a new business
development Director for Japan.
Loss on continuing activities before
tax is consistent at £3.0 million in 2015
(2014: £3.1 million) and loss and total
comprehensive income and expense
for the period has remained at £2.7
million for 2015 (2014: £2.8 million).
Statement of financial position and
cash flows
At 30 April 2015, net assets
amounted to £6.5 million (2014:
£7.8 million), including net funds of
£6.0 million (2014: £7.1 million).
The principal elements of the £1.1
million decrease over the year ended
30 April 2015 in net funds were:
§ Share proceeds (net of costs) of
£1.4 million (2014: £7.4 million);
§ Cash used in operations of £2.8
million (2014: £2.5 million); and
§ Research and development tax
credits received of £0.3 million
(2014: £0.3 million).
Subscription warrants were issued
in 2010 with an exercise price of
51p per warrant. During the year
2,617,647 warrants were converted
to ordinary shares with proceeds
to the Company of £1.3 million.
The remaining unconverted 15,686
warrants expired on 28 May 2014.
Treasury policy and financial risk
management
Credit risk
The Group follows a risk-averse
policy of treasury management.
Sterling deposits are held with
one or more approved UK-based
financial institutions. The Group’s
primary treasury objective is to
minimise exposure to potential
capital losses whilst at the same time
securing prevailing market rates.
Ilika plc | Annual Report and Accounts 2015 Principal risks and uncertainties
Commercial risk
Financial risk
Intellectual
property risk
The Company 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 Company is largely dependent on its partners to
commercialise the end-products containing the Company’s materials.
The Company seeks to reduce this risk by continually assessing competitive
technologies and competitors. The Company seeks to commercialise
materials through multiple channels to reduce over reliance on individual
partners and, in agreements with partners, it ensures that there are
commercialisation milestones which must be met for the partner to retain
the rights to commercialise the materials.
The Company is reliant on a small number of significant customers and
partners. Termination of these agreements could have a material adverse
effect on the Group’s results or operations or financial condition. The
Company expects to incur further operating losses as progress on
development programmes continue. There can be no assurance that the
Company will ever achieve significant revenues or profitability.
The Company seeks to reduce this risk by broadening the number of
customers and partners and thereby reduce reliance on individual
significant companies. The Company has reduced the level of its operating
loss and has significantly reinforced the balance sheet with a substantial
capital raise in the year along with additional funding shortly after the
year-end.
The Group faces the risk that intellectual property rights necessary to
exploit research and development efforts may not be adequately secured
or defended. The Group’s intellectual property may also become obsolete
before the products and services can be fully commercialised.
The Company seeks to reduce this risk by employing in-house staff with
extensive global experience of patenting and licensing using commercially
available patent searching and landscaping software. External patent
agents and attorneys are used to advise on the drafting and filing of
patent applications.
Dependence on
senior management
and key staff
Certain members of staff are considered vital to the successful
development of the business. Failure to continue to attract and retain such
highly skilled individuals could adversely affect operational results.
The Group seeks to reduce this risk by offering appropriate incentives to
staff through competitive salary packages and participation in long-term
share option schemes.
By order of the Board
Jack Boyer
Chairman
9 July 2015
Graeme Purdy
CEO
11
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Board of Directors
Jack Boyer OBE
Chairman (independent)
Graeme Purdy
Chief Executive Officer
Prof. Brian Hayden
Chief Scientific Officer
Steve Boydell
Finance Director
Mike Inglis
Clare Spottiswoode CBE
Prof. Sir William Wakeham
Prof. Keith Jackson
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Jack joined Ilika as Chairman
in 2004. He is 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. Jack
was educated at Stanford
University (B.A. Hons), the
London School of Economics
(M.Sc.) and INSEAD (MBA).
He 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.
Jack has been awarded
the OBE for his services to
science and engineering.
Graeme was appointed
to head-up Ilika from the
beginning of May 2004, just
before completion of the
Company’s seed round of
funding. He led the Company
through two successful
rounds of venture funding
before floating the Company
on AIM in 2010.
Prior to joining Ilika, Graeme
was Chief Operating Officer
of a high-technology
company in the Netherlands
and before that worked
internationally in a variety of
technical and commercial
roles for Shell. Graeme
holds a Master’s degree in
Chemical Engineering from
Cambridge and an MBA
from INSEAD business
school in France. Graeme is
a Chartered Engineer and
a Sainsbury Management
Fellow.
Brian is a founder of Ilika and
holds the executive role of
Chief Scientific Officer. He
is also Professor of Physical
Chemistry at the University of
Southampton, a Fellow of the
Royal Society of Chemistry,
Fellow of the Institute of
Physics, and a member of the
International Editorial Board
of Surface Science.
Brian is a pioneer of surface
science with a strong track
record in running successful
industrial collaborations
and has published in excess
of 100 papers in the fields
of surface science, surface
electrochemistry and
fundamental aspects of
heterogeneous catalysis and
electro-catalysis.
He is also the author of over
12 active patents including
new catalysts and materials
for low temperature fuel
cells and solid state Li-ion
batteries.
Having qualified with
Deloittes in 1996, Steve held
a number of acquisition,
treasury and group reporting
roles at both Hays plc, a
diversified commercial,
logistics and personnel
group, and then AGI
Media, a global creative
packaging group. He then
become Finance Director of
Healthy Direct, a successful
Guernsey-based group of
companies, producing and
supplying vitamins and
supplements to the UK
market. 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.
Steve studied Economics at
Nottingham University and
is a Fellow of the Institute of
Chartered Accountants.
Mike Inglis was appointed
Clare’s career started as an
Prof. Sir William Wakeham
Keith has had a wide ranging
a Non-executive Director
of Ilika in July 2015. He is
economist with the Treasury
retired as Vice-Chancellor
before establishing her own
of the University of
and successful career in
companies varying from
currently a Non-executive
software company.
Southampton in September
start-ups to multinationals.
Director of Pace plc and
2009. He studied Physics
He founded and grew an
Advanced Micro Devices Inc.
She is perhaps best known
at Exeter University at both
automotive control systems
for her role as Director
undergraduate and doctoral
company. Following the sale
Formerly, Mike was a Director
General of Ofgas between
level.
and member of the Executive
1993 and 1998 where she
of the company to a major
car company he joined Rolls
of ARM Holdings for over
a decade serving as Chief
oversaw the transformation
He is a Fellow, Senior Vice-
Royce PLC where he worked
of the gas industry from a
President and International
as Chief Technology Officer
Commercial Officer until the
monopoly, which controlled
Secretary of the Royal
end of March 2013, having
the whole gas supply
previously been EVP & GM
chain, into a deregulated,
Academy of Engineering,
a Fellow of the Institution
in the electrical power and
control systems group.
Processor Division and EVP
competitive industry.
of Chemical Engineers, the
Keith is Chief Technology
Sales and Marketing. Before
joining ARM, he worked in
management consultancy
Clare was a commissioner
and Technology, the
Institution of Engineering
Officer at Meggitt PLC,
a global aerospace and
on the Independent
Institute of Physics and the
energy components and
with AT Kearney and held a
Commission on Banking
Portuguese Academy of
systems company where
number of senior operational
Chaired by John Vickers,
Engineering. He is a Visiting
he is responsible for the
and marketing positions at
and currently chairs Gas
Professor at Imperial College
technology strategy and
Motorola. Mike has previously
Strategies Group Limited
London, Exeter and Lisbon,
research and technology.
worked in semi-conductor
and Flowgroup plc. She
Chair of Exeter Science Park
He is also actively involved
sales, marketing, engineering
is also a Non-Executive
Limited and Trustee of Royal
on talent development
and consultancy with Texas
Director of G4S plc and
Anniversary Trust.
Instruments, Fairchild
and BIS Macintosh and
Enquest plc. Awarded a
CBE for services to industry
He was knighted in 2009
programmes.
at Meggitt through its
Fellowship and graduate
gained his initial industrial
in 1999, she holds degrees
for services to Chemical
experience with GEC
from Cambridge and Yale
Engineering and Higher
Telecommunications. He is
Universities and has an
Education.
a Chartered Engineer and a
honorary doctorate from
Chartered Marketer.
Brunel.
Keith is a Fellow of the
Society of Automotive
Engineers, a Rolls Royce
Engineering Fellow and a
visiting Professor at Sheffield
University. He is a graduate
from University College
London.
12
Ilika plc | Annual Report and Accounts 2015 Jack Boyer OBE
Graeme Purdy
Chairman (independent)
Chief Executive Officer
Prof. Brian Hayden
Chief Scientific Officer
Steve Boydell
Finance Director
Mike Inglis
Non-Executive Director
Clare Spottiswoode CBE
Non-Executive Director
Prof. Sir William Wakeham
Non-Executive Director
Prof. Keith Jackson
Non-Executive Director
Jack joined Ilika as Chairman
Graeme was appointed
Brian is a founder of Ilika and
Having qualified with
in 2004. He is a Non-
to head-up Ilika from the
holds the executive role of
Deloittes in 1996, Steve held
Executive Director of FTSE
beginning of May 2004, just
Chief Scientific Officer. He
a number of acquisition,
250 companies Mitie plc
before completion of the
is also Professor of Physical
treasury and group reporting
and Laird plc and chairs the
Company’s seed round of
Chemistry at the University of
roles at both Hays plc, a
Remuneration Committee
funding. He led the Company
Southampton, a Fellow of the
diversified commercial,
of the latter. He previously
through two successful
Royal Society of Chemistry,
logistics and personnel
founded and was the CEO of
rounds of venture funding
Fellow of the Institute of
group, and then AGI
pan-European engineering
before floating the Company
Physics, and a member of the
Media, a global creative
group TCG, an Executive
on AIM in 2010.
International Editorial Board
packaging group. He then
Director at Goldman
of Surface Science.
Sachs and a management
Prior to joining Ilika, Graeme
become Finance Director of
Healthy Direct, a successful
consultant at Bain & Co. Jack
was Chief Operating Officer
Brian is a pioneer of surface
Guernsey-based group of
was educated at Stanford
of a high-technology
science with a strong track
companies, producing and
University (B.A. Hons), the
company in the Netherlands
record in running successful
supplying vitamins and
London School of Economics
and before that worked
industrial collaborations
supplements to the UK
(M.Sc.) and INSEAD (MBA).
internationally in a variety of
and has published in excess
market. He was instrumental
technical and commercial
of 100 papers in the fields
in the restructuring of that
He is a Council member
of the Engineering and
roles for Shell. Graeme
of surface science, surface
group and its subsequent
holds a Master’s degree in
electrochemistry and
trade sale to a competitor.
Physical Sciences Research
Chemical Engineering from
fundamental aspects of
He joined Ilika in 2009
Council, the Higher
Cambridge and an MBA
heterogeneous catalysis and
as Finance Director and
Education Funding Council
from INSEAD business
electro-catalysis.
Company Secretary.
for England’s Research
school in France. Graeme is
Excellence Framework main
a Chartered Engineer and
He is also the author of over
Steve studied Economics at
panel for physical sciences.
a Sainsbury Management
12 active patents including
Nottingham University and
Jack has been awarded
Fellow.
new catalysts and materials
is a Fellow of the Institute of
the OBE for his services to
science and engineering.
for low temperature fuel
cells and solid state Li-ion
batteries.
Chartered Accountants.
Mike Inglis was appointed
a Non-executive Director
of Ilika in July 2015. He is
currently a Non-executive
Director of Pace plc and
Advanced Micro Devices Inc.
Formerly, Mike was a Director
and member of the Executive
of ARM Holdings for over
a decade serving as Chief
Commercial Officer until the
end of March 2013, having
previously been EVP & GM
Processor Division and EVP
Sales and Marketing. Before
joining ARM, he worked in
management consultancy
with AT Kearney and held a
number of senior operational
and marketing positions at
Motorola. Mike has previously
worked in semi-conductor
sales, marketing, engineering
and consultancy with Texas
Instruments, Fairchild
and BIS Macintosh and
gained his initial industrial
experience with GEC
Telecommunications. He is
a Chartered Engineer and a
Chartered Marketer.
Clare’s career started as an
economist with the Treasury
before establishing her own
software company.
She is perhaps best known
for her role as Director
General of Ofgas between
1993 and 1998 where she
oversaw the transformation
of the gas industry from a
monopoly, which controlled
the whole gas supply
chain, into a deregulated,
competitive industry.
Clare was a commissioner
on the Independent
Commission on Banking
Chaired by John Vickers,
and currently chairs Gas
Strategies Group Limited
and Flowgroup plc. She
is also a Non-Executive
Director of G4S plc and
Enquest plc. Awarded a
CBE for services to industry
in 1999, she holds degrees
from Cambridge and Yale
Universities and has an
honorary doctorate from
Brunel.
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.
He is 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 is a Visiting
Professor at Imperial College
London, Exeter and Lisbon,
Chair of Exeter Science Park
Limited and Trustee of Royal
Anniversary Trust.
He was knighted in 2009
for services to Chemical
Engineering and Higher
Education.
Keith has had a wide ranging
and successful career in
companies varying from
start-ups to multinationals.
He founded and grew an
automotive control systems
company. Following the sale
of the company to a major
car company he joined Rolls
Royce PLC where he worked
as Chief Technology Officer
in the electrical power and
control systems group.
Keith is Chief Technology
Officer at Meggitt PLC,
a global aerospace and
energy components and
systems company where
he is responsible for the
technology strategy and
research and technology.
He is also actively involved
on talent development
at Meggitt through its
Fellowship and graduate
programmes.
Keith is a Fellow of the
Society of Automotive
Engineers, a Rolls Royce
Engineering Fellow and a
visiting Professor at Sheffield
University. He is a graduate
from University College
London.
13
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Directors’ report
The Directors present their report and
the audited financial statements for
Ilika plc (‘Ilika’) and its subsidiary
('the Group’) for the year ended
30 April 2015.
Details of Directors’ remuneration and
share options are given in the
Directors’ remuneration report.
Directors
The Directors who served on the
Board of Ilika during the year and to
the date of this report were as follows:
Executive
Mr. S. Boydell (FD and
Company Secretary)
Prof. B. E. Hayden (CSO)
Mr. G. Purdy (CEO)
Non-Executive
Mr. J. B. Boyer OBE (Chairman)
Ms. C. Spottiswoode CBE
Prof. Sir W. Wakeham
Prof. K. Jackson
(appointed 1 November 2014)
Research and development costs
In accordance with the policy outlined in note 1, the Group incurred research
and development expenditure of £1,740,173 in the year (2014: £1,642,152).
Commentary on the major activities is given in the Strategic report.
Financial instruments
The use of financial instruments and financial risk management policies is
covered in the Strategic report and also in note 17 of the financial statements.
Dividends
The Directors do not recommend the payment of a dividend.
Political donations
The Group made no political donations during the year (2014: Nil).
Directors’ interests in Ordinary Shares
The Directors, who held office at 30 April 2015, had the following interests in
the Ordinary Shares of the Company:
Number of shares
G. Purdy
J. Boyer
C. Spottiswoode
S. Boydell
W. Wakeham
B. Hayden1
K. Jackson
1 May 2014
30 April 2015
477,427
589,427
394,009
394,009
45,454
9,090
45,454
9,090
–
–
–
–
–
–
1 B. Hayden had an interest in Preference Shares of the Company amounting to 426,300 at 1 May 2014 and
at 30 April 2015.
Between 30 April 2015 and the date of this report, there has been no change in
the interests of Directors in shares as disclosed in this report.
14
Ilika plc | Annual Report and Accounts 2015 Substantial shareholdings
On 6 July 2015 the Company had been notified of the following holdings of
more than 3 percent or more of the issued share capital of the Company.
Shareholder
Henderson Global
Charles Stanley Group plc
IP Group plc
Ruffer LLP
Baillie Gifford & Co.
Richard Griffiths
Southampton Asset Management
Herald Investment Management
Hargreave Hale
Mackin Holdings
No. of Ordinary
Shares
%
shareholding
9,500,000
8,734,198
6,458,779
6,105,454
4,956,616
3,936,069
2,349,900
2,250,000
2,063,045
2,017,647
14.5
13.3
9.8
9.3
7.5
6.0
3.6
3.4
3.1
3.1
Post balance sheet events
There are no significant post balance sheet events from the 30 April 2015 to the
signing of this report.
Auditors
All the current Directors have taken all the steps that they ought to have taken
to make themselves aware of any information needed by the Company’s
Auditors for the purposes of their audit and to establish that the Auditors are
aware of that information. The Directors are not aware of any relevant audit
information of which the auditors are unaware.
A resolution to reappoint BDO LLP will be proposed at the next Annual General
Meeting.
By order of the Board
Steve Boydell
Company Secretary
15
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Directors’ remuneration report
This report is non-mandatory for AIM-quoted companies and has been produced on a voluntary basis. It includes and
complies with the disclosure obligations of the AIM Rules.
Remuneration Committee
The Company’s remuneration policy is the responsibility of the Remuneration Committee ('the Committee’), which was
established in May 2004. The terms of reference of the Committee are outlined in the Corporate Governance Statement
on page 20. The members of the Committee are Jack Boyer (Chairman), Clare Spottiswoode, Prof. Keith Jackson and
Prof. Sir William Wakeham.
The Committee met 4 times during the year ended 30 April 2015. The Chief Executive Officer and certain executives
may be invited to attend meetings of the Committee to assist it with its deliberations, but no executive is present when
his or her own remuneration is discussed.
Remuneration policy
(i) Executive remuneration
The Committee has a duty to establish a remuneration policy which will enable it to attract and retain individuals of the
highest calibre to run the Group. Its policy is to ensure that the executive remuneration packages of Executive Directors
and the fee of the Chairman are appropriate given performance, scale of responsibility, experience, and consideration of
the remuneration packages for similar executive positions in companies it considers to be comparable. Packages are
structured to motivate executives to achieve the highest level of performance in line with the best interests of
shareholders. A significant element of the total remuneration package, in the form of bonus and share options, is
performance driven.
Executive remuneration currently comprises a base salary, an annual performance-related bonus, a pension contribution
to the Executive Director’s individual money purchase scheme (at between 8 percent and 10 percent of base salary) and
critical illness cover. Salaries and benefits were last reviewed in January 2015 with increases taking effect from 1 January
2015, taking into account Group and individual performance, external benchmark information and internal relativities.
The Company operates a discretionary bonus scheme for Executive Directors for delivery of exceptional performance
against a series of financial, commercial and technology objectives. The maximum bonus payable for the year to 30 April
2015 was restricted to 50 percent of CEO base salary, 30 percent of CSO base salary and 20 percent of CFO base salary.
(ii) Chairman and Non-Executive Director remuneration
The Chairman, Mr Boyer receives a fixed fee of £61,200 per annum and declined any increase in this fee for the year to
31 December 2015. Clare Spottiswoode, Prof. Sir William Wakeham and Prof. Keith Jackson received a fixed fee of £31,312
per annum for the year to 31 December 2014 and will receive £32,500 per annum for the year to 31 December 2015. The
fixed fee covers preparation for and attendance at meetings of the full Board and committees thereof. The Chairman and
the Executive Directors are responsible for setting the level of non-executive remuneration. The Non-Executive Directors
are also reimbursed for all reasonable expenses incurred in attending meetings.
All remuneration policies will be reviewed regularly to maintain adherence with best market practice as appropriate.
16
Ilika plc | Annual Report and Accounts 2015 Directors’ remuneration
The aggregate remuneration received by Directors who served during the year ended 30 April 2015 and 2014 was as follows:
Basic salary
£
Fees
£
Benefits
in kind
£
Bonus
£
Total short-
term benefits
£
Year to 30 April 2015
G. Purdy
S. Boydell
B. Hayden1
J. Boyer
K. Jackson
W. Wakeham
C. Spottiswoode
Year to 30 April 2014
G. Purdy
S. Boydell
B. Hayden1
J. Boyer
W. Braun
W. Wakeham
C. Spottiswoode
176,667
115,000
60,270
61,200
16,035
31,641
31,641
492,454
158,800
102,788
53,468
61,200
–
30,804
30,804
437,864
–
–
–
–
–
–
–
–
–
–
–
–
5,200
–
–
5,200
543
356
–
–
–
–
–
899
444
292
–
–
–
–
–
736
24,000
12,000
12,000
–
–
–
–
201,210
127,356
72,270
61,200
16,035
31,641
31,641
48,000
541,353
25,320
11,140
5,347
–
–
–
–
41,807
184,564
114,220
58,815
61,200
5,200
30,804
30,804
Pension
£
29,833
17,450
–
–
–
–
–
47,283
28,260
18,244
–
–
–
–
–
Total
£
231,043
144,806
72,270
61,200
16,035
31,641
31,641
588,636
212,824
132,464
58,815
61,200
5,200
30,804
30,804
532,111
485,607
46,504
1 B. Hayden is employed by the University of Southampton. The amounts disclosed in the table above relate to payments made directly to B. Hayden.
The University of Southampton recharged employment costs of £55,873 to the Company in the year in respect of B. Hayden. (2014: £54,327).
Share-based payment charge attributable to Directors in the year was £7,080 (2014: £nil).
Benefits in kind include critical illness cover.
Share options
The share options of the Directors are set out below:
Unapproved
G. Purdy
J. Boyer
B. Hayden
B. Hayden
S. Boydell
W. Wakeham
C. Spottiswoode
Approved
G. Purdy
S. Boydell
2015
Number
Exercise price
2014
Number
1,050,000
1,050,000
525,000
–
117,600
65,100
50,100
Granted
–
–
–
177,900
–
–
–
1,050,000
1,050,000
525,000
177,900
117,600
65,100
50,100
51p
51p
51p
81.5p
51p
51p
51p
81.5p
81.5p
–
–
245,300
154,600
245,300
154,600
Expiry date
May 2020
May 2020
May 2020
February 2025
May 2020
May 2020
May 2020
February 2025
February 2025
17
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Directors’ remuneration report continued
The share options of the Directors in Ilika plc exchanged from share options in Ilika Technologies Limited.
Approved
G. Purdy
G. Purdy
S. Boydell
Unapproved
G. Purdy
J. Boyer
B. Hayden
2014
Number
Exercised
2015
Number
Exercise price
Expiry date
139,500
26,500
90,000
139,500
–
–
–
26,500
90,000
10p
80p
80p
9 June 2015
14 May 2017
1 December 2019
2014
Number
Lapsed
2015
Number
Exercise price
136,200
540,200
59,300
–
540,200
–
136,200
–
59,300
80p
10p
80p
Expiry date
11 July 2017
29 June 2014
11 July 2017
Mr. Purdy exercised 139,500 options in the year (2014: 594,700).
Jack Boyer
Chairman of the Remuneration Committee
18
Ilika plc | Annual Report and Accounts 2015 Statement of Directors’ responsibilities
in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements in accordance with 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.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a
website. Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Group’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the financial statements contained therein.
Going concern
The Directors have prepared and reviewed financial forecasts. After due consideration of these forecasts and current
cash resources, the Directors consider that the Company and the Group have adequate financial resources to continue in
operational existence for the foreseeable future (being a period of at least 12 months from the date of this report), and
for this reason the financial statements have been prepared on a going concern basis.
By order of the Board
Graeme Purdy
Chief Executive
9 July 2015
19
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Corporate governance statement
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 September 2012 ('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
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 formulation of the overall strategy of the Company, the running of the Board, ensuring
that no individual or group dominates the Board’s decision-making and ensuring that the Non-Executive Directors are
properly briefed on matters. Prior to each Board meeting, Directors are sent an agenda and Board papers for each
agenda item to be discussed. Additional information is provided when requested by the Board or individual Directors.
The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day-to-
day business activities of the Group through his chairmanship of the Executive Committee.
The Non-Executive Directors bring relevant experience from different backgrounds and receive a fixed fee for their
services and reimbursement of reasonable expenses incurred in attending meetings.
The 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,
Professor Keith Jackson 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.
ii) Remuneration Committee
The Remuneration Committee comprised Jack Boyer (Chairman), Clare Spottiswoode CBE, Professor Keith Jackson and
Professor Sir William Wakeham.
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.
20
Ilika plc | Annual Report and Accounts 2015 iii) Nomination Committee
The Nomination Committee comprised Jack Boyer (Chairman), Professor Sir William Wakeham, Professor Keith Jackson
and 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 committees meetings during the year:
Attendance
Mr. S. Boydell
Mr. J. B. Boyer
Prof. B. E. Hayden
Mr. G. Purdy
Ms. C. Spottiswoode
Prof. Sir W Wakeham
Prof. K. Jackson
Board
Audit
Nomination
Remuneration
6/6
6/6
6/6
6/6
6/6
6/6
2/2
–
2/2
–
–
2/2
2/2
1/1
–
3/3
–
–
3/3
3/3
1/1
–
4/4
–
–
4/4
4/4
2/2
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 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
9 July 2015
21
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Corporate and social responsibility statement
Ilika continues to approach its responsibilities to corporate social responsibility ('CSR') in a co-ordinated and committed
way and applies a positive and systematic approach to environmental and social issues that impact on our business
whilst at the same time delivering good value for the Company and continued benefit for society. We aim to include CSR
in all aspects of our business.
Overall responsibility for developing and implementing our CSR policies and for reviewing their effectiveness lies
ultimately with the Ilika Board. Regular and consistent reviews of the scope of the Company strategy ensures we remain
focused on the material issues for the business. The CSR policy and procedures are reviewed by the management team
regularly and are communicated to all employees. Strong communication ensures that there is both an upward and a
downward flow of information and ideas. The management team report to the Board regularly to ensure the Board are
fully apprised of the status of the Company’s efforts in this area.
The main areas of CSR at Ilika are:
1. Health and safety
It is of paramount importance that, as a company, we ensure the well-being, safety and welfare of our employees
and those who are affected by our business and to maintain a safe and healthy working environment. Health and safety
has direct positive benefits for the Company and a commitment to a high level of safety makes good business sense.
As a business function, health and safety must continually progress and adapt to change.
At Ilika, health and safety is considered at the highest level in the Company with the ultimate responsibility resting
with the Board. Health and safety is an agenda item at each Board meeting and a full report is presented annually.
Our policies and procedures are independently reviewed by experts to ensure compliance with not only legislation
but also best practice.
2. Environment and sustainability
Ilika is committed to achieving a real and sustainable positive impact on the broader community by adopting
environmentally responsible policies. We believe it is essential that both as a Company and as individuals we operate
in an environmentally conscious manner. Our objective is to minimise the impact of our business activity on the
environment wherever possible. This includes ensuring our suppliers do likewise: we actively seek collaborations with
those who are similarly aware of and active in this field.
Ilika has implemented many changes within the business in furtherance of our policies and continues to review and
monitor progress against our own targets and to creatively consider new initiatives. Our ongoing objectives are to
consider environmental issues in all of our decision-making processes; to evaluate future energy usage to see how
we can use low energy systems and to fundamentally reduce our impact on the environment and ask our employees,
suppliers and customers do likewise.
3. Employee rights
Ilika adheres to legislation relating to employment rights and equal opportunities, with particular reference to non-
discrimination on the basis of ethnic origin, religion, gender, age, marital status, disability or sexual orientation. However,
Ilika’s policies go beyond the legal requirements and the Company acknowledges its moral rights to provide a safe and
dignified working environment.
We maintain the highest level of integrity with regard to employees, customers and all others with whom we interact.
We recognise the value that our employees create for the business and our commitment to training and personal
development, together with remuneration policies, are designed to reward achievement and emphasise the importance
of retaining staff.
Ilika will not tolerate discrimination, bullying or any other kind of harassment within our business community. The
concept of ’mutual respect’ is one of our guiding principles. Employees are expected to abide by Company rules and to
be honest and considerate in their various roles.
Internal procedures have been established to report grievances or alleged inappropriate behaviour to other individuals
or organisations. We treat dishonest actions and accusations seriously; this may result in disciplinary action in
accordance with Company rules and disciplinary procedures.
22
Ilika plc | Annual Report and Accounts 2015 4. Ethics and values
Ilika supports the principles of the Universal Declaration of Human Rights. This means 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 or 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.
Neither will we work with organisations which are involved in the funding or carrying out of terrorist activities.
Ilika will not provide support or work with organisations 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.
Ilika does not give or receive any bribes, extra contractual gratuities, inducements, facilitation fees or similar payments.
Any gifts, whether in cash or kind, received by employees or the Company in the course of normally accepted business
entertainment are accepted subject to the prior written approval of the management. We do not donate (including
sponsorship, subscriptions or provision of employee time or facilities) to any political party or similar organisation.
5. 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 post-doctoral level.
We have an active Outreach department and participate in many activities designed to encourage and support the
study of science.
23
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Independent auditor’s report to the members of Ilika plc
We have audited the financial statements of Ilika plc for the year ended 30 April 2015 which comprise the consolidated
balance sheet, the Parent Company balance sheet, the consolidated statement of comprehensive income, the
consolidated cash flow statement, the Parent Company cash flow statement, the consolidated statement of changes in
equity and 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 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 Financial Reporting Council’s ('FRC’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 FRC’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 2015 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and 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.
Malcolm Thixton (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
Southampton
United Kingdom
9 July 2015
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
24
Ilika plc | Annual Report and Accounts 2015 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/total comprehensive income attributable to owners of parent
Loss per share from continuing operations
Basic
Diluted
Year ended 30 April
Notes
2015
£
2014
£
2
5
1,093,978
(591,044)
1,049,879
(586,869)
502,934
(3,588,837)
–
463,010
(3,569,696)
810
3 (3,085,903)
6
50,557
7
–
(3,105,876)
22,131
(1,513)
8
9
(3,035,346)
333,647
(3,085,258)
287,171
(2,701,699)
(2,798,087)
(4.10)p
(4.10)p
(5.37)p
(5.37)p
25
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Consolidated balance sheet
Company number 7187804
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
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
Provisions
Total liabilities
Total equity and liabilities
As at 30 April
Notes
£
2015
£
2014
£
10
11
12
8
13
14
18
15
16
30,119
560,698
793
607,627
590,817
608,420
496,985
304,122
528,349
5,479,035
572,304
248,191
1,776,767
5,329,967
6,808,491
7,927,229
7,399,308
8,535,649
663,748
17,465,442
6,486,077
632,660
16,082,944
6,486,077
(18,094,830) (15,426,779)
6,520,437
7,774,902
728,871
150,000
878,871
610,747
150,000
760,747
7,399,308
8,535,649
The notes on pages 29 to 41 form part of these financial statements
These financial statements were approved and authorised for issue by the Board of Directors on 9 July 2015.
Mr. J. B. Boyer
Chairman
26
Ilika plc | Annual Report and Accounts 2015 Consolidated cash flow statement
Cash flows from operating activities
Loss before taxation continuing operations
Adjustments for:
Amortisation
Depreciation
Equity settled share-based payments
Loss on disposal of plant, property and equipment
Net financial income
Operating cash flow before changes in working capital, interest and taxes
Decrease in trade and other receivables
Increase in trade and other payables
Cash utilised by operations
Tax received
Net cash flow from operating activities
Cash flows from investing activities
Interest received
Sale of property plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Decrease/(Increase) in other financial assets
Net cash from/(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 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
Year ended 30 April
2015
£
2014
£
(3,035,346)
(3,085,258)
12,736
324,556
33,648
–
(50,557)
8,632
556,795
15,000
(145)
(20,618)
(2,714,963)
79,918
118,124
(2,525,594)
5,200
116,560
(2,516,921) (2,403,834)
269,266
277,716
(2,239,205)
(2,134,568)
45,958
1,640
(279,267)
(42,062)
1,248,418
29,390
2,450
(61,021)
–
(321,675)
974,687
(350,856)
1,413,586
–
–
–
7,716,912
(300,434)
(7,544)
(1,513)
1,413,586
7,407,421
149,068
5,329,967
4,921,997
407,970
5,479,035
5,329,967
27
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Consolidated statement of changes in equity
As at 30 April 2013
Share-based payment
Issue of shares
Expenses of share issue
Loss and total comprehensive income
As at 30 April 2014
Share-based payment
Issue of shares
Loss and total comprehensive income
Share
capital
£
475,354
–
157,306
–
–
Share
premium
account
£
Capital
restructuring
reserve
£
Total
attributable to
equity holders
of parent
£
Retained
earnings
£
8,823,770
–
7,559,607
(300,433)
–
6,486,077 (12,643,692)
15,000
–
–
(2,798,087)
–
–
–
–
3,141,509
15,000
7,716,913
(300,433)
(2,798,087)
632,660 16,082,944
6,486,077 (15,426,779)
7,774,902
–
31,088
–
–
1,382,498
–
–
–
–
33,648
–
(2,701,699)
33,648
1,413,586
(2,701,699)
As at 30 April 2015
663,748
17,465,442
6,486,077 (18,094,830) 6,520,437
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.
28
Ilika plc | Annual Report and Accounts 2015 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 2015 and in accordance with the recognition and measurement criteria of IFRSs adopted by the European
Union.
The individual financial statements of Ilika plc are shown on pages 42 to 46.
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 2015,
amounted to £6,007,383. 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
During the period ended 30 April 2015, there were no new or revised standards, amendments to standards or
interpretations that have been adopted that 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 9
IFRS 10
IFRS 11
IFRS 12
IFRS 14
IFRS 15
IFRIC 21
IAS 16
IAS 19
IAS 27
IAS 28
IAS 38
Financial Instruments
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Regulatory Deferral Accounts
Revenue from Contracts with Customers
Levies
Property, Plant and Equipment
Employee Benefits
Consolidated and Separate Financial Statements
Investments in Associates and Joint Ventures
Intangible Assets
Effective date for
periods commencing
1 January 2018
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
17 June 2014
1 January 2016
1 July 2014
1 January 2016
1 January 2016
1 January 2016
No other new standards or amendments are expected to have an effect on the Group.
The following principal accounting policies have been applied consistently in dealing with items which are considered
material in relation to the financial information.
Revenue
Revenue comprises the fair value for the sale of goods and services, net of value added tax and is recognised as follows:
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.
29
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
1 Accounting policies continued
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.
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 2015, 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.
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.
30
Ilika plc | Annual Report and Accounts 2015 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 less their estimated residual value. The estimated useful lives are as follows:
Leasehold improvements
Plant, machinery and equipment
Fixtures & fittings
lease term
3–5 years
3–5 years
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 at the present value of
the future expected cash flows associated with the impaired asset.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.
Impairment losses are recognised in 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.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call with the bank.
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 contracts 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 22.
31
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
1 Accounting policies continued
§ Taxation
The current tax receivable is the expected tax receivable on the research and development qualifying 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 3 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 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 and hydrogen storage sectors.
Year ended 30 April
Turnover
Analysis by geographical market:
By destination
Asia
Europe
North America
UK Grants
2015
£
2014
£
125,875
441,219
142,351
384,533
406,585
347,751
201,764
93,779
1,093,978
1,049,879
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:
Year ended 30 April
Turnover
Customer 1
Customer 2
Customer 3
Customers less than 10 percent
2015
£
384,533
247,200
189,052
273,193
2014
£
332,218
108,597
107,900
501,164
1,093,978
1,049,879
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 22. 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.
32
Ilika plc | Annual Report and Accounts 2015 3 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
Operating lease rentals
Share-based payment
Foreign exchange differences
4 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:
Wages and salaries
Social security costs
Share-based payment expense
Pension costs
The total remuneration of the Directors of the Group was as follows:
Wages and salaries
Pension costs
Directors’ emoluments
Social security costs
Share-based payment expense
Key management personnel
Year ended 30 April
2015
£
1,740,173
324,556
12,736
2014
£
1,642,152
556,795
8,632
19,700
19,700
6,800
202,964
33,648
5,123
6,800
201,784
15,000
3,281
Year ended 30 April
2015
Number
2014
Number
8
23
31
8
26
34
Year ended 30 April
2015
£
1,641,465
153,801
18,648
98,206
2014
£
1,603,975
137,254
–
102,441
1,912,120
1,843,670
Year ended 30 April
2015
£
541,353
47,283
588,636
60,858
7,080
656,574
2014
£
485,607
46,504
532,111
59,688
–
591,799
The Directors represent key management personnel and further details are given in the Directors’ remuneration report
on pages 16 to 18.
33
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
5 Other operating income
Sundry other income
6 Financial income
Income from short-term deposits
7 Financial expense
Interest on:
Finance leases
Year ended 30 April
2015
£
–
2014
£
810
Year ended 30 April
2015
£
50,558
2014
£
22,131
Year ended 30 April
2015
£
–
2014
£
1,513
8 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 R&D
tax credit claims as follows:
Year ended 30 April
Current tax on loss for the year
Adjustments to prior period
2015
£
304,122
29,525
333,647
2014
£
248,191
38,980
287,171
(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 21 percent (2014: 23 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
21 percent (2014: 23 percent)
Effects of:
Expenses not deductible for corporation tax
R&D relief
Origination of unrecognised tax losses
Share options
Under provision in previous years
Total tax credit for the year
2015
£
2014
£
(3,035,346)
(3,085,258)
(637,423)
(709,609)
956
(304,122)
629,401
7,066
(29,525)
1,426
(248,191)
704,733
3,450
(38,980)
(333,647)
(287,171)
Unrecognised deferred taxation
There are tax losses available for carry forward against future trading profits of approximately £15,290,000
(2014: £13,010,000). A deferred tax asset in respect of these losses of approximately £3,058,000 (2014: £2,602,000) has
not been recognised in the accounts, as the full utilisation of these losses in the foreseeable future is uncertain.
34
Ilika plc | Annual Report and Accounts 2015 9 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 loss after tax,
are as follows:
Year ended 30 April
Weighted average number of equity shares
Earnings, being loss after tax
Loss per share
2015
Number
2014
Number
65,895,078
52,153,675
£
£
(2,701,699)
(2,798,087)
Pence
(4.10)
Pence
(5.37)
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 2015 there were 5,414,848 options outstanding (2014: 6,925,766 options
outstanding) as detailed in notes 18 and 22.
10 Intangible assets
Cost
As at 30 April 2013 and 2014
Additions
Disposals
As at 30 April 2015
Amortisation
As at 30 April 2013
Provided for the year
As at 30 April 2014
Provided for the year
Disposals
As at 30 April 2015
Net book value
As at 30 April 2013
As at 30 April 2014
As at 30 April 2015
Software
licences
£
Intellectual
property
£
27,918
42,062
(15,615)
75,000
–
–
Total
£
102,918
42,062
(15,615)
54,365
75,000
129,365
18,493
8,632
27,125
12,736
(15,615)
75,000
–
75,000
–
–
93,493
8,632
102,125
12,736
(15,615)
24,246
75,000
99,246
9,425
793
30,119
–
–
–
9,425
793
30,119
The amortisation charge of £12,736 (2014: £8,632) is included within administrative expenses.
35
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
11 Property, plant and equipment
Cost
As at 30 April 2013
Additions
Disposals
As at 30 April 2014
Additions
Disposals
As at 30 April 2015
Depreciation
As at 30 April 2013
Provided for the year
Disposals
As at 30 April 2014
Provided for the year
Disposals
As at 30 April 2015
Net book value
As at 30 April 2013
As at 30 April 2014
As at 30 April 2015
Leasehold
improvements
£
Plant,
machinery and
equipment
£
Fixtures
and fittings
£
Total
£
552,058
9,692
–
561,750
5,750
–
4,132,297
51,329
(3,300)
4,180,326
271,439
(25,688)
169,712
–
–
169,712
2,078
–
4,854,067
61,021
(3,300)
4,911,788
279,267
(25,688)
567,500
4,426,077
171,790
5,165,367
394,102
106,936
–
501,038
66,462
–
3,212,928
442,289
(995)
3,654,222
250,981
(24,048)
141,331
7,570
–
148,901
7,113
–
3,748,361
556,795
(995)
4,304,161
324,556
(24,048)
567,500
3,881,155
156,014
4,604,669
157,956
60,712
919,369
526,104
–
544,922
28,381
20,811
15,776
1,105,706
607,627
560,698
There are no commitments for capital expenditure contracted but not provided for (2014: £nil).
12 Trade and other receivables
Trade receivables
Prepayments and accrued income
Other receivables
The ageing of trade receivables is as follows:
0–29 days
30–59 days
60–89 days
90+ days
13 Other financial assets – bank deposits
Amounts receivable within 1 year:
Sterling fixed rate deposits of greater than 3 months’ maturity at inception
36
As at 30 April
2015
£
5,108
323,516
168,361
496,985
2014
£
30,450
389,990
151,864
572,304
As at 30 April
2015
£
1,322
3,595
191
–
5,108
2014
£
20,123
–
10,327
–
30,450
As at 30 April
2015
£
2014
£
528,349
1,776,767
Ilika plc | Annual Report and Accounts 2015 14 Cash and cash equivalents
Current bank accounts
Short-term deposits with less than 3 months’ maturity
15 Trade and other payables
Trade payables
Other payables
Other taxes and social security costs
Accruals and deferred income
The ageing of trade payables is as follows:
0–29 days
30–59 days
60–89 days
90+ days
16 Provisions
As at 1 May 2014 and at 30 April 2015
All provisions are due within 1 year.
As at 30 April
2015
£
2014
£
220,843
5,258,192
172,392
5,157,575
5,479,035
5,329,967
As at 30 April
2015
£
219,567
15,845
40,079
453,380
728,871
2014
£
208,135
14,034
37,824
350,754
610,747
As at 30 April
2015
£
157,324
15,113
–
47,130
219,567
2014
£
86,893
51,361
5,162
64,719
208,135
Leasehold
Dilapidations
£
150,000
Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of
the lease in accordance with the lease terms.
17 Financial instruments
The risks associated with financial instruments are set out below.
Foreign currency risk
The Group buys goods and services in currencies other than Sterling. The Group’s non-Sterling liabilities and cash flows
can be affected by movements in exchange rates. 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.
37
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
17 Financial instruments continued
Liquidity risk
The Group’s policy is to maintain adequate cash resources to meet liabilities as they fall due. All Group payable balances
fall due for payment within one year. Cash balances are placed on deposit for varying periods with reputable banking
institutions to ensure there is limited risk of capital loss. The Group does not maintain an overdraft facility.
Interest rate risk
The main risk arising from the Group’s financial instruments is interest rate risk. The Group placed deposits surplus to
short-term working capital requirements with a variety of reputable UK-based banks. These balances are placed at
floating rates of interest and deposits have maturities of 1 to 12 months. The Group’s cash and short-term deposits are set
out in note 14. 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 2015 had a weighted average period to maturity of 32 days and a weighted average annualised rate of interest of
0.81 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 2015 by approximately £31,000 (2014: £20,000).
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 2015 by approximately £62,000 (2014: £25,000).
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.
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.
As at 30 April
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
Accruals
Provisions
Total other financial liabilities (see notes 15 and 16)
38
2015
£
2014
£
5,108
107,595
168,361
220,843
528,349
5,258,192
30,450
185,173
151,864
172,392
1,776,767
5,157,575
6,288,488
7,474,221
219,567
15,845
40,079
453,380
150,000
878,871
208,135
14,034
37,824
350,754
150,000
760,747
Ilika plc | Annual Report and Accounts 2015 18 Share capital
Authorised
65,736,416 Ordinary Shares of £0.01 each (2014: 62,240,019)
1,781,400 Convertible Preference Shares of £0.01 each
Allotted, called up and fully paid
65,736,416 Ordinary Shares of £0.01 each (2014: 62,240,019)
638,400 Convertible Preference Shares of £0.01 each (2014: 1,025,900)
As at 30 April
2015
£
2014
£
657,364
17,814
622,400
17,814
657,364
6,384
663,748
622,400
10,259
632,659
Share rights
The Ordinary Share 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 14 July 2014, 2 January 2015 and 10 March 2015, 250,000, 50,000 and 87,500 respectively, £0.01 convertible
Preference Shares were converted to £0.01 Ordinary Shares.
On 6 May 2014 and 12 May 2014, 450,000 and 2,167,647 respectively, subscription warrants with an exercise price of 51p
per warrant, were converted into Ordinary Shares.
Share options and warrants
Employee related share options are disclosed in note 22. 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 previous brokers also have a warrant to subscribe
to 130,100 Ordinary Shares of £0.01.
491,250 share options were converted into 491,250 £0.01 Ordinary Shares in the year for a total consideration of £78,618.
10,539,216 warrants to subscribe to Ordinary Shares of £0.01 were issued on 14 May 2010 with an exercise price of £0.51
per warrant and an expiry date of 28 May 2014. During the year ended 30 April 2015, 2,617,647 warrants were exercised
and 15,686 expired.
19 Operating leases
The total future minimum rent payable under non-cancellable operating leases is as follows:
Property leases which expire:
Within 1 year
As at 30 April
2015
£
–
–
2014
£
70,329
70,329
20 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 £98,206 (2014: £102,441).
39
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the consolidated financial statements continued
21 Related party transactions
The Directors consider that no one party controls the Group.
During the year ended 30 April 2015, the Company incurred costs of £245,576 (2014: £147,371) 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 2015, the
amount unpaid in respect of these costs was £2,765 (2014: £nil).
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. Further details are given in the Directors’
Remuneration Report on pages 16 to 18.
Details of key management personnel and their compensation are given in note 4 and in the Directors’ remuneration
report on pages 16 to 18.
22 Share-based payments expense and share options
Share-based payment expense
The Group has incentivised and motivated staff through the grant of share options under the Enterprise Management
Incentive ('EMI') scheme and through unapproved share options.
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 30 April 2015, the following options, whose fair values have been fully charged to the consolidated statement of total
comprehensive income, were outstanding:
Approved share options:
Date of grant
30 March 2006
14 May 2007
15 January 2008
02 February 2009
01 December 2009
14 May 2010
01 February 2012
139,500 options with an exercise price of £0.10 per share were exercised in the year.
Unapproved share options:
Date of grant
11 July 2007
11 November 2008
14 May 2010
40
Number
of shares
Period
of option
Exercise price
per share
15,200
156,100
46,400
78,000
90,000
41,500
45,028
10 years
10 years
10 years
10 years
10 years
10 years
10 years
£0.10
£0.80
£1.00
£0.80
£0.80
£0.51
£0.53
Number
of shares
Period
of option
Exercise price
per share
195,500
40,000
2,947,800
10 years
10 years
10 years
£0.80
£2.4283
£0.51
Ilika plc | Annual Report and Accounts 2015 Black-Scholes valuation
Outstanding:
At start of the period
Granted in the period
Exercised in the period
Lapsed in the period
At the end of the period
Weighted average exercise price
Number
2015
£
2014
£
2015
2014
0.4121
0.8150
0.1038
0.1508
0.8341
0.3436
–
0.1000
0.4969
1,693,523
1,521,920
(423,250)
(604,045)
2,305,523
–
(594,700)
(17,300)
0.4121
2,188,148
1,693,523
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 7.85 years (2014: 2.2 years). These share options are exercisable and must be
exercised within 10 years from the date of grant.
Stochastic valuation
Outstanding:
At start of the period
Exercised in the period
Lapsed during the period
At the end of the period
Weighted average exercise price
Number
2015
£
0.51
0.51
0.51
0.51
2014
£
0.51
0.51
0.51
0.51
2015
2014
3,057,300
(68,000)
–
3,062,900
–
(5,600)
2,989,300
3,057,300
The exercise price of options outstanding at the end of the period was £0.51 (2014: £0.51) and their weighted average
contractual life was 6 years (2014: 7 years).
Ilika plc Executive Share Option Scheme 2010
At 30 April 2015 the following share options were outstanding in respect of the Ilika plc Executive Share Option Scheme 2010:
Date of grant
14 May 2010
01 February 2012
26 February 2015
Number
of shares
Period
of option
Exercise price
per share
41,500
45,028
1,344,020
10 years
10 years
10 years
£0.51
£0.53
£0.815
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.
54,845 options lapsed in the year and 6,650 options were exercised.
Ilika plc unapproved share options
At 30 April 2015 the following share options were outstanding in respect of Ilika plc unapproved share options:
Date of grant
14 May 2010
26 February 2015
Number
of shares
Period
of option
Exercise price
per share
2,947,800
177,900
10 years
10 years
£0.51
£0.815
65,100 options were exercised in the year. There are 3,655,528 options which were capable of being exercised as at
30 April 2015.
Share-based payment expense
Black-Scholes calculation
2015
£
2014
£
33,648
33,648
15,000
15,000
41
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 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
Notes
2015
£
2014
£
24
121,339
121,339
25
18,195,689
16,732,341
18,317,028
16,853,680
26
663,748
17,444,653
75,276
632,660
16,062,155
42,515
18,183,677
16,737,330
133,351
133,351
116,350
116,350
18,317,028
16,853,680
The notes on pages 45 to 46 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 9 July 2015.
Mr. J. B. Boyer
Chairman
42
Ilika plc | Annual Report and Accounts 2015 Company cash flow statement
Cash flows from operating activities
(Loss)/profit before tax
Adjustments for:
Equity settled share-based payments
Operating cash flow before changes in working capital, interest and taxes
Increase in trade and other receivables
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
Year ended 30 April
2015
£
2014
£
(887)
14,453
33,648
15,000
32,761
(1,463,348)
17,001
29,453
(7,495,026)
49,093
(1,413,586)
(7,416,480)
1,413,586
–
7,716,913
(300,433)
1,413,586
7,416,480
–
–
–
–
–
–
43
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Company statement of changes in equity
As at 30 April 2013
Issue of shares
Expenses of share issue
Share-based payment
Profit and total comprehensive income
As at 30 April 2014
Issue of shares
Share-based payment
Profit and total comprehensive income
As at 30 April 2015
Share
capital
£
475,354
157,306
–
–
–
Share
premium
account
£
8,802,981
7,559,607
(300,433)
–
–
Retained
earnings
£
13,062
–
–
15,000
14,453
Total
attributable to
equity holders
£
9,291,397
7,716,913
(300,433)
15,000
14,453
632,660
16,062,155
42,515
16,737,330
31,088
–
–
1,382,498
–
–
–
33,648
(887)
1,413,586
33,648
(887)
663,748
17,444,653
75,276
18,183,677
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.
44
Ilika plc | Annual Report and Accounts 2015 Notes to the Company financial statements
23 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with 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 19.
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.
Share-based payments
The critical accounting estimates, assumptions and judgements underpinning the valuation of the option awards are
disclosed in note 22.
Investments in subsidiary undertakings
Investments in subsidiary undertakings where the Company has control are stated at cost less any provision for
impairment. 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 some of its activities.
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 loss for the year was £887 (2014: profit of £14,453).
Directors’ remuneration
The remuneration of the Directors is disclosed in the Directors’ Remuneration Report on pages 16 to 18.
Auditors’ remuneration
Auditors’ remuneration is disclosed in note 3.
24 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 £2,700,812 (2014: £2,812,409) and had net liabilities as at 30 April 2015 of £11,541,901
(2014: £8,841,089).
Shares in Group undertakings (at cost)
At 1 May 2014 and 30 April 2015
2015
£
2014
£
121,339
121,339
45
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes to the Company financial statements continued
25 Trade and other receivables
Prepayments
Other debtors
Amounts due from subsidiary undertakings
26 Share capital
Authorised
65,736,416 Ordinary Shares of £0.01 each (2014: 62,240,019)
1,781,400 Convertible Preference Shares of £0.01 each
Allotted, called up and fully paid
65,736,416 Ordinary Shares of £0.01 each (2014: 62,240,019)
638,400 Convertible Preference Shares of £0.01 each (2014: 1,025,900)
As at 30 April
2015
£
2014
£
6,218
–
18,189,471
594
–
16,731,747
18,195,689
16,732,341
As at 30 April
2015
£
2014
£
657,364
17,814
622,400
17,814
657,364
6,384
663,748
622,400
10,260
632,660
Share rights
The Ordinary Share 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 14 July 2014, 2 January 2015 and 10 March 2015, 250,000, 50,000 and 87,500 respectively, £0.01 Convertible
Preference Shares were converted to £0.01 Ordinary Shares.
On 6 May 2014 and 12 May 2014, 450,000 and 2,167,647 respectively, subscription warrants with an exercise price of 51p
per warrant, were converted into Ordinary Shares.
491,250 share options were converted into 491,250 £0.01 Ordinary Shares in the year for a total consideration of £78,618.
46
Ilika plc | Annual Report and Accounts 2015 Notes
47
OverviewStrategic ReportCorporate GovernanceFinancial StatementsIlika plc | Annual Report and Accounts 2015 Notes
48
Ilika plc | Annual Report and Accounts 2015 Corporate directory
Company number
7187804
Directors
Executive
Non-Executive
Secretary
Registered office
Graeme Purdy
Prof. Brian Hayden
Steve Boydell
Jack Boyer OBE (Chairman)
Mike Inglis
Clare Spottiswoode CBE
Prof. Sir William Wakeham
Prof. Keith Jackson
Steve 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
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