Polymers for Better Living™
Itaconix plc
Annual Report & Accounts 2020
Science and nature
combine for
SUSTAINABLE
LIVING
to satisfy the
most demanding
consumers
HIGHLIGHTS
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
STRATEGIC REPORT
OPERATIONAL HIGHLIGHTS
• Highlights
• Chairman’s Statement
• Chief Executive Officer’s Statement
• Our Strategy
• Financial Review
• Principal Risks and Uncertainties
• Sustainability
• Section 172 Statement
GOVERNANCE
• Board of Directors
• Corporate Governance Report
• Directors’ Remuneration Report
• Audit Committee Report
• Directors’ Report
• Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
• Independent Auditor’s Report
• Consolidated Income Statement
• Consolidated Statement of Other
Comprehensive Income
• Consolidated and Company Balance
Sheets
• Consolidated and Company Statements of
Change in Equity
• Consolidated and Company Statements of
Cash Flows
• Notes to Financial Statements
Appendix to the annual report
• Corporate Information
• Increased demand across all major products and applications,
including major new brands in North America.
• Grew revenues by 155.6% while successfully navigated the global
Covid-19 pandemic.
• Oversubscribed fundraise with gross proceeds of $2.2m.
FINANCIAL HIGHLIGHTS
Itaconix plc (AIM:ITX) (OTC:ITXXF), the world leader in polymers of
itaconic acid and its derivatives, announced final results for the year
ended 31 December 2020.
Revenues ($’000)
$3,292
+155.6%
Gross profits ($’000)
$1,154
+156.4%
Adjusted EBITDA1 ($’000)
$(993)
+59.6%
Net loss ($’000)
$(1,646)
-20.7%
Diluted loss per share (¢)
$(0.005)
+0.0%
1 Adjusted for interest, tax, depreciation, amortization,
and exceptional items.
CHAIRMAN’S STATEMENT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Polymers for Better Living™
Itaconix plc is dedicated to reducing the planet’s carbon footprint and addressing climate change with plant-
based polymers that are essential ingredients in a new generation of safer, more sustainable consumer products.
Our principal activities are the production and sale of proprietary plant-based specialty ingredients that satisfy
consumers’ increasing awareness of how their purchases impact climate change and the environment. Our
sustainable plant-based polymers replace fossil-based ingredients while offering uncompromising performance
and cost. Most of our efforts are focused on home and personal care applications where consumer interest and
desires for safer and more sustainable products are particularly high.
We are continuing to advance the potential for consumer products with near net zero carbon consumption
through the plant-based ingredients we produce and are developing, the energy-efficient production processes
we use, and more compact consumer products our ingredients enable that use fewer natural resources and
release less chemicals into the environment.
We made great strides in 2020 towards fulfilling our potential to make the world a better and safer place. Our
polymers are key ingredients in a growing number and range of home and personal care products. Our progress
was reflected in 155.6% revenue growth, our leadership in next generation detergents with the launch of two
new products by major brands, and the introduction of our Bio*Asterix™ plant-based functional ingredients.
We achieved this progress amid continuous uncertainty from the Covid-19 pandemic that challenged our
operations and our funding. I greatly appreciate the unwavering dedication of our customers, our shareholders,
our employees, and our vendors to generate such a transformative year of growth and advancement toward our
potential.
With Polymers for Better Living™, Itaconix is enabling new generations of consumer products to fight climate
change and protect our environment.
James Barber
Chairman
29 March 2021
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CHIEF EXECUTIVE OFFICER’S STATEMENT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Overview
We completed a transformational year in 2020 as a leader in sustainable plant-based polymers used as essential
ingredients in everyday consumer products. Brands increasingly looked to Itaconix to improve the competitive
position of their products with new performance and environmental claims.
Major customer projects progressing to launch in 2020 increased our revenues and our revenue potential in a
broadening range of home and personal care products. The expanding foundation of formulations among our
customers is building a strong base of recurring use to underpin our continued growth.
As a result of this momentum, year on year revenues increased and operating losses decreased from both new
and recurring orders in detergent, odour control, and personal care applications.
Having completed a successful fundraise in July 2020, we have also substantially strengthened our balance sheet
with healthy cash balances at the year end.
Commercial progress
Our product revenues grew by 155.6% to $3.3m in 2020 compared to $1.3m in 2019.
Revenues increased across all our home and personal care polymers. Although aided by demand for household
cleaning during the Covid-19 pandemic, most of our increased revenues came from new customer products
entering the market after several years of development.
Our new Itaconix® TSI™ 322 polymer is leading a new generation of dishwashing detergents with excellent
performance and high bio-based content, including the launch of two new North American brands in 2020 and
another North American brand at the start of 2021. New formulation activity with Itaconix® TSI™322 increased
in the second half of 2020 which we expect will lead to additional usage in current and new brands in the second
half of 2021. Although our Itaconix® CHT™ 122 polymer has established use in the EU, the focus of formulation
development during the Covid-19 pandemic has slowed EU adoption of the added benefits available with
Itaconix® TSI™ 322.
In hair styling, we were pleased that demand for our unique bio-based hair fixative polymer sold worldwide by
Nouryon, a global specialty chemicals leader, continued to grow despite a general downturn in the personal care
market during the Covid-19 pandemic. This growth has come from more brands launching new products
containing the ingredient and an expansion in the applications for the ingredient.
In homecare odour control, our ZINADOR™ polymers sold through Croda, a global specialty chemicals leader,
are similarly seeing broader use. Demand continues to grow with expanding adoption in existing brands and
initial usage by new brands. We are seeing increased focus and activity during the Covid-19 pandemic on home
odour control, which we expect to translate into continued revenue growth.
In personal odour control, our VELAFRESH™ polymers are gaining important initial adoption as key ingredients
in specialty underarm deodorant brands.
Our major new product development for 2020 was the announcement of our BIO*Asterix™ line of plant-based
functional additives. We see breakthrough opportunities for reducing the carbon footprint of consumer
products and increasing the use of safer chemicals through an evolving line of BIO*Asterix™ functional
ingredients. Our initial commercial work is focused on a joint development agreement for potential use by a
leading innovator in biodegradable packaging.
Overall, active customer projects advancing or emerging out of our sales development pipeline present multiple
new revenue opportunities as we are increasingly able to turn ingredient “wish lists” into product sales. Growth
in the second half of 2020 was particularly strong, driven by both new orders and the increased size of recurring
orders.
Covid-19
We have experienced positive and negative effects of the Covid-19 pandemic and continue to closely monitor
emerging issues.
The health and safety of our employees is our first and foremost focus. We follow recommended policies and
protocols for monitoring individuals’ health and mandatory social distancing measures or remote access where
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CHIEF EXECUTIVE OFFICER’S STATEMENT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
possible. We operated continuously and delivered on growing order volumes in 2020 through the extraordinary
efforts of our dedicated employees.
We implemented cost saving measures from March 2020 to August 2020 to conserve our available cash
resources while receiving a US Paycheck Protection Program loan in May and completing a fundraise in July.
Our rapid responses allowed us to manage effectively through the initial repercussions of the Covid-19
pandemic. Secondary effects are starting to emerge in our and our customers’ supply chains around shipping
delays, higher shipping costs, higher raw material costs, and the availability of raw materials that may delay the
ramp up on some customer projects. We continue to monitor these situations very closely.
Financial Performance, Funding and Cash
Revenues for the year were $3.3m, representing 155.6% growth over 2019. As a result of the increase in
revenues, adjusted EBITDA has improved in line with management’s expectations to ($1.0m).
Despite an increase in our operating expenses, which rose in the second half to $1.6m compared to H1 2020
$1.0m, we managed to maintain an attractive gross margin of 35.1% (2019: 34.9%). The increase in operating
expenses was mainly due to an increase in our staff as we ramped up production volumes to meet demand.
Our operating losses decreased by 51.7% to $1.5m, highlighting that the Company is making significant progress
towards break-even profitability.
Net cash balances as at year end were $1.4m. This was in part due to the completion in July 2020 of a successful
$2.2 million fundraise via an oversubscribed placing and subscription from existing and new investors. The net
proceeds were used to fund working capital requirements and invest in key staff to support our continued
growth, and are currently forecasted to provide sufficient funding for our operations for the foreseeable future
as of the issuance of these financial statements, although there are continuing uncertainties due to the Covid-
19 pandemic as we advance our medium-term plan for break-even net operating cash flow.
Overall, with an improved operating performance and a stronger balance sheet, the Company has a much
stronger financial position for its next phase of growth.
People
We expanded and realigned our executive team to fulfil increasing order volumes, create more demand for
current products, and add significant new revenue potential from our proprietary itaconate chemistry platform.
In January 2021, after the reporting period, we appointed Helen Cane as Vice President, Operations to manage
our fulfilment capabilities. In November 2020, we appointed Monna Manning as Vice President, Marketing &
Sales to lead our commercial activities.
Increased experience and knowledge on our executive team offer new opportunities for me and our Chief
Technology Officer, Dr Yvon Durant, to build our next phase of revenue development with new products and
collaborations for major unmet customer needs.
Shareholder Engagement
We have turned to virtual meetings to engage directly with shareholders and to update the market on our
progress towards profitability as our products are more broadly adopted.
We held our first virtual investor meeting on 28 October 2020, with access granted to all current investors,
potential investors and interested parties. We plan on continuing to use virtual meetings to maintain open
engagement with our shareholders, in particular on our progress.
Outlook
2020 was a positive year of trading in many ways for Itaconix. We experienced continued growth in the use of
our proprietary polymers as key ingredients in an expanding range of everyday consumer products. Consumers
and brand managers are increasingly aware of the potential for consumer goods to reduce carbon emissions and
energy consumption and decrease the release of harmful chemicals into the environment.
With new urgency in consumer markets to address both cleanliness and climate change, our years of
development efforts propelled our commercial activities and results to a new stage of growth. We are pleased
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CHIEF EXECUTIVE OFFICER’S STATEMENT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
that brands are recognising the role our plant-based polymers play as sustainable materials within the
decarbonisation economy and we expect them to be increasingly adopted as core ingredients by brands.
All indications are that our products will increasingly be taken up by major brands and we expect the commercial
momentum experienced in 2020 to continue in 2021, particularly as current customer products succeed in the
market and major new customer products continue to launch in 2021.
The expanding foundation of recurring revenues is creating a strong base for continued revenue growth and
progress toward the Company’s goal of sustained profitability in the coming years. We look forward with
increased optimism and confidence.
John R. Shaw
Chief Executive Officer
29 March 2021
P a g e | 6
OUR STRATEGY
Principal Activities
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Itaconix plc is a leading innovator in plant-based ingredients for improving the safety and performance of
consumer and industrial products. Its proprietary polymer technologies generate a growing range of new
specialty ingredients with unique functionalities that meet consumer demands for value and sustainability.
The Group’s principal activities are the development of plant-based polymers, the proprietary production of
these materials, and sales of these materials globally either directly or through partners as ingredients in
consumer product formulations.
Most of the Group’s efforts are focused on home and personal care applications where consumer interest and
desires for safer and more sustainable products are particularly high.
Proprietary Ingredients with Unique Functionality
The Group has completed many years of exploratory research and holds an extensive patent portfolio related
to the production and use of polymers made from itaconic acid. The commercial potential for these materials
as ingredients in consumer products stems from the unique functionalities available through the chemical
structure of itaconic acid and from the bio-based production of itaconic acid through fermentation using plant-
based sugar sources.
Building on the Group’s process of identifying a market need and then developing a product to meet that need,
initial products from its itaconate chemistry platform have commercial momentum in non-phosphate
detergents, odour control, and hair styling. As these products generate more revenues, Itaconix expects to
identify more opportunities for additional new products within its itaconate chemistry platform.
Progress in 2020
The Group advanced its research and commercial activities in its core product areas through its own efforts and
commercial collaborations with Nouryon and Croda, as detailed in the Chief Executive Officer’s Statement. Most
notable was the entry of major new customer products onto the market that drove dramatic revenue growth,
particularly in non-phosphate detergent sales. The Group is well positioned for growth in the coming years.
The combination of dramatic revenue growth and continued costs control in 2020 significantly advanced the
Group towards its goals of reducing cash use and reaching profitability. The Group’s efforts during the year
included the elimination of the remaining costs from the UK facility.
Key Performance Indicators (KPIs)
The three key performance indicators for the Group are:
• Revenue
• Adjusted EBITDA, adjusted for interest, tax, depreciation, amortization, and exceptional items.
• Cash
The Directors believe that revenue and adjusted EBITDA are key performance indicators in measuring Group
performance. The Group seeks to commercialise its existing and new technologies and generate revenues from
a growing number of commercial agreements with users of its products. Revenue performance is detailed in the
Chief Executive Officer’s Statement on pages 4 to 6.
The Directors believe that a further important performance measure is the Group’s rate of cash expenditure and
its effect on cash resources. Net cash inflow for the period to 31 December 2020 was $0.7m compared to the
same period in 2019 with net cash outflow was $1.9m. Further details of cash flows in 2020 (and 2019) are set
out in the Group’s Consolidated Cash Flow Statement on page 46 and note 21 on page 67.
P a g e | 7
FINANCIAL REVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Key performance metrics continue to improve as the Group gains commercial momentum. Most notably,
revenues for the year increased by 155.6% from 2019. The gross profit margin remained consistently high in
2020 at 35.1% compared to 34.9% in 2019. Cash used in operations decreased from $1.8m in 2019 to $1.1m in
2020. This was all complemented by the Group’s successful fundraise in July 2020. Below is a table showing the
Group’s key performance metrics:
Revenue
Gross profit
Gross profit margin
Adjusted EBITDA1
Cash used from operating activities
Net cash at year-end
Financial Performance
Revenue
2020
$’000
3,292
1,154
35.1%
(993)
(1,157)
1,448
2019
$’000
1,288
450
34.9%
(2,457)
(1,831)
765
2018
$’000
881
140
15.9%
(5,370)
(6,973)
2,655
Total revenues for the 12-month period ended 31 December 2020 were $3.3m, representing a 155.6% increase
over 2019 revenues of $1.3m. Revenues grew across all major product lines from detergent polymers, hair
styling polymers, and odour control. Detergent polymers represented the largest area of growth with several
new end user products launched in 2020.
Revenues in all geographical regions increased. North America represents 87.2% of the Group’s revenue and
grew by 154.3%. North America revenue growth was due largely to the increased product launches that used
the Group’s detergent polymers. Europe represents 12.8% of the Group’s revenue and grew by 164.4%.
European revenue growth is due to increased demand for the Group’s hair styling polymers supplied through
Nouryon.
Gross Profit and Adjusted EBITDA2
Gross profit margin remained consistent between 34.9% in 2019 and 35.1% in 2020. As the Group continued to
focus efforts on fulfilment and commercialisation of the current itaconate polymer technologies, gross profit
increased from $450k in 2019 to $1,154k in 2020, an increase of 156.4%.
Adjusted EBITDA is a non-IFRS measure but is widely recognised in financial markets and it is used within the
Group as a key performance indicator. Adjusted EBITDA improved from a loss of $2.5m in 2019 to a loss of
$1.0m in 2020. The improvement in EBITDA was due to the Group’s gain in commercial momentum, improved
gross profit margin and the reduced cost structure from the 2018 Group reorganization.
1 Adjusted for interest, tax, depreciation, amortization, and exceptional items.
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FINANCIAL REVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Below is a reconciliation of Loss for the Year to Adjusted EBITDA:
Loss for the year
Taxation
Depreciation
Amortization
Exceptional revaluation of contingent consideration
Exceptional organizational restructuring
Finance income
Movement on investment in associate
2020
2019
2018
$’000
(1,646)
7
200
198
339
(91)
-
-
$’000
(1,358)
1
223
198
(1,474)
-
(1)
(46)
$’000
(9,868)
(187)
296
-
3,323
1,190
(4)
(120)
Adjusted EBITDA
(993)
(2,457)
(5,370)
Administrative Expenses
Administrative expenses consist of sales, marketing, operations, research and development, and public company
costs such as legal, finance and the Group Board. These expenses were $2.6m in 2020 down from $3.4m in 2019.
The reduction in administrative expense was largely due to cost cutting efforts to conserve cash through the
Covid-19 pandemic.
Costs and Available Cash
The Group’s increasing revenues and overall cost reductions resulted in Net Cash Outflow from Operations of
$1.1m, which represents an improvement from 2019 when Net Cash Outflow from Operations was $1.8m. As
at 31 December 2020, the Group held cash of $1.4m. In addition to the improved operating cash flow, the
Group’s cash at year end was higher than the prior year because the Group completed a fund raise of $2.2m and
received $0.2m from the US Government Paycheck Protection Program.
Working capital
At year end, overall carrying value of inventory, trade and other receivables, and trade and other payables had
increased. However, the working capital as a per cent of revenues had decreased from 69.3% in 2019 to 56.7%
in 2020. The most significant increase in the working capital were the inventories and accounts payable.
Inventories increased from $0.5m in 2019 to $1.4m in 2020 to address growing customer demand and volume.
The accounts payable were increased at year end in relation to the inventory increase. Trade and other payables
increased from $0.7m in 2019 to $1.4 m in 2020.
Financial Position
At 31 December 2020, the Group had equity of ($0.6m) as compared to ($1.0m) in 2019. This primarily resulted
from a revaluation of the deferred consideration (note 17) net of the equity raise and stronger operating results.
Revaluation of Deferred Consideration
As a result of revaluing deferred consideration with respect to the acquisition of Itaconix Corporation in 2016,
as per note 17, there is an exceptional non-cash expense of $0.3m in 2020, which offsets the exceptional non-
cash income of $1.5m (excluding foreign exchange) from 2019. Subsequent to year end, the Group is expecting
to issue shares to certain Sellers of Itaconix Corporation in the amount of $0.1m by 31 March 2021.
Exceptional Expense on Reorganization
As part of the Group reorganization in 2018, certain costs to close the UK facility were accrued. The former
corporate headquarters in Deeside, UK was leased through July 2021 and the full value remaining on the lease
was accrued. In September 2020, the Group was able to surrender the lease to the landlord. This relieved the
remaining liability associated with the lease and the Group recognized an income of $91k.
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FINANCIAL REVIEW
Financial Reporting
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
There were no new reporting standards adopted for the year end 31 December 2020 that have a material impact
on the financial statements.
Going Concern
The financial statements have been prepared on a going concern basis. The Directors have reviewed the
Company’s and the Group’s going concern position taking account its current business activities, budgeted
performance and the factors likely to affect its future development, set out in the Annual Report, and including
the Group’s objectives, policies and processes for managing its working capital, its financial risk management
objectives and its exposure to credit and liquidity risks.
The Directors have also taken into consideration the impact of the Covid-19 pandemic on the Group’s revenues
and supply chain. While there has not been a significant negative impact through the report date on the Group
revenues or supply chain due to the pandemic, the Directors have applied sensitivities to the timing, quantum,
and growth of new customer projects in revenue models and have assessed alternate supply chains that have
been developed by the Group to mitigate any issues in deliveries to our customers.
As further detailed in the Directors’ Report on page 29 and note 2 to the Annual Report, the Directors have
reviewed the Group’s cash flow forecasts covering a period of at least 12 months from the date of approval of
the financial statements, which foresee that the Group will be able to meet its liabilities as they fall due.
However, the success of the business is dependent on customer adoption of our products in order to increase
revenue and profit growth. Inability to deliver this could result in the requirement to raise additional funds.
Shareholdings and Earnings per Share
Itaconix had 432,448,253 shares in issue as at 31 December 2020. The undiluted weighted average number
of shares for the period to 31 December 2020 was 344,970,117. The difference in the two numbers is the result
of the issuance of new shares in July 2020 (see note 20). The undiluted weighted average number of shares
was used to calculate the loss per share presented in note 10.
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PRINCIPAL RISKS AND UNCERTAINTIES
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Effective risk management is a priority for the Group to sustain the future success of the business. Therefore,
the Directors have overall responsibility for the Group’s risk management process but have delegated
responsibility for its implementation, the system of controls which reduce risk and for reviewing their
effectiveness to the management team. The risk of uncertainties that the Group face evolve over time, therefore
the management team review and monitor the emerging risks and update mitigation effort. The results are
reported to the Board.
Commercialisation Activities
Significant progress was made in 2020 toward achieving profitability by increasing revenues and reducing costs.
Ultimately, it is uncertain whether the success of Itaconix products will be in sufficient quantities for the Group
to generate an overall profit.
Management of risk: The Group has sought to manage this commercialisation risk by partnering with market
leaders for the worldwide promotion of our leading products, continued development of end-user formulas to
provide customers with packaged solutions, and continuous review of the market needs for Itaconix products.
Dependence on Key Personnel
The Group depends on its ability to attract and retain a limited number of highly qualified managerial and
scientific personnel, the competition for whom is intense. While the Group has conventional employment
arrangements with key personnel aimed at securing their services for minimum terms, their retention cannot
be guaranteed.
Management of risk: The Group expanded its management team with the hiring of two executives and has
service contracts in place for John R. Shaw as Chief Executive Officer and Dr. Yvon Durant as Chief Technology
Officer. In addition, the Group seeks to retain key personnel in the US using an Equity Incentive Plan for share
option grants, as disclosed in note 22.
Customer Retention
The ability to retain key customers is critical to maintaining revenue streams. The loss of key customers could
impact business results adversely.
Management of risk: Acceptance of our products in our customers’ end-product formulations is closely
monitored and managed. Our customer service includes regular engagement on the performance of both our
products and the end-products to ensure our ingredients are delivering the desired value to our customers and
end-users.
Regulatory and Legislation
Regulatory bans on the use of phosphates as ingredients in detergents have transformed the consumer
detergent markets in Europe and North America over the last ten years. Phosphates are known to enter
waterways through detergent effluent and act as a nutrient for algae growth that subsequently cuts oxygen
levels in water and harms aquatic life. We believe that phosphates are likely to be phased out in other
jurisdictions around the world over time. Itaconix polymers can act as effective replacements for phosphates in
detergent formulations and are used in numerous detergent products in North America and Europe for this
purpose.
Management of risk: The Group closely monitors regulatory developments in the use of ingredients in consumer
and industrial products to assure compliance and find new revenue potential for Itaconix polymers. Further, the
Group regularly assesses the relative performance and cost efficacy of Itaconix polymers to current and
emerging phosphate replacements to identify revenue risks and opportunities.
Competition and Technology
The production and use of Itaconix polymers are subject to technological change over time. There can be no
assurance that developments by others will not render the Group’s product offerings and research activities
obsolete or otherwise uncompetitive.
Management of risk: The Group employs experienced and highly-trained polymer chemists to develop and
protect the Group’s intellectual property. These efforts include continuous work on the performance and cost
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PRINCIPAL RISKS AND UNCERTAINTIES
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
advantages of Itaconix polymers. In addition, the staff monitors technologies and patents through publications,
scientific conferences, and collaborations with other organisations to identify new risks and opportunities.
Covid-19 Risk
The Group faces potential disruption to the demand for its products, the operations of its production facility,
the supply of raw materials, and the supply of other ingredients going into customer products due to the Covid-
19 pandemic. The US operations continued to operate while implementing recommended CDC guidance to
protect our employees and provide a safe work environment. Delayed supply chain issues are emerging in early
2021 from extended shipping times and the availability of other ingredients going into customer products.
Management of risk: Management closely monitors Covid-19 regulatory developments and expected demand
from customers. Management and staff actively communicate with all major suppliers and customers about
upcoming demand and reliability of the supply chain. The US operations also hold significant stock of long lead
raw materials from Asia.
Liquidity Risk
Itaconix seeks to manage financial risk by ensuring adequate liquidity is available to meet foreseeable needs and
to invest cash assets safely and profitably. In July 2020, the Group completed a $2.2m fundraise to support
working capital and revenue growth. In addition, short-term flexibility is achieved by holding significant cash
balances in Itaconix’s functional currencies, notably UK Sterling and US Dollars.
Credit Risk
The principal credit risk for Itaconix arises from its trade receivables. To manage credit risk, new customers are
subject to credit review and all customer accounts are regularly reviewed for debt aging and collection history.
As at 31 December 2020, there were no significant credit risk balances.
Foreign Exchange Risk
Itaconix Plc is a publicly traded holding company on the London Stock Exchange. The Group’s primary operations
are in the US. These US based operations transact trades with customers in North America and internationally.
Revenue and costs are exposed to variations in exchange rates and therefore reported losses. In 2019, the Group
elected to convert the reporting currency from UK Sterling to US Dollars. The US Dollar transactions represent
a significant portion of the functional currency transactions and therefore reduces the Group's overall exposure
to translation exchange risk.
Government Risk
The Group has potential exposure to government activities related to Covid-19, Brexit, and US-China trade
relations. Risks related to Covid-19 are detailed above.
Brexit has created potential risks to the Group as the UK is no longer part of the European Union. These risks
include alignment of various chemical regulations and trade relations between the UK and US.
US trade tariffs with China have caused increases to certain raw material costs and may continue to create
volatility. These increases have not caused any major issues with profitability to date. Itaconix has assessed
alternative supply sourcing from India and other countries which are not affected by increased tariffs. However,
if an alternate supply is not available the Group is prepared to pass cost increases through to customers if
needed.
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SUSTAINABLITY
Polymers for Better Living™
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Our polymers are advanced sustainable materials that can make the world a better and safer place to live as
essential ingredients in the next generation of consumer products.
The composition of our polymers, our patented process to produce them, their performance as ingredients in
consumer product formulas, and how these formulas are packaged and delivered to consumers contribute to
the fight against climate change with plant-based carbon, sequestering carbon, energy efficiency, and lighter
consumer products.
Itaconix Ingredient Benefits as Advanced Sustainable Materials
Product
Detergents
Itaconix® DSP 2K™
Itaconix® TSI™
Itaconix® CHT™
VELASOFT™
Odour Control
ZINADOR™ (Croda)
VELAFRESH™
Hair & Skin Care
Amaze™ SP (Nouryon)
Plant-based carbon
Plant-Based
Carbon
Decarbonisation
Energy
Efficiency
Lighter
Products
100%
>75%
>80%
100%
80-100%
80-100%
100%
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
The renewable carbon in the itaconic acid we use to make Itaconix products is captured as carbon dioxide by
plants. Corn plants convert carbon dioxide into carbon in sugars that are used to produce itaconic acid via
fermentation. We bring this itaconic acid into our patented process at our US operations to produce polymers
that have 75-100% plant-based carbon.
Decarbonisation
The increase of carbon dioxide as a greenhouse gas in our atmosphere is a major cause of climate change.
Carbon dioxide is sequestered as carbon in Itaconix products for a period of time until, depending on the
circumstances, they degrade. During this period, the amount of carbon held contributes to a reduction of
carbon dioxide in the atmosphere.
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SUSTAINABLITY
Energy efficiency
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Improving energy consumption is a major sustainability goal for Itaconix and within the chemical industry.
Itaconix’s efforts start with its patented polymer production process, which is efficient in its use of energy and
capital equipment. Less energy use translates into less direct and indirect GHG emissions.
Itaconix is working to extend its energy efficiency efforts across all of its operations and practices with the
development of reporting under the Streamlined Energy & Carbon Reporting (SECR) framework. We began in
2020 with the direct and indirect emissions from the purchase of electricity and natural gas. The table below
shows the energy consumption and estimated GHG emissions at our US operations for the 12-month period
ending 31 December 2020 from these activities.
Direct and indirect emissions
Intensity ratio: tCO2e per $m Net Revenue
Energy consumption
GHG Emissions
(kWh)
162,840
(tCO2e)
44.59
13.51
We have selected an intensity metric based on tonnes of carbon dioxide emissions (tCO2e) per $m Net
Revenue. We will use this ratio to monitor and extend our energy efficiency efforts further into our operations
and practices.
Lighter products
The multifunctional performance of Itaconix ingredients offers the potential for more compact consumer
products, particularly in detergents. Compact products are lighter and can reduce greenhouse gas emissions by
using less chemicals, less packaging, and more efficient transportation.
A study by a leading third-party sustainability research firm estimated the potential for dishwashing detergents
using Itaconix ingredients to reduce greenhouse gas emissions.
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SUSTAINABLITY
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Revenues from Advanced Sustainable Materials
Itaconix plc is dedicated to reducing the planet’s carbon footprint and addressing climate change with plant-
based polymers that are essential ingredients in a new generation of safer, more sustainable consumer products.
Our financial results demonstrate that commercial and environmental progress can advance equally through the
value and adoption of our ingredients. We are pleased to announce that 96% percent of our 2020 revenues were
derived from advanced sustainable materials. This means that 96% of our revenues are related specifically to
the design, development, and manufacture of materials that during their manufacture or through their use allow
for considerable increases in the efficiency of resource usage.
P a g e | 15
SECTION 172 STATEMENT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Statement of Compliance with Section 172 of the Companies Act 2006
The Directors are required to include a separate statement in the Annual Report that explains how they have
considered broader stakeholder needs when performing their duty under Section 172(1) of the Companies Act
2006. This duty requires that a director of a company must act in the way he or she considers, in good faith,
would be most likely to promote the success of the company for the benefit of its members as a whole, and in
doing so have regard (amongst other matters) to:
•
•
•
•
•
•
the likely consequences of any decision in the long term;
the interests of the company's employees;
the need to foster the company's business relationships with suppliers, customers, and others;
the impact of the company's operations on the community and the environment;
the desirability of the company to maintain a reputation for high standards of business conduct; and
the need to act fairly between members of the company.
In connection with its statement, the Board describes in general terms how key stakeholders, as well as issues
relevant to key decisions are identified, and also the processes for engaging with key stakeholders including
employees and suppliers, and understanding those issues. It is the board’s view that these requirements are
predominantly addressed in the corporate governance disclosures we have made in the directors’ report, which
are themselves discussed more extensively on the company’s website.
A more detailed description is limited to matters that are of strategic importance in order to remain meaningful
and informative for shareholders. The Board believes that two decisions taken during the year fall into this
category, and engaged with internal and external stakeholders on these decisions:
•
2020 Fundraise – The Directors, along with the Group’s NOMAD and broker, assessed the market for
its appetite to support the Group’s fundraising efforts. Strategy and work were completed to launch a
fundraise in early 2020. This was determined to be the optimal time to execute a fundraise as the 2019
revenue numbers reflected the growth in polymer sales that shareholders were expecting. These
efforts in March 2020 were unsuccessful due to the impact of Covid-19 on the London Stock Exchange.
The fundraise was completed in July 2020.
• Covid-19 – The Group continually assesses the impact Covid-19 has on customer orders, supply chain
and employees. Efforts have been put in place to support customer demand, ensure safety stock, and
safeguard employees’ wellness during these unprecedented times.
The Strategic Report encompassed on pages 7 through 16 was approved by the Board of Directors on 29 March
2021 and signed on behalf of the Board of Directors by:
James Barber
Chairman
John R. Shaw
Chief Executive Officer
P a g e | 16
BOARD OF DIRECTORS
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Dr. James (“Jim”) Joseph Barber (aged 66) – Independent
Non-Executive Chairman
Jim joined the Board on 12 September 2016 and became Chairman on
21 December 2018. Since 2007, he has run his own business
consultancy practice Barber Advisors LLC. Prior to this, Jim served as
President and CEO of Metabolix, Inc. from January 2000 to May 2007,
leading the transformation of Metabolix from a research boutique to
a world renowned, highly regarded leader in “clean tech” and
industrial biotechnology, with a market cap of over $500m. Prior to
joining Metabolix, he had senior commercial
the
Organometallics and Catalysts business of Albemarle Corporation,
Ethyl Corporation, and a number of other chemicals businesses. Jim is
a non-executive director of Graham Corporation. He has a BS degree
in Chemistry from Rensselaer Polytechnic Institute and a PhD in
Organic Chemistry from the Massachusetts Institute of Technology.
roles at
John Roger Shaw (aged 61) – Chief Executive Officer
John joined the Board on 12 July 2018, when he assumed the role of
Chief Executive Officer. As a founder, John has driven the direction and
growth of Itaconix Corporation since 2008. He has over 25 years of
experience in senior management roles in
the pharmaceutical,
biomedical, and specialty chemical sectors and brings significant
marketing, strategy, and business management expertise along with
a broad technical understanding to Itaconix’s management team.
John began his career holding a number of increasingly senior roles at
SmithKline Beecham, Westaim, and Mitek Systems, Inc. He has a BA in
Economics from Pomona College and an MBA from Harvard Business
School.
Dr Bryan Crawford Dobson (aged 68) – Independent
Non-Executive Director
Bryan joined the Board on 13 September 2012. He has more than 30
years’ experience in the chemicals industry: 28 years with ICI and 5 years
with the Croda Group, where he was most recently President Global
Operations for Croda International. He was a member of the
executive management teams in Croda and in a number of large
specialty chemicals businesses in ICI, and has extensive management
experience running regional and global business units in the UK, US,
Belgium, and The Netherlands. He also has expertise in developing new
business in the specialty chemicals sectors; extensive functional
experience in R&D and operations, and significant M&A experience.
He is also currently Non-Executive Chairman of Applied Graphene
Materials Plc.
P a g e | 17
BOARD OF DIRECTORS
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
John Ingalls Snow III (aged 60) – Independent Non-Executive
Director
John joined the Board and became Audit Committee Chair on 2
October 2018. He has 30 years’ experience in the private equity
market. He is currently a Managing Director at Quabbin Capital, Inc., a
Boston based alternative investment firm. John is a non-executive
director of Upper Crust Holdings, LLC, Winchester Savings Bank,
Advanced Duplication Services, YMCA Camp Belknap, Endowment for
Health, and Mary Snow Designs, Incorporated. He has a BA in
Economics from Amherst College and an MS in Accounting from New
York University. John is a Chartered Financial Analyst and a non-
practicing Certified Public Accountant.
P a g e | 18
CORPORATE GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The Board is committed to ensuring that the Group has the people, strategy, and structure to deliver value to
customers and shareholders in the near and long term. We recognise that effective corporate governance is
essential to meeting this commitment and fundamental to the success of the Group.
Solid corporate governance starts with the calibre and talents of the Directors. Biographies of the Directors are
presented on page 17 and 18 in this Annual Report and reveal a range of relevant experience that brings a high
level of independent judgement to Itaconix’s business.
Under AIM Rule 26, AIM-quoted companies are required to adopt and give details of the corporate governance
code which they have adopted and to show how they are following it. Of the recognised codes generally
adhered to by AIM companies, the Quoted Companies Alliance’s (QCA) Corporate Governance Code for small
and mid-size quoted companies (the “QCA Code”) was drafted with smaller businesses using a pragmatic and
principles-based approach. The Board deemed the QCA Code as the most suitable for the Group and adopted
it with effect from 29 September 2018.
As Chair, I am responsible for leading the overall effectiveness of the Board, for ensuring that the Board
maintains effective corporate governance processes, and for promoting open communication and debate
within the Board and across the Group to foster a positive governance culture. I am pleased with the continued
application of the QCA Code and the Company’s approach to complying with the QCA Code which is set out
below.
Compliance with the Quoted Companies Alliance Corporate Governance Code
The QCA Code identifies ten principles that focus on the pursuit of medium- to long-term value for shareholders
without stifling entrepreneurial spirit. Itaconix’s adoption of the QCA principles is summarised below. Further
details are available on our website.
1. Establish a strategy and business model which promote long-term value for shareholders
Over the last ten years, Itaconix developed a polymer technology platform for producing specialty
ingredients from renewable resources. The Group uses its novel chemistries to create new ingredients with
unique functionality that create value and meet customer needs in homecare, personal care, and industrial
products. We utilise direct sales efforts to acquire initial customers and confirm the value for a new
product, then scale globally with appropriate marketing partners. The long-term revenue and profit
potential of each new product relative to its near-term development cost can generate many years of
attractive returns and shareholder value. Our near-term strategy is to balance aggressive sustained
product innovation from our polymer technology platform with a focus on profitability to reach positive
cash flow and long-term financial stability. Additional information on our strategy and business model is
presented in the Strategic Report on pages 7 to 16.
2. Seek to understand and meet shareholder needs and expectations
The Board is committed to communicating and having constructive dialogues with current and potential
shareholders on a regular basis. Due to Covid-19, shareholders are encouraged to participate in the Proxy
vote via mail or other electronic means. Shareholders are also encouraged to attend the Company’s virtual
presentation following the Annual General Meeting. Information on significant Group milestones and
developments is readily available in news releases, interim reports, and annual reports issued directly,
broadcast widely, and posted to the Group’s website. Our CEO is the primary contact for current and
potential investors, and works closely with our Nominated Advisor (NOMAD) and others to interact with
the broader investment community on a regular basis.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
The Board is committed to the Group developing and maintaining open communications and dialogues
with employees, customers, suppliers, regulators, investors, and partners. In addition to the investor
activities described above, key practical elements of this commitment include a flat organization with
ready employee access to management and the Board, regular direct contact with customers, quality
assessments and reviews with vendors, and leadership roles in industry and scientific associations.
P a g e | 19
CORPORATE GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
4. Embed effective risk management, considering both opportunities and threats, throughout the
organization
The Board and management use a framework that effectively identifies, assesses, and manages the risks
to the business that allows the Group to achieve its corporate objectives. The risk management process is
embedded in monthly reporting and quarterly meetings. The risks that the Board considers to be most
significant to the Group’s business are set out on pages 11 to 12.
5. Maintain the Board as a well-functioning, balanced team led by the Chairman
The QCA Code requires that Boards have an appropriate balance between Executive and Non-Executive
Directors and that each Board should have at least two Independent Directors. The Board is made up of
one Executive Director and three Independent Non-Executive Directors. The three Independent Non-
Executive Directors are experienced and independent persons who have each succeeded in their own
businesses and are not dependent upon income from the Group. They have a strong and detailed
understanding of the business, and are prepared and able to intervene and challenge the Executive
Director and management.
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
All members of the Board bring relevant experience to the Board’s responsibilities and duties. The Board
believes its blend of experience, skills, and personal capabilities are well-suited for governing the success
of the Group. Details of the background and experience of the Directors are set out in their biographies.
These demonstrate that the Board collectively has extensive specialty chemical industry knowledge and
relevant experience on the challenges of technology-based growth businesses and publicly-traded
companies.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Board preformed a formal self-assessment in 2021 to evaluate various aspect of its structure,
performance, and interaction with management. The Board will continually review its needs and assess
opportunities for improvement as the Group’s commercial activities develop.
8. Promote a corporate culture that is based on ethical values and behaviours
Itaconix’s core values are embedded in its quality system, which commits the Group to consistently deliver
customer value, satisfaction and service through continual improvement and employee development. Key
pillars of the culture are curiosity to use new approaches and technology to meet a need, accuracy of
scientific analyses, the safety of our products and our processes, data-driven product claims that compel
customers to reformulate, reliable order fulfilment with quality product, compliance with all laws and
regulations, and respect for the livelihoods of all stakeholders. These values and pillars are introduced and
reinforced through daily routines and periodic activities that instil ethical and rewarding behaviour into
each employee’s work practices and experience.
9. Maintain governance structures and processes that are fit for purpose and support good decision-
making by the Board
Formal Board meetings are held at least quarterly to review strategy, management, and performance of
the Group, with additional meetings between those dates convened as necessary. We have three Board
committees, the Audit Committee, the Remuneration Committee, and the Nominations Committee. The
terms of reference of these committees of the Board are available on our website.
10. Communicate how Itaconix is governed and is performing by maintaining a dialog with shareholders and
other relevant stakeholders
The Company’s approach to investor and shareholder engagement is described under Principle 2 above.
Annual reports, Annual General Meeting notices, regulatory announcements, trading updates and other
governance related materials since the year 2016 are available on our website.
P a g e | 20
CORPORATE GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The Board of Directors
The Board of Directors is responsible for the proper management of the Group by formulating, reviewing and
approving the Group's strategy, budgets, and corporate actions. In order to achieve its objectives, the Board
has adopted the ten principles of the QCA Code. Through successfully implementing these principles, the Board
aims to deliver long-term growth for shareholders and maintain a flexible, efficient and effective management
framework within an entrepreneurial environment.
It is important that the Board itself contains the right mix of skills and experience in order to deliver the strategy
of the Group. As such, the Board is comprised of:
• An Independent Non-Executive Chair, whose primary responsibility is the delivery of the Group's
corporate governance model. The Chair has a clear separation from the day-to-day business of the
Group which allows him to make independent decisions;
• One Executive Director; and
•
Two Independent Non-Executive Directors.
The Board has not appointed a Senior Independent Director after taking into account the Group's size and
development stage.
Each Director serves on the Board subject to re-election on a three-year rotation at the Annual General
Meeting. The Board generally meets at least four times a year.
Corporate Governance
In compliance with UK best practice, the Board has established the following committees to help the Board
discharge its responsibilities with formally delegated duties and responsibilities.
1.
Audit Committee
The purpose of the Audit Committee is to monitor the integrity of the financial statements of the Group and
to assist the Board in its oversight of risk and risk management processes.
Some of the Audit Committee's duties include:
• Reviewing the Group's accounting policies and adoption of new accounting standards;
• Reviewing reports from the external auditor;
• Considering whether the Group has followed appropriate accounting standards and made appropriate
estimates and judgments, taking into account the views of the external auditor;
• Reporting its views to the Board of Directors if it is not satisfied with any aspect of the proposed financial
reporting by the Group;
• Reviewing the adequacy and effectiveness of the Group’s internal financial controls and internal control
and risk management systems;
• Reviewing the adequacy and effectiveness of the Group's anti-money laundering systems and controls
for the prevention of bribery and receive reports on non-compliance; and
• Overseeing the appointment of and the relationship with the external auditor.
The Audit Committee currently has three members, all of whom are Independent Non-Executive Directors and
at least one member who has recent and relevant financial experience. As at 29 March 2021, the Audit
Committee is comprised of John Snow as Chair, James Barber, and Bryan Dobson.
P a g e | 21
CORPORATE GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
2.
Remuneration Committee
The purpose of the Remuneration Committee is to develop and propose to the Board the framework and
policies for the remuneration of the Group’s Executive Directors and senior management.
The Committee normally meets at least twice a year and is responsible for determining and reviewing the policy
for the remuneration of the Executive Directors and such other members of the executive management as it is
designated to consider. Within the terms of the agreed policy, it determines the total individual remuneration
of the Executive Directors. The Committee also approves the design of, and determines targets for, any
performance-related pay schemes, reviews the design of any share incentive plans, determines the awards to
the Executive Directors and sets the policy for, and scope of, pension arrangements for each Executive Director,
as appropriate. Finally, the Committee approves the design and principles of the remuneration schemes for
the employees of the business outside of the management team, which are implemented by the Executive
Directors.
As at 29 March 2021, the Remuneration Committee is comprised of Bryan Dobson as Chair, James Barber, and
John Snow, each of whom is an Independent Non-Executive Director.
3.
Nominations Committee
The Company’s Nominations Committee is comprised of James Barber as Chair, Bryan Dobson, and John Snow.
The Committee is normally required to meet at least once a year and is responsible for reviewing the structure,
size and composition of the Board and recommending to the Board any changes required, for succession
planning, and for identifying and nominating for approval of the Board candidates to fill vacancies as and when
they arise, with a view to ensuring that the Board is composed of individuals with the necessary skills. The
Committee is also responsible for succession planning for Directors and Executives, reviewing the leadership
needs of the organisation, reviewing Board performance, making recommendations to the Board concerning
suitable candidates for the role of senior independent Director (if applicable) and the membership of the
Board’s committees, and the election or re-election of Directors at the annual general meeting.
Terms of Reference
All Board committees operate within defined terms of reference and sufficient resources are made available
for them to undertake their duties. The terms of reference for each committee are available on the Company’s
website (in the Investor Relations section and under Corporate Governance).
Corporate Social Responsibility
The Board recognises the critical role of ethics, the growing concerns for social and environmental matters, and
the need to take into account the interests of the Group’s stakeholders, including its investors, employees,
suppliers and business partners, when operating the business.
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.
Relations with Shareholders
Itaconix attaches a high priority to effective communication with both institutional and private shareholders.
The AGM is the principal forum for dialogue with private shareholders. A business presentation is made after
the AGM and there is an opportunity for shareholders to put questions to the Directors. Due to Covid-19, these
communications will be held virtually. Itaconix aims to maintain regular contact with institutional shareholders
through a programme of one to one presentations, group meetings, and briefings scheduled around the
announcement of significant commercial developments in the business and the preliminary and interim
financial results.
P a g e | 22
CORPORATE GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Share Dealing Code
The Company has adopted a share dealing code to ensure directors and certain employees do not abuse and
do not place themselves under suspicion of abusing inside information of which they are in possession and to
comply with its obligations under the Market Abuse Regulation ("MAR") which applies to the Company by virtue
of its shares being traded on AIM. Furthermore, the Company's share dealing code is compliant with the AIM
Rules for Companies, published by the London Stock Exchange (as amended from time to time).
Under the share dealing code, the Company must:
•
•
•
Keep a list of each person who is in possession of inside information relating to the Group;
Procure that all persons discharging managerial responsibilities and certain employees are given
clearance by the Group before they are allowed to trade in Company securities; and
Procure that all persons discharging managerial responsibilities and persons closely associated to them
notify both the Company and the Financial Conduct Authority of all trades in Company securities that
they make.
Internal Control
The Board has overall responsibility for ensuring that the Group maintains a system of internal control to provide
its members with reasonable assurance regarding the reliability of financial information used within the business
and for publication and that the Group’s assets are safeguarded. There are inherent limitations in any system of
internal control and accordingly even the most effective system can provide only reasonable, and not absolute,
assurance with respect to the preparation of accurate financial information and the safeguarding of assets. The
key features of the internal control system that operated throughout the year are described under the following
headings:
• Control environment: particularly the definition of the organisation structure and the appropriate
delegation of responsibility to operational management.
•
Identification and evaluation of business risks and control objectives: particularly through a formal process
of consideration and documentation of risks and controls which is periodically undertaken by the Board.
• Main control procedures: which include the setting of annual and longer term budgets and the monthly
reporting of performance against them, agreed treasury management and physical security procedures,
formal capital expenditure and investment appraisal approval procedures, and the definition of
authorisation limits (both financial and otherwise).
• Monitoring: particularly through the regular review of performance against budgets and the progress of
research activities undertaken by the Board. The Board reviews the operation and effectiveness of this
framework on a regular basis. The Directors consider that there have been no weaknesses in internal
controls that have resulted in any losses, contingencies or uncertainties requiring disclosures in the financial
statements.
Annual General Meeting
The Annual General Meeting of the Group will take place on 24 June 2021. Full details are included in the
Notice of Meeting that accompanies this Annual Report and is published on our website (www.itaconix.com).
James Barber
Chairman
29 March 2021
P a g e | 23
DIRECTORS’ REMUNERATION REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
I am pleased to present the report on behalf of the Remuneration Committee.
The Committee is responsible for setting the remuneration policy of the Executive Directors and other senior staff,
including terms of employment, salaries, any performance bonuses and share option awards.
Committee Composition
The members of the Remuneration Committee as at 29 March 2021 are Bryan Dobson as Chair, James Barber,
and John Snow. We are all Non-Executive Directors.
Committee Duties
The Company has established a formal and transparent procedure for developing policy on executive
remuneration and for fixing the remuneration packages of individual Directors. No Director is involved in deciding
his own remuneration.
Remuneration Policy
The key principles of the Remuneration Policy include:
•
•
•
•
The need to attract, retain, and motivate executives who have capability to ensure the Group achieve its
strategic objectives;
The need to ensure that short term benefits and long term incentive plans are aligned with the interests of
shareholders;
The need to take into account the competitive landscape in the North American and European specialty
chemicals industry and current best practices in setting appropriate levels of compensation; and
The Committee to meet at least twice per year.
Director’s Remuneration
The following table summarises the total gross remuneration for the qualifying services of the directors who
served during the year to 31 December 2020.
Directors’ Remuneration and Transactions
The Directors’ emoluments in the year ended 31 December 2020 were:
Basic salary
Retirement
Bonus
2020 Total
2019 Total
Benefits in
kind
$’000
Executive Director
John R. Shaw
Non-Executive Directors
James Barber
Bryan Dobson
John Snow III
Total
$’000
237
60
45
46
388
$’000
$’000
$’000
$’000
-
-
-
-
-
7
-
-
-
7
-
-
-
-
-
244
244
60
45
46
60
45
46
395
395
P a g e | 24
DIRECTORS’ REMUNERATION REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Directors’ Interests
The interests of the Directors in the share capital of the Company are disclosed below.
Directors’ Interests
31 December 2020
Number of ordinary shares of 1p each
31 December 2019
Number of ordinary Shares of 1p each
John R. Shaw
John Snow III
James Barber
Bryan Dobson
44,076,733
2,576,841
2,557,727
1,038,045
33,894,915
1,849,568
1,466,818
583,500
None of the Directors has a service contract with the Group requiring more than twelve months’ notice of
termination to be given. None of the Directors had, either during or at the end of the year, any material interest
in any contract of significance with the Company or its subsidiaries.
Executive Directors’ Service Contracts
The Executive Director signed service contracts on his appointment. These contracts are not of fixed duration.
The Chief Executive Officer’s contract is terminable by either party giving twelve months’ written notice.
Non-Executive Directors
The Non-Executive Directors signed letters of appointment with the Group for the provision of Non-Executive
Directors’ services, which may be terminated by either party giving written notice. The remuneration of the Non-
Executive Directors is determined by the Board as a whole.
The Committee met six times during the financial year to 31 December 2020.
Bryan Dobson
Chairman of the Remuneration Committee
29 March 2021
P a g e | 25
AUDIT COMMITTEE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The Audit Committee is responsible for promoting the quality of internal controls and ensuring that the financial
performance of Itaconix is reviewed and reported properly.
The Committee reviews reports on the interim and annual accounts, financial announcements, the Company’s
accounting and financial control systems, changes to accounting policies, the extent of non-audit services
undertaken by the external auditor, and the appointment of the external auditor.
During the period the Audit Committee reviewed the draft interim reports and associated announcements. The
Audit Committee considered the accounting policies and principles adopted in these accounts as well as
significant accounting issues and areas of judgement and complexity.
Committee Composition
The terms of reference for the Audit Committee require the committee to consist of preferably three members
but not less than two members and that a majority of the members shall be independent non-executives with
at least one with recent and relevant financial experience.
The members of the Audit Committee as at 29 March 2021 are John Snow as Chair, James Barber, and Bryan
Dobson. We are all Independent Non-Executive Directors.
The Board is of the view that the Audit Committee has recent and relevant financial experience. John Shaw,
CEO, and relevant management may attend Committee meetings by invitation.
Role of the Committee
The main duties of the Committee are set out in its terms of reference, which are available on Itaconix’s website.
The main items of business considered by the Committee included:
• Reviewing the Group's accounting policies and reports produced by internal and external audit
functions;
• Considering whether the Group has followed appropriate accounting standards and made appropriate
estimates and judgments, taking into account the views of the external auditor;
• Reporting its views to the Board of Directors if it is not satisfied with any aspect of the proposed financial
reporting by the Group;
• Reviewing the adequacy and effectiveness of the Group’s internal financial controls and its internal
control and risk management systems;
• Reviewing the adequacy and effectiveness of the Group's anti-money laundering systems and controls
for the prevention of bribery and receive reports on non-compliance, and
• Overseeing the appointment of and the relationship with the external auditor.
Financial Reporting
The Committee reviews whether suitable accounting policies have been adopted and whether management has
made appropriate judgements and estimates. The Committee’s remit includes reviews of accounting papers
prepared by management providing details on the main financial reporting judgements as well as assessments
of the impact of potential new accounting standards.
The Committee has concluded that the Annual Report and financial statements are prepared appropriately and
provide the necessary information for shareholders to assess Itaconix’s strategy and performance.
P a g e | 26
AUDIT COMMITTEE REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Risk Management and Internal Controls
The risk and control management framework of Itaconix is designed to manage rather than eliminate the risk of
failure to meet Itaconix’s objectives. The system of controls can provide reasonable but not absolute assurances
against material misstatement or loss. Itaconix faces a number of risks, the significant ones of which are set out
in the section on Principal Risks and Uncertainties on page 11 to 12.
Through the control systems outlined in the Corporate Governance Report on pages 19 to 23, Itaconix operates
an ongoing process of identifying, evaluating, and managing significant risks faced by the business. This process
includes the following:
• Defined organisation structure and appropriate delegation of authority;
•
• Clear responsibility for management to maintain good financial control and the production and review
Formal authorisation procedure for investments;
of detailed, accurate and timely financial information;
Identification of operational risks and mitigation plans developed by senior management; and
•
• Regular reports to the Board from the Executive Directors.
Itaconix remains, in substance, in early stage development and is currently implementing appropriate internal
controls and processes to reflect its size and business complexity. The Committee has been kept up-to-date of
progress in implementing these processes, reviewed the Board’s processes, and the Committee is satisfied that
the risk management and internal control systems in place are currently operating effectively.
External Auditor
BDO was appointed auditor of Itaconix during 2019. The Committee considers that its relationship with the
auditor is working well and is satisfied with their effectiveness.
The Committee is responsible for implementing a suitable policy for ensuring that non-audit work undertaken
by the auditor is reviewed so that it will not impact their independence and objectivity. The breakdown of fees
between audit and non-audit services is provided in note 6 to Itaconix’s financial statements.
The non-audit fees primarily relate to taxation advice and, as necessary, the Committee held private meetings
with the auditor to review key items within its scope of responsibility.
For and on behalf of the Audit Committee
John I. Snow III
Chairman of the Audit Committee
29 March 2021
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DIRECTORS’ REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The Directors of Itaconix plc (registered number 08024489) submit their report prepared in accordance with
Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(‘Schedule 7’).
Principal Activities
The principal activities of the Group are the research and production of proprietary specialty polymers that meet
significant customer needs, with a strategy of direct selling efforts to establish initial use of new polymers, and
then partner development to scale global demand.
Most of the Group’s activities are focused on homecare and personal care applications where consumer interest
and desires for safer and more sustainable products are particularly high.
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 herein.
Financial Instruments and Liquidity Risks Information about the use of financial instruments by the Company
and its subsidiaries and the Group’s financial risk management policies are given in note 18.
Directors and their Interests
The Directors of the Group at 31 December 2020 were:
James Barber (Chairman);
John R. Shaw (Chief Executive Officer);
Bryan Dobson (Non-Executive); and
John I. Snow III (Non-Executive);
John Shaw and John Snow were elected at the 2019 Annual General Meeting. Bryan Dobson was re-elected at
the 2020 Annual General Meeting. In accordance with Article 90 of the Company’s Articles of Association, James
Barber will stand for election at the 2021 Annual General Meeting.
Biographical details of all the Directors as at 31 December 2020 are given above on pages 17 to 18.
Liability Insurance for Directors, Officers and Employees
Itaconix has purchased insurance to cover the Directors, officers and employees of Itaconix plc and its subsidiaries
against defence costs and civil damages awarded following an action brought against them in their personal
capacity whilst carrying out their professional duties for the Group.
Dividends
Itaconix is seeking primarily to achieve capital growth for its shareholders. Its intention is to retain future
distributable profits, if any, and therefore the Company does not anticipate paying any dividends in the
foreseeable future. The Directors therefore do not recommend payment of a dividend (2019: £nil).
Research and Development
Details of the Group’s activities on research and development during the year are set out in the Strategic Report
on pages 7 to 16 and Chief Executive Officer’s Statement on pages 4 to 6.
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DIRECTORS’ REPORT
Going Concern
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Itaconix business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report and the financial position of Itaconix, its cash flows and liquidity
position are described in the notes to the financial statements, in particular in the consolidated cash flow
statement and in note 18 (financial instruments).
The financial statements have been prepared on a going concern basis. The Directors have reviewed the
Company’s and the Group’s going concern position taking account its current business activities, budgeted
performance and the factors likely to affect its future development, set out in the Annual Report, and including
the Group’s objectives, policies and processes for managing its working capital, its financial risk management
objectives and its exposure to credit and liquidity risks.
As described in note 2, the Directors have reviewed the Group’s cash flow forecasts covering a period of at least
12 months from the date of approval of the financial statements, which foresee that the Group will be able to
meet its liabilities as they fall due. However, the success of the business is dependent on customer adoption of
our products in order to increase revenue and profit growth. Inability or delay to deliver this could result in the
requirement to raise additional funds.
The Directors have also taken into consideration the impact of the Covid-19 pandemic on the Group’s revenues
and supply chain. While there has not been a negative impact through the report date on the Group revenues
or supply chain due to the pandemic, the Directors have applied sensitivities to the timing, quantum, and
growth of new customer projects in revenue models and have assessed alternate supply chains that have been
developed by the Group to mitigate any issues to our customers.
The Directors have concluded that the circumstances set forth above represent a material uncertainty, which
may cast significant doubt about the Company and Group’s ability to continue as a going concern. However,
they believe that taken, as a whole, the factors described above enable the Company and Group to continue
as a going concern for the foreseeable future. The financial statements do not include the adjustments that
would be required if the Company and the Group were unable to continue as a going concern.
Substantial Shareholdings
In addition to the Directors’ interests, as disclosed in the Director’s Remuneration Report, the Company is aware
of the following shareholders with a percentage holding amounting to 3% or more of the ordinary share capital
based on the Company’s shareholder register as of 31 December 2020:
Shareholder
Hargreaves Lansdown Asset Management
IP Group
John R. Shaw
Interactive Investor
Octopus Investments
Halifax Share Dealing
Guy Broadbent
Barclay Wealth
Shares Held
64,599,063
48,291,522
44,076,733
21,916,433
21,387,288
20,373,288
18,275,000
14,156,127
% Holding
14.9%
11.2%
10.2%
5.1%
5.0%
5.0%
4.2%
3.3%
The percentage interest has been calculated on the total voting rights of 432,448,253, being the Company’s
issued share capital on 31 December 2020. No other person has reported an interest in the ordinary shares of the
Company required to be notified to the Company.
Information Presented in Other Sections
Certain information required to be included in a directors’ report by Schedule 7, including references to future
developments, research and development, and financial instruments, can be found where applicable in the other
sections of this Annual Report. All of the information presented in those sections is incorporated by reference into
this Directors’ Report and is deemed to form part of this report.
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DIRECTORS’ REPORT
Brexit
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The United Kingdom (‘UK’) formally left the European Union (‘EU’) on 30 January 2020. The period from when
the UK voted to exit the EU on 23 June 2016 and the formal process initiated by the UK government to withdraw
from the EU, or Brexit, created volatility in the global financial markets. The UK entered a transition period, being
an intermediary arrangement covering matters like trade and border arrangements, citizens’ rights and
jurisdiction on matters including dispute resolution, taking account of The EU (Withdrawal Agreement) Act 2020,
which ratified the Withdrawal Agreement, as agreed between the UK and the EU. The transition period ended
on 31 December 2020, where upon the UK-EU Trade & Cooperation Agreement (together with other connected
Agreements concluded on by the UK and EU, which includes the Exchanging and Protecting of Classified
Information Agreement) signed on the 24 December 2020, with UK Parliament approval on 30 December 2020.
As such, and given the Group’s main focus of activity is in the United States of America, the Directors deem that
the adoption of the UK-EU Trade & Cooperation Agreement will not have a significant impact on the Group’s
operations nor consider it likely that the Group will be significantly impacted as it is not currently a material
importer or exporter of goods between the UK and EU. However, the Directors and senior leadership team are
closely monitoring the situation to be able to manage the risk of any volatility in global financial markets and
impact on global economic performance due to Brexit.
Greenhouse Gas Emissions
The 2018 Regulations introduced requirements under Part 15 of the Companies Act 2006 for an enhanced
group of companies, which are defined as large by the Companies Act 2006, to disclose their annual energy use
and greenhouse gas emissions, and related information. Under the 2018 Regulations, the Group is not
currently defined as large and is considered a low energy user, with annual energy consumption less than 40
MWh. Based on Itaconix’s dedication to reducing the planet’s carbon footprint and addressing climate change,
the Group has chosen to disclose its US subsidiary annual energy use and greenhouse gas emissions in the
Sustainability Section on page 14.
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STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Directors’ Responsibilities
The Directors are responsible for preparing the annual report and the financial statements in accordance with
applicable law and regulations. Company law requires the Directors to prepare financial statements for each
financial year. Under the law the Directors have elected to prepare the Group and Company financial statements
in accordance with International Accounting standards in conformity with the requirements of the Companies
Act 2006 and applicable law. 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 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. 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 International Accounting standards in
conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed
and explained in the financial statements; and
Prepare the financial statements on a 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 company'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 company's website is the responsibility
of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements
contained therein.
Information Given to the Auditor
Each of the persons who are Directors of the Company at the date when this report was approved confirms that:
•
•
So far as the Director is aware, there is no relevant audit information (as defined in the Companies Act 2006)
of which the Company’s auditor is unaware; and
The Directors have taken all steps that they ought to have taken as Directors to make themselves aware of
any relevant audit information (as defined in the Companies Act 2006) and to establish that the Company’s
auditor is aware of that information. This confirmation is given and should be interpreted in accordance with
the provisions of s418 of the Companies Act 2006.
Auditor
BDO, LLP have expressed their willingness to continue in office as auditor. A resolution concerning their re-
appointment will be proposed at the 2021 Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the Board,
John R. Shaw
Chief Executive Officer
29 March 2021
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Opinion on the financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2020 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Itaconix plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2020 which comprise the consolidated income statement, the consolidated statement of
comprehensive income, the consolidated and company balance sheets, the consolidated and company statements of
changes in equity, the consolidated and company statements of cash flows and notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable
law and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial
reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law
and United Kingdom Accounting Standards including Financial Reporting Standard 101 “Reduced Disclosure Framework”
(United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements which sets out the Directors considerations over going concern
and that the Group is dependent on customer adoption of the Group’s products in order to increase revenue and profit
growth. Inability to deliver this could result in the requirement to raise additional funds within the next 12 months. As
stated in note 2, these events or conditions, along with the other matters as set out in note 2, indicate that a material
uncertainty exists that may cast significant doubt about the Parent Company and Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. We considered going concern to be a key audit matter based on
our assessment of the significance of the risk and the effect on our audit strategy.
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Our audit procedures included the following:
•
•
•
•
•
•
Review of the internal forecasting process to confirm the projections are prepared by an appropriate level of staff
that are aware of the detailed figures included in the forecast but also have an understanding of the entity’s
market, strategy and changes in the customer base and the potential impact that the Covid-19 pandemic might
have on these projections;
Reviewing management’s assessment of going concern through analysis of the Group’s cash flow forecast and
other projections through to 30 June 2022, including assessing and challenging the assumptions as to determine
whether there is adequate support for the assumptions underlying the forecasts through comparison against post
year-end results to date.
Performing sensitivity analysis to consider cash flow requirements if the level of revenue and costs changes. This
includes, taking account of the Covid-19 pandemic, reverse stress testing to ascertain what levels of cost increases
or revenue decline cause a cash shortage at any point in management’s post balance sheet assessment period and
considering the likelihood that those fact patterns could occur;
Reviewing the terms of the Group’s existing financing and plans for future fund raising;
Reviewing post-balance sheet results, specifically the cash flow position against that budgeted; and
Considering the adequacy of the disclosures in the financial statements against the requirements of the accounting
standards.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Overview
Coverage
Key audit matters
Materiality
100% (2019: 98%) of Group loss before tax
99% (2019: 99%) of Group revenue
100% (2019: 100%) of Group total assets
KAM 1
KAM 2
KAM 3
2020
Revenue Recognition
Valuation of Contingent
Consideration
Going Concern
2019
Revenue Recognition
Valuation of Contingent
Consideration
Going Concern
Group financial statements as a whole
$160,000 (2019: $160,000) based on 3 year average loss before tax,
adjusted for certain non-recurring transactions relating to the movement
in contingent consideration in the year (2019: based on 3 year average loss
before tax adjusted for certain non-recurring transactions relating to the
movement in contingent consideration)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements at the Group level. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by
the Directors that may have represented a risk of material misstatement.
The Group is comprised of 2 UK incorporated management or holding companies (including Itaconix Plc) and 1 US trading
component.
The US component was identified as a significant component and was subject to full scope audit for Group reporting
purposes. This component accounted for 99% (2019: 99%), of the Group’s revenue and 100% of the Group’s loss before tax
(2019: 98%). Full scope statutory audits were completed on the UK incorporated entities with targeted audit procedures
performed over key risks. All procedures were performed by the Group audit team.
We also obtained an understanding of the internal control environment related to the financial reporting process and
assessed the appropriateness, completeness and accuracy of Group journals and other adjustments performed on
consolidation.
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the material uncertainty related to going concern section,
we have determined the matters described below to be the key audit matters.
Key Audit Matter
KAM 1 - Revenue Recognition
Refer to note 2 on page 49 and
note 4 on page 54 of the
financial
consolidated
statements for the Group’s
revenue
and
accounting policies applied
during the year.
streams
How the scope of our audit addressed the
key audit matter
The Group generates revenue from the
sales of goods, with revenue recognised
at a point in time.
We performed
testing:
the
following specific
We considered there to be a significant
audit risk arising from inappropriate or
incorrect recognition of revenue.
The key audit matters related to revenue
recognition are as follows:
•
•
•
The existence and timing of
revenue recognition arising
from the sale of products to
customers.
the recognition of revenue
around the year end (cut-off);
and
appropriateness
of
the
revenue
recognition policy
itself, as detailed in notes 2 &
4 to the consolidated financial
statements.
transactions
• We agreed a sample of recorded
revenue
from
throughout the year to invoice,
cash receipt and evidence of
delivery;
• We agreed a sample of revenue
transactions from either side of
the balance sheet date to invoice
and evidence of delivery to check
that they have been recorded in
the correct period; and
• We selected journal entries to
record revenue and corroborated
the transaction to invoice and
evidence of delivery to confirm
that the processing and timing of
record
to
journals
revenue
around
year-end were
the
appropriate.
• We assessed whether the
revenue recognition policies
adopted by the Group comply
with the requirements of
applicable accounting standards.
Key observations:
Based on the procedures performed, we
consider that revenue has been recognised
appropriately and in accordance with the
Group’s revenue recognition accounting
policy.
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Key Audit Matter
KAM 2
contingent consideration
- Valuation of
to
Refer
accounting
the
policies in note 2, 3 and 17 of
the Consolidated Financial
Statements.
(2019: $2.4m) provision
The Group balance sheet reports a
$2.9m
for
contingent consideration that arose
from a historic acquisition.
Contingent consideration is subject to
estimates in respect of future expected
annual revenues until and including the
year to 31 December 2022 and the
discount rate; both impact the quantum
of the fair value of the contingent
consideration liability as at the balance
sheet date.
fair
Any change in estimated revenues or the
discount rate in the period, will change
contingent
the
consideration, with an equal and
opposite entry recorded in the Income
Statement.
value
of
How the scope of our audit addressed the
key audit matter
We have performed the following specific
testing:
in
• We confirmed that the cash flow
the
used
forecast
measurement of the liability is
consistent with the information
for FY 21-22 approved by the
Board at December 2020 and for
FY 21, in conformity with the
forecasts provided to support
going concern basis;
• We evaluated forecasts in light of
of
forecasts and
historical
management’s
subsequent results;
accuracy
assessing
• We used specialists in the area of
Valuation
the
in
appropriateness of the model
and the discount rate adopted by
management and applied to the
cash flow forecast;
• We
tested
the methodology
applied in the calculations and
the mathematical accuracy of
management’s
by
recalculating the model, applying
the inputs used by management;
and
model
• We performed sensitivity analysis
on the key assumptions in the
model.
Key observations:
Based on the procedures performed, we
noted no
that
management’s judgements in estimating
the
consideration were
inappropriate.
to suggest
contingent
instances
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below
these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
2020
2019
Parent company financial statements
2020
2019
Materiality
Basis for determining
materiality
$160,000
$160,000
Based on 3 year average loss before tax,
adjusted for certain non-recurring
transactions relating to the movement in
contingent consideration in the year
$65,800
2% of total
assets
$115,000
72% of Group
materiality
Rationale
benchmark applied
for
the
Performance
materiality
Basis for determining
performance
materiality
Component materiality
Primary KPI as relevant to the users of the
financial statements evidenced by this metric
being used to address the performance of the
business by the Board, and is consistently
referenced within the RNS announcements
released by the Group.
Primary KPI as relevant to the users of the
financial statements for a holding company.
(2019: 72% of Group materiality given the
assessment of the components aggregation
risk.)
$120,000
$120,000
$49,300
$86,250
75% of materiality (2019: 75%)
In reaching our conclusion on the level of performance materiality to be applied the main
factor considered was our assessment of a number of factors including the expected total
value of known and likely misstatements (based on past experience), our knowledge of the
Group’s internal controls and management’s attitude towards proposed adjustments.
We set materiality for the significant component of the Group at 75% of Group materiality (2019: 72%) based on the size and
our assessment of the risk of material misstatement of that component. Component materiality was $120,000 (2019:
$115,000). In the audit of the component, we further applied a performance materiality level of 75% of the component
materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of $8,000 (2019:
$8.000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the
Annual Report and Accounts 2020, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
Matters on which
we are required to
report by exception
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic report and the Directors’ report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
•
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material
misstatements in the Strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which 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.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities set out on page 31, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
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INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud are detailed below:
• We have identified and assessed the potential risks related to irregularities, including fraud, by considering the
following:
o Obtaining an understanding of the legal and regulatory framework in which the Group operates. We
considered provisions of other laws and regulations that do not have direct effect on the financial statements
but compliance with which may be fundamental to the Group’s ability to operate. The significant laws are
considered to be international accounting standards in conformity with the Companies Act 2006, the
Companies Act 2006 and relevant UK and US tax regulations.
The audit team received training prior to performing the audit procedures required to provide assurance over
compliance with relevant UK and US laws and regulations.
o
o Obtaining an understanding of how the Group is complying with those frameworks by making enquiries of
management, those responsible for legal and compliance procedures and the Company Secretary. We
corroborated our enquiries through our review of board minutes and papers provided to the Audit
Committee.
Considering the processes and controls that the Group has established and the controls in place to mitigate
risks in relation to non-compliance with laws and regulations;
o
o Making enquiry of Group management and external legal counsel concerning actual and potential litigation
and claims.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might
occur.
Our audit planning identified fraud risks in relation to
▪
▪
Revenue recognition - existence and accuracy - has been assessed as a Key Audit Matter above (KAM
1));
Contingent consideration – valuation - has been assessed as a Key Audit Matter above (KAM 2));
and
▪ Management override.
o We made enquiry of Group management to understand where they considered there was a susceptibility to
fraud and regarding detection and response to the risk of fraud and any knowledge of actual, suspected or
alleged fraud.
Reading the minutes of meetings of those charged with governance.
o
o We considered the processes and controls that the Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how management monitors the processes and controls.
o We designed our audit procedures to detect irregularities, including fraud. Our procedures included journal
entry testing, with a focus on large or unusual transactions based on our knowledge of the business; enquiries
with Group management and focused testing as referred to in the Key Audit Matters section above.
Third party confirmations were obtained directly from the Group’s external legal counsel to audit the
completeness of claims and legal matters;
Review of financial statements disclosures and testing to supporting documentation;
o
o Assessing whether the judgements made in making accounting estimates are indicative of potential bias; and
o
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks
of misstatement due to fraud.
o
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There
are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware
of it.
A further description of our responsibilities
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on the Financial Reporting Council’s website at:
P a g e | 38
INDEPENDENT AUDITOR’S REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Iain Henderson (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
29 March 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
P a g e | 39
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Revenue
Cost of sales
Gross profit
Other operating income
Administrative expenses
Group operating loss before exceptional items
Exceptional (expense) / income on revaluation of contingent
consideration
Exceptional income on organizational restructuring
Finance income
Gain on sale of associate
Share of loss of associate
Notes
4
5
6
17
8
2020
$’000
3,292
(2,138)
1,154
50
(2,595)
(1,391)
(339)
91
-
-
-
2019
$’000
1,288
(838)
450
62
(3,390)
(2,878)
1,474
-
1
84
(38)
Operating loss before tax from operations
(1,639)
(1,357)
Taxation
Loss for the year from operations
Loss for the year
Basic and diluted loss per share
Diluted loss per share
9
(7)
(1)
(1,646)
(1,358)
(1,646)
(1,358)
(0.5)
(0.5)
(0.5)
(0.5)
10
10
The accompanying notes 1 to 26 form an integral part of the financial statements.
P a g e | 40
CONSOLIDATED STATEMENT OF OTHER
COMPREHENSIVE INCOME
For the year ended 31 December 2020
Loss for the year
Items that will be reclassified subsequently to profit
or loss
Exchange gains in translation of foreign operations
Total comprehensive loss for the year, net of tax
Attributable to:
Equity holders of parent
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
2020
2019
Notes
$’000
$’000
(1,646)
(1,358)
8
48
(1,638)
(1,310)
(1,638)
(1,310)
The accompanying notes 1 to 26 form an integral part of the financial statements.
P a g e | 41
CONSOLIDATED AND COMPANY
BALANCE SHEETS
At 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Non-current assets
Property, plant and equipment
Right-of-use assets
Investment in subsidiary undertakings
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Financed by
Equity shareholders’ funds
Equity share capital
Equity share premium
Own shares reserve
Merger reserve
Share based payment reserve
Foreign translation reserve
Retained deficit
Total equity
Non-current liabilities
Contingent consideration
Note payable
Lease liabilities
Current liabilities
Trade and other payables
Notes payable
Contingent consideration
Lease liabilities
Group
Company
31 Dec
2020
31 Dec
2019
31 Dec
2020
31 Dec
2019
Notes
$’000
$’000
$’000
$’000
12
19
11
13
14
15
20
17
16
19
16
16
17
19
501
746
-
1,247
1,361
463
1,448
3,272
701
920
-
1,621
504
331
765
1,600
-
-
1,084
1,084
-
49
934
983
-
-
1,053
1,053
-
36
240
276
4,519
3,221
2,067
1,329
5,718
46,135
(5)
31,343
10,335
(211)
(93,940)
(625)
3,677
46,135
(5)
31,343
10,317
(219)
(92,245)
(997)
5,718
46,135
(5)
3,582
1,258
(2,150)
(55,517)
(979)
3,677
46,135
(5)
3,582
1,240
(2,273)
(53,807)
(1,451)
2,707
51
476
3,234
1,404
132
146
228
1,910
2,441
-
750
3,191
707
-
-
320
1,027
2,707
-
-
2,707
2,441
-
-
2,441
193
-
146
-
339
339
-
-
-
339
Total liabilities
5,144
4,218
3,046
2,780
Total equity and liabilities
4,519
3,221
2,067
1,329
P a g e | 42
CONSOLIDATED AND COMPANY
BALANCE SHEETS
At 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The loss for the year for the Company amounted to $1,661k (2019: $4,894k). The financial statements of Itaconix
plc, registered number 08024489, were approved by the Board of Directors for issue on 29 March 2021.
John R. Shaw
Director
James Barber
Director
The accompanying notes 1 to 26 form an integral part of the financial statements
P a g e | 43
CONSOLIDATED AND COMPANY
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2020
Consolidated statement of changes in equity
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
At 1 January 2019
Loss for the year
Exchange differences on
translation of foreign operations
Share based payments
At 31 December 2019
Loss for the year
Share issuance proceeds
Share issuance expenses
Exchange differences on
translation of foreign operations
Share based payments
At 31 December 2020
Equity
share
capital
$’000
3,677
–
–
–
3,677
–
2,041
–
–
–
5,718
Equity share
premium
Own shares
reserve
Merger
reserve
$’000
$’000
$’000
Share based
payment
reserve
$’000
Foreign
translation
reserve
$’000
Retained
deficit
$’000
Total
$’000
46,135
–
–
–
46,135
–
205
(205)
–
–
46,135
(5)
–
–
–
(5)
–
–
–
–
–
(5)
31,343
–
10,293
–
(267)
–
(90,887)
(1,358)
289
(1,358)
–
–
31,343
–
–
–
–
–
31,343
–
24
10,317
–
–
–
–
18
10,335
48
–
(219)
–
–
–
–
–
(92,245)
(1,646)
–
(49)
48
24
(997)
(1,646)
2,246
(254)
8
-
(211)
–
–
(93,940)
8
18
(625)
Company statement of changes in equity
Equity
share
capital
Equity share
premium
Own
shares
reserve
Share based
payment
reserve
Foreign
translation
reserve
Merger
reserve
Retained
deficit
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
At 1 January 2019
Loss for the year
Exchange differences on
translation of foreign operations
Share based payments
At 31 December 2019
Loss for the year
Share issuance proceeds
Share issuance expenses
Exchange differences on
translation of foreign operations
Share based payments
At 31 December 2020
3,677
–
–
–
3,677
–
2,041
–
–
–
5,718
46,135
–
–
–
46,135
–
205
(205)
–
–
46,135
(5)
–
–
–
(5)
–
–
–
–
–
(5)
3,582
–
–
–
3,582
–
–
–
–
–
3,582
1,216
–
(2,455)
–
(48,913)
(4,894)
3,237
(4,894)
–
24
1,240
–
–
–
–
18
1,258
182
–
(2,273)
–
–
–
–
–
(53,807)
(1,661)
–
(49)
182
24
(1,451)
(1,661)
2,246
(254)
123
–
(2,150)
–
–
(55,517)
123
18
(979)
The accompanying notes 1 to 26 form an integral part of the financial statements.
P a g e | 44
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
CONSOLIDATED AND COMPANY
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2020
The reserves described above have the purposes described below:
Share capital
Amount subscribed for share capital at par value.
Share premium
Amount subscribed for share capital in excess of nominal value less the cost of issuance of shares.
Own shares reserve
The reserve records the nominal value of shares purchased and held by the Employee Benefit Trust to satisfy
the future exercise of options under the Group’s share option schemes.
Merger reserve
This reserve arose as a result of a common control business combination on the formation of the Group. The
premium on the issue of shares as part of a business combination is credited to this reserve.
Share based payment reserve
This reserve records the credit to equity in respect of the share based payment cost.
Foreign exchange translation reserve
This reserve arises on the translation of the assets and liabilities of overseas subsidiaries.
P a g e | 45
CONSOLIDATED AND COMPANY
STATEMENTS OF CASH FLOWS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Group
Company
2020
2019
2020
Net cash (outflow) / inflow from operating activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Proceeds from sales of associate investment, net of
transaction costs
Repayment on the loan to associate
Interest received - loan to associate
Cash loaned to subsidiary undertakings
Net cash inflow / (outflow) from investing activities
Cash received from issue of shares
Transactions costs paid on the issue of shares
Proceeds from government secured debt
Repayment of lease liability
Interest paid - leases
Net cash inflow / (outflow) from financing activities
Net inflow / (outflow) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
21
$’000
(1,157)
20
-
-
------
-
-
-
-
20
2,246
(254)
183
(327)
(28)
1,820
683
765
1,448
$’000
(1,831)
40
(39)
211
57
6
-
275
-
-
-
(320)
(14)
(334)
(1,890)
2,655
765
$’000
(74)
-
-
-
-
-
(1,224)
(1,224)
2,246
(254)
-
-
-
1,992
694
240
934
2019
(Restated)
$’000
210
-
-
-
-
-
(2,164)
(2,164)
-
-
-
-
-
-
(1,954)
2,194
240
The accompanying notes 1 to 26 form an integral part of the financial statements
P a g e | 46
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
1.
General Information
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Itaconix plc ("the company") is a public limited company incorporated in England and Wales. The address of
its registered office and principal place of business is set out on page 72. The principal accounting policies
adopted by the Group are set out in note 2. The nature of the Group’s operations and its principal activities
are set out in the Strategic Report. The principal activities of the Company and its subsidiaries are described in
note 4. The financial statements have been presented in US Dollars and rounded to the nearest thousand
($’000) unless otherwise indicated.
2.
Accounting policies
Basis of presentation
The financial reporting framework that has been applied in their preparation is applicable law and international
accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. The
financial information has been prepared on the historical cost basis except that financial instruments are stated
at the fair value.
While the Company’s functional currency is British Pounds Sterling, the Group’s financial statements have been
presented in US Dollars. The directors believe this better reflects the underlying nature of the business.
Approximately ninety per cent of the Group’s revenue and operating costs are denominated in US Dollars. The
exchange rates used for translation of British Pounds Sterling amounts are 1.3663 US Dollars to British Pounds
Sterling as at 31 December 2020 and 1.2833 US Dollars to British Pounds Sterling as the average rate prevailing
during 2020.
Itaconix applied all standards and interpretations issued by the IASB that were effective as of 1 January
2020. The accounting policies set out below have, unless otherwise stated, been applied consistently to all years
presented in this financial information.
The preparation of the financial statements, in conformity with IFRS, requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
Itaconix’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements, are disclosed in note 3.
Adoption of new and revised standards
There are no new standards impacting the Group that have been adopted in the annual financial statements
for the year ended 31 December 2020, which have given rise to material changes in the Group's accounting
policies.
Going concern
The financial statements have been prepared on a going concern basis. The Directors have reviewed the
Company’s and the Group’s going concern position taking account its current business activities, budgeted
performance and the factors likely to affect its future development, set out in the Annual Report, and including
the Group’s objectives, policies and processes for managing its working capital, its financial risk management
objectives and its exposure to credit and liquidity risks.
The Group made a loss before exceptional items for the year of $1,391k, had Net Current Assets at the period
end of $1,308k and a Net Cash Outflow from Operating Activities of $1,157k. Primarily, the Group meets its
day to day working capital requirements through existing cash resources and had on hand cash, cash
equivalents and short-term deposits at the balance sheet date of $1,448k.
During the year, the Group reduced its expenditures and successfully raised funds of $2,246k.
The Directors have reviewed the Group’s cash flow forecasts covering a period of at least 12 months from the
date of approval of the financial statements, which foresee that the Group will be able to meet its liabilities as
they fall due. However, the success of the business is dependent on customer adoption of our products in
order to increase revenue and profit growth. Inability to deliver this could result in the requirement to raise
additional funds.
P a g e | 47
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The Directors have also taken into consideration the impact of the Covid-19 pandemic on the Group’s revenues
and supply chain. While there has not been a negative impact through the report date on the Group revenues
or supply chain due to the pandemic, the Directors have applied sensitivities to the revenue models and have
assessed alternate supply chains that have been developed by the Group to mitigate any issues to our
customers.
The Directors have concluded that the circumstances set forth above represent a material uncertainty, which
may cast significant doubt about the Company and Group’s ability to continue as a going concern. However,
they believe that, taken as a whole, the factors described above enable the Company and Group to continue
as a going concern for the foreseeable future. The financial statements do not include the adjustments that
would be required if the Company and the Group were unable to continue as a going concern.
Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made up to 31 December each year. The Company controls an
investee if, and only if the Company has the following:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
Exposure of rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
In accordance with Section 408 of the Companies Act 2006, no profit and loss account is presented for the
Company.
Business combinations and contingent consideration
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured at the acquisition date fair value, and the amount
of any non-controlling interest in the acquiree. For each business combination, the Group elects whether to
measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree’s
identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative
expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration are recognised in accordance with IFRS 9
in profit or loss.
The fair value of contingent consideration is determined by reference to the projected financial performance in
relation to the specific contingent consideration criteria for each acquisition.
P a g e | 48
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Revenue recognition
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Revenue is recognised to the extent that services have been delivered and the revenue can be reliably measured,
regardless of when the payment is being made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.
Revenue from the sale of goods is recognised when performance obligations have been satisfied. The delivery
date is usually the date on which performance obligations have been satisfied. However, where goods are
supplied when title does not irrevocably pass on delivery, it may not be appropriate to recognise all the revenue
immediately. The Group provides for potential sales returns based on its actual experience of returns from
customers in such cases. Where it has no such history it makes estimates by reference to minimum sales
commitments in the relevant contract, or by reference, where available, to customer retail sales data or customer
inventory levels at the financial year end, or based on other reasonable and relevant judgements.
Leases
Leases are accounted for under IFRS 16: Leases. The standard sets out the principles for the recognition,
measurement, presentation and disclosure of leases.
IFRS 16 requires lessees to recognize a lease liability that reflects the net present value of future lease payments
and a corresponding “right-of-use asset” in all lease contracts, although lessees may elect not to recognize lease
liabilities and right-of-use assets in respect of short-term leases or leases of assets of low value.
The Group has elected not to recognize right-of-use assets and lease liabilities in respect of certain leases of office
equipment of low value or of short term. The lease payments associated with these leases is recognized as an
expense on a straight-line basis over the lease term.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The Group recognizes a right-of-use asset and a corresponding lease liability at the lease commencement date.
The lease liability is initially measured at the present value of the following lease payments:
•
•
•
•
•
fixed payments;
variable payments that are based on index or rate;
the exercise price of any extension or purchase option if reasonably certain to be exercised;
penalties for terminating the lease, if relevant; and
other payments to the landlord relating to the leased asset which are determined to be in substance
lease payments.
Judgement is applied to determine whether common area expenses paid to the landlord are determined to be
lease or non-lease payments. (See note 3)
The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. The Group has used its incremental borrowing rate as the
discount rate.
The right-of-use assets are initially measured based on the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs. The right-of-use assets
are depreciated over the period of the lease term, or, if earlier, the useful life of the asset, using the straight-
line method. The lease term includes periods covered by an option to extend, if the Group is reasonably certain
to exercise that option. In addition, the right-of-use assets may during the lease term be reduced by impairment
losses, if any, or adjusted for certain remeasurements of the lease liability.
On 28 May 2020, the IASB issued final amendments to IFRS 16 related to Covid-19 rent concessions for lessees.
The amendments modify the requirements of IFRS 16 to permit lessees to not apply modification accounting to
certain leases where the contractual terms have been affected due to Covid-19 (e.g. rent holidays or other rent
concessions). The amendments are effective for periods beginning on or after 1 June 2020, with earlier
application permitted. The Group did not adopt this standard as no such concessions were applicable.
P a g e | 49
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Government grants and research income
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Government grants and research income are recognised as a credit to the income statement where there is
reasonable assurance that they will be received and all associated conditions will be complied with.
When the income relates to an expense item, it is recognised as income over the period necessary to match it
on a systematic basis to the costs that it is intended to compensate. Where the income relates to an asset, it is
recognised as deferred income and released to income in equal annual amounts over the expected useful life of
the related asset.
Research and development costs
Research costs are expensed as incurred. Development expenditure on an individual project is recognised as an
intangible asset only when the Group can demonstrate the technical feasibility of completing the intangible
asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset,
how the asset will generate future economic benefits, the availability of resources to complete the asset and
the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the cost model is applied requiring
the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.
Amortisation of the asset begins when development is complete and the asset is available for use. It is
amortised over the period of expected future benefit. During the period of development, the asset is tested
for impairment annually.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the year-
end date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were initially recorded are recognised in the income statement in the period
in which they arise. Exchange differences on non-monetary items are recognised in the statement of
comprehensive income to the extent that they relate to a gain or loss on that non-monetary item taken to the
statement of comprehensive income, otherwise such gains and losses are recognised in the income statement.
The assets and liabilities in the financial statements of foreign subsidiaries and those of the parent company
where the functional and presentational currency differ, are translated at the rate of exchange ruling at the
year-end date. Income and expenses are translated at the actual rate. The exchange differences arising from the
retranslation of the opening net investment in subsidiaries are taken directly to the ‘Foreign currency
retranslation reserve’ in equity. On disposal of a foreign operation the cumulative translation differences
(including, if applicable, gains and losses on related hedges) are transferred to the income statement as part of
the gain or loss on disposal.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and any accumulated
impairment in value. Such cost includes the cost of replacing part of the plant and equipment when that cost
is incurred, if the recognition criteria are met.
Depreciation is calculated to write off the cost less estimated residual value of all tangible assets over their
expected useful economic life on a straight-line basis. The rates generally applicable are:
Plant and equipment
Short leasehold improvements
Computer and office equipment
4-7 years
5 years
3 years
P a g e | 50
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Financial assets
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Financial assets are recognised in Itaconix’s and the Company’s statement of financial position when Itaconix
and the Company become party to the contractual provisions of the instrument. Under IFRS 9 the classification
of financial assets is based both on the business model and cash flow type under which the assets are held.
There are three principal classification categories for financial assets: amortised cost; fair value through other
comprehensive income; and fair value through profit or loss. Itaconix has not classified any of its financial
assets as fair value through other comprehensive income.
Amortised cost
These assets are non-derivative financial assets held under the ‘held to collect’ business model and
attracting cash flows that are solely payments of principal and interest. They comprise trade and other
receivables and cash and cash equivalents. They are initially measured at fair value plus transaction costs,
and are subsequently carried at amortised cost using the effective interest rate method, less provision for
impairment.
Impairment provisions for trade and other receivables are calculated using an expected credit loss model.
Under this model, impairment provisions are recognised to reflect expected credit losses based on
combination of historic and forward-looking information, the amount of such a provision being the
difference between the net carrying amount and the present value of the future expected cash flows
associated with the impaired receivable. For trade receivables, which are reported net; such provisions
are recorded in a separate allowance account. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off against the associated provision.
Cash, cash equivalents and investments
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand.
Income taxes
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance
sheet date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, with the following exceptions:
• Where the temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss; and
• Deferred income tax assets are recognised only to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, carried forward tax credits or
tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are
expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted
or substantively enacted at the balance sheet date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity.
Otherwise income tax is recognised in the income statement.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other
financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are stated at fair value with differences taken to the consolidated income statement.
Interest on financial liabilities up to maturity is included in the finance costs line item in the consolidated
income statement.
P a g e | 51
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Trade and other payables
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Trade payables and other payables are not interest bearing and are stated at their full value on initial
recognition. For disclosure purposes, the fair values of trade and other payables are estimated at the
present value of future cash flows, discounted at the market rate of interest at the reporting date. As
trade payables and other payables are short term in nature as at the reporting date, the carrying value is
considered to be a reasonable approximation of fair value.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. They are
subsequently measured at amortised costs using the effective interest method, with interest recognised
on an effective rate basis.
Inventory valuation
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing
each product to its present location and condition.
Share based payments
The Company issues equity-settled share-based payments to certain employees and these payments are
measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of the grant
using appropriate pricing models. 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 Company’s estimate
of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.
At the date of each statement of financial position, the Company revises its estimate of the number of equity
instruments that are expected to become exercisable. It recognises the impact of the revision of original
estimates, if any, in the income statement, and a corresponding adjustment is made to equity over the
remaining vesting period. The fair value of the awards and ultimate expense are not adjusted on a change in
market vesting conditions during the vesting period.
The value of share-based payment is taken directly to reserves and the charge for the period is recorded in the
income statement. Itaconix’s scheme, which awards shares in the parent entity, includes recipients who are
employees in all subsidiaries. In the consolidated financial statements, the transaction is treated as an equity-
settled share-based payment, as Itaconix has received services in consideration for equity instruments. An
expense is recognised in the Group income statement for the fair value of share-based payment over the
vesting year, with a credit recognised in equity.
In the subsidiaries’ financial statements, the awards, in proportion to the recipients who are employees in said
subsidiary, are treated as an equity-settled share-based payment, as the subsidiaries do not have an obligation
to settle the award. An expense for the grant date fair value of the aware is recognised over the vesting year,
with a credit recognised in equity. The credit is treated as a capital contribution, as the parent is compensating
the subsidiaries’ employees with no cost to the subsidiaries as there is no expectation to recharge the cost. In
the parent company’s financial statements, there is no share-based payment charge where the recipients are
employed by a subsidiary, with the parent company recognising an increase in the investment in the
subsidiaries as a capital contribution from the parent and a credit to equity.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs. Dividends and distributions relating to equity instruments are debited direct to equity.
Exceptional items
The Group has classified the finance income, movement on investment in associate, organizational restructuring,
and the fair value adjustment of the contingent consideration as exceptional items in the income statement.
These items are not considered to reoccur and are of such significance to the results that they have been
presented as exceptional to provide a fair and balanced presentation in the financial statements.
P a g e | 52
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
3.
Critical accounting assumptions and key sources of estimation uncertainty
The preparation of the Group’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent assets and liabilities, at the end of the reporting period. However, uncertainty about
these assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of the asset or liability affected in future periods.
Judgements and estimates
In the process of applying the Group’s accounting policies, management has made a number of judgements
and estimates. Those which have the most significant effect on the amounts recognised in the financial
statements are summarised below:
Judgements
Valuation of contingent consideration
The value of any contingent consideration is also reviewed at each period end by way of comparison to the
value of expected future payments, as estimated using appropriate methodologies, e.g. discounted cash flow
techniques. See note 17 for further details.
Fair value of Group indebtedness (Company only)
The fair value of amounts owing from Group companies is impaired in those cases where the subsidiary is, at
the balance sheet date, both illiquid and not yet generating positive cash flows, or otherwise highly unlikely to
repay such indebtedness (See note 14).
IFRS 16 – Lease Accounting - lease term, non-lease components
The determination of the lease term for some lease contracts of the Group is based on the consideration as to
whether the Group is reasonably certain to exercise lessee options.
Judgement is applied to determine whether common area expenses paid to the landlord are determined to be
lease or non-lease payments. Consideration is made to the nature and variability of costs incurred and other
terms within such arrangements. (See note 19)
Estimates
Valuation of contingent consideration
The value of any contingent consideration is also reviewed at each period end by way of comparison to the
value of expected future payments, as estimated using appropriate methodologies, e.g. discounted cash flow
techniques. See note 17 for further details.
Share based payment cost
The estimation of share based payment costs requires the selection of an appropriate valuation model,
considerations as to the inputs necessary for the valuation model chosen and the estimation of the number of
awards that will ultimately vest, inputs for which arise from judgements relating to the probability of meeting
non-market performance conditions and the continuing participation of employees (See note 22).
P a g e | 53
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
4.
Revenue
Revenue recognised in the Group income statement is analysed as follows:
Sale of goods
Geographical information
North America
Europe
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
2020
$’000
3,292
3,292
2020
$’000
2,869
423
3,292
2019
$’000
1,288
1,288
2019
$’000
1,128
160
1,288
The revenue information is based on the location of the customer.
Segmental information
The revenue information above is derived from the continuing operations. The Group therefore has one
segment, the Specialty Chemicals segment, which designs and manufactures proprietary specialty polymers
to meet customers’ needs in the home care and industrial markets and in personal care being the Group’s
principal activities.
Net assets of the Group (being total assets less total liabilities) are attributable to geographical locations as at
31 December 2020 as follows:
North America
Europe
5.
Other operating income
2020
$’000
932
(1,557)
(625)
2019
$’000
1,251
(2,248)
(997)
Other operating income arises mainly from grants and research income and sale of fixed assets. Since it is not
considered to be part of the main revenue generating activities, the Group presents this income separately
from revenue.
Grant and research income
Profit / (loss) on sale of assets
2020
$’000
30
20
50
2019
$’000
94
(32)
62
P a g e | 54
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
6.
Group operating loss
This is stated after charging:
Auditor’s remuneration:
Audit of the financial statements
Audit of the subsidiaries
Non-audit services
Total fees
Equity settled share based payment expense
Employer’s national insurance (credit) associated with
vested share options
Depreciation of owned assets
Amortisation of right-of-use assets
Profit on disposal of lease liability
Research and development expenditure
Foreign exchange differences
Profit on disposal of equipment
7.
Staff costs
Staff costs for the Group, including Directors, consist of:
Wages and salaries
Invoiced by third parties
Post-employment benefits
Equity settled share based payment expense
2020
$’000
2019
$’000
10
121
4
135
18
-
200
198
(91)
130
55
20
2020
$’000
1,443
-
34
18
1,495
10
76
6
92
24
(16)
223
198
-
101
56
(32)
2019
$’000
1,457
8
35
24
1,524
Details of Directors’ fees are included in the Directors’ Remuneration Report on page 24 to 25.
Details of key management personnel fees are included in note 23.
The average monthly number of Group employees, including Directors, during the year was made up as
follows:
Executive Directors
Non-executive Directors
Research and development
Finance and administration
Sales
Production
Contract staff
Itaconix plc had no employees other than the Directors.
2020
No.
1
3
4
2
2
3
1
16
2019
No.
1
3
5
2
2
2
1
16
P a g e | 55
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
8.
Finance income
Interest receivable on bank deposits
9.
Taxation
Corporation tax credits
Prior years’ corporation tax credits
Current year corporation tax liability
Corporation tax credits
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
2020
$’000
-
2020
$’000
-
(7)
(7)
2019
$’000
1
2019
$’000
7
(8)
(1)
During the year ended 31 December 2020, the Group had a taxation expense of $7k (2019: $1k) of which
relates a provision of $7k for US taxation payable in respect of 2020 by the US subsidiary.
Total tax on loss on ordinary activities
The tax for the year can be reconciled to the loss per the income statement as follows:
Loss before tax relief
Loss on ordinary activities multiplied by standard
UK corporation tax rate of 19% (2019:19%)
Effects of:
Disallowed expenses & non-taxable income
Adjustments in respect of prior periods
Other timing differences
Movement in deferred tax not recognised
Total tax expense for the year
Deferred tax
The Group has the following net deferred tax asset which is not recognised:
Accelerated capital allowances
Other timing differences
Tax losses carried forward
Share based payments
2020
$’000
(1,639)
(311)
80
73
-
165
7
2020
$’000
1
509
9,333
-
9,843
2019
$’000
(1,357)
(258)
(245)
-
(7)
511
1
2019
$’000
1
517
9,155
5
9,678
The net deferred tax asset is not recognised as there is insufficient evidence of future taxable profits against
which the asset will be available for offset. Certain operating losses will expire in 2030 if no profits are
generated to offset the loss carry forwards. These losses are also subject to certain regulatory restrictions.
P a g e | 56
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Tax rate and tax rate changes
The main rate of UK corporation tax was 19% from 1 April 2015.
The US federal tax rate is 21% as of 1 January 2018.
10.
Loss per share
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the year.
Loss
2020
$’000
2019
$’000
Loss for the purposes of basic and diluted loss per share
Weighted average number of ordinary shares for the purposes of basic
and diluted loss per share (’000)
Basic and diluted loss per share
(1,646)
(1,358)
344,970
(0.5)¢
269,130
(0.5)¢
The loss for the period and the weighted average number of ordinary shares for calculating the diluted
earnings per share for the period to 31 December 2020 are identical to those used for the basic earnings per
share. This is because the outstanding share options (note 22) would have the effect of reducing the loss per
ordinary share and would therefore not be dilutive.
P a g e | 57
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
11. Investment in subsidiary undertakings
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
In prior years, management has fully impaired the intangible assets arising on acquisition of Itaconix Corporation
and has also impaired the value of the investment in Itaconix Corporation in the Company balance sheet
proportionate to its shareholding.
At 1 January 2019
Foreign translation adjustment
At 31 December 2019
Foreign translation adjustment
At 31 December 2020
Company
$000
1,010
43
1,053
31
1,084
Name
Principal activity
Place of
incorporation
and operation
Proportion of
ownership
interest
Direct investments
Itaconix (U.K.) Limited (1)
Itaconix EBT Limited (1)(3)
Indirect investments
Itaconix Corporation (2)
UK operating company
Trustee of Itaconix employee benefit trust
England
England
Trading US subsidiary of Itaconix (U.K.) Ltd
USA
100%
100%
100%
(1) The registered address is Fieldfisher, LLP, Riverbank House, 2 Swan Lane, London, EC4R 3TT, UK
(2) The registered address is 2 Marin Way, Stratham, NH 03885, USA
(3) On 13 December 2019, the Company changed name from Revolymer EBT Limited to Itaconix EBT Limited.
P a g e | 58
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
12.
Property, plant and equipment
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Group
Cost
At 1 January 2019
Additions
Impairment
Disposals
At 31 December 2019
Additions
Impairment
Disposals
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Charge
Eliminated on disposal
At 31 December 2019
Charge
Eliminated on disposal
At 31 December 2020
Carrying Amount
At 31 December 2020
At 31 December 2019
Computer and
office
equipment
$’000
Plant and
equipment
$’000
Short
Leasehold
improvements
$’000
25
–
–
-
25
–
–
–
25
20
5
-
25
-
-
25
-
-
1,284
39
(43)
(44)
1,236
-
-
-
1,236
364
199
-
563
181
-
744
492
673
96
-
-
-
96
-
-
-
96
49
19
-
68
19
-
87
9
28
Total
$’000
1,405
39
(43)
(44)
1,357
-
-
-
1,357
433
223
-
656
200
-
856
501
701
At the end of 2018, the Group held certain assets for sale that were used in at the UK subsidiary, but due to the
reorganization were no longer needed. These assets were placed for sale in 2019 and were impaired at the end
of year. In 2020, some of these assets were sold and $20k gain was recognized on the sale of the assets.
13.
Inventories
Group
Raw materials
Work in progress
Finished goods
Inventory reserve
2020
$’000
279
6
1,111
(35)
1,361
2019
$’000
42
4
469
(11)
504
P a g e | 59
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
14.
Trade and other receivables
Current assets
Group
Trade receivables
Amounts owed by Group companies
Other receivables
2020
$’000
411
-
52
463
2019
$’000
247
-
84
331
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Company
2020
$’000
2019
$’000
-
-
49
49
-
-
36
36
Trade receivables are non-interest bearing and are generally on 30 day terms.
As at 31 December 2020, a provision of $86k (2019: $nil) has been made to trade receivables that were
considered to be impaired. Amounts due from Group undertakings have been classified as current. The Company
does not consider any of the amounts due from Group undertakings to be overdue.
In respect of the Company
•
There is significant doubt as to the future recoverability of these balances, and as such, a provision for
bad and doubtful debts has been raised against the amounts due from Group undertakings. To the
extent the counter party is unable to do so, the Group does not intend to recall the amounts due, within
one year.
• As at 31 December 2020 the balance of the fair value of debt from Group undertakings before
adjustment for impairment is $44,696k (2019: $43,472k).
•
The loss for the year includes a release of fair value impairment of Group indebtedness of $1,224k
resulting from a movement in provisions for this indebtedness (2019: $2,164k).
As at 31 December, the analysis of trade receivables that were past due but not impaired is as follows:
Group
2020
2019
Neither
past due
nor
impaired
$’000
-
-
Total
$’000
411
247
<30
days
$’000
404
155
30–60
Days
$’000
-
36
60–90
days
$’000
-
14
90–120
days
$’000
-
2
>120
Days
$’000
7
40
The fair value of amounts owing from Group companies to the Company has been impaired to the extent the
subsidiary is, at the balance sheet date, both illiquid and not yet generating positive cash flows, or otherwise
unlikely to repay such indebtedness. The Group provides against trade receivables where there are significant
doubts as to future recoverability based on prior experience, on assessment of the current economic climate and
on the length of time that the receivable has been overdue.
Non-current assets
Amounts owed by Group companies
Group
Company
2020
$’000
-
-
2019
$’000
-
-
2020
$’000
-
-
2019
$’000
-
-
P a g e | 60
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
15.
Cash and cash equivalents
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with a maturity of
less than three months. The carrying amount of these assets approximates their fair value.
Analysis of cash and cash equivalents disclosed in the cash flow statement:
Group
Company
2020
$’000
1,448
2019
$’000
765
2020
$’000
934
2019
$’000
240
Cash at bank and in hand
Credit, liquidity and market risk
The Group’s principal financial assets are bank balances. The credit risk on these assets is limited because the
counterparties are banks with high credit ratings assigned by international credit rating agencies. The Directors
have carefully reviewed the carrying value of the Group’s financial assets and consider that at the date of this
report no impairment in those values is anticipated.
16.
Current liabilities
Current liabilities
Trade payables and other payables
Accruals
Note payable
Contingent consideration
Lease liabilities (note 19)
Group
2020
$’000
1,088
316
132
146
228
1,910
2019
$’000
307
400
-
-
320
1,027
Company
2020
$’000
57
136
-
146
-
339
2019
$’000
65
274
-
-
-
339
The US Government provided support to US companies through the Small Business Administration Paycheck
Protection Program (SBA PPP), the US Corporation applied for support under the SBA PPP and received a note
payable for $183k. The note bears interest at one per cent (1.00%) and is payable over 18 months beginning
on 6 December 2020. Interest of $1k has been charged in the year. The US Corporation has applied for
forgiveness of the outstanding principal and any interest on the loan amount from the SBA PPP as funds were
used to support the US Corporation’s employees during the global pandemic, Covid-19. As of the date of this
report, the loan is still outstanding.
The Directors consider that the carrying amount of trade payables, other payables and note payable
approximate to their fair value.
P a g e | 61
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
17.
Contingent Consideration
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
As at 1 January
Movement in fair value and discounting unwind
Foreign exchange effect
As at 31 December
Current
Non-current
Contingent consideration
Group
Company
2020
$’000
2,441
339
73
2,853
146
2,707
2019
$’000
3,891
(1,474)
24
2,441
–
2,441
2020
$’000
2,441
339
73
2,853
146
2,707
2019
$’000
3,891
(1,474)
24
2,441
–
2,441
As part of the purchase agreement with the previous owners of Itaconix Corporation, a contingent consideration
was agreed with certain of the sellers (the “Sellers”). This would be payable to the Sellers, subject to the
achievement of revenue targets for products based on the technology acquired for the calendar years 2017 to
2020, based on 50% of incremental annual net sales value above $3m in 2017 and in excess of the prior year for
2018 to 2020 inclusive (and no less than $3m). The deferred performance-related consideration is capped at
$6m in aggregate. Such deferred performance consideration, if any, would be satisfied annually entirely in new
ordinary shares of Itaconix plc at the then prevailing price.
During 2018, in conjunction with the fund raise, a restructuring of the contingent consideration was executed.
The contingent consideration was restructured into two components:
• A one-time issue of 15 million new Itaconix plc shares to the Sellers.
•
The continuation of the previous contingent consideration mechanism (i.e. up to $6m in shares), but with
the window of time for potential achievement expanded to the end of 2022 (from the end of 2020) and
including all the revenues of the Group (which are primarily from products based on the acquired
technology in any event).
It should also be noted that the second component summarised above is intended to serve as an incentive
programme for the two members of management (John Shaw and Yvon Durant) who are also Sellers and are
entitled to 63% of the total contingent consideration. Accordingly, they were not eligible for any cash bonus or
other share incentive programme for the years 2018 to 2020 inclusive. Simultaneously, the merger agreement
with the former shareholders of Itaconix Corporation and related agreements were amended to remove various
restrictive clauses, including minimum funding requirements and employment terms.
Based on the share price at the execution of the restructuring agreement in 2018, the 15m shares had a value
of £0.3m which was expensed immediately.
In respect of 2020, the deferred consideration was valued using a discounted cash flow-based assessment of the
expected sales of the relevant products extracted from the latest Board approved forecasts, consistent with the
approach in prior years. A discount rate of 10.9% was used (2019: 11.2%). The valuation includes elements which
are unobservable and which have a significant impact on the fair value. Accordingly, contingent consideration is
classified as Level 3 fair value measurement.
The value of the adjusted contingent component using the latest Board approved forecasts and assumptions as
above is $2.9m (2019 - $2.4m).
P a g e | 62
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
As a result of the changed revenue forecasts, earn out period, and discount rate from the original value
assessments, the contingent consideration at 31 December 2020 was increased to $2.9m. Sensitivity analysis
was also performed, summarised as follows:
•
If the sales in the period 2020 to 2022 were reduced by $1.0m, the fair value would be reduced by
approximately $0.4m
• A 1% increase in the discount rate would reduce the fair value by $46k
Since the forecasts used were a conservative base case, the computed fair value was deemed appropriate.
18.
Financial instruments
Financial risk management objectives and policies
Itaconix principal financial liabilities comprise trade and other payables and borrowings. The primary purpose
of these financial liabilities is to finance the operation. Itaconix has trade and other receivables and cash that
derive directly from its operations.
The Company has limited financial liabilities as its primary purpose is to hold investments in other Group
companies. The Company’s receivables largely relate to funding the operations of Itaconix.
Financial assets
Cash
Trade and other receivables
Intercompany receivable
Financial liabilities
Trade and other payables
Note payable
Lease liabilities
Contingent consideration
Group
Company
2020
$’000
1,448
463
-
(1,404)
(183)
(704)
(2,853)
2019
$’000
765
331
-
2020
$’000
934
49
-
(707)
-
(1,070)
(2,441)
-
-
-
(2,853)
2019
$’000
240
36
-
(339)
-
-
(2,441)
(3,233)
(3,122)
(1,870)
(2,504)
The Directors consider that the carrying amount for all financial assets and liabilities approximates to their
fair value.
Financial risk management
The Group is exposed to market risk, which includes interest rate risk and currency risk, credit risk and
liquidity risk. The senior management oversees the management of these risks and ensures that the financial
risk taken is governed by appropriate policies and procedures and that financial risks are identified, measured
and managed in accordance with Itaconix’s policies and risk appetite.
Liquidity risk
Itaconix seeks to manage financial risk by ensuring adequate liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably. Short-term flexibility is achieved by holding significant cash
balances in Itaconix’s main operational currencies, notably UK Sterling and US Dollar.
Credit risk
The principal credit risk for Itaconix arises from its trade receivables. In order to manage credit risk, new
customers undergo credit review and customer accounts are regularly reviewed for debt ageing and
collection history. As at 31 December 2020, there were no significant credit risk balances.
P a g e | 63
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Credit risk from cash balances with banks and financial institutions is managed in accordance with group
policy. Credit risk with respect to cash is managed by carefully selecting the institutions with which cash is
deposited.
The financial assets of the Group comprise cash at banks, trade receivables and other receivables. Having
reviewed the recoverability of Itaconix’s financial assets since the reporting date, as well as the likelihood of
future losses over the next 12 months and the lifetime of the assets, the Board does not consider it necessary
to recognise any credit losses.
Interest rate risk
The Group finances its operations principally from equity funding and has no debt. Therefore the downside
risk associated with changes in interest rates is minimal. No sensitivity analysis has been presented for
changes in interest rates as these do not have a material impact on the loss before tax.
Currency risk
During the year, the Group received revenue in USD, EURO and GBP, whilst the majority of its cost base is in
USD. These receipts are currently relatively small and tend to be used first to cover costs in the same currency
before conversion to USD, and so currency risk impacting cash balances is deemed to be appropriately
managed. Intercompany loans from Itaconix plc to Itaconix Corporation to fund the US operations is
denominated in GBP and so is translated to USD each period end, potentially resulting in significant debits or
credits to the Company’s profit and loss but with no cash or other impact on the Group as the loan is
eliminated on consolidation. Management notes that such foreign exchange movements are non-cash items.
No forward foreign exchange contracts were entered into during the period (2019: nil). At 31 December 2020
the bank balances on hand of foreign currencies were:
Currency
GBP
EUR
2020
‘000
344
-
2019
‘000
367
78
The foreign currency balances are in aggregate higher than at the end of 2019, which is due to the US-based
Itaconix Corporation being the main operating entity. No sensitivity analysis has been presented for changes
in currency exchange rates, although management will keep the need for sensitivity analysis under regular
review going forward.
Liquidity risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably. The Group’s policy through the period has been to ensure
continuity of funding by equity. The table below summarises the maturity profile of the Group’s financial
liabilities at the year-end based on contractual undiscounted payments, specifically noting that the lease
liability total is determined as the undiscounted lease payments including interest payable.
At 31 December 2020:
Group
Trade and other payables
Contingent consideration
Lease liability
Note payable
On
demand
$000
-
-
-
-
Less than
3 months
$000
974
146
63
39
3 to 12
months
$000
430
-
189
93
1 to 5
years
$000
-
3,301
681
51
> 5 years
$000
-
-
-
-
-
1,222
712
4,033
-
Total
$000
1,404
3,447
933
183
5,967
P a g e | 64
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
At 31 December 2019:
Group
Trade and other payables
Contingent consideration
Lease liability
On
demand
$000
-
-
-
Less than
3 months
$000
394
-
96
3 to 12
months
$000
313
-
288
1 to 5
years
$000
-
2,441
1,195
> 5 years
$000
-
-
-
-
490
601
3,636
-
Total
$000
707
2,441
1,579
4,727
The range of interest rates applicable to instant access deposit accounts and term deposits at 31 December
2020 was 0.25% to 1.00% per annum (2019: 0.25% to 1.00%).
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while also
maximizing the operational potential of the business. The capital structure of Itaconix consists of cash and
cash equivalents and equity attributable to equity holders of the Company, comprising issued capital and
reserves as disclosed in the consolidated statement of changes in equity. Itaconix is not exposed to externally
imposed capital requirements.
Committed facilities
The US Government provided support to US companies through the Small Business Administration Paycheck
Protection Program (SBA PPP), the US Corporation applied for support under the SBA PPP and received a note
payable for $183k. The note bears interest at one per cent (1.00%) and is payable over 18 months beginning on
6 December 2020.
The Group has no floating rate committed borrowing facilities as at 31 December 2020 (2019: nil).
There are no material differences between the fair value of financial instruments and the amount at which
they are stated in the financial statements. This is due to the fact that they are of short maturity and if
payable on demand the fair value is not materially different from the carrying value.
19.
Leases
The Group leases all its facilities from which it operates. The headquarters, production, and main offices are
located in Stratham, NH, USA. The facility is approximately 31,000 square feet and the lease expired in
September 2019. Management renewed the lease for a 5-year extension, through to September 2024. Lease
payments to September 2024 have been included in the initial recognition of the lease liability. There was
another office facility in Deeside, Flintshire, UK that expires in July 2021, but which was surrendered to the
landlord in September 2020. There was an exceptional income recognized from the surrender of $91k due
to the onerous lease liability being released.
The Group has adopted IFRS 16 Leases, which specifies how to recognize, measure, and present leases
liabilities and the associated right-of-use assets. The reclassifications and the adjustments arising from the
new accounting standard were recognized in the opening balance sheet on 1 January 2019. In respect of the
Group’s former headquarters in the UK, the Group has applied practical expedient to retain the IAS 17
valuation of this onerous lease of $0.3m, this being set off against the right-of-use asset at 1 January 2019.
On initial application, the Group recognized lease liabilities in relation to leases which had previously been
classified as ‘operating leases’ under the principles of IAS 17: Leases. These liabilities were measured at the
present value of the remaining lease payments, discounted using the lessee’s weighted average incremental
borrowing rate as at 1 January 2019 of 7.75%. The Group has elected to record right-of-use assets as equal
to the corresponding lease liabilities as the impact of potential additional costs or deductions to the asset s
are immaterial.
In applying IFRS 16 for the first time, the Group used practical expedients permitted by the standard:
P a g e | 65
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
•
•
reliance on previous assessments on whether leases are onerous;
the use of hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
The Group has also elected not to reassess whether a contract is or contains a lease at the date of initial
application. Instead, for contracts entered into before the application date, the Group has relied on its
assessment made applying IAS 17 and IFRIC 4 in determining whether an arrangement is or contains a lease.
Right-of-use asset
At 1 January 2019
Amortisation
Exchange differences
At 31 December 2019
Additions in year
Amortisation
Exchange differences
At 31 December 2020
Lease liability
At 1 January 2019
Additions in year
Interest expense
Lease payments
Exchange differences
At 31 December 2019
Additions in year
Interest expense
Lease payments
Lease termination
Exchange differences
At 31 December 2020
Leased Building
$’000
1,118
(198)
-
920
24
(198)
-
746
Leased Building
$’000
1,384
-
14
(334)
6
1,070
24
28
(327)
(91)
-
704
The above table also provides an evaluation of the material changes in the Group’s liabilities arising from
financial activities, as noted in the Group’s Cashflow.
At 31 December 2020, the maturity of the lease liability is as follows:
Up to 3 months
$’000
53
2
Between 3
months and 12
months
$’000
One to two years
$’000
Two to five years
$’000
152
4
190
5
287
13
Leased building
Leased equipment
P a g e | 66
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
20.
Share capital
At 1 January 2019 (269,130,071 shares in issue)
Issued as a result of an exercise of options
Nil
New share issued
Nil
At 31 December 2019 (269,130,071 shares in issue)
Issued as a result of an exercise of options
Nil
New share issued
08/07/20 – 11,549,134
15/07/20 – 151,769,048
At 31 December 2020 (432,448,253 shares in issue)
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Group
$000
3,677
-
-
3,677
-
145
1,896
5,718
Company
$000
3,677
-
-
3,677
-
145
1,896
5,718
Itaconix plc (previously Revolymer plc) was incorporated on 10 April 2012.
On 8 July 2020, the Company issued 11,549,134 ordinary shares with a nominal value of 1p per share for 1.1p
per share. The consideration was received in cash.
On 15 July 2020, the Company issued 151,769,048 ordinary shares with a nominal value of 1p per share for
1.1p per share. The consideration was received in cash.
21.
Notes to the statements of cash flow
Group
Company
Loss before tax
Depreciation of property, plant and equipment
Amortisation of right-of-use asset
Disposal of equipment
Impairment of Group indebtedness
Revaluation of deferred consideration
Exceptional income on reorganization
Loss on foreign exchange
Gain on sale of associate
Share based payments charge
Share of loss / profit from associate
Recovery of loan to associate
Taxation
Operating cash flows before movements in working
capital
Increase in inventories
(Increase) / decrease in receivables
Increase / (decrease) in payables
Net cash outflow from continuing operating activities
2020
$’000
(1,639)
200
198
(20)
-
412
(91)
8
-
18
-
-
(7)
(921)
(857)
(132)
753
(1,157)
2019
$’000
(1,357)
223
198
42
-
(1,450)
-
48
(84)
24
38
(29)
(1)
(2,348)
(117)
542
92
(1,831)
2020
$’000
(1,661)
-
-
-
1,224
412
-
92
-
18
-
-
-
85
-
(13)
(146)
(74)
2019
$’000
(4,894)
-
-
-
6,169
(1,450)
-
182
-
24
-
-
-
31
-
(27)
206
210
P a g e | 67
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
22.
Share based payments
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
An expense is recognised for share based payments based on the fair value of the awards at the date of grant,
the estimated number of shares that will vest and the vesting period of each award. The charge for share based
payments for the period to 31 December 2020 is $18k (2019: $24k) as disclosed in note 7.
During the year to 31 December 2020 no share options (2019: nil) were granted under the Itaconix LTIP scheme
as either approved options (under the HMRC approved EMI scheme) or unapproved options. The management
team received nil cost share options (either HMRC approved or unapproved) with market facing performance
conditions required for vesting (“Management Options”). The fair value of Management Options as at the date
of grant was therefore estimated using a Monte Carlo simulation model. UK employees did not receive share
options under the EMI scheme (and with an exercise price of the market price as at the date of grant) (“Employee
Options”). US employees did receive share options under the US Option scheme (and with an exercise price of
120% of the 3-day weighted average of the market price as at the date of grant) (“Employee Options”).
Accordingly the fair value of the Employee Options was estimated as at the date of grant using a Black Scholes
model. Both models took into account the terms and conditions upon which the options were granted using the
following assumptions.
Grant date
2020 Option Grant
Number of options granted
Exercise price
Expected volatility
Risk free rate
Expected dividend yield
Expected option life
2017 Option Grant
Number of options granted
Exercise price
Expected volatility
Risk free rate
Expected dividend yield
Expected option life
Unapproved
Management
Options
EMI
Management
Options
EMI UK
Employee
Options
2019 US
Employee
Options
nil
£nil
nil
nil
nil
nil
nil
£nil
nil
nil
nil
nil
nil
£nil
nil
nil
nil
nil
4,900,000
£0.027
132.62%
0.83%
0%
3-4 years
2,096,282
£nil
33.1%
0.4%
0%
36 months
1,582,127
£nil
33.1%
0.4%
0%
36 months
834,051
£0.235
33.1%
0.4%
0%
36 months
nil
£nil
nil
nil
nil
nil
The Employee Options have a vesting period of 36-48 months with no performance criteria. The vesting period
of the Management Options is also 36 months but they only become exercisable if challenging market facing
performance conditions are met; namely that 50% of the grant becomes exercisable if the weighted average
ordinary share price in the 180 day period ending on 31 May 2020 of grant is £0.40. Between weighted average
ordinary share prices of £0.40 and £0.55, vesting shall be pro-rata and on a straight line basis between 50% and
100%. Below £0.40 the grants are not exercisable and lapse in full.
The valuation methodology used in valuing share based payments includes the key assumptions shown above.
Management have revisited and amended the assumptions in respect of expected volatility and risk free rate in
the year to 31 December 2020. The charge for share based payments for the period to 31 December 2020 is
accordingly $18k (31 December 2019 $24k).
P a g e | 68
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
Employee share option plans – unvested options
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
During the year the Company operated an employee share option plan (“the EMI plan”) for the benefit of certain
employees of the Company.
All options granted in the year are subject to the employee completing a specified period of service. All options
lapse when the employee ceases to be employed by the Company.
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in,
unvested share options outstanding under the “EMI plan” during the year:
Unvested
Balance at beginning of year
Awarded during year
Lapsed during the year
Unvested options at end of year
2020
Number
of shares WAEP
£0.25
136,859
£0.03
4,900,000
£0.25
(136,859)
2019
Number
of shares
1,892,396
-
(1,755,537)
4,900,000
£0.03
136,859
WAEP
£0.04
£nil
£0.02
£0.25
Unapproved share option plan – unvested options
During the year, the Company operated a share option plan for the benefit of employees who had received
grants under the EMI plan up to their personal limits.
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in,
unvested share options outstanding under the Unapproved plan during the year:
Unvested
Balance at beginning of year
Awarded during year
Lapsed during the year
Unvested options at end of year
2020
Number of
2019
Number of
shares WAEP
shares WAEP
893,941
-
(893,941)
-
£nil
£nil
£nil
£nil
6,158,491
-
(5,264,550)
893,941
£nil
£nil
£nil
Summary of all options – vested and unvested
The following table summarises the position regarding all share options whether vested or not, including those
that vested at Admission in 2012:
Vested and unvested
Balance at beginning of year
Awarded during the year
Lapsed during the year
Exercised during the year
Balance at end of year
2020
Number
of shares WAEP
2019
Number
of shares WAEP
1,030,800
4,900,000
(1,030,800)
-
£0.08
£0.03
£0.08
£nil
6,915,677
-
(5,884,877)
-
£0.08
£nil
£nil
£0.01
4,900,000
£0.03
1,030,800
£0.08
P a g e | 69
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
23.
Related party transactions
Transactions with key management personnel
Remuneration of key management personnel
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
The remuneration of the Directors and Executives, who are considered to be the key management personnel
of the Company, is set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party
Disclosures’.
Salaries and other short-term employee benefits
Post-employment benefits
Directors’ fees invoiced by third parties
Equity settled share based payment expense
Other related party transactions
2020
$’000
793
19
-
13
825
2019
$’000
784
18
8
9
819
The Group entered into the following related party transactions during the current and prior year:
IP2IPO invoiced the Group for the services of Mr. Townend who has served on the Board of Itaconix plc until
May 2019, when Mr. Townend stepped off the Board.
In 2019 the Group sold its investment in Alkalon and received payment for the outstanding loan and accrued
interest as part of the sale of its investment.
2020
None
2019
IP2IPO Services Limited
Alkalon A/S
Receipts
from related
parties
$’000
–
Receipts
from related
parties
$’000
–
61
Payments
to related
parties
$’000
–
Payments
to related
parties
$’000
8
–
Amounts due
to related
parties
$’000
–
Amounts due
from related
parties
$’000
–
Amounts due
to related
parties
$’000
–
–
Amounts due
from related
parties
$’000
–
–
All related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.
There have been no write-offs of related party balances during the year and there are no provisions against
any related party balances. The terms and conditions of related party transactions are the same as those for
other debtors and creditors.
24.
Contingent assets
There were no contingent assets in 2020 (2019 - nil).
25.
Contingent liabilities
There were no contingent assets in 2020 (2019 - nil).
P a g e | 70
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2020
26.
Post Balance Sheet Events
There were no material post balance sheet events.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
P a g e | 71
APPENDIX TO THE ANNUAL REPORT
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
Corporate Information
Advisors
Auditors
BDO, LLP
55 Baker Street
London
W1U 7EU
Solicitors
Fieldfisher LLP
Riverbank House
2 Swan Lane
London EC4R 3TT
NOMAD/Broker
N+1 Singer
One Bartholomew Lane
London
EC2N 2AX
Patent Agent
Grossman, Tucker, Perreault & Pfleger, LLP
55 South Commercial Street
Suite B14
Manchester, NH, USA
03101
Registered Office
Fieldfisher LLP
Riverbank House
2 Swan Lane
London EC4R 3TT
BPE Solicitors LLP
St James’ House
St James’ Square
Cheltenham
Gloucestershire GL50 3PR
Registrar
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Bankers
HSBC plc
Vista
St David’s Park
Ewloe
US Operations
2 Marin Way
Unit 1
Stratham, NH, USA
03885
P a g e | 72