267703 Proteome cover.qxp 10/04/2024 16:48 Page ofc1
Proteome Sciences plc
Registered number: 02879724
Report and Financial Statements
for the year ended 31 December 2023
Perivan.com
267703
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267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 1
CONTENTS
BUSINESS REVIEW
Chief Executive Officer’s Statement
Strategic Report
GOVERNANCE
Board of Directors
Corporate Governance
Audit Committee Report
Remuneration Committee Report
Directors’ Report
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated and Company Cash Flow Statements
Notes to the Consolidated Financial Statements
AGM INFORMATION
Notice of Annual General Meeting
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CHIEF EXECUTIVE OFFICER’S STATEMENT
For the year ended 31 December 2023
Group revenues for the full year decreased by 35% to £5.03m (2022: £7.78m), services revenue
decreased by 41% to £1.63m (2022: £2.75m) and sales and royalties attributable to TMT®/TMTpro™
reagents decreased by 18% to £3.40m (2022: £4.16m*).
*excluding the sales milestone payment of £0.87m received in 2022 under the exclusive licence and distribution agreement
with Thermo Fisher Scientific.
Despite our expectation at the end of 2022 and during H1 2023 to deliver further growth in 2023, the
second half of 2023 did not develop as expected. As alluded to in our investor meeting in September
2023 and announced on 30 November 2023 the challenging macroeconomic situation with weak growth,
high inflation and tight monetary policy has impacted many of our clients and partners. Particularly the
biotech sector was severely affected by these headwinds, exemplified by significant layoffs and reduction
of R&D budgets industry wide. Also, larger customers reduced their activities in the proteomics field
and postponed planned projects to 2024. Given the market requirement for our proteomic products and
services we expect customer interest for our services to significantly improve during 2024, with the
introduction of new next generation tags in the isobaric and isotopic field, and the output from the US lab,
the Company is confident to see the business return to growth in 2024.
We have continued our planned strategic investment in both our Frankfurt and San Diego laboratories
and added various instruments primarily in the US laboratory including an Orbitrap Ascend Tribrid mass
spectrometer and Accelerome automated sample preparation platform. We launched single cell
proteomics (“SCP”) in October 2023 and are working on the first projects. In addition, we have advanced
our new tag developments (isobaric and isotopic) and expect to launch both near term plus develop
next generation isotopic tags.
Total costs, excluding finance costs, rose to £6.65m (2022: £6.05m) which has resulted in an operating
loss of £1.62m (2022: operating profit of £1.73m) and a net loss of £2.44m (2022: profit after tax of
£1.33m). Cash reserves at the year-end were at £2.03m (2022: £3.99m).
2023
£’000
Revenue 5,028
Gross profit 1,647
Administrative expenses* (3,268)
EBITDA (1,137)
Other non-cash items and non-recurring costs (share based payment) 218
Adjusted EBITDA (919)
2022
£’000
7,780
4,767
(3,039)
2,125
303
2,428
Adjusted EBITDA (a non-GAAP Group specific measure (see Note 3) which is considered to be a key
performance indicator of the Group’s financial performance) decreased by £3.35m year on year mainly
due to lower revenues while costs have increased due to additional staff and the expansion to the U.S.
*Includes depreciation of £0.5m (2022: £0.4m)
Services
It was a challenging year in our service business in 2023. As in previous years, the US is by far our most
significant market in terms of biopharma companies who outsource their proteomic services to Contract
Research Organisations (“CROs”) such as Proteome Sciences. Unfortunately, the biopharma market
especially in the US was marked by employee layoffs in 2023. According to Fierce Biotech, a company that
provides news, analysis and data relating to the biotech sector, biopharma layoffs were 57% up in 2023.
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CHIEF EXECUTIVE OFFICER’S STATEMENT
For the year ended 31 December 2023
This has been confirmed by other Life Science
provider companies in their public reporting. The
significantly reduced level of financing in biopharma
resulted in workforce reductions affecting 187
organisations in 2023. We were in contact and
discussing projects with 38 of these that were
primarily focused in proteomic pre-clinical and
clinical research. Projects were either cancelled
before samples were shipped, or significantly
delayed pending future financing rounds. This
seriously affected our ability to win business.
During the first half of 2023 orders received and
sales were performing to plan halfway through the
year, but this slowed significantly in the second half
of 2023. Projects under discussion in the first half
of 2023 did not arrive in the second half of the year,
and initial discussions on new projects slowed.
A considerable client outreach effort was initiated
at the start of the second half of the year to offset
this slowdown and that did uncover new project
opportunities that are currently under discussion,
so we believe the worst of the 2023 slowdown is
behind us now. In the US the main focus was our
investment in the new laboratory and preparing the
market for the pending launch of the SCP service.
Over and above this additional outreach, we
continued our presence in various conferences and
exhibitions throughout 2023 in both the US and
Europe, combining these events with local client
visits when in the close vicinity.
The news that the company has invested in a new
US based laboratory in San Diego was very well
received by existing clients who said they will use
our new facility from 2024 onwards, and from new
customers who will use us for the first time as a
result of the new laboratory. It was not unexpected
to hear that all clients preferred a local facility to
avoid excessive shipping charges to get their
samples into Europe, and to avoid any customs
issues
through German
importation control. Equipping the new lab with a
latest generation mass spectrometer was also seen
as giving us a distinct advantage over more local
competition. In addition, our US entity Proteome
Sciences US Inc enables the company to partake
to clear samples
in National Institute of Health (“NIH”) and other US
government sponsored grants.
In the European section of our business, we
concluded all the work connected with a large
Europe based clinical trial through the year. From a
European perspective the UK continues to be the
more active component, and we have picked up
important clients requiring proteome
several
analysis in projects destined for, or in clinical trials.
In general, the biopharma investment slowdown
did affect our business more than we expected at
the start of 2023, but given the investment in new
equipment, facilities and new product offerings
commercially we remain confident to get back on
our growth trajectory in 2024.
through
Licences
Income from licensing our intellectual property
assets remains a key contributor to revenue,
the TMT® and TMTpro™
primarily
reagents. We retain a portfolio of patents and
applications covering biomarkers and reagents
which we continue to monitor for commercialisation
potential. As the field around use of blood proteins
in diagnosis of Alzheimer’s disease, other
neurodegenerative disorders and many cancers
our patented biomarkers may prove critical in
development of novel diagnostic tests opening up
additional licensing opportunities.
relative
to 2022
Tandem Mass Tags®
In line with other parts of the business the revenue
from TMT® and TMTpro™ reagent sales decreased
(excluding milestone
18%
payment). In part this is attributable to the full year
effect of a one-off adjustment to running royalties
following expiry of the TMT1 patent family in
September 2022 but also reflects weaker markets
for the tags globally. A range of factors are likely to
have impacted tag sales including the general
macroeconomic situations, the use of alternative
mass spectrometry methods such as data
independent acquisition and
the delay of
purchases pending introduction of the 32plex
TMTpro™ tags due in 2024.
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CHIEF EXECUTIVE OFFICER’S STATEMENT
For the year ended 31 December 2023
We are working with our licensee Thermo Fisher
Scientific to address the market challenges and are
excited at the prospects for the extended TMTpro™
reagents that now allow large discovery projects to
be completed in a single experiment, greatly
improving the coverage and quantitative precision
and accuracy available to researchers.
Stroke Biomarkers
Our two licensees Randox Laboratories and Galaxy
CCRO (“Galaxy”) have made progress with their
clinical trials during 2023. In connection with
Galaxy’s initiation of a first clinical study in Europe
we received a milestone. Galaxy is a US based
clinical contract research organisation, which is
developing a point of care test for the diagnosis
and timing of stroke onset in order to guide the use
of specialist thrombolytic treatment. Under the
terms of the licence with Galaxy we have received
equity in Galaxy as an initial fee in 2019 and
similarly the milestone in 2023 was also satisfied in
equity. As a result of this we own a minority stake
in Galaxy and under the licence we are entitled to
subsequent development milestones and a running
royalty on any product sales. We expect more news
to come during 2024 with the possibility for further
milestones relating to trial completion and product
launches on the horizon.
Research
During the year we have focused our research
efforts on improving our processes and have
successfully achieved a significant improvement in
our sample preparation processes enabling us to
increase our capacities by 50%. The new
workflows are also simpler, more robust and deliver
equivalent performance within the same budget.
In parallel, we continued to optimise workflows for
Single Cell Proteomics. Over the year we were able
to improve coverage so that we can attain
quantification for approximately 1,500 proteins per
cell in studies where we measure 576 individual
cells. Overall performance is stable across different
cell types and we are now beginning our first
commercial activities with the SysQuant®-SCP
service operating from our Frankfurt laboratory.
tags
We also continue research to develop new
reagents for proteomics and this resulted in our
producing a set of non-isobaric
for
multiplexing of data-independent acquisition
(“DIA”) studies. The tags are being evaluated by
academic partners and we have
initiated
discussions around licensing for commercial
development that we expect to conclude during the
year. We also completed the development of the
extended set of TMTpro™ reagents and look
forward to their introduction to our services in the
first half of 2024. We continue to innovate in
chemistry and will be working on ancillary products
to add new functionality for TMTpro™ enabled
studies through a sponsored research project.
Operating Environment
We started the year 2023 with a strong order
book. Our service business developed positively
in H1 2023 with 19% increase over the same
period in 2022 – a trend which could not be
sustained in H2 2023. The TMT® business
remained flat in the first half of the year and
decreased by 18% year on year. Next to the
macroeconomic changes which have influenced
our clients and us negatively the expectation of
the new 32plex isobaric tags might also have
played a role in the cautious ordering of tags.
To address the growing DIA market, we have
developed a totally new line of isotopic tags which
we aim to partner with a strong distribution partner.
SCP as our new service was launched in October
2023 and we have started first projects in
partnership with academic key opinion leaders and
our long-term customers. The roll out of this service
is expected to unfold in 2024 when customer
projects will be delivered from the Frankfurt lab.
The US lab has been opened in January 2024, and
was met with good interest primarily in the US
market where we plan to address the customers
who have had reservations to ship samples to the
EU. With the lab in San Diego, one of the largest
biotechnology and pharmaceutical research hub
globally, we have addressed these concerns and
are starting customer projects in 2024.
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CHIEF EXECUTIVE OFFICER’S STATEMENT
For the year ended 31 December 2023
At the end of a difficult year for our business and
following the substantial strategic investments that
have been made for the future, we would like to
thank all our teams for their contribution, passion
and hard work. We expect the macroeconomic
trends to improve in the course of 2024 and these
should impact positively on our business.
Outlook
We invested substantially in 2023 to expand our
business by establishing the facility in San Diego,
developing new ranges of TMT® and DIA tags and
launching SCP to address the growing global
demand for proteomics in 2024.
The 2024 year has experienced significant
customer engagement and interest in proteomics
services reflected by the considerable increase in
customer contact and quotations provided across
multiple projects from which new contacts have
been secured in the first quarter. We expect this
momentum to continue throughout 2024.
For our tag business we expect the introduction of
the 32plex TMTpro™ tags due in 2024 to generate
strong interest in the market and significant
revenues in the coming years.
Our DIA tags are being evaluated by academic
partners and we have initiated discussion around
licensing for commercial development that we
expect to conclude during the year.
Interest in SCP has continued to grow since our
launch and we expect to run more commercial
projects in the near future.
In summary, we expect the investments that we
have made and the new products and services we
have introduced to add to and bring the business
back to growth in 2024.
We would like to thank our shareholders and team
for their continuing support, and we look forward to
communicating renewed progress in 2024.
Dr. Mariola Söhngen
Chief Executive Officer
9 April 2024
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STRATEGIC REPORT
For the year ended 31 December 2023
is
Single Cell Proteomics is a good example of how
the company is moving forward, by using mass
spectrometry to achieve protein detection levels
currently several orders of magnitude greater than
ELISA based technologies can achieve at this time.
Another clear application area
for mass
spectrometry
in detection of more post
translational modifications on the proteins detected
in a more conventional run. We see an increasing
need from biopharma to detect post translational
modified peptides and proteins as end-point
biomarkers in a clinical trial. This can provide
ongoing business via classical protein Discovery
based projects, and more importantly as the drug
progresses into clinical trials, a Targeted assay
under Good Clinical Laboratory Practice (“GCLP”)
laboratory standards. Clients have informed us that
we are one of a few CRO’s that they have identified
who can take a research project now through to
clinical reporting base in the future under more
stringent GCLP standards. Furthermore, we
continue to meet both new and current clients to
discuss their upcoming proteomic needs and how
we can help them. As protein experts, clients value
our thoughts and processes on how we can solve
their problems. Proteome Sciences will be
expanding its services to include these 32 tags by
end H1 2024, thereby having a head start on other
CRO’s who will have to wait for the new tags to be
available from Thermo Fisher Scientific.
Finally, we have made a significant step by
investing in our US laboratory. This will make it
easier for current US clients to ship samples to us,
and it removes the barrier for new clients to do the
same. These new clients will be biopharma but will
also address the considerable academic market.
Many academic institutes could not use our
Frankfurt facility because their grant money could
only be spent in the US. Proteome Sciences US Inc
also enables the company to participate in NIH/US
Government grants as a US entity, employing US
employees and have a US based footprint. With the
latest generation mass spectrometer in the San
Diego lab, we are better placed than the local
providers.
Review of the Business
The principal activities of the Group involve protein
biomarker research and development. As a leader
in applied proteomics, we use high sensitivity
proprietary techniques to detect and characterise
differentially expressed proteins in biological
samples for diagnostic, prognostic and therapeutic
invented and
In addition, we
applications.
developed the technology for TMT® and TMTpro™,
and manufacture these small, protein-reactive
chemical reagents which are sold for multiplex
quantitative proteomics under exclusive license by
Thermo Fisher Scientific.
predominantly
pharmaceutical
Proteome Sciences is a major provider of contract
research services for the identification, validation
and application of protein biomarkers. Our clients
are
and
biotechnology companies, but we also perform
services for other sectors including academic
research. While we have several well-established
workflows that meet the needs of many customers,
we retain our science-led business focus wherever
possible, developing new analytical methods, new
reagents and data analysis tools to provide greater
flexibility in the types of studies we can deliver. Our
contract service offering remains centred on mass
is
spectrometry-based proteomics, and
becoming more widely implemented in drug
development projects as the pharmaceutical
industry seeks to expand biological knowledge
beyond genomics. These services are fully aligned
with the drug development process, can be used
in support of clinical trials and in vitro diagnostics,
and include proprietary bioinformatics capabilities.
this
Progress during 2023
Growing Our Services Business
As in all sectors of technology-based sales, no
organisation can stand still and offer the same
services year in and year out. As ligand binding
technologies like multiplex ELISA expand both
antibody and aptamer arrays to cover more
proteins per run, thereby more closely compete
with
traditional proteomic analysis by mass
spectrometry, we must take our services deeper
into the proteomic field.
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STRATEGIC REPORT
For the year ended 31 December 2023
Expanding beyond the core proteome
We have been delivering deep analysis of post-
translational modifications through our SysQuant®
phosphoproteomics workflows for many years and
introduced new methods for analysis of protein
ubiquitylation more recently. These two methods
have been used across many different types of
to better
studies enabling our customers
understand how their drug targets fit into the wider
biological context, as well as providing deeper
insights into the mechanism of action of their
experimental drugs. In 2023 we started to expand
our coverage to include additional modifications
relevant to a range of disease areas that were
previously poorly served by traditional proteomics
methods. We continue to evaluate the potential to
add further protein modifications to our repertoire,
along with adding additional analytes in the
metabolic space where
the same mass
spectrometry platforms can be deployed.
Single Cell Proteomics
Our launch of Single Cell Proteomics services in
October 2023 followed an intensive development
process reflecting the large technical challenge of
working with such limited material. We have now
initiated several biological studies with academic
collaborators to demonstrate different aspects of the
technology as well as a proof-of-concept study with
one of our
to
developing SCP is the downstream data analysis and
visualization. We have been working on an in-house
tool for streamlining data quality assessment,
pre-processing and statistical analysis that allows us
to identify cellular diversity based on the expression
profiles of over 1,000 proteins per cell. Interest in
SCP has continued to grow since our launch and
we expect to run our first commercial projects in the
near future.
long-term customers. Critical
Status of the Tandem Mass Tag® Product Portfolio
During 2023 we have been working on the largest
extension of TMT™ multiplexing as we increase the
current 18plex tags to 32plex. This was in response
to market demand as the need to use more
samples in proteomics studies is being widely
recognised. Whilst many groups have been moving
towards data-independent acquisition methods to
gain throughput, this has been at the cost of some
analytical precision and we believe
that
introduction of an additional 14 channels will
re-balance the demand for TMTpro™ reagents
which still provide the greatest combination of
quantitative precision and, when combined with our
patented MS3 acquisition methods, accuracy.
Commercial stocks of the additional 14 tags have
been synthesized and we are working with our
licensee Thermo Fisher Scientific to optimise the
mass spectrometry acquisition methods. We are
introducing 32plex workflows to our standard
proteomics services which will be available ahead
of the wider commercial launch of the reagents.
Stroke biomarkers
We currently have two licensees to our stroke
biomarkers and both have been engaged in clinical
trials of their respective tests during 2023. Randox
Laboratories have a long-running trial based in the
UK nearing completion and results are expected
during 2024. We would hope that a product
approval and launch may then follow swiftly, at least
for the European market. Our other licensee,
Galaxy CCRO, continues to operate in stealth
mode, with a preliminary clinical trial of the GSTP
marker initiated in Glasgow during the second half
of 2023. Galaxy have indicated they expect a
read-out of the Rhesus trial during 2024 and this
will inform decisions around a full regulatory trial
both in Europe and the US. We own a minority stake
in Galaxy and under the license we are entitled to
subsequent development milestones and a running
royalty on any product sales.
Patent Applications and Proprietary Rights
During the year 2023 23 new patents were issued
across five different families. Of these 6 related to
the TMTpro™ reagents and methods of use and
6 related to biomarkers for Alzheimer’s disease and
cancer. One new patent application was submitted
relating to new isotopic tags for data independent
acquisition mass spectrometry. Overall costs of
maintaining the patent estate were slightly lower
than in 2022 due to expiry of several early
TMT patents.
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STRATEGIC REPORT
For the year ended 31 December 2023
Strategic evaluation
We have used 2023 to further implement our
strategy of organic growth. In particular we have:
– Addressed
the growing DIA market by
developing a totally new line of isotopic tags
which we will licence with a strong distribution
partner.
– Worked on the life cycle management of TMT
by developing 32plex isobaric tags.
–
Launched SCP in October 2023 as our new
service and have started first projects. The roll
out of this service is expected to unfold during
2024 when customer projects will be delivered
from the Frankfurt lab.
– Opened the US lab in January 2024.
Financial Performance
For the twelve-month period ended 31 December
2023
to £5.03m
(2022: £7.78m).
revenue decreased 35%
•
Licences, sales and services
revenue
decreased 27% to £5.03m (2022: £6.91m
(adjusted for the milestone)). This is comprised
of two revenue streams: TMT® related revenue
and Proteomic (Biomarker) Services. Sterling
values of our sales and royalties received for
TMT® tags decreased by 18% to £3.40m
(2022: £4.16m).
• Adjusted EBITDA decreased to £(0.92)m
(2022: £2.43m).
•
The loss after tax was £2.44m (2022: profit after
tax of £1.33m).
Financial Review
Results and Dividends
Key Performance Indicators (“KPI’s”)
•
The directors consider that revenue, adjusted
tax are
EBITDA, and profit before/after
important in measuring Group performance.
The performance of the Group is set out in the
Chief Executive Officer’s Statement on page 2.
•
•
The directors believe that the Group’s rate of
cash expenditure and its effect on Group cash
resources are important. Net cash outflows
from operating activities for 2023 were £0.48m
(2022: net cash inflows of £2.14m). The costs
in 2023 were higher when compared to 2022
due to the investment in our San Diego site,
development of next generation tags and the
launch of SCP. We suffered from lower revenues
in biomarker services and TMT® as compared
to 2022. Cash at 31 December 2023 was
£2.03m (31 December 2022: £3.99m).
In 2023 service revenues decreased by 41% to
£1.63m (2022: £2.75m). As a proportion of total
group revenue (excluding the milestone revenue)
service revenues in 2023 was 32% compared
to 40% in 2022.
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Proteome Sciences plc
Taxation
Owing to the changing nature of our services
business, with a stronger focus on commercial
activities, we have not fully assessed our available
R&D tax credit for 2023, and such amounts are only
recognised when reasonably assured.
Costs and Available Cash
•
The Group maintained a positive cash balance
in 2023 and continues to seek improved cash
flows from commercial income streams. Due to
lower revenues and higher operating costs year
on year, the Group had a negative cash flow in
the year. Administrative expenses in 2023 were
£3.27m (2022: £3.04m).
• Staff costs
the year were £3.35m
(2022: £3.12m) of which £0.22m was a share
based payment charge (2022: £0.30m).
for
• Property costs without charges on rent of
£0.44m were higher than previous years
(2022: £0.16m) also including property costs
for the lab in San Diego.
•
Finance costs relate to interest due on loans
from two major investors in the Company and
lease interest. Costs of £0.80m were higher
than the prior year (2022: £0.47m).
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 9
STRATEGIC REPORT
For the year ended 31 December 2023
•
•
Trade and other payables were £0.63m
(2022: £0.82m).
Trade and other receivables were £0.96m
(2022: £1.44m).
conventional employment arrangements with key
personnel and staff turnover is low, their retention
cannot be guaranteed as evidenced by 1 resignation
during 2023.
• Cash at
the year end was £2.03m
(2022: £3.99m).
Principal Risks and Uncertainties
Commercialisation Activities
It is uncertain whether our range of contract
proteomic services will generate sufficient
revenues for the Group ultimately to be successful
in an increasingly competitive commercial market
which generally favours companies with a broader
technology platform than our own. Similarly, our
increased capacities and the opening of our US
laboratory create a risk that we do not generate
sufficient orders to make our commercial activities
profitable.
Management of Risk: The Group has sought to
manage this risk by broadening its proteomic
services offering by increasing the coverage of
unbiased discovery experiments and broadening
capabilities for analysis of very small samples
including single cells, investing in our own sales by
dedicating more staff time to direct business
development activities in our principal commercial
territories and adopting conventional service-based
metrics directed at speed, cost and quality.
Adding new services bears
that
competitors are already more advanced and it will
be difficult to find and retain new customers.
risk
the
Management of Risk: We believe the technology
we are developing for single cell proteomics has a
high demand in the market and hence we believe
there is sufficient room for many players to satisfy
the demand. Moreover, Proteome Sciences has a
USP (Unique Selling Point) as we are the owner of
TMT® which gives us a number of advantages
(including cost control) vis à vis competitors.
Dependence on Key Personnel
The Group depends on its ability to retain a limited
number of highly qualified scientific, commercial and
managerial personnel, the competition for whom
is strong. While the Group has entered into
Management of Risk: The Group has a policy of
organising its work so that projects are not
dependent on any one individual, and we have
strong managerial oversight and support for our
laboratory-based staff. Retention is also sought
through
of
remuneration packages, performance related
bonus payments, and the opportunity for share
option grants.
role-based
reviews
annual,
Investment Limitations
Sales and royalties from TMT® have historically
been key to revenue and working capital for the
group to invest in the business. We are still reliant
on TMT® sales and royalties for the majority of our
revenues and working capital to invest in growing
the business remains limited.
Management of Risk: In addition to previous cost
reduction and ongoing containment measures
which have significantly changed the cost profile
of the business over the last years, we also actively
engage with our major creditors to manage the
Company’s debt.
Competition and Technology
The international bioscience sector is subject to
rapid and substantial technological change. There
can be no assurance that developments by others
will not render the Group’s service offerings and
research activities obsolete or otherwise
uncompetitive. Proteomics remains a growth area
where increasing demand from the pharmaceutical
industry remains ahead of the growth in service
provider capacities.
Management of Risk: The Group employs highly
experienced
research scientists and senior
managerial staff who monitor developments in
technology that might affect the viability of its
service business or research capability. This is
achieved through access to scientific publications,
attendance at conferences and collaboration with
other organisations.
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9
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267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 10
STRATEGIC REPORT
For the year ended 31 December 2023
Licensing Arrangements
The Group intends to continue sub-licensing new
discoveries and products to third parties, but there
can be no assurance
licensing
arrangements will be successful.
that such
Management of Risk: The Group manages this risk
by a thorough assessment of the scientific and
feasibility of proposed research
commercial
projects which is conducted by an experienced
management team. Risk has also been reduced by
decreasing the overall number of research projects
and re-distributing available resources.
for
tags, and
Patent Applications and Proprietary Rights
The Group seeks patent protection for identified
protein biomarkers which may be of diagnostic,
prognostic or therapeutic value, for its chemical
mass
its other proprietary
technologies. The successful commercialisation of
such biomarkers, chemical tags and proteomic
workflows is likely to depend on the establishment
of such patent protection. However, there is no
assurance that the Group’s pending applications
will result in the grant of patents, that the scope of
protection offered by any patents will be as
intended, or whether any such patents will
ultimately be upheld by a court of competent
jurisdiction as valid in the event of a legal
challenge. If the Group fails to obtain patents for its
technology and is required to rely on unpatented
proprietary technology, no assurance can be given
that the Group can meaningfully protect its rights.
All patents have a limited period of validity and
competing products may be sold by third parties
on expiry in each territory. The final TMT1 patent
expired in the US in September 2022. This was the
last case with broad claims to the field of isobaric
tagging, but the patents covering the TMT® and
TMTpro™ products themselves, along with several
proprietary methods such as TMTcalibrator™ and
MS3 quantification remain in force. Whilst the
expiration of the earliest TMT patent results in a
reduced royalty rate under the exclusive licence
and distribution agreement with Thermo Fisher
Scientific, we do not expect further royalty
reductions in 2024 and beyond. We continually
monitor the implications of patent expiry and have
not seen any generic isobaric tags enter the
markets so far.
Management of Risk: The Group retains limited but
experienced patent capability
in house,
supplemented by external advice, which has
established controls to avoid the release of
patentable material before it has filed patent
applications. Maintenance of the existing patent
portfolio is subject to biannual review ensuring that
its ongoing cost is proportional to its perceived
value. We seek to prolong the value of our
proprietary technologies by patenting improved
chemical tags and superior biomarker panels when
we are able to do so, and we monitor the impact of
patent expiry by monitoring of market share of
licensed products such as TMT® and TMTpro™.
Section 172 statement
The Board recognises the importance of the
Group’s wider stakeholders when performing their
duties under Section 172(1) of the Companies Act
and their duties to act in the way they consider,
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:
(a) the likely consequences of any decision in the
long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business
relationships with suppliers, customers and
others,
(d) the impact of the company's operations on the
community and the environment,
(e) the desirability of the company maintaining a
reputation for high standards of business
conduct, and
(f)
the need to act fairly as between members of
the company.
10 Proteome Sciences plc
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 11
STRATEGIC REPORT
For the year ended 31 December 2023
The Board considers that all their decisions are
taken with the long-term in mind, understanding that
these decisions need to regard the interests of the
company’s employees,
relationships with
suppliers, customers, the communities and the
environment in which it operates. It is the view of the
Board that these requirements are addressed in the
Corporate Governance Statement on page 14,
which can also be found on the company’s website
www.proteomics.com.
its
For the purpose of this statement detailed
descriptions of the decisions taken are limited to
those of strategic importance. The Board believes
that two decisions taken during the year fall into this
category and were made with full consideration of
both internal and external stakeholders as follows:
• Annual General Meeting (AGM)
The Board encourages engagement with the
Group’s shareholders and took the decision in
2023 to hold the AGM as both an in person and
virtual meeting therefore improving accessibility.
Investment in a US laboratory
•
The board considers the decision to open a US
laboratory facility an important investment in the
future of the organisation. With a large percentage
of interest in the organisation’s services originating
from the US the new San Diego laboratory will
expand the reach of the organisation to provide
services to both existing and new customers in
the US.
By Order of the Board
Coveham House
Downside Bridge Road
Cobham
Surrey KT11 3EP
Victoria Birse
Company Secretary
9 April 2024
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267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 12
BOARD OF DIRECTORS
For the year ended 31 December 2023
Dr Mariola Söhngen
Chief Executive Officer
Mariola Söhngen has established a strong and
successful career in the pharmaceutical industry
both in the US and Europe. She was a co-founder
of Paion AG which developed a clinical-stage asset
for the treatment of stroke and subsequently
delivered a novel anaesthetic that received FDA
and other national approvals in 2021. She was
instrumental in the acquisition of UK listed CeNeS
Pharmaceuticals plc by Paion AG. She has also
held roles as CEO at Mologen AG and Convert
Pharmaceuticals and most
ran a
pharmaceutical consultancy with a strong focus on
supporting Chinese companies and investors
trying to enter the European pharmaceuticals
research and development market.
recently
Dr Ian Pike
Chief Scientific Officer
Ian Pike has over 30 years’ experience working in
the diagnostics and biotechnology sectors and
joined Proteome Sciences plc in November 2002.
Having gained a PhD in medical microbiology, he
joined Wellcome Diagnostics as a research group
leader and spent eight years working on new
diagnostic assays, particularly for hepatitis. In
December 1999, he joined the Technology Transfer
Office of the UK Medical Research Council with
responsibility for patents and commercialisation of
a wide portfolio of technologies related to the
biomedical sector. Most recently, Ian worked for
Cancer Research Ventures managing intellectual
property and performing business development
activities in Europe and the US.
Richard Dennis
Chief Commercial Officer
Richard Dennis joined the Group in April 2017. He
has a commercial background spanning over
30 years in the global life sciences research sector.
Throughout his career he has held positions based
in both the UK and US managing international
sales teams. Prior to joining Proteome Sciences, he
had held positions of increasing responsibility and
diversity in companies such as Meso Scale
Discovery, BioScale Inc., and most recently
Quanterix Corp. He sits on the board of trustees of
Kidscan Children’s Cancer Research, a charity
based in Manchester, UK.
Abdelghani Omari
Chief Financial Officer
Abdelghani Omari joined Proteome Sciences from
Paion AG in September 2022 and has more than
20 years’ experience in finance, starting his career
at KPMG Audit after a business degree from the
University of Aachen. At KPMG he worked in audit
and financial consultancy roles prior to joining
Paion, a listed speciality pharmaceutical company,
where he has been CFO and since 2014 a member
of the management board. During his time at Paion
he negotiated numerous license agreements with
than
pharma companies and
150 million Euros in financing from investors in the
U.S. and in Europe.
raised more
Christopher Pearce
Non-executive Chairman
Christopher Pearce has built the Group since
inception and been responsible for the formulation
and implementation of strategy, collaborative and
licensing agreements, and IP. He was co-founder
and Executive Chairman of Fitness First plc.
12 Proteome Sciences plc
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 13
BOARD OF DIRECTORS
For the year ended 31 December 2023
Roger McDowell
Non-executive Director (i) (ii)
Roger McDowell has a highly successful career as
a businessman and entrepreneur. He was Chief
Executive of Oliver Ashworth Group plc for
eighteen years before its sale to St Gobain. He is
currently the Chairman or a non-executive director
of seven listed companies, namely Avingtrans plc,
Brand Architekts Group plc, Flowtech Fluidpower
plc and Hargreaves Services plc as Chairman,
British Smaller Companies VCT2 plc and Tribal
Group plc as non-executive director. He brings
considerable commercial experience with him and
is a keen exponent of growing shareholder value.
Martin Diggle
Non-executive Director
Martin Diggle has worked in finance for over
30 years. He was a director and partner of
UBS/Brunswick in Russia until 2003, after which he
joined Vulpes Investment Management, where he
is currently a director and partner. He is an
experienced specialist investor in life sciences and
manages the Vulpes Life Sciences Fund, the
registered holder of 22.97% of Proteome Sciences'
ordinary share capital.
Dr Ursula Ney
Non-executive Director (i) (ii)
Ursula Ney has more than 30 years’ experience in
the pharmaceutical and biotech industry, with
20 years in leadership roles in the biotech sector.
She was director of Development and on the Board
of Celltech plc, and later COO and executive
director of Antisoma plc. More recently she was
CEO of the private company Genkyotex SA and a
non-executive director on the board of Discuva, a
Cambridge, UK based start-up. She is currently
also a non-executive director at Scancell plc and a
Trustee of the University of Plymouth. She has
broad experience of drug development across a
range of therapeutic areas and products.
(i) Member of Audit Committee
(ii) Member of Remuneration Committee
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267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 14
CORPORATE GOVERNANCE
For the year ended 31 December 2023
The Chairman’s Statement on Corporate
Governance
I am pleased to present this year’s Corporate
Governance Statement.
The Company is committed to maintaining high
standards of corporate governance. It is the
responsibility of the Board and me as Chairman to
ensure that the Company has in place the
structure, strategy and people to deliver value to
shareholders in the medium to long term. The
Board recognises that an effective corporate
governance framework is important to help achieve
this aim and is fundamental to the long-term
success of the Company.
The Company adopted the Quoted Companies
Alliance Corporate Governance Code (QCA Code)
during 2018 and continues to comply with each of
the ten principles of the QCA Code. In 2023 the
QCA Code was updated, and the Company will
comply with and report on changes to the code
within the required timeframe. The remainder of this
statement sets out how the Company applies the
Code. Further information on the Company’s
compliance
is published on our website
(www.proteomics.com/investors).
Compliance with the Quoted Companies Alliance
Corporate Governance code
The Quoted Companies Alliance has published a
for small and
corporate governance code
mid-sized quoted companies, which includes a
standard of minimum best practice for AIM
companies, and recommendations for reporting
corporate governance matters (the “QCA Code”).
The Directors of Proteome Sciences plc comply
with the QCA Code.
The QCA Code sets out ten principles which
should be applied. These are listed below together
with a short explanation of how the Company
applies each of the principles. Where the Company
fully comply with a principle an
does not
explanation as to why has also been provided.
14 Proteome Sciences plc
1. Establish a strategy and business model which
promote long-term value for shareholders
Proteome Sciences plc is a contract research
organisation specializing in the analysis of proteins
by mass spectrometry, providing both discovery
and targeted proteomics services and proprietary
biomarker assays
to biopharmaceutical and
diagnostic companies engaged in the discovery
and development of precision medicines.
Proteomics is an enabling biotechnology platform
for an increasing number of companies invested in
the identification of targeted therapeutics for the
future provision of healthcare. Offering a service to
such companies, in addition to the synthesis of
specialty chemical tags for mass spectrometry, is
an essential part of the strategy to deliver
shareholder value in the medium to long-term.
2. Seek to understand and meet shareholder
needs and expectations
The Board is committed to maintaining good
communication and having constructive dialogue
with its shareholders on a regular basis.
All shareholders are encouraged to attend the
Company’s Annual General Meeting and any other
General Meetings that are held throughout the year.
Investors also have access to current information
its website,
on
https://www.proteomics.com. Requests
from
institutional and retail shareholders are addressed
directly whenever possible by members of the
Executive team.
the Company
through
their
implications
3. Take into account wider stakeholder and social
responsibilities and
for
long-term success
The Board recognises that for the long-term
success of the Company their decisions must
consider a wider stakeholder group and the
Company’s social responsibilities. The Company is
reliant upon the efforts of the employees of the
Company, its subsidiaries, contractors, suppliers
and regulators, and upon relationships with
customers and licensees. Feedback from all these
stakeholders is shared with, and reviewed by, the
executive team on a regular basis and, where
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 15
CORPORATE GOVERNANCE
For the year ended 31 December 2023
appropriate, actions are documented. The
executive team, led by the CEO, is also responsible
for identifying the resources and relationships
necessary for developing the business, and
sharing these needs with the Board.
An agreed procedure exists for directors in the
furtherance of their duties to take independent
professional advice. With the prior approval of the
Chairman, all directors have the right to seek
independent legal and other professional advice at
the Company’s expense concerning any aspect of
the Company’s operations or undertakings in order
to fulfil their duties and responsibilities as directors.
If the Chairman is unable or unwilling to give
approval, Board approval will be sufficient. Newly
appointed directors are made aware of their
responsibilities through the Company Secretary.
•
Inform investors of material changes to the
Company’s risk profile.
Conflicts of interest
The Board has instituted a process for reporting
and managing any conflicts of interest held by
directors. Under
the Company’s Articles of
Association, the Board has the authority to approve
such conflicts.
Company materiality threshold
The Board acknowledges that assessment on
materiality and subsequent appropriate thresholds
are subjective and open to change. As well as the
applicable laws and recommendations, the Board
has considered quantitative, qualitative and
cumulative factors when determining the materiality
of specific relationships of directors.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
Risk management
The Board constantly monitors the operational and
financial aspects of the Company’s activities and
is responsible for the implementation and ongoing
review of business risks that could affect the
Company (see page 19). Duties in relation to risk
management that are conducted by the directors
include, but are not limited to:
5. Maintain the board as a well-functioning,
balanced team led by the chair
The Board recognises that the Company needs to
deliver growth in long-term shareholder value and
that this requires an efficient, effective and dynamic
management
should be
framework. This
accompanied by good communication which helps
to promote confidence and trust.
The Board currently comprises four Executive
Directors:
•
Initiate action to prevent or reduce the adverse
effects of risk
• Control further treatment of risks until the level
of risk becomes acceptable
Dr Mariola Söhngen (Chief Executive Officer)
Dr Ian Pike (Chief Scientific Officer)
Richard Dennis (Chief Commercial Officer)
Abdelghani Omari (Chief Financial Officer)
Identify and record any problems relating to the
management of risk
and four Non-Executive Directors;
Christopher Pearce (Chairman)
•
•
Initiate, recommend or provide solutions
through designated channels
• Verify the implementation of solutions
• Communicate and consult
externally as appropriate
internally and
Roger McDowell
Martin Diggle
Dr Ursula Ney
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Details of the qualifications, background and
responsibilities of each director are described on
pages 12-13 and provided on the Company’s website
(https://www.proteomics.com/about/leadership).
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CORPORATE GOVERNANCE
For the year ended 31 December 2023
The Board is supported by Audit and Remuneration
Committees, details of which are summarised
under Principle 9 below.
–
The Board considers Roger McDowell and
Dr Ursula Ney to be independent.
- Martin Diggle, a director of Vulpes Investment
Management which manages the Vulpes Life
Sciences Fund (the largest shareholder in the
Company) is not remunerated for his role on the
Board and is not a member of any Board
sub-committee.
for
time as
Non-Executive Directors are expected to devote
such
the proper
is necessary
performance of their duties, but it is anticipated that
they will spend approximately one day a month on
work for the Company. This will include attendance
of Board meetings (usually 8 per year), see page 19
for the attendance during the year, the AGM,
committee meetings and sufficient time to consider
relevant meeting papers.
the Board bring
6. Ensure that between them the directors have
the necessary up-to-date experience, skills and
capabilities
All members of
relevant
experience. The Board believes that its blend of
experience, skills, personal qualities and
capabilities is suitable to ensure it successfully
executes its strategy. The existing spectrum of
differing entrepreneurial skills continues to be
together with
represented on
considerable knowledge and expertise
from
scientific
the pharmaceutical
industry. The Board will continue to ensure that
Directors receive appropriate support and training
as required to keep them up to date with current
practices. The Board’s biographies are set out on
pages 12-13.
research and
the Board
7. Evaluate board performance based on clear
and relevant objectives, seeking continuous
improvement
The Board considers that it is appropriate to
evaluate the performance of the Board and its
Committees annually. The 2023 evaluation is
detailed below. This is intended to make sure that
16 Proteome Sciences plc
the Board remains effective, well-informed and able
to make high quality and timely decisions for the
benefit of all stakeholders in the Company with
regular meetings to discuss the strategic direction
and the terms of reference for the Committees.
Areas covered include Board structure, Board
arrangements, frequency and time, content of
Board meetings, Board culture and succession
planning. It is recognised that there continues to be
more regulation about which Directors need to be
informed and aware. The Board will continue to
ensure that Directors receive appropriate support
and training as required to keep them up to date
with current practices.
The Chairman
led an annual performance
assessment of the Board and its Committees at the
end of 2023. The performance effectiveness
process included each Director completing a
performance evaluation questionnaire, the results
and feedback from which were collated into a
summary and discussed by the Board.
to
implement
to deliver
The Chairman concluded that the Board operated
the strategy and
effectively
investment necessary
the goals
established for 2023. Whilst challenging to set up
the new facility in San Diego, USA at the same time
as developing single cell proteomics services for
customers, both were completed at the year end.
This was achieved through appropriate risk
management and interaction between the Board
and the executive and with the provision of regular
communication to staff and shareholders.
8. Promote a corporate culture that is based on
ethical values and behaviours
As part of the Board’s commitment to the highest
standard of conduct, the Company expects that
board members will act in good faith, fair and
impartially, with honesty and integrity and always in
the best interests of the organisation and in
particular such matters as:
•
•
•
responsibilities to shareholders
compliance with laws and regulations
relations with customers and suppliers
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 17
CORPORATE GOVERNANCE
For the year ended 31 December 2023
•
•
•
ethical responsibilities
employment practices
responsibility to the environment and the
community.
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the board
Chairman
The current Chairman of
is
Christopher Pearce who has been a director of the
Company since July 1994. The responsibilities of
the Chairman are to:
the Company
•
Lead the Board, ensuring its effectiveness on
all aspects of its role
• Ensure that the directors receive accurate,
timely and clear information
• Ensure
effective
communication with
shareholders
•
Facilitate the effective contribution of non-
executive directors
• Act on the results of board performance
evaluation.
Chief Executive Officer
The responsibilities of the Chief Executive Officer
are to:
• Provide
leadership and day
management of
authorities delegated by the Board.
the business within
to day
the
Board meetings
The Board meets on average 8 times a year, during
2023 the board met 8 times, usually by way of both
face to face and teleconference meetings. During
2023 there were 3 in person meetings and the
remainder were held via teleconference. Decisions
concerning the direction and control of the
business are made by the Board, and a formal
schedule of matters specifically reserved for the
Board is in place. Matters reserved for the Board
include:
• Approval of overall strategy and strategic
objectives;
• Oversight of operations (including accounting,
planning and internal control systems);
• Compliance with
requirements;
legal and
regulatory
• Management/operational performance review;
• Changes in corporate or capital structure;
• Approval of the risk appetite of the Company;
• Approval of the half-year and annual report and
accounts;
• Declaration of any
interim dividend and
recommendation of a final dividend;
• Approval of
shareholders;
formal communications with
• Approval of major contracts and investments;
and
• Approval of policies on matters such as health
and safety, corporate social responsibility
(CSR) and the environment.
Generally, the powers and obligations of the Board
are governed by the Companies Act 2006, and the
other laws of the jurisdictions in which the
Company operates. The Board is responsible,
inter alia, for setting and monitoring Group strategy,
reviewing trading performance, ensuring adequate
funding, examining major acquisition opportunities,
formulating policy on key issues and reporting to
the shareholders.
Board Committees
There are two board committees:
• Audit Committee - members are Roger
(Chair), and Dr Ursula Ney.
McDowell
This committee met twice during 2023.
• Remuneration Committee - members are
Dr Ursula Ney (Chair) and Roger McDowell.
This committee met twice during 2023.
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CORPORATE GOVERNANCE
For the year ended 31 December 2023
Audit Committee
The Committee provides a forum for reporting by
the Company’s external auditors. Meetings are held
on average twice a year and are attended,
by invitation, by the Executive Directors.
The Audit Committee is responsible for reviewing a
wide range of financial matters including the
annual and half year results, financial statements
and accompanying reports before their submission
to the Board and monitoring the controls which
ensure the integrity of the financial information
reported to the shareholders. Audit Committee
Terms of Reference are provided on
the
Company’s website.
is
responsible
Remuneration Committee
The Committee
for making
recommendations to the Board, within agreed
terms of reference, on the Company’s framework
of executive remuneration and its cost. The
Remuneration Committee determines the contract
terms, remuneration and other benefits for the
Executive Directors, including performance related
bonus schemes, compensation payments and
option schemes. The Board itself determines the
remuneration of the Non-Executive Directors.
Remuneration Committee Terms of Reference are
provided on the Company’s website.
Nominations Committee and internal audit
The Directors consider that the Company is not
currently of a size to warrant the need for a
separate Nominations Committee or internal audit
function, although the Board has put in place
as
financial
internal
summarised below.
control procedures
Internal financial control
The Board is responsible for establishing and
maintaining the Group’s system of internal financial
controls. Internal financial control systems are
designed to meet the particular needs of the
Group and the risk to which it is exposed, and by
their very nature can provide reasonable, but not
absolute, assurance against material misstatement
or loss.
18 Proteome Sciences plc
The Directors are conscious of the need to keep
effective internal financial control, particularly in
view of the cash resources of the Group. The
Directors have reviewed the effectiveness of the
procedures presently in place and consider that
they remain appropriate to the nature and scale of
the operations of the Company.
10. Communicate how the Company is governed
and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
Shareholders are regularly advised of any
significant developments in the Company through
announcements via the Regulated News Service
and are encouraged to participate in the Annual
General Meeting and any other General Meetings
that may take place throughout the year.
Copies of the annual returns, general meeting
notices and announcements made to the London
Stock Exchange are published on the Company’s
website.
Risk management
The Board has ultimate responsibility of the
Group’s risk management controls. The risk and
control management system framework includes:
•
•
close management of the day-to-day activities
of the Group by the Executive Directors and the
Senior Leadership Team;
a comprehensive annual budgeting process,
which is approved by the Board;
• detailed monthly reporting of performance
against budget; and
•
central control over key areas such as capital
expenditure authorisation and banking facilities.
Internal controls
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 assets are safeguarded. There
are inherent limitations in any system of internal
267703 Proteome p01-p20.qxp 10/04/2024 16:34 Page 19
CORPORATE GOVERNANCE
For the year ended 31 December 2023
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
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.
Board operation
The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and
corporate actions. The Board held eight scheduled meetings during the financial year. The Board has
established two Committees; the Audit Committee and Remuneration Committee each having written
terms of reference. The Board consider that the Company is not currently of a size to warrant the need
for a separate Nominations Committee or internal audit function. Reports by the Chairpersons of the two
Committees are reported separately on pages 21 for the Audit Committee and 22 for the Remuneration
Committee.
Board effectiveness
The Board and Committee meetings are scheduled in advance for each calendar year. Additional
meetings are arranged as necessary. Board and Committee meetings and attendance during the year
ended 31 December 2023 were as follows:
Director
C.D.J. Pearce
R. McDowell
M. Diggle
Dr U. Ney
Dr M. Söhngen
Dr I. Pike
R. Dennis
A. Omari
Board
Meeting
Audit Remuneration
Committee
Committee
8/8
8/8
7/8
8/8
8/8
7/8
8/8
8/8
2/2
2/2
1/2
2/2
2/2
1/2
1/2
2/2
–
2/2
–
2/2
–
–
–
–
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CORPORATE GOVERNANCE
For the year ended 31 December 2023
The Executive Directors were all employed by the
Company. The Non-Executive Directors have
commitments outside the Company. These are
summarised
the Board biographies on
pages 12-13. All the Non-Executive Directors give
sufficient time to fulfil their responsibilities to the
Company.
in
The Annual General Meeting (AGM)
The Annual General Meeting of the Group will take
place on 16 May 2024. Full details are included in
the Notice of Meeting on page 82 and will be
published on our website (www.proteomics.com).
The Board also strongly encourages all
shareholders to vote on the AGM resolutions by
following the instructions set out in the Notice of
Meeting Notes, please note that no Proxy Form
accompanies this document this year.
Christopher Pearce
Chairman
9 April 2024
20 Proteome Sciences plc
267703 Proteome p21-p33.qxp 10/04/2024 16:36 Page 21
AUDIT COMMITTEE REPORT
For the year ended 31 December 2023
I am pleased to present the report on behalf of the
Audit Committee.
•
The Committee is responsible for monitoring the
quality of internal controls and for ensuring that the
financial performance of the Group is properly
reviewed and reported. The Board considers that
the Company is not currently of the size to warrant
the need for an internal audit function although the
Board has put
internal financial
in place
procedures to ensure close internal controls.
Committee Composition
The members of the Audit Committee are myself,
Roger McDowell, as Chair and Ursula Ney. We are
both independent Non-Executive Directors. The
Board is of the view that we have recent and
relevant experience. Meetings are held at least
twice a year. The Chief Executive Officer, the Chief
Financial Officer and the Group’s auditors attend
by invitation. I report to the Board following an Audit
Committee meeting and minutes are available to
the Board.
Committee Duties
The main duties of the Committee are set out in its
terms of reference, which are available on the
Company’s website. In this period the main items
of business included:
•
•
•
•
reviewing and recommending to the Board in
relation to the appointment and removal of the
external auditor;
recommending
the
remuneration and terms of engagement;
external
auditor’s
reviewing the independence of the external
auditors, objectivity and the effectiveness of the
audit process, taking into account relevant
professional and regulatory requirements;
reviewing and monitoring the extent of the
non-audit work undertaken by the Group’s
external auditor;
reviewing a wide range of financial matters
including the annual and half year results,
financial statements and accompanying
reports;
• monitoring the controls which ensure the
integrity of the financial information reported to
the shareholders.
Financial reporting
The Committee reviews reports provided by the
external auditor on the annual results which
highlight any observation from the work they have
undertaken.
The Group does not expect any other standards
issued by the IASB, but not yet effective, to have a
material impact on the Group.
External Auditor
Cooper Parry Group Ltd was re-appointed as the
Group’s auditor at the Annual General Meeting held
on the 17 May 2023.
The Committee considers that its relationship with
the auditor is working well and is satisfied with their
effectiveness. The Committee is responsible for
ensuring there is a suitable policy for ensuring that
non-audit work undertaken by the auditor is
reviewed to ensure it will not impact their
independence and objectivity. The breakdown of
fees is provided in note 8 on page 53 of the
Group’s financial statements.
As necessary the Committee held private meetings
with the auditor to review key items in its
responsibilities. Taking into account the auditor’s
knowledge of the Group and experience, the
Committee has recommended to the Board that the
auditor is re-appointed for the year ending
31 December 2024.
Roger McDowell
Chair of the Audit Committee
9 April 2024
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REMUNERATION COMMITTEE REPORT
For the year ended 31 December 2023
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 are myself Ursula Ney as Chair and Roger McDowell.
We are both independent 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 their own remuneration.
Remuneration policy
The key principles of the Remuneration Policy include:
•
•
•
the need to attract, retain and motivate executives who have the capability to ensure the Company
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 UK and German biotechnology/service
industry and current best practice in setting appropriate levels of compensation;
•
the Committee to meet at least once 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 2023.
Directors’ remuneration and transactions
The directors’ emoluments in the year ended 31 December 2023 were:
National
Basic Insurance Benefits Pension
Costs
salary Bonus Contributions
2023
2023 2023 2023
£’000
£’000 £’000 £’000
in kind
2023
£’000
Total
2023
£’000
Total
2022
£’000
Executive Directors
Dr M. Söhngen 249 – 4
Dr I. Pike 186 10 26
R. Dennis 159 10 22
A. Omari 199 – 5
Non-Executive Directors
C.D.J. Pearce 50 – 6
R. McDowell 32 – 3
M. Diggle – – –
Dr U. Ney 30 – 3
905 20 69
–
4
–
–
6
–
–
–
10
8
19
16
8
–
–
–
–
51
261
245
207
212
62
35
–
33
1,055
310
233
235
73
62
33
–
30
976
22 Proteome Sciences plc
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REMUNERATION COMMITTEE REPORT
For the year ended 31 December 2023
Directors and their interests
The Directors who served during the year are as shown below:
Dr M. Söhngen
Dr I.H. Pike
R. Dennis
A. Omari
C.D.J. Pearce
R. McDowell
M. Diggle
Dr U. Ney
Chief Executive Officer
Chief Scientific Officer
Chief Commercial Officer
Chief Financial Officer
Non-Executive Chairman
Non-Executive
Non-Executive
Non-Executive
In accordance with the Company's articles Christopher Pearce, Ursula Ney, Mariola Söhngen and
Richard Dennis will retire by rotation at the next Annual General Meeting and, being eligible, offer
themselves for re-election. The directors at 31 December 2023 and their interests in the share capital of
the Company were as follows:
a) Beneficial interests in Ordinary Shares:
31 December 2023
Number of Ordinary
Name of Director Shares of 1p each
%
shareholding
Dr M. Söhngen –
Dr I.H. Pike 165,583
R. Dennis 625,000
A. Omari –
C.D.J. Pearce 36,915,059
R. McDowell 3,400,000
M. Diggle –
Dr U. Ney –
–
0.05
0.21
–
12.51
1.15
–
–
Note
For C.D.J Pearce, shares held at 31 December 2023 includes shares held by connected persons.
For R. Dennis and R. McDowell, shares held at 31 December 2023 are held in nominee accounts.
M. Diggle is a Director and partner in Vulpes Investment Management and manages the Vulpes Life Sciences Fund which
is the registered holder of 22.97% of Proteome Sciences’ ordinary share capital.
b) Directors’ interests in the Long-Term Incentive Plan (“LTIP”):
The maximum number of shares to be allocated to the Directors under the 2011 and 2021 LTIP schemes,
in each case for an aggregate consideration of £1 are as follows:
Number at
31 December 2023
Number at
31 December 2022
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(i) Dr M. Söhngen
(ii) Dr I.H. Pike
(iii) R. Dennis
(iv) A. Omari
(a)
(a)
(a)
(a)
9,000,000 (b)
4,000,000 (b)
4,000,000 (b)
4,000,000 (b)
9,000,000
4,000,000
4,000,000
4,000,000
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REMUNERATION COMMITTEE REPORT
For the year ended 31 December 2023
The options (a)(i) relate to an award made to Dr M. Söhngen on the 8 June 2021, options (a)(ii) and
(iii) were awarded to Dr I. H. Pike and R. Dennis on the 11 October 2022. Options (a)(iv) were awarded
to A. Omari on 1 December 2022. Options (b)(i), (ii), (iii) were awarded to Dr M. Söhngen, Dr I. H. Pike,
R. Dennis on the 8 June 2021.
Executive Directors’ service contracts
The Executive Directors signed service contracts on their appointment. These contracts are not of fixed
duration. Executive Directors’ contracts are terminable by either party giving three months’ written notice
with the exception of the Chief Executive Officer’s and Chief Financial Officer’s contracts which are
terminable by either party giving six month’s 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 one month’s written
notice. The remuneration of the Non-Executive Directors is determined by the Board as a whole.
The Committee has met twice during the financial year to 31 December 2023.
Dr Ursula Ney
Chair of the Remuneration Committee
9 April 2024
24 Proteome Sciences plc
267703 Proteome p21-p33.qxp 10/04/2024 16:36 Page 25
DIRECTORS’ REPORT
For the year ended 31 December 2023
The Directors present their annual report and
financial statements
the year ended
31 December 2023. An indication of likely future
developments in the business is set out in the
Strategic Report.
for
•
state whether they have been prepared in
accordance with UK adopted 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;
Directors
The Directors who held office during the year and
up to the date of signature of the financial
statements were as follows:
Dr Mariola Söhngen
Dr Ian Pike
Richard Dennis
Abdelghani Omari
Christopher Pearce
Roger McDowell
Martin Diggle
Dr Ursula Ney
Directors’ responsibilities
The directors are responsible for preparing the
annual report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare
financial statements for each financial year. Under
that law the directors have elected to prepare the
Group and Company financial statements in
accordance with UK adopted
international
accounting standards in conformity with the
requirements of the Companies Act 2006. Under
company law the directors must not approve the
financial statements unless they are satisfied that
they give a true and fair view of the state of affairs
of the group and company and of the profit or loss
of the Group and Company for that period. The
directors are also required to prepare financial
statements in accordance with the rules of the
London Stock Exchange for companies trading
securities on AIM.
In preparing these financial statements, the
directors are required to:
•
select suitable accounting policies and then
apply them consistently;
• make judgements and accounting estimates
that are reasonable and prudent;
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and 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
from
financial statements, which may vary
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.
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
24 of the financial statements (page 73).
a) As set out in note 18(b) (i) to (iii) in these
financial statements, C.D.J. Pearce has made a
loan facility available to the Company which can
be converted, at Mr. Pearce’s option, into
Ordinary Shares of the Company at the lower of
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DIRECTORS’ REPORT
For the year ended 31 December 2023
market price on the date of conversion or the average price over the lowest consecutive 10 day trading
period since 29 June 2006 (the date on which details of the original loan agreement were disclosed).
Interest accrues at 2.5% per annum above the UK sterling base rate of Barclays Bank plc.
b) On 2 July 2018, Proteome Sciences plc secured a loan facility of £1.0m from Vulpes Investment
Management (VIM). Interest accrues at 2.5% per annum above the UK sterling base rate of Barclays
Bank plc and is repayable alongside the principal loan. The Company signed the Second Amendment
to the Agreement on the 29 March 2021 which extended the term of the loan to 1 May 2022. On the
17 June 2021 the Loan Agreement was amended to allow for conversion into ordinary shares such that
until 30 April 2022, VIM may convert part (being not less than £50,000 or a multiple thereof) or all of the
Drawn Loan and accrued interest to 31 December 2021 (being £51,538) into new ordinary shares of
the Company. The conversion price was 7.16p per share, which is the average of the closing middle
market price for the ordinary shares of the Company during the five consecutive trading days immediately
prior to entering into the Loan Amendment. The loan conversion agreement expired on 30 June 2022.
This loan is deemed a related party transaction by nature of a common director being on both the boards
of Proteome Sciences plc and VIM. On the 30 March 2022, the Company signed the Third Amendment
to the VIM Loan Agreement which extended the term to the loan to 30 June 2023. On the 1 June 2023
Proteome Sciences plc repaid both the outstanding loan facility and accrued interest of £824,424.
c) The market price of the Ordinary Shares at 31 December 2023 was 4.53p and the range during the
year was 8.79p to 3.18p.
Substantial shareholdings
As at 9 April 2024, the Company had received notification of the following significant interests in the
ordinary share capital of the Company:
Name of Holder
C.D.J. Pearce
Vulpes Life Science Fund
Number of
Ordinary
Shares
Percentage
of issued
Ordinary
Share Capital
36,915,059
67,789,772
12.51
22.97
Going concern
The Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Chief Executive Officer’s Statement on page 2 and Strategic
Report on page 6. The financial position of the Group, its cash flows, liquidity position and borrowing
facilities are described in the notes to the financial statements, in particular in the consolidated cash flow
statement on page 40 and in notes 18(b) (Financial liabilities) and 24 (Financial instruments).
These financial statements have been prepared on the going concern basis which remains reliant on
the Group achieving an adequate level of sales in order to maintain sufficient working capital to support
its activities. The directors have reviewed the Company’s and the Group’s going concern position, taking
account of current business activities, budgeted performance and the factors likely to affect its future
development, as 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.
In particular, the directors have considered the potential challenges from the macro environment on
international business and the general inflationary pressure on costs, may have on the ability to achieve
adequate level of sales.
26 Proteome Sciences plc
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DIRECTORS’ REPORT
For the year ended 31 December 2023
Group revenues for the year ended 31 December
2023 decreased by 35% to £5.03m (2022: £7.78m).
Proteomics services decreased 41% to £1.63m
(2022: £2.75m). Sales and royalties attributable to
TMT® and TMTpro™ reagents were £3.40m (2022:
£4.16m). Total costs, excluding finance costs, rose
to £6.65m (2022: £6.05m) and resulted in an
Operating Loss of £1.62m (2022: Operating Profit
£1.73m) and a loss after tax of £2.44m (2022: Profit
after tax £1.33m). Adjusted EBITDA decreased to
£(0.92)m (2022: £2.43m). Cash reserves at the
year-end decreased to £2.03m (2022: £3.99m).
The Group is also dependent on the loan facility
provided by the Chairman of the Group, which under
the terms of the facility, is repayable on demand. The
amount owed as of 31 December 2023, including
interest, was £11,235k (2022: £10,459k). Further
details of this facility are set out in note 18(b) to the
financial statements.
The directors have received a legally binding
written confirmation from the Chairman that he has
no intention of seeking its repayment, with the
facility continuing to be made available to the
Group, on the existing terms, for at least 12 months
from the date of approval of these financial
statements or until at least 30 April 2025.
On 1 June 2023 the Company repaid the loan from
Vulpes together with accrued interest totalling
£824,424.
Following a detailed review of forecasts, budgets
and sales order book, the directors have a
reasonable expectation the Group as a whole, has
adequate financial and other resources to continue
in operational existence for the period of at least
twelve months post approval of these financial
statements. For this reason, the Directors continue
to adopt the going concern basis in preparing the
Financial Statements.
Events after the balance sheet date
There have been no significant events which have
occurred subsequent to the reporting date.
Research and development
Details of the Group’s activities on research and
development during the year are set out in the
Chief Executive Officer’s Statement (page 2) and
Strategic Report (page 6).
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 director has taken all steps that he/she
ought to have taken as a director to make
himself/herself 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
section 418 of the Companies Act 2006.
The directors will place a resolution before the
Annual General Meeting to appoint Cooper Parry
Group Limited as auditor for the following year.
Liability insurance for Company officers
As permitted by section 233 of the Companies Act
2006, the Company has purchased insurance
cover for the directors against liabilities that might
arise in relation to the Group.
By order of the Board
Coveham House
Downside Bridge Road
Cobham
Surrey
KT11 3EP
Victoria Birse
Company Secretary
9 April 2024
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INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
Independent auditors’ report to the members of
Proteome Sciences plc
evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
We have audited the financial statements of
Proteome Sciences plc (the ‘Parent Company’) and
its subsidiaries (the ‘Group’) for the year ended
31 December 2023 which comprise
the
consolidated income statement, the consolidated
statement of comprehensive
the
consolidated and company balance sheets, the
consolidated and company statements of changes
in equity, the consolidated and company cash flow
statements and the related notes to the financial
statements, including a summary of significant
accounting policies.
income,
The financial reporting framework that has been
applied
the financial
the preparation of
statements is applicable law and UK adopted
international accounting standards.
in
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 2023 and of the Group’s loss
for the year then ended;
•
•
have been properly prepared in accordance
with UK adopted international accounting
standards; and
have been prepared in accordance with the
requirements of the Companies Act 2006.
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 are
independent of the Group and 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. We believe that the audit
28 Proteome Sciences plc
Our approach to the audit
In order to assess the risks identified, the
engagement team performed an evaluation of
identified components and to determine the
planned audit responses based on a measure of
the
materiality, calculated by considering
significance of components as a percentage of the
Group’s total revenue and loss before taxation and
the Group’s total assets.
The 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. 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.
In establishing the overall approach to the Group
audit, we assessed the audit significance of each
reporting unit in the Group by reference to both its
financial significance and other indicators of audit
risk, such as the complexity of operations and the
degree of estimation and judgement in the financial
results. We identified three individually significant
components.
Limited
To this extent, the Group audit team performed full
scope audits for Proteome Sciences plc, and its
subsidiaries Electrophoretics
and
Proteome Sciences R&D GmbH & Co. KG.
These represent 100% of total revenues, 82% of
total assets and 100% of loss before tax. The
financial
the remaining non-
significant components was subject to analytical
review procedures performed by the Group audit
team for Group reporting purposes. Any material
balances from the Group’s position that were
identified in the non-significant components were
subject to audit work by the Group audit team.
information of
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance
267703 Proteome p21-p33.qxp 10/04/2024 16:36 Page 29
INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
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.
Revenue recognition
Matter
Biomarker service revenue is recognised based on
progress towards satisfaction of performance
obligations included in the contracts undertaken.
There is judgement involved in determining the
stage of completion, resulting in a greater risk of
error. The risk is specific to contracts which are
incomplete at the year end as changes to these
estimates could give rise to material variances in
the amount of revenue recognised at the year end.
Given the above, there is a risk that revenue is not
accounted for appropriately.
Response
Our procedures in response to the risk included:
• Reviewed accounting policies
in place
surrounding revenue and ensured that they
were applied consistently and appropriately;
•
For a sample of biomarker contracts
we obtained the 31 December 2023 project
summary, and performed the following for each
sample:
o Obtained and reviewed the signed contract
to understand the performance obligations
therein;
o Held detailed discussions to understand
the scope of work, the progress to date
and any challenges or variations which
have occurred;
o Assessed the accounting estimates made
in respect of any variable consideration;
o Reviewed post year end contract
performance and cash receipts in relation
to
together with a
performance update from the prior year to
assess the accuracy of budgeting; and
that contract
o
Traced the figures per the year end
contract report into the relevant nominal
postings to ensure revenue is recognised
in line with these documents.
Our procedures did not identify any material
misstatements in the revenue recognised during
the period. We consider that the Group’s revenue
recognition policy is appropriate and that revenue
has been recognised in accordance with the
Group’s revenue policy.
Going concern
Matter
The Group and Parent Company are reliant on the
continued availability of loans from related parties.
Response
Our procedures in response to the risk included:
• Obtained
the
assessment made by
management and the Directors regarding the
Group’s ability to continue as a going concern;
• Reviewed the assumptions used in their
key
sensitising
any
assessment
and
assumptions used;
• Reviewed the prior year budgets compared to
actuals for the year ended 31 December 2023
to gain assurance over forecasting accuracy;
• Discussed with management any additional
factors or other issues which could impact the
Group’s ability to continue as a going concern;
• Reviewed the actual results achieved post year
end compared to the budget to consider the
reasonableness of the budgeting process; and
• Obtained a signed letter of comfort for the
related party loans.
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INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
Our conclusions in respect of this risk area are set
out below within the section ‘Conclusions relating
to going concern’.
Valuation/impairment of goodwill and investments
Matter
The Group has significant goodwill held on the
consolidated balance sheet, and the parent
company also has a significant investment in
subsidiaries on the balance sheet. These are
material areas involving significant levels of
judgement and estimation.
Response
Our procedures in response to the risk included:
• Obtained and reviewed the impairment review
prepared by management in relation to the
goodwill and investment values;
• Assessed the key assumptions used in those
impairment review calculations, being:
o
Identification of CGUs and the trade
the new
relating
US subsidiary, Proteome Sciences US Inc
including
them
to
o Discount rate applied
o Growth assumptions within
trading
forecasts
Our application of materiality
We apply the concept of materiality in planning and
performing our audit, in determining the nature,
timing and extent of our audit procedures, in
identified
the effect of any
evaluating
misstatements, and in forming our audit opinion.
The materiality for the Group financial statements
as a whole was set at £75,000. This has been
determined with reference to the benchmark of the
Group’s revenue which we consider to be an
appropriate measure for a group of companies
such as these. Materiality represents 1.5% of
Group revenue. Performance materiality has been
set at 75% of Group materiality.
The materiality for the Parent Company financial
statements as a whole was set at £67,500. This has
been determined with reference to the benchmark
of the parent company’s net assets which we
consider to be an appropriate measure for a parent
company such as this. Materiality has been capped
at 90% of Group materiality. Performance materiality
has been set at 75% of Parent Company materiality.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £3,750, in addition to other identified
reporting on
that warranted
misstatements
qualitative grounds.
• Performed sensitivity analysis over the key
reviewed
assumptions
available headroom and/or indications of
impairment arising from the use of different
assumptions;
listed above and
Conclusions relating to going concern
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.
• Reviewed the market capitalisation of the group
and considered this against the net assets of
the group
indicators of
to
impairment; and
review
for
• Reviewed the completeness and consistency
of disclosures in relation to intangible assets
within the annual report.
Our procedures did not identify any material
misstatements in the year.
30 Proteome Sciences plc
Our evaluation of the Directors’ assessment of the
entity’s ability to continue to adopt the going
concern basis of accounting included:
• Challenging management on key assumptions
included in their forecast scenarios;
• Considering the potential impact of various
scenarios on the forecasts; and
• Reviewing management’s disclosures in the
financial statements.
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INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
Based on the work we have performed, we have not
identified any material uncertainties relating to
events or conditions that, individually or collectively,
may cast significant doubt on the Group's ability to
continue as a going concern for a period of at least
twelve months from when the financial statements
are authorised for issue.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are
described in the relevant sections of this report.
•
the strategic report and the directors’ report
have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of
the Group and the Parent Company and their
environment obtained in the course of the audit, we
have not identified material misstatements in the
strategic report or the directors’ report.
Other information
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. The
Directors are responsible for the other information
included in the annual report. 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
such material
misstated.
inconsistencies or apparent material misstatements,
we are required to determine whether there is a
material misstatement in the financial statements or
a material misstatement of the other information. 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.
If we
identify
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
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 period for
which the financial statements are prepared is
consistent with the financial statements; and
We have nothing to report in respect of the
following matters
the
Companies Act 2006 requires us to report to you if,
in our opinion:
to which
relation
in
•
•
•
adequate accounting records have not been
kept, 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.
in
Responsibilities of directors
the directors’
fully
As explained more
responsibilities statement set out on page 25, 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.
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INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
•
obtaining an understanding of the entity’s risk
assessment process, including the risk of
fraud;
• designing our audit procedures to respond to
our risk assessment; and
• performing audit testing over the risk of
management override of controls, including
testing of journal entries and other adjustments
for appropriateness, evaluating the business
rationale of significant transactions outside the
normal course of business and reviewing
accounting estimates for bias.
Whilst considering how our audit work addressed
the detection of irregularities, we also consider the
likelihood of detection based on our approach.
Irregularities arising from fraud are inherently more
difficult to detect than those arising from error.
Because of the inherent limitations of an audit,
there is a risk that we will not detect all irregularities,
including those leading to a material misstatement
in the financial statements or non-compliance with
regulation. This risk increases the more that
compliance with law or regulation is removed from
the events and transactions reflected in the
financial statements, as we will be less likely to
become aware of non-compliance. The risk is also
greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional
forgery, collusion, omission or
concealment,
misrepresentation.
A further description of our responsibilities for the
audit of the financial statements is located on
the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
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.
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, is detailed below:
focused on key
Our assessment
laws and
regulations the Group and Parent Company have
the financial
to comply with and areas of
statements we assessed as being more
susceptible to misstatement. These key laws and
regulations included but were not limited to
the Companies Act 2006,
compliance with
UK adopted international accounting standards,
and relevant tax legislation.
We are not responsible for preventing irregularities.
Our approach to detecting irregularities included,
but was not limited to, the following:
•
•
obtaining an understanding of the legal and
regulatory framework applicable to the entity
and how the entity is complying with that
framework;
obtaining an understanding of the entity’s
policies and procedures and how the entity has
complied with these, through discussions;
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INDEPENDENT AUDITOR’S REPORT
For the year ended 31 December 2023
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.
Katharine Warrington (Senior Statutory Auditor)
For and on behalf of
Cooper Parry Group Limited
Chartered Accountants and Statutory Auditor
Sky View
Argosy Road
East Midlands Airport
Castle Donington
Derby
DE74 2SA
Date: 9 April 2024
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CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2023
Revenue
Licences, sales and services
Revenue - total
Cost of sales
Gross profit
Administrative expenses
Operating (Loss)/profit
Finance costs
(Loss)/profit before taxation
Tax (charge)/credit
(Loss)/profit for the year
(Loss)/profit per share
Basic
Diluted
Notes
5, 6
8
7
11
12
2023
£’000
5,028
5,028
(3,381)
1,647
(3,268)
(1,621)
(797)
(2,418)
(25)
(2,443)
2022
£’000
7,780
7,780
(3,013)
4,767
(3,039)
1,728
(473)
1,255
70
1,325
(0.83p)
(0.83p)
0.45p
0.43p
The accompanying notes 1 to 27 are an integral part of the financial statements
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CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
for the year ended 31 December 2023
(Loss)/profit for the year
Other comprehensive income for the year
Items that will or may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Re-measurements of Defined Benefit Pension Schemes (see note 19)
2023
£’000
(2,443)
2022
£’000
1,325
(41)
43
158
145
(Loss)/profit and total comprehensive income for the year
(2,441)
1,628
Attributable to owners of parent
(2,441)
1,628
The accompanying notes 1 to 27 are an integral part of the financial statements
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CONSOLIDATED BALANCE SHEET
as at 31 December 2023
Non-current assets
Goodwill
Property, plant and equipment
Right-of-use asset
Current assets
Inventories
Trade and other receivables
Contract assets
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Net current liabilities
Non-current liabilities
Lease liabilities
Pension provisions
Total non-current liabilities
Total liabilities
Net liabilities
Equity
Share capital
Share premium
Share-based payment reserve
Merger reserve
Translation and other reserve
Retained loss
Total deficit
Notes
13
14
14
16
17(a)
5
17(b)
18(a)
5
18(b)
26
26
19
20
22
22
22
22
2023
£’000
4,218
551
2,525
7,294
837
955
345
2,027
4,164
11,458
(629)
(1)
(11,235)
(609)
(12,474)
(8,310)
(1,631)
(419)
(2,050)
(14,524)
(3,066)
2,952
51,466
4,713
10,755
(10)
(72,942)
(3,066)
2022
£’000
4,218
444
873
5,535
901
1,443
560
3,994
6,898
12,433
(823)
(104)
(11,262)
(300)
(12,489)
(5,591)
(353)
(434)
(787)
(13,276)
(843)
2,952
51,466
4,495
10,755
31
(70,542)
(843)
The financial statements of Proteome Sciences plc, registered number 02879724, were approved by the
board of directors and authorised for issue on 9 April 2024. They were signed on its behalf by:
Dr M. Söhngen
A. Omari
9 April 2024
Director
Director
The accompanying notes 1 to 27 are an integral part of the financial statements.
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COMPANY BALANCE SHEET
as at 31 December 2023
Non-current assets
Investment in subsidiaries
Current assets
Cash and cash equivalents
Total assets
Current liabilities
Payables owed to other group entity
Borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium account
Share-based payment reserve
Retained loss
Total equity
Notes
15
17(b)
18(a)
18(b)
20
2023
£’000
8,611
8,611
90
90
8,701
(350)
(1,887)
(2,237)
6,464
2,952
51,466
4,713
(52,667)
6,464
2022
£’000
9,262
9,262
367
367
9,629
(601)
(2,559)
(3,160)
6,469
2,952
51,466
4,495
(52,444)
6,469
The Company generated a loss for the year ended 31 December 2023 of £0.22m (2022: loss £0.18m).
The financial statements of Proteome Sciences plc, registered number 02879724, were approved by
the board of directors and authorised for issue on 9 April 2024. They were signed on its behalf by:
Dr M. Söhngen
A. Omari
9 April 2024
Director
Director
The accompanying notes 1 to 27 are an integral part of the financial statements.
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CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 31 December 2023
Equity
Share- attributable
Share based to owner
Share premium payment Translation Merger Retained of the
Total
capital account reserve reserve reserve loss parent (deficit)
£’000
£’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2023 2,952 51,466 4,495 31 10,755 (70,542) (843)
(843)
Loss for the year – – – – – (2,443) (2,443) (2,443)
Exchange differences
on translation of foreign
operations – – – (41) – – (41)
Re-measurements of
Defined Benefit Pension
Schemes – – – – – 43 43
Loss and total
comprehensive income
for the year – – – (41) – (2,400) (2,441) (2,441)
Credit to equity for
share-based payment – – 218 – – – 218
218
At 31 December 2023 2,952 51,466 4,713 (10) 10,755 (72,942) (3,066) (3,066)
(41)
43
At 1 January 2022 2,952 51,466 4,193 (128) 10,755 (72,013) (2,775) (2,775)
Profit for the year – – – – – 1,325 1,325 1,325
Exchange differences
on translation of
foreign operations – – – 158 – – 158
Re-measurements of
Defined Benefit
Pension Schemes – – – – – 145 145
Profit and total
comprehensive
income for the year – – – 158 – 1,470 1,628 1,628
Credit to equity for
share-based payment – – 303 – – – 303
At 31 December 2022 2,952 51,466 4,495 31 10,755 (70,542) (843)
303
(843)
145
158
The accompanying notes 1 to 27 are an integral part of the financial statements.
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COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2023
Company
At 1 January 2022
Loss and total comprehensive
income for the year
Credit to equity for
share-based payment
At 31 December 2022
At 1 January 2023
Loss and total comprehensive
income for the year
Credit to equity for
share-based payment
At 31 December 2023
Share
Share-
based
Share
capital
£’000
premium payment Retained
loss
reserve
account
£’000
£’000
£’000
Total
equity
£’000
2,952
51,466
4,193
(52,268)
6,343
–
–
–
–
–
(176)
(176)
303
–
303
2,952
51,466
4,495
(52,444)
6,469
2,952
51,466
4,495
(52,444)
6,469
–
–
–
(223)
(223)
–
2,952
–
51,466
218
4,713
–
(52,667)
218
6,464
The accompanying notes 1 to 27 are an integral part of the financial statements.
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CONSOLIDATED AND COMPANY
CASH FLOW STATEMENTS
as at 31 December 2023
Group
2023
£’000
Group Company Company
2023
2022
£’000
£’000
2022
£’000
Note
(Loss)/profit after tax
(2,443)
1,325
(224)
(176)
7&18c
14
26
21
26
14
18c
Adjustments for:
Finance costs
Depreciation of property, plant and
equipment
Lease depreciation
Tax (credit)/charge
Share-based payment expense
Operating cash flows before movements in
Working capital
Decrease in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
(Decrease)/increase in provisions
Foreign exchange
Cash (used in)/generated from operations
Tax (paid)/received
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Lease upfront payments
Purchases of property, plant and equipment
Loans advanced to subsidiary undertakings
Net cash (outflow)/inflow from investing activities
Financing activities
Lease payments
Debt repayments
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents
at end of year
797
123
361
25
218
(919)
63
704
(298)
(15)
9
(456)
(25)
(481)
(187)
(237)
–
(424)
(238)
(824)
(1,062)
(1,967)
3,994
–
437
106
178
(70)
303
2,279
187
(920)
293
80
151
2,070
70
2,140
–
(319)
–
(319)
(209)
–
(209)
1,612
2,387
(5)
152
99
–
–
–
–
(72)
–
–
(251)
–
–
(323)
–
(323)
–
–
870
870
–
(824)
(824)
(277)
367
–
–
–
–
–
(77)
–
–
(95)
–
–
(172)
–
(172)
–
–
75
75
–
–
–
(97)
464
–
17b
2,027
3,994
90
367
The accompanying notes 1 to 27 are an integral part of the financial statements.
40 Proteome Sciences plc
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
1 GENERAL INFORMATION
Proteome Sciences plc is a company incorporated in the United Kingdom. These financial statements
are the consolidated financial statements of Proteome Sciences plc and its subsidiaries (“the Group”)
and the Company financial statements for Proteome Sciences plc (“the Company”). The financial
statements are presented in pounds sterling because that is the currency of the primary economic
environment in which the Group operates.
2 CHANGES IN ACCOUNTING POLICIES
Adoption of new and revised standards
Proteome Sciences plc has applied the same accounting policies and methods of computation in its
financial statements as in its 2022 annual financial statements. No new and revised standards were
adopted for the period commencing 1 January 2023.
The IASB has issued amendments to IAS 1 Presentation of Financial Statements and IFRS 16 Leases.
The amendments to IAS 1 clarified how an entity classifies debt and other financial liabilities as current
or non-current in particular circumstances. The amendment to IFRS 16 Leases specifies requirements
for seller-lessees to measure the lease liability in a sale and leaseback transaction. Both amendments
are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application
permitted. The amendments have not been applied in the reporting period. We don’t anticipate a
significant effect on the Group’s financial statements from the application of these amendments.
3 SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
These financial statements have been prepared in accordance with UK adopted international
accounting standards and in conformity with the requirements of the Companies Act 2006. The
financial statements have been prepared under the historical cost convention, except financial
instruments and share-based payments, which are prepared in accordance with IFRS 9 and IFRS 2
respectively.
Going concern
The Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Chief Executive Officer’s Statement on page 2 and
Strategic Report on page 6. The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the notes to the financial statements, in particular in the
consolidated cash flow statement on page 40 and in notes 18(b) (Financial liabilities) and 24
(Financial instruments).
Notwithstanding net liabilities of £3,066k these financial statements have been prepared on the going
concern basis which remains reliant on the Group achieving an adequate level of sales in order to
maintain sufficient working capital to support its activities. The directors have reviewed the Company’s
and the Group’s going concern position, taking account of current business activities, budgeted
performance and the factors likely to affect its future development, as 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.
In particular, the directors have considered the challenges from the macro environment on
international business, and the general inflationary pressure on costs. The Company did not see any
impact on the supply chain of its raw materials or its products but did observe reduced demand for
TMT® and for its services during the second half of 2023 but has seen first signs of a potential
recovery since the beginning of 2024. During 2023 the Company has observed price increases from
its suppliers and vendors and had increases in its labour costs.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
Due to the continued backdrop from the macro environment on international business, and the
general inflationary pressure on costs, Group revenues for the year ended 31 December 2023
decreased by 35% to £5.03m (2022: £7.78m). Proteomic (biomarker) services decreased 41% to
£1.63m (2022: £2.75m). Sales and royalties attributable to TMT® and TMTpro™ reagents were £3.40m
(2022: £4.16m).
Total costs, excluding finance costs, rose to £6.65m (2022: £6.05m) and this resulted in an operating
loss of £1.62m (2022: operating profit of £1.73m) and a net loss of £2.44m (2022: a profit of £1.33m).
Cash reserves at the year end were at £2.03m (2022: £3.99m).
The Group is also dependent on the loan facility provided by the Chairman of the Group, which under
the terms of the facility, is repayable on demand. Further details of this facility are set out in note 18(b)
to the financial statements.
The directors have received a legally binding written confirmation from the Chairman that he has no
intention of seeking its repayment, with the facility continuing to be made available to the Group, on
the existing terms, for at least 12 months from the date of approval of these financial statements or
until at least the 30 April 2025.
On the 1 June 2023 the company repaid the loan facility from Vulpes Investment Management plus
accrued interest of £824,424.
Following a detailed review of forecasts, budgets, and sales order book, the directors have a
reasonable expectation the Group as a whole, has adequate financial and other resources to continue
in operational existence for the period of at least twelve months past approval of these financial
statements. For this reason, the directors continue to adopt the going concern basis in preparing the
Financial Statements.
Basis of 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.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
income statement from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Goodwill
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any
accumulated impairment.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating
units expected to benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is
less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. Any impairment is recognised immediately in
the income statement and is not subsequently reversed.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents
amounts receivable for goods and services provided in the normal course of business, net of
discounts, VAT and other sales-related taxes.
The majority of the Group’s revenue is derived from selling TMT® products, end customer sales-based
royalties, which are paid on a quarterly retrospective basis, milestone payments for development
work and revenue milestone payments.
TMT® product sales
TMT® revenues are recognised at the point at which the customer obtains control of the asset. Control
of an asset refers to the ability to direct the use of, and obtain substantially all of the remaining benefits
from, the asset. In relation to TMT® product sales this occurs at the point that the significant risks and
rewards of ownership have been transferred to the customer, the Company retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold, revenue can be reliably measured and it is probable that the economic benefits will
flow to the Company. The standard payment terms for TMT® product invoices are 45 days from receipt.
TMT® royalties
Royalty revenues are recognised on a quarterly basis at the end of each quarter retrospectively as
soon as the calculation of the royalty amount is available. Royalties are earned when other parties
generate sales that use the Group’s TMT® IP. This variable revenue is subject to the sales/usage
restriction in IFRS 15 and, as such, it is only recognised when that underlying sale of the third-party
product is made. The price is a fixed percentage of the underlying sale and payment is due on a
quarterly basis, based on the sales made in that quarter. Royalty payments are received the month
following the quarter end.
TMT® revenue milestones
Milestone revenues are due on cumulative sales-related revenues. The milestone revenue is
recognised at a point in time when the revenue milestone has been achieved. This is because the
milestone revenue is deemed variable consideration and is constrained due to factors outside the
Company’s influence. There is uncertainty as regards the variable consideration amount.
Biomarker services
Proteomics (biomarker) services revenue is recognised typically on an over time basis. Performance
obligations are described for larger service orders in the form of work packages, which identify
individual deliverable services, and each represent a value on its own to the customer. The nature of
the Group’s work is that our biomarker contracts create an asset with no alternative use and contracts
are worded in such a way that the Group has an enforceable right to be paid for the performance
completed to date including an appropriate profit margin. Revenue is recognised over time as the
biomarker services are performed. On partially complete biomarker projects, the Group recognises
revenue based on stage of completion of the project which is estimated by reviewing the individual
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
deliverable services stipulated in the work package. The stage of completion is estimated based on
costs to date over total expected costs. This is considered a faithful depiction of the transfer of
services as the contracts are initially priced on the basis of individual work packages and therefore
represent the amount to which the Group would be entitled based on its performance to date.
Determining the transaction prices and allocation of amounts to performance obligations
Most of the Group’s revenue is derived from fixed price contracts and therefore the amount of revenue
to be earned from each contract is determined by reference to those fixed prices. For TMT® products
sold there is a fixed unit price, which is applied. For the royalties a percentage charge per product
unit sold is fixed and used as the transaction price. Transactions prices for biomarker services and
grant services are determined on the basis of contractual agreements within the purchase order /
contract with fixed prices stipulated in advance.
For biomarker services revenues the Company does not use any discount or bonus schemes.
Revenue is allocated at the transaction price specified in the contract for the individual work orders
representing a distinct performance obligation.
The Group does not operate a returns or refunds policy due to the bespoke nature of its products
and services.
Research grants
In the event that research grant income is received following the Group reporting the number of
working hours carried out on a research project at the allowable rate. Where retention of a grant is
dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When
the criteria for retention have been satisfied, the deferred income balance is released to the
consolidated income statement.
Leasing
All leases are accounted for by recognising a right-of-use asset and a lease liability except for the
UK office.
The rental for the UK office amounted in 2023 to £9k and is not considered a lease under IFRS 16.
In the case of the Group there are four leases recognised under IFRS 16, one for the Frankfurt
operations of the Group, which commenced in August 2019 and ends on 31 December 2026. Its
asset class is land and building as a rental lease.
The second lease is for equipment and commenced on 1 November 2021 and has a term until
November 2025. Its asset class is machinery and equipment. It does not contain variable elements
or break clauses. Similarly, there are no special restoration clauses attached, there are no restrictions
or covenants in place and it does not include an option for a sale and lease back transaction.
The third lease is for the Group’s US operations and commenced in August 2023 and has a term
until July 2027, with an early termination option after 2 years.
The fourth lease is for equipment for the US operations and commenced in October 2023 with a term
until December 2028.
Information of the right of use assets and their amortisation are disclosed in note 14. Information of
future lease payments can be found in notes 23 and 26 and information about financial commitments
and their timing can be found in note 24.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
Details of the Group’s leases existing at the balance sheet date can be found in note 26.
Foreign Currencies
The individual financial statements of each Group company are prepared in the currency of their
primary economic environment in which they operate, their functional currency. For the purpose of
the consolidated financial statements, the results and financial position of each Group company are
expressed in pounds sterling.
In preparing the financial statements of the individual companies, transactions in currencies other
than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the rates prevailing on the balance
sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not retranslated.
Exchange differences arising on the settlement of monetary items, are included in profit or loss for
the period except for differences arising on the retranslation of non-monetary items in respect of
which gains, and losses are recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the period, unless
exchange rates fluctuate significantly during that period, in which case the exchange rates at the
date of transactions are used. Exchange differences arising, if any, are classified as equity and
transferred to the Group’s translation reserve. Such translation differences are recognised as income
or as expenses in the period in which the operation is disposed of.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall
due. Payments made to state-managed retirement benefit schemes are dealt with as payments to
defined contribution schemes where the Group’s obligations under the schemes are equivalent to
those arising in a defined contribution retirement benefit scheme.
As a result of the acquisition of Proteome Sciences R&D Verwaltungs GmbH and Proteome Sciences
R&D GmbH & Co KG during financial year 2002, the Group makes contributions in Germany to a
funded defined contribution plan and to a funded defined benefit plan. These plans are operated in
their entirety by the Pensionskasse der Mitarbeiter der Hoechst-Gruppe VVaG (Hoechst Group), an
independent German mutual insurance company which is required to comply with German insurance
company regulations.
The schemes’ assets are held in multi-employer funds, and the other employers who contribute to
the schemes are not members of the Group. The Group has not been able to identify its share of the
underlying assets and liabilities of the defined benefit scheme and accordingly it has also been
accounted for as a defined contribution scheme. The Group’s contributions to the schemes are
included within the amount charged to the income statement in respect of pension contributions.
Funding contributions paid by the Group are based on annual contributions determined by Hoechst
Group, the administrator for the pension plans. The Group does not have any information about any
deficit or surplus in the defined benefit plan that may affect the amount of future contributions,
including the basis used to determine that deficit or surplus and the implications, if any for the entity.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
The Group also has a direct pension obligation (defined benefit obligation) for its German subsidiary
for which it provides in full at the balance sheet date. This scheme has no separable assets. The
Company uses the projected unit credit method to determine the present value of its unfunded
defined benefit obligation.
Taxation
Any tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported
in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The
Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised
if the temporary difference arises from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries, except where the Group is able to control the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future.
Research and development tax credit
Companies within the Group may be entitled to claim special tax allowances in relation to qualifying
research and development expenditure (e.g. R&D tax credits). The Group accounts for such
allowances as tax credits, which means that they are recognised when it is probable that the benefit
will flow to the Group and that benefit can be reliably measured.
R&D tax credits are measured on a cash basis due to the uncertainty over the amount and timing of
receipt. R&D tax credits reduce current tax expense and, to the extent the amounts due in respect
of them are not settled by the balance sheet date, reduce current tax payable.
Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised
impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful
lives, using the straight-line method, on the following bases:
Laboratory equipment, fixtures and fittings
20-33%
Internally-generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Development expenditure, where it meets certain criteria (given below), is capitalised and amortised
on a straight-line basis over its useful life. Depreciation periods and useful life expectations are subject
to regular review and an impairment exercise carried out at least once a year.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
Where no internally generated intangible asset can be recognised, development expenditure is
written-off in the period in which it is incurred.
An asset is recognised only if all of the following conditions are met:
•
•
•
•
the product is technically feasible and marketable;
the Company has adequate resources to complete the development of the product;
it is probable that the asset created will generate future economic benefits; and
the development cost of the asset can be measured reliably.
The directors do not consider that any Research and Development intangible assets have been
created in 2023 or the prior year on the basis that it is uncertain whether the intangible assets will
generate future cash flows.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised as an expense through profit or loss.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials
and, where applicable, direct labour costs and those overheads that have been incurred in bringing
the inventories to their present location and condition. Cost is calculated using the weighted average
method. Net realisable value represents the estimated selling price less all estimated costs of
completion and costs to be incurred in marketing, selling and distribution.
Financial instruments
The Group classifies its financial assets into one of three measurement categories (fair value through
profit or loss, fair value through other comprehensive income or amortised cost) depending on the
purpose for which the asset was acquired and the nature of the contractual cash flows. As all of the
Group’s financial assets are held in order to collect contractual cash flows and the contractual cash
flows are solely payments of principal and interest, all financial assets are measured at
amortised cost.
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Amortised cost
Financial assets classified under the amortised cost model are Trade and other receivables, Cash
and cash equivalents, Trade and other payables and Loans to subsidiaries.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
Impairment provisions for trade receivables are recognised based on the simplified approach within
IFRS 9 using the lifetime expected credit loss. During this process the probability of the non-payment
of the trade receivable is assessed and multiplied by expected amount of credit loss resulting from
credit default. The Company has set up a matrix using the time a debtor is overdue as a criterion to
determine the default probability using five categories ranging from 0% to 90% probability. Provisions
are recorded in a separate provision account and the movements in the ECL (Expected Credit Loss)
provision are recognised in profit or loss. On notice of a realised default the gross carrying amount
of the asset is written off against the provision.
The Company’s loans to its subsidiaries are interest free and under terms which would technically
provide the Company the right to demand immediate repayment. The current financial situation of
the subsidiaries is such that they would be unable to repay the amounts due if demanded and, in
consequence, they are considered to be credit-impaired and lifetime expected credit losses are
recognised. As part of the assessment of the lifetime expected credit losses of these intercompany
loan receivables, the directors have considered the cash flows that may be generated from a number
of different scenarios, including through an orderly sale of the underlying business.
Contract assets
Contract assets are recognised on the face of the balance sheet and are defined as the right to
consideration in exchange for goods or services that have been transferred to a customer when that
right is conditional on something other than the passage of time (for example, the entity’s future
performance). Contract assets are considered within the expected loss calculation under IFRS 9, but
usually do not fulfil the recognition criteria.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term
highly liquid investments with an original maturity date of fewer than three months that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Borrowings
Interest-bearing loans are recorded initially at fair value, net of direct issue costs and subsequently
at amortised cost. Finance charges, including premiums payable on settlement or redemption and
direct issue costs, are accounted for on an accruals basis in profit or loss using the effective interest
rate method and are added to the carrying amount of the instrument to the extent that they are not
settled in the period in which they arise.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised
cost, using the effective interest rate method.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and
it is probable that the Group will be required to settle that obligation. Provisions are measured at the
directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date
and are discounted to present value where the effect is material. Further details of the pension
provision policy are set out in the paragraph above headed Retirement benefit costs.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
3 SIGNIFICANT ACCOUNTING POLICIES continued
Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled
share-based payments are measured at fair value (excluding the effect of non-market vesting
conditions) at the date of grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period, based on the
Group’s estimate of shares that will eventually vest based on the effect of non-market vesting
conditions. Share based payments are recognised as an additional cost of investment in subsidiary
undertakings in the Company where the Company issues share options to executives employed by
its subsidiaries.
Fair value is measured by use of the Black Scholes model for all awards. The expected life used in
the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
EBITDA
EBITDA is earnings before interest, taxes and operational depreciation including leasing effects.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP company specific measure which is considered to be a key
performance indicator of the Group’s financial performance. Adjusted EBITDA is calculated as
operating profit before depreciation (including right-to-use assets amortisation), amortisation,
non-recurring costs, and employee share-based payment.
As these are non-GAAP measures, they should not be considered as replacements for IFRS
measures. The Group’s definition of these non-GAAP measures may not be comparable to other
similarly titled measures reported by other companies.
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are discussed below. The Group makes
certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. In the future, actual experience may
differ from these estimates and assumptions. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Internally-generated intangible assets – research and development expenditure
The directors do not consider that any Research and Development intangible assets have been
created in 2023 or the prior year on the basis that it is uncertain whether the intangible assets will
generate future cash flows due to economic feasibility not being established until late in the process.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the fair value less costs to sell
the cash-generating units to which goodwill has been allocated. The fair value less costs to sell
calculation requires the entity to estimate the future cash flows expected to arise from the
cash-generating unit. As the recoverable amount of goodwill at the balance sheet date exceeded
the goodwill amount as shown in the balance sheet of £4.22m an impairment was not undertaken.
Details of the estimates used in the calculation are set out in note 13.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
continued
Investments in subsidiary companies
The carrying cost of the Company’s investments in subsidiary companies is reviewed at each balance
sheet date by reference to the income that is projected to arise therefrom. From a review of these
projections the directors have not made a provision against their carrying values as shown in note 15
to the financial statements and the directors therefore believe that the investments concerned will
generate sufficient economic benefits to justify their revised carrying values, despite the inevitable
uncertainties over timing of the receipt of income and the size of the markets from which income is
anticipated.
Inventories
The carrying cost of the Company’s inventories is reviewed at each balance sheet date. The directors
have reviewed the historic sales volumes of the finished goods on a product-by-product level
compared to the stock level of each product at the balance sheet date. From this review the directors
have made a provision against the carrying values of the finished goods where the goods at the
balance sheet date exceed a certain multiple of goods of the respective product sold in the prior
12 months period. This assessment is based on forward looking assumptions about future sales levels
of products. The directors believe that the inventories concerned will generate sufficient economic
benefits to justify their revised carrying values, despite the inevitable uncertainties over timing and
size of the receipt of income.
Leases
Leases accounted under IFRS16 require judgement in respect of interest rates applied. For the
property leases the Group uses the internal rate of return equating to the interest rate agreed for the
Group’s major loans granted by the shareholders of the Group and considers this to be most
appropriate discount rate as the Group does not use other external financing. However, for the
equipment lease for its US operations an implicit rate of interest can be determined as part of the
lease contract and has been applied.
Share based payment charge
The award of share options in 2021 and 2022 resulted in a share based payment charge of £218k
in 2023. The valuation of these options was determined by the Company using the Black Scholes
model and applying the parameters in the grant documents of the share option awards. Details of
the calculations are set out in note 21.
Pension
The Group operates for its German employees a defined benefit retirement scheme and treats, where
appropriate, payments to the scheme similar to payments to a defined contribution scheme. Valuation
of the scheme is based on the annual report of an independent actuary. The Group considers this
is sufficient to guarantee appropriate valuation of the scheme and to consider all resulting financial
liabilities.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
5 REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
Year to 31 December 2023
Primary Geographic Markets
US
UK
EU
Other
Revenue recognised at a
point in time
Revenue recognised over
a period
Disaggregation of Revenue
Biomarker
services
£’000
444
311
857
17
1,629
–
1,629
1,629
Biomarker
services
TMT
Sales
£’000
1,991
–
–
–
1,991
1,991
–
1,991
TMT
Sales
Year to 31 December 2022
£’000
£’000
Primary Geographic Markets
US
UK
EU
Other
Revenue recognised at a
point in time
Revenue recognised over
a period
1,233
330
1,163
25
2,751
–
2,751
2,751
2,198
–
–
–
2,198
2,198
–
2,198
TMT
Royalties
£’000
1,408
–
–
–
1,408
1,408
–
1,408
TMT
Royalties
and
milestones
£’000
2,831
–
–
–
2,831
2,831
–
2,831
Total
£’000
3,843
311
857
17
5,028
3,399
1,629
5,028
Total
£’000
6,262
330
1,163
25
7,780
5,029
2,751
7,780
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
5 REVENUE FROM CONTRACTS WITH CUSTOMERS continued
Contract Balances
Contract Contract Contract Contract
Assets Assets Liabilities Liabilities
2023 2022 2023 2022
£’000 £’000 £’000 £’000
At 1 January 560 479 (105) (35)
Transfer in the period from contract
assets to trade receivables (560) (479) – –
Amounts included in contract liabilities that
were recognised as revenue during the period – – 105 35
Excess of revenue recognised over cash
(or rights to cash) being recognised
during the period 345 560 – –
Cash received in advance of performance
and not recognised as revenue
during the period – – (1) (105)
345 560 (1) (105)
Contract assets
Contract assets and contract liabilities arise from the Group’s biomarker services where contracts
may not be completed at the year end and because payments received from customers at each
balance sheet date do not necessarily equal the amount of revenue recognised on the contracts.
The Group expects to recognise this revenue in 2024.
Remaining performance obligations
The vast majority of the Group’s contracts are for the delivery of goods within the next 12 months for
which the practical expedient of IFRS 15 applies.
6 SEGMENT INFORMATION
For executive management purposes, the Group has one reportable segment which is the sale of
goods and biomarker services. All revenue from its operations is reported to this one segment and
the two income streams form the two categories reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker. These two categories are TMT® revenues
and Biomarker services and other license income. In identifying the operating segments,
management has considered internal reports about components of the Group that are used by the
Chief Executive, who is the Chief Operating Decision Maker, to determine allocation of resources
and to assess their performance.
7 FINANCE COSTS
Interest on related party loans (note 18)
Finance costs
2023
£’000
797
797
2022
£’000
436
436
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
8 OPERATING (LOSS)/PROFIT
Operating (loss)/profit is stated after charging/(crediting):
Depreciation charge (including depreciation on lease)
Research and development costs
Operating lease rentals
– other
Auditor’s remuneration (see below)
Foreign exchange loss/(gain)
The analysis of auditor’s remuneration is as follows:
Fees payable to the Company’s auditor for the audit of the
Company’s annual accounts
Fees payable to the Company’s auditor for other services to the Group
– The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Tax compliance services
Total non-audit fees
Total fees
2023
£’000
2022
£’000
484
637
9
89
151
89
–
89
–
–
89
397
376
12
82
(238)
82
–
82
–
–
82
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP company specific measure which is considered to be a key
performance indicator of the Group’s financial performance. Adjusted EBITDA is calculated as
operating profit before depreciation (including right-to-use assets amortisation), amortisation,
non-recurring costs, and employee share-based payment.
As these are non-GAAP measures, they should not be considered as replacements for IFRS
measures. The Group’s definition of these non-GAAP measures may not be comparable to other
similarly titled measures reported by other companies.
Operating (loss)/profit
Depreciation
Depreciation on leases
EBITDA
Other non-cash items - Share based payments (see note 21)
Non-recurring costs (cash relevant)
Adjusted EBITDA
2023
£’000
(1,621)
123
361
(1,137)
218
–
(919)
2022
£’000
1,728
106
291
2,125
303
–
2,428
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
9 STAFF COSTS
The Group average monthly number of employees (including executive directors) was:
2023
Number
2022
Number
Research and development
Administration
28
7
35
Their aggregate remuneration (including that of executive directors) comprised:
Wages and salaries
Social security costs
Other pension costs
Share based payments
£’000
2,513
456
164
218
3,351
23
6
29
£’000
2,423
367
31
303
3,124
No staff costs are incurred in the parent company, Proteome Sciences plc.
10 DIRECTORS’ REMUNERATION AND TRANSACTIONS
The directors’ emoluments in the year ended 31 December 2023, were:
National
Basic Insurance Benefits Pension
salary Bonus Contributions in kind Costs Total Total
2023 2023 2023 2023 2023 2023 2022
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
Dr M. Söhngen 249 – 4 – 8 261 310
Dr I. H. Pike 186 10 26 4 19 245 233
R. Dennis 159 10 22 – 16 207 235
A. Omari 199 – 5 – 8 212 73
Non-Executive Directors
C.D.J. Pearce 50 – 6 6 – 62 62
R. McDowell 32 – 3 – – 35 33
M. Diggle – – – – – – –
Dr U. Ney 30 – 3 – – 33 30
Total 905 20 69 10 51 1,055 976
(i)
The remuneration of the executive directors is decided by the Remuneration Committee.
(ii) Aggregate emoluments disclosed above do not include any amounts for the value of options to
subscribe for Ordinary Shares in the Company granted to or held by the directors.
(iii) Details of the options in place and of awards under the Company’s Long-Term Incentive Plan are
given in note 21.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
10 DIRECTORS’ REMUNERATION AND TRANSACTIONS continued
(iv) The number of directors in pension schemes is as follows:
Defined contribution pension schemes
Pension costs in the year ended 31 December 2023 were as follows:
Dr M. Söhngen
Dr I. H. Pike
R. Dennis
A. Omari
2023
2
2023
£’000
8
19
16
8
51
2022
2
2022
£’000
7
15
15
2
39
Directors’ transactions
(a) Other than as disclosed note 18(b) no director had a material interest in any contract of
significance with the Company in either year.
(b) C.D.J. Pearce had a consultancy agreement with the Company at a rate of £70,000 per annum
which ended in May 2021. The balance of the fees relating to the consultancy agreement at the
year end was £70k (2022: £140k). This decrease during the year represents the repayment of
the consultancy fees during the year.
11 TAX
Tax (charge)/credit on profit before taxation on ordinary activities
The Group is entitled to make claims for UK tax credit income on qualifying R&D expenditure each
year under the Corporation and Taxes Act 2009. As an SME qualifying entity, tax credits can be
claimed in respect of the tax effect of tax losses generated from qualifying R&D expenditure. From
2018 the Group recognised R&D tax claims on a receipt basis.
UK Corporation tax
Overseas tax charge
Group tax charge for the year
R&D tax credit received
Group tax (charge)/credit for the year
2023
£’000
–
(160)
(160)
135
(25)
2022
£’000
–
(156)
(156)
225
70
The UK Corporation tax credit relates to research and development tax credits claimed under the
Corporation Taxes Act 2009.
At 31 December 2023 there were gross tax losses available for carry forward of approximately £49.1m
(2022: £46.0m).
The tax credit and trading losses to be carried forward for the year are subject to the agreement of
HM Revenue & Customs.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
11 TAX continued
Factors affecting the tax credit for the year
R&D tax credit entitlements are lower than in the previous year, due to the stronger commercial focus
of the Company’s research services revenue stream. As such the Company has not recognised any
tax credit in respect of 2023 The differences are explained below:
(Loss)/profit before tax
Income tax credit calculated at 23.52% (2022: 19.00%)
Effects of:
Fixed asset timing differences
Expenses not deductible for tax purposes
Unrecognised tax losses carried forward
Effect of overseas tax
Prior year adjustment
Tax Unrecognised deferred tax
The following deferred tax assets have not been
recognised at the balance sheet date:
Tax losses
Depreciation in excess of capital allowances
Provisions
Total
2023
£’000
(2,418)
569
–
(129)
(430)
(160)
125
(25)
2023
£’000
12,275
137
105
12,518
2022
£’000
1,255
(238)
(146)
–
341
(112)
225
70
2022
£’000
11,506
168
105
11,779
The deferred tax assets have not been recognised as the directors are uncertain of their recovery.
The assets will be recovered if the Group makes sufficient taxable profits in the future against which
losses can be utilised at an estimated future rate of 25%.
12 (LOSS)/PROFIT PER ORDINARY SHARE
The calculations of basic and diluted loss per ordinary share are based on the following profits and
numbers of shares.
(Loss)/profit for the financial year
Weighted average number of ordinary shares for the purposes
of calculating basic earnings per share:
Weighted average number of ordinary shares and outstanding
options for the purposes of calculating diluted earnings per share:
Basic and Diluted
2023
2022
£’000
£’000
(2,443)
1,325
2023
Number of
shares
2022
Number of
shares
295,182,056 295,182,056
311,222,086 309,020,565
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
12 (LOSS)/PROFIT PER ORDINARY SHARE continued
The weighted average number of ordinary shares outstanding was calculated applying the treasury
stock method to an amount of 23.6m share options which were in the money (see note 21 on
pages 67-71) on the 31 December 2023. An average share price for 2023 of 5.43p per share added
by the outstanding service amounts for these options and resulting in a number of shares of
16,040,030 added to the existing issued share stock for the purpose to calculate the diluted EPS. A
number of 0.5m shares were not considered in the calculation of the weighted number of outstanding
shares used for the diluted EPS calculation as these options were not dilutive at the 31 December
2023. Since the Group is recording a loss for 2023 no dilution has been recognised in calculation of
the loss per share for 2023.
13 GOODWILL
Cost and carrying amount
1 January 2023 and 31 December 2023
Goodwill
£’000
4,218
The Group comprises a single CGU, which comprises the business carried out by Electrophoretics
Limited, Proteome Sciences R&D GmbH & Co KG and, Proteome Sciences US Inc. For the purpose
of testing goodwill, the recoverable value of the CGU is determined from fair value less estimated
costs of disposal and value in use.
In assessing the fair value of the CGU, management and the directors have considered and assessed
the following evidence:
As at 31 December 2023 the market capitalisation for the Group was £13.4m based on the quoted
share price of the Company of 4.53p per ordinary share.
The recoverable amount of the CGU is in excess of the carrying value of £4,218k, therefore no
impairment is required. The following assumptions were used to calculate the value in use:
• Discounted Cash Flow model produced modelling cash flow for the CGU over 6 years
•
Terminal value applied to cash flow from year 6 onwards
• Discount rate of 10.3% applied reflecting the WACC of the Group
• Dynamic growth rate applied, ranging from 4-15% depending on the business unit for the 6 year
period
•
Sensitivities around the model: a 0.1% increase in the discount rate has an impact of
approximately £236k in headroom, a 0.1% decrease in growth rates has an impact of
approximately £413k in headroom.
The directors have concluded that based on the above, recoverable value (on a fair value less cost
to sell basis) of the goodwill exceeds the carrying value of the goodwill at 31 December 2023.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
14 PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSET
Property, plant and equipment comprise laboratory equipment, fixtures and fittings and motor vehicles
held by and equipment on loan to the Group. The movement in the year was as follows:
Laboratory
Equipment
£’000
Right of
use Asset
Building
£’000
Right of
use Asset
Equipment
£’000
Cost
1 January 2022 1,486
Exchange adjustments 27
Additions during the year 320
Disposals during the year (71)
31 December 2022 1,762
1st January 2023 1,762
Exchange adjustments (14)
Additions during the year 238
Disposals during the year (16)
31 December 2023 1,970
Depreciation
1 January 2022 1,268
Exchange adjustments 15
Charge for the year 106
Depreciation relating to disposals (71)
At 31 December 2022 1,318
At 1 January 2023 1,318
Exchange adjustments (6)
Charge for the year 123
Depreciation relating to disposals (16)
At 31 December 2023 1,419
Net book value
At 1 January 2023 444
At 31 December 2023 551
655
33
51
–
739
739
(14)
701
–
1,426
330
5
98
–
433
433
1
165
–
599
306
827
758
41
–
–
799
799
(84)
1,409
–
2,124
31
7
193
–
231
231
–
196
–
427
568
1,697
Total
£’000
2,899
101
371
(71)
3,300
3,300
(112)
2,348
(16)
5,520
1,629
27
397
(71)
1,982
1,982
(5)
484
(16)
2,445
1,318
3,076
In August 2023 the Group extended a 5-year lease contract for the Frankfurt operation, by 2 years
until 31 December 2026. In May 2023 the Group additionally entered into a building lease for its US
operations starting in August 2023 and ending in July 2027, with an early termination option after
2 years. Furthermore, the Group entered into a lease of equipment for its US operations in October
2023, with the lease ending in December 2028.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
15 INVESTMENT IN SUBSIDIARIES
Company
At 1 January 2022
Share based payment expense
Repayment of loan by subsidiary
At 31 December 2022
At 1 January 2023
Additions
Share based payment expense
Repayment of loan by subsidiary
At 31 December 2023
Loans to
Cost of shares
in subsidiary
subsidiary
undertakings undertakings
£’000
£’000
691
303
–
994
994
2
218
–
1,214
8,344
–
(75)
8,269
8,269
–
–
(872)
7,397
Total
£’000
9,035
303
(75)
9,263
9,263
2
218
(872)
8,611
(i)
(ii)
The increase in the cost of shares in subsidiary undertakings of £218k (2022: £303k) represents a
capital contribution between the Company and certain of its subsidiaries, reflecting the provision of
equity instruments in the Company to subsidiary company employees.
The decrease in loans to subsidiary companies in 2023 of £870k (2022: £75k) arose mainly from the
repayment of a loan of the Company by it’s trading subsidiary.
(iii) The Company’s loans to its subsidiaries are interest free and under terms which would technically
provide the Company the right to demand immediate repayment. The current financial situation of
the subsidiaries is such that they would be unable to repay the amounts due if demanded and, in
consequence, they are considered to be credit-impaired and lifetime expected credit losses are
recognised. As part of the assessment of the lifetime expected credit losses of these intercompany
loan receivables, the directors have considered the cash flows that may be generated from a number
of different scenarios, including through an orderly sale of the underlying business.
The carrying amount of the Company’s loans to subsidiaries was £7,397k (2022: £8,269k).
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
15 INVESTMENT IN SUBSIDIARIES continued
Company investments
The Company has investments in the following subsidiary undertakings, which contribute to the net
assets of the Group:
Subsidiary undertakings
Country of
incorporation
and operation Principal activity Company
Description and proportion
of shares held by the
Proteome Sciences
R&D Verwaltungs GmbH
Germany
Administrative
Company
100% Share
Capital
Proteome Sciences
R&D GmbH & Co. KG
Germany
Research
Company
100%
Partnership
Interest
Group
100% Share
Capital
100%
Partnership
Interest
Proteome Sciences, Inc. U.S.A.
Electrophoretics
Limited
United
Kingdom
Veri-Q Inc.
U.S.A.
Phenomics Limited
Proteome Sciences
US Inc
United
Kingdom
U.S.A.
Research
Company
Administrative
and Research
Company
Research
Company
Dormant
100% Common
Stock
100% Common
Stock
100% Ordinary
shares
100% Ordinary
Shares
76.9% Common
Stock
76.9% Common
Stock
100% Ordinary
Shares
100% Ordinary
Shares
Research
Company
100% Common
Stock
100% Common
Stock
(i)
The investments in Proteome Sciences, Inc., Electrophoretics Limited and Phenomics Limited
comprise the entire issued share capital of each subsidiary undertaking and carry 100% of the
voting rights.
The registered offices of the companies above are:
Proteome Sciences R&D Verwaltungs GmbH, Proteome Sciences R&D GmbH & Co. KG, -
Altenhöferallee 3, 60438 Frankfurt am Main, Germany
Proteome Sciences plc, Electrophoretics Limited and Phenomics Limited, Coveham House, Downside
Bridge Road, Cobham, Surrey KT11 3EP
Proteome Sciences Inc PO Box 2767 Humble, Texas, 77347. US
Veri-Q Inc ,2711 Centerville Road, Suite 400, Wilmington, Delaware 19808-1645, US
Proteome Sciences US Inc, 10179 Huennekens Street, San Diego, CA 92121, US
We own a minority stake in Galaxy, a US based clinical contract research organisation, which is
developing a point of care test for the diagnosis and timing of stroke onset in order to guide the sue
of specialist thrombolytic treatment. Under the terms of the licence with Galaxy we have received
equity in Galaxy as an initial fee in 2019 and similarly the milestone in 2023 was also satisfied in
equity. As a result of this we own a minority stake in Galaxy and under the license we are entitled to
subsequent development milestones and a running royalty on any product sales. Given the still early
stage of development of the test that Galaxy is developing and the uncertainties around the future
development of Galaxy as well as the limited information available to us in relation to Galaxy, we have
not accounted for the shares in Galaxy as an investment. We may reconsider this in the future as
Galaxy continues to make progress of the development of its business.
60 Proteome Sciences plc
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
16 INVENTORIES
Work-in-progress
Finished goods
17 OTHER CURRENT ASSETS
(a) Trade and other receivables
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Other Debtors
Prepayments
Total
Group
2023
£’000
–
837
837
Group
2023
£’000
735
(30)
705
78
172
955
Group
2022
£’000
187
714
901
Group
2022
£’000
1,011
(3)
1,008
172
263
1,443
At 31 December 2023 the lifetime expected loss provision for trade receivables is as follows:
More than More than More than More than
30 days 90 days 270 days 364 days
Current past due past due past due past due
Expected loss rate % 0 % 10 % 15% 60% 90%
Gross carrying amount 655 18 18 44 –
Loss provision – (2) (3) (26) –
Total
£’000
735
(31)
At 31 December 2022 the lifetime expected loss provision for trade receivables is as follows:
More than More than More than More than
30 days 90 days 270 days 364 days
Current past due past due past due past due
Expected loss rate % 0 % 10 % 15% 60% 90%
Gross carrying amount 979 32 – – –
Loss provision – (3) – – –
Total
£’000
1,011
(3)
As at 31 December 2023 trade receivables of £79,806 (2022: £31,263) were past due and partially
impaired.
The main factors considered by the finance function in determining that the amounts due are impaired
are the length of time outstanding and additionally background information provided by the sales
and production department.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
17 OTHER CURRENT ASSETS continued
The maturity profile of any due debt is presented below.
0 to 3 months
3 to 9 months
9 to 12 months
> 12 months
(b) Cash and cash equivalents
Cash and cash equivalents
2023
£’000
18
18
44
–
2022
£’000
32
–
–
–
Group
2023
£’000
2,027
Company
2023
£’000
Group
2022
£’000
Company
2022
£’000
90
3,994
367
The directors consider that the carrying amount of trade receivables and cash and cash equivalents
approximates their fair value.
18 FINANCIAL LIABILITIES
(a) Trade and other payables
Due within one year
Trade and other payables
Accruals
Payables due to group entities
Group
2023
£’000
Company
2023
£’000
Group
2022
£’000
Company
2022
£’000
449
180
–
629
–
–
350
350
672
151
–
823
–
–
601
601
Trade creditors and other payables principally comprise amounts outstanding for trade purchases
and continuing costs. The average credit period taken for trade purchases is between 30 and 45
days. For most suppliers no interest is charged on the trade payables for the first 30 days from the
date of the invoice. The Group has financial risk management policies in place to ensure that all
payables are paid within the credit time frame.
The directors consider that the carrying amount of trade payables approximates to their fair value.
(b) Short term borrowings
Group
2023
£’000
Company
2023
£’000
Group
2022
£’000
Company
2022
£’000
Loans from related parties
11,235
1,887
11,262
2,599
The directors consider that the carrying amount of borrowings approximates to their fair value.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
18 FINANCIAL LIABILITIES continued
Note:
(i) The loan from related parties includes a loan of £11,235k (2022: £10,459k) including interest,
represents a loan from Mr C. D. J. Pearce, Non-Executive Chairman of the Company. The loan is
secured by a fixed charge over the Company’s patent portfolio and a floating charge over the
Company’s inventory. The loan bears interest at 2.5% above the base rate of Barclays Bank plc.
Interest accrued on the loan was £776k for 2023 (2022: £405k). Loan amounts representing £5m
may be converted into ordinary share capital at the option of Mr Pearce at the lower of market
price on the date of conversion or the average price over the lowest consecutive ten day trading
period since 29 June 2006. The conversion option is immaterial to the financial statements. The
balance owed by the Group was £11,235k (2022: £10,459k) of which £1,887k is owed by the
Company (2022: £1,756k).
The loan is repayable on seven days’ notice, or immediately in the event of:
(a) A general offer to the shareholders of the Company being announced to acquire its issued
share capital, or
(b) The occurrence of any of the usual events of default attaching to this sort of agreement.
The Company has received a legally binding written confirmation from Mr Pearce that he does
not intend to seek repayment for 12 months from signing of these financial statements or until at
least 30 April 2025.
(ii) On 2 July 2018, Proteome Sciences plc secured a loan facility of £1.0m from Vulpes Investment
Management (VIM). Interest accrues at 2.5% per annum above the UK sterling base rate of
Barclays Bank plc and is repayable alongside the principal loan. The Company signed the First
Amendment to the Agreement on the 17 April 2021 which extended the term of the loan to 1 May
2021. On 29 March 2021, the loan facility with Vulpes Investment Management Private Limited
(“VIM”) (the “Loan”) was amended such that the Loan and all accrued interest is now repayable on
1 May 2022 (previously 1 May 2021). On the 17 June 2021 the Loan Agreement was amended to
allow for conversion into ordinary shares such that until 30 April 2022, VIM may convert part (being
not less than £50,000 or a multiple thereof) or all of the Drawn Loan and accrued interest to
31 December 2021 (being £51,538) into new ordinary shares of the Company. The conversion price
was 7.16p per share, which is the average of the closing middle market price for the ordinary shares
of the Company during the five consecutive trading days immediately prior to entering into the Loan
Amendment. On 30 March 2022, the Company signed the Third Amendment to the VIM Loan
Agreement which extended the term of the loan to 30 June 2023.
This loan is deemed a related party transaction by nature of a common director being on both
the boards of Proteome Sciences plc and Vulpes Investment Management. At 31 May 2023
amounts drawn down and owed by the Company were £700k, and interest of £124k was accrued
(2022: loan £700k interest £102k).
The loan and accrued interest totalling £824,424 was repaid to Vulpes Investment Management
(VIM) on 1 June 2023.
(iii) The amounts shown above as outstanding under short term for both loans include accrued
interest.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
18 FINANCIAL LIABILITIES continued
(c) Changes in liabilities arising from financing activities
Group
Note supporting the cash flow statement - movement in net debt
Interest
accruing
1 January Cash Non-cash
addition
Flow*
£,000
£,000
2023
£,000
in the Foreign 31 December
2023
period exchange
£,000
£,000 £,000
Short term borrowings
Lease Liabilities
Total
11,262
653
(824)
(553)
11,915
(1,377)
–
2,161
2,161
797 –
57 (78)
854 (78)
11,235
2,240
13,475
* The difference to cash flow statement is due to the inclusion of immaterial forex gains, interest and
addition belonging to the lease in cash flow figure, spread out in note 18c separately.
Company
Note supporting the cash flow statement – movement in net debt
Short term borrowings
Total
Interest
accruing
1 January
2023
£,000
Cash
Flow
£,000
in the 31 December
2023
period
£,000
£,000
2,559
2,559
(824)
(824)
152
152
1,887
1,887
Group
Note supporting the cash flow statement - movement in net debt
Interest
accruing
1 January Cash Non-cash
addition
Flow
£,000
£,000
2022
£,000
in the Foreign 31 December
2022
period exchange
£,000
£,000 £,000
Short term borrowings
Lease Liabilities
Total
10,825
862
11,687
–
(293)
(293)
–
10
10
437 –
37 36
474 36
11,262
653
11,915
Company
Note supporting the cash flow statement – movement in net debt
Interest
accruing
1 January
2022
£,000
Cash
Flow
£,000
in the 31 December
2022
period
£,000
£,000
2,460
2,460
–
–
99
99
2,559
2,559
Short term borrowings
Total
64 Proteome Sciences plc
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
19 PENSION PROVISIONS
Group
At 1 January
(Reduction)/Additional provision in the year
Exchange movement
At 31 December
2023
£’000
434
(5)
(10)
419
2022
£’000
499
(92)
27
434
(i) Pension Provision
The pension provision relates to pension costs which may become payable in connection with the
Group’s Frankfurt employees, under the pension scheme arrangements set out in note 19 (iii). This
provision will be utilised as members of the scheme reach retirement age and draw down their
pensions.
(ii) Pension arrangements
As a result of the acquisition of Proteome Sciences R&D Verwaltungs GmbH and Proteome Sciences
R&D GmbH & Co KG from Aventis Research & Technologies GmbH & Co KG, the Group makes
contributions in Germany to a funded defined contribution plan and to a funded defined benefit plan.
These plans are operated in their entirety by the Pensionskasse der Mitarbeiter der Hoechst-Gruppe
VVaG (Hoechst Group), an independent German mutual insurance company, which is required to
comply with German insurance company regulations.
The schemes assets are held in multi-employer funds and the other employers who contribute to the
schemes are not members of the Group. The Group has not been able to identify its share of the
underlying assets and liabilities of the defined benefit scheme and accordingly it has also been
accounted for as defined contribution scheme. The Group’s contributions to the scheme are included
within the amount charged to the income statement in respect of pension contributions.
Funding contributions paid by the Group are based on annual contributions determined by Hoechst
Group, the administrator for the pension plans. For the year ending 31 December 2023, funding
contributions payable by the Group are based on employee contributions at the rate of 1.5% - 2.5%
% (2022: 1.5% - 2.5%) of wages and salaries and employer contributions at the rate of 8 times
(2022:8 times) employee contributions. The Company expects pension costs for 2024 in relation to
the defined benefit scheme of £27,190 (2023: £41,820 actual cost).
The amount charged to the income statement in respect of the contributions to the scheme in 2023
was £90,683 (2022: £176,505).
As at 31 December 2023, an actuarial deficit did not exist for the multi-employer scheme. The Group’s
contributions to the scheme during 2023 represented 0.05% of total contributions to the scheme by
employers and employees (2022: 0.05%). Under the terms of the multi-employer plan, the Group’s
obligations are limited to the original promise/commitment that it has given to its own employees. The
Group does not have an exposure to liability in relation to other third-party employers’ obligations.
The Group does not have any information about how the actuarial status of the plan may affect the
amounts of future contributions to the plan.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
19 PENSION PROVISIONS continued
The Group also has a direct pension obligation for which it provides in full at the balance sheet date.
This scheme has no separable assets. The Company uses the projected unit credit method to
determine the present value of its unfunded defined benefit obligation. Demographic assumptions
are based on Prof. Klaus Heubeck’s mortality table “Richttafeln 2005 G”, the standard German
actuarial table, with full recognition for fluctuations in mortality rates on account of gender and current
age. Pensionable age has been set at 60.
The Company has applied a discount rate for the year of 3.90% (2022: 3.35%). The Company has
assumed an income increase of 3.00% (2022: 3.25%) and German inflation of 3.0% (2022: 2.5%).
Provisions for future unfunded pension liabilities at 31 December 2023 amounted to £418,986 (2022:
£433,726). Amounts recognised through the consolidated income statement for the year to
31 December 2023 included service costs of £27,681 (2022: £50,075), interest costs of £14,140 (2022:
£6,279) and an actuarial gain of £43,714 (2022: gain of £145,430) excluding any exchange effects.
Other pension costs in relation to defined contribution schemes for United Kingdom employees
amounted to £40,436 (2022: £36,476).
20 SHARE CAPITAL
(i) Allotted and called-up
Ordinary Shares of 1p each
The number of shares in issue in 2023 was:
2023
£’000
2022
£’000
2,952
2,952
2023
Number
2022
Number
As at 1 January 2023 and 31 December 2023
295,182,056 295,182,056
66 Proteome Sciences plc
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
21 SHARE OPTIONS AND SHARE BASED PAYMENTS
(i) Options
Options under the schemes noted below may be exercised from the date on which any shares in the
Company are first admitted to the Official List of the London Stock Exchange.
(ii) 2011 Long-Term Incentive Plan (“LTIP”)
At 31 December 2023, the maximum number of the Company’s Ordinary Shares of 1p each to be
potentially allocated or issued under the LTIP was as follows:
Number at
31 Dec
2022
Awarded
in the
year
Exercised Lapsed Number at
in the in the 31 Dec
year year 2023
Number of
Options
Vesting
Date
9,000,000
2,500,000
2,500,000
300,000
14,300,000
–
–
–
–
–
– – 9,000,000
3,000,000
3,000,000
3,000,000
– – 2,500,000
1,000,000
1,000,000
500,000
– – 2,500,000
1,000,000
1,000,000
500,000
300,000
– – 300,000
– – 14,300,000
15 September
2021
15 September
2022
15 September
2023
15 September
2021
15 September
2022
15 September
2023
15 September
2021
15 September
2022
15 September
2023
8 June 2024
Latest
Exercise
Date
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June
2031
8 June 2031
At 31 December 2022, the maximum number of the Company’s Ordinary Shares of 1p each to be
potentially allocated or issued under the LTIP was as follows:
Number at
31 Dec
2021
Awarded Exercised Lapsed
in the in the in the
year year year
Number at
31 Dec
2022
Vesting
Date
9,000,000
– – –
2,500,000
– – –
2,500,000
– – –
300,000
14,300,000
– – –
– – –
9,000,000 15 September
2021, 2022
& 2023
2,500,000 15 September
2021, 2022
& 2023
2,500,000 15 September
2021, 2022
& 2023
8 June 2024
300,000
14,300,000
Latest
Exercise
Date
8 June 2031
8 June 2031
8 June 2031
8 June 2031
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
21 SHARE OPTIONS AND SHARE BASED PAYMENTS continued
(iii) 2011 Share Option Plan
At 31 December 2023 options had been granted and were still outstanding in respect of the
Company’s Ordinary Shares of 1p each under the Company’s 2011 Share Option Plan as follows:
Number of
Shares
Amount of Capital
(£)
Exercise Price
(p)
Vesting Date
Dates
Exercisable
45,000
500,000
545,000
45
500
545
16.75
7.83
18.3.19
8.6.24
18.3.19 – 18.3.26
08.6.24 – 08.6.31
At 31 December 2022 options had been granted and were still outstanding in respect of the
Company’s Ordinary Shares of 1p each under the Company’s 2011 Share Option Plan as follows:
Number of
Shares
Amount of Capital
(£)
Exercise Price
(p)
Vesting Date
Dates
Exercisable
43,000
48,000
560,000
651,000
430
480
5,600
6,510
49.87
16.75
7.83
25.6.16
18.3.19
8.6.24
25.6.16 – 25.6.23
18.3.19 – 18.3.26
8.6.24 – 8.6.31
(iv) 2021 Share Option Plan
At 31 December 2023 options had been granted and were still outstanding in respect of the
Company’s Ordinary Shares of 1p each under the Company’s 2021 Share Option Plan as follows:
Number of
Shares
Amount of Capital
(£)
Exercise Price
(p)
Vesting Date
Dates
Exercisable
1,520,000
1,520,000
1,520
1,520
4.30
11.10.25
11.10.25 – 11.10.32
At 31 December 2022 options had been granted and were still outstanding in respect of the
Company’s Ordinary Shares of 1p each under the Company’s 2011 Share Option Plan as follows:
Number of
Shares
Amount of Capital
(£)
Exercise Price
(p)
Vesting Date
Dates
Exercisable
1,640,000
1,640,000
1,640
1,640
4.30
11.10.25
11.10.25 – 11.10.32
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
21 SHARE OPTIONS AND SHARE BASED PAYMENTS continued
(v) 2021 Long-Term Incentive Plan (“LTIP”)
At 31 December 2023, the maximum number of the Company’s Ordinary Shares of 1p each to be
potentially allocated or issued under the LTIP was as follows:
Number at
31 Dec
2022
Awarded
in the
year
Exercised Lapsed Number at
in the in the 31 Dec
year year 2023
Number of
Options
Vesting
Date
Latest
Exercise
Date
1,500,000
1,500,000
800,000
4,000,000
7,800,000
–
–
–
–
–
– – 1,500,000
– – 1,500,000
– – 800,000
– – 4,000,000
– – 7,800,000
500,000 11 October 2023 11 October 2032
500,000 11 October 2024 11 October 2032
500,000 11 October 2025 11 October 2032
500,000 11 October 2023 11 October 2032
500,000 11 October 2024 11 October 2032
500,000 11 October 2025 11 October 2032
800,000 11 October 2025 11 October 2032
1 December
2032
1 December
2032
1 December
2032
1 December
2023
1 December
2024
1 December
2025
1,333,333
1,333,333
1,333,333
The Company issues equity-settled share-based payments under the 2011 Share Option Plans. The
vesting period is three years. If the options remain unexercised after a period of 10 years from the
date of grant, the options expire. Options are usually forfeited if the employee leaves the Group before
the options vest.
At the 31 December 2023, awards over 45,000 shares (2022: 91,000) had vested and were capable
of exercise.
A Long-Term Incentive Plan was introduced in 2011 which closed in July 2021 and no further awards
will be made under that scheme. The Board adopted a new Long-Term Incentive Plan in 2021. Awards
made during the year are stated in note 21(v) and are on the condition of continued employment.
Any exercised options are settled by the Company issuing shares.
As a result of the awards a charge to the income statement of £218k (2022: £303k) was recognised
during the year in respect of all schemes.
Before awards vest the Remuneration Committee will satisfy itself that the TSR performance is a
genuine reflection of the Company’s underlying performance over the three-year performance period.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
21 SHARE OPTIONS AND SHARE BASED PAYMENTS continued
Outstanding at 1 January 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Exercisable at 31 December 2022
Outstanding at 1 January 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Exercisable at 31 December 2022
Outstanding at 1 January 2022
Granted in the year
Forfeited during the year
Outstanding at 31 December 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Exercisable at 31 December 2022
70 Proteome Sciences plc
2011 Share Option Plan
Weighted
average
exercise
price (p)
Options
714,000
–
63,000
651,000
–
106,000
545,000
45,000
91,000
34.01
–
36.50
34.01
–
36.50
34.01
16.75
34.01
2011 LTIP
Maximum
Number of
Weighted
average
fair value
Shares per share (p)
14,300,000
–
–
14,300,000
–
–
14,300,000
14,000,000
5,000,000
1.00
–
–
1.00
–
–
1.00
1.00
1.00
2021 Share Option Plan
Weighted
average
exercise
price (p)
Options
–
1,640,000
–
1,640,000
–
120,000
1,520,000
–
–
–
7.83
–
7.83
–
7.83
7.83
–
–
267703 Proteome p61-p81.qxp 10/04/2024 16:42 Page 71
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
21 SHARE OPTIONS AND SHARE BASED PAYMENTS continued
Outstanding at 1 January 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2022
Granted in the year
Lapsing in the year
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Exercisable at 31 December 2022
2021 LTIP
Maximum
Number of
Weighted
average
fair value
Shares per share (p)
-
7,800,000
–
–
–
–
-
2.60
–
–
–
–
7,800,000
2.60
–
–
–
–
The options outstanding at 31 December 2023 had a weighted average remaining contractual life as
follows:
2011 Share Option Plan
2011 LTIP
2021 Share Option Plan
2021 LTIP
2023
No. of
months
2022
No. of
months
70.1
89
109
106
82.1
101
121
118
The inputs into the Black-Scholes model were:
2023
2022
Weighted average share price 4.54p
Weighted average exercise price 2.15p
Expected volatility 78.81%
Expected life 2.3 years
Risk free rate 4.04% – 4.46%
4.22p
2.90p
78.81%
2.3 years
4.04% – 4.46%
Notes
(i) Expected volatility is a measure of the tendency of a security price to fluctuate in a random,
unpredictable manner and is determined by calculating the historical volatility of the Company’s share
price over the previous years.
(ii) The expected life has been adjusted, based on management’s best estimate, for the effects of non-
transferability, exercise restrictions and behavioural considerations.
(iii) The Company has used the Monte Carlo model to value the LTIP awards granted before 2022, which
simulates a wide range of possible future share price scenarios and calculates the average net present
value of the option across those scenarios and which captures the effect of the market-based
performance conditions applying to such awards.
For the LTIP awards granted during 2022 the Black Scholes model was used as there was only one
performance condition attached.
Proteome Sciences plc 71
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
22 RESERVES DESCRIPTION AND PURPOSE
Share premium
Amount subscribed for share capital in excess of nominal value.
Translation reserve
Gains/losses arising on retranslating the net assets of overseas operations into Sterling.
Retained earnings
All other net gains and losses and transactions with owners (e.g., dividends) not recognised
elsewhere.
Share based payment Reserve
The amounts transferred to the Equity Reserve are for charges recognised in respect of the
requirements of IFRS 2 “Share-based payments”.
Merger Reserve
The merger reserve arose in the period to the 11 November 1994 and represented the premium on
the allotment of new ordinary shares issued in a share exchange agreement entered into by the
shareholders of Monoclonetics International Inc, (now Proteome Sciences Inc.).
23 GUARANTEES AND OTHER FINANCIAL COMMITMENTS
Operating lease arrangement
The Group leases one office space in the UK on a short-term operating lease which renews on a
twelve monthly basis ending in May 2024 and there is no control over the asset. The Group pays
insurance, maintenance and repairs of this property.
At the balance sheet date 31 December 2023, the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due as follows:
Within 1 year
Within 2-5 years
> 5 years
Group
2023
£’000
Company
2023
£’000
Group
2022
£’000
Company
2022
£’000
9
–
–
9
9
–
–
9
7
–
–
7
7
–
–
7
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
24 FINANCIAL INSTRUMENTS
Capital risk management
The Group monitors “adjusted capital” which comprises all components of equity (i.e., share capital,
share premium translation reserve and merger reserve, retained earnings, and revaluation reserve).
The Group’s objectives when maintaining capital are:
•
•
to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders, and
Provide an adequate return to shareholders by pricing products and services commensurately
with the level of risk
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital
structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group
does not pay dividends to shareholders.
Due to recent market uncertainty the Group’s strategy is to preserve a strong cash base and to
maintain a positive cash flow for at least 15 months in advance.
The Board has overall responsibility for the determination of the Group's risk management objectives
and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for
designing and operating processes that ensure the effective implementation of the objectives and
policies to the Group's finance function. The Board receives monthly management reports from the
Group’s finance function and bi-monthly cash flow calculations through which it reviews the
effectiveness of the processes put in place and the appropriateness of the objectives and policies
it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies
are set out below.
The capital structure of the Group consists of the financial instruments listed below which determine
the financial risk and an according risk management.
Financial instruments for the Group comprise:
•
Trade and other receivables
• Cash and cash equivalents
•
Trade and other payables
• Borrowing from major investors of the Company at floating rate
•
Leases liability
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
24 FINANCIAL INSTRUMENTS continued
For the Company:
• Cash and cash equivalents
•
Investment in quoted and unquoted securities
• Borrowing from major investors of the Company at floating rate
Categories of financial instruments
Financial assets
Cash and cash equivalents*
Trade and other receivables*
Total financial assets
Financial liabilities
Trade and other payables*
Short-term borrowings*
Lease liabilities
Total financial liabilities
Group
2023
£’000
Company
2023
£’000
Group
2022
£’000
Company
2022
£’000
2,027
783
2,810
(449)
(11,235)
(2,240)
(13,924)
90
–
90
–
(1,887)
–
(1,887)
3,994
1,180
5,174
(672)
(11,262)
(653)
(12,587)
367
–
367
–
(2,559)
–
(2,559)
The described financial instruments are measured applying the following methodologies:
* measured at amortised cost through the consolidated income statement
The Group is exposed to the following financial risks:
• Credit risk
•
•
Fair value or cash flow interest rate risk
Foreign exchange risk
• Other market price risk
•
Liquidity risk
Credit risk
Group
Electrophoretics Limited, the main trading company in the Group, has a credit policy in place and
the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on
customers as deemed necessary based on the nature of the prospective customer and size of order.
To minimize any credit risk upfront payment for service orders are requested when they require larger
pre-financing of consumables needed for order fulfilment. Further for any larger service orders interim
payments are requested based on work order related performance obligations. The overall structure
of our client base with the majority being B2B and to a lesser extent institutional customers like
universities or state funded research institutions minimizes credit risk as well.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
24 FINANCIAL INSTRUMENTS continued
For trade receivables and other receivables further explanation and calculation of ECL (Expected
credit loss) provisions relating to credit risk are presented in note 17.
At 31 December 2023, the largest exposure was represented by the carrying value of trade
receivables and contract assets of £1.30m (2022: trade receivables and contract assets £2.00m).
A provision for impairment was recognised for 2023 £30k (2022: £3k) on the basis that the Company’s
customers are typically large companies and there is a long-standing relationship and history of
payment by customers so there is a very low history of credit defaults. The Group does have
significant concentrations of credit risk on its trade receivables, with the largest debtor/contracted
asset amounting to £586k (2022: £560k).
Credit risk arising from cash and cash equivalents held with banking institutions is controlled by using
only good rated Institutions as presented in the table. Nevertheless, the economic challenges created
by global events such as the COVID-19 pandemic and the Russia-Ukraine conflict might result in a
strain on the liquidity of the individual banking institutions. As such the company follows the
developments in the financial markets closely. As a consequence, a more even allocation of funds
between the different banks might be adopted and we will consider reallocation of funds to better
rated institutions in case of larger changes in credit rating by more than one of the big credit rating
agencies (such as Moody’s, S&P, Fitch). Due to fluctuating cash flows we inevitably need to hold a
larger amount of cash deposits to fund the operational business requirements and only limited risk
mitigation is possible here.
Barclays plc
Commerzbank AG
Other
Group
2023
£’000
1,789
149
89
2,027
Company
2023
£’000
90
–
–
90
Group
2022
£’000
3,522
472
–
3,994
Company
2022
£’000
367
–
–
367
Company
The Company is exposed to credit risk on loans provided to related parties. At the reporting date, the
largest exposure was represented by the carrying value of loans to Proteome Sciences R&D GmbH
& Co. KG of £8.0m. At 31 December 2023, the carrying value of loans owed by Electrophoretics
Limited to the Company was £0.04m (2022: £0.28m), of loans owed by subsidiaries to the Company
was £7.4m (2022: £8.3m). Refer to Note 15 for further detail.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange
rates and interest rates (see below).
Fair value and cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from long term borrowings. The level of borrowings
is determined by the capital requirements of the Group as it was operational in a net cash outflow
position. As such usual gearing ratios to assess debt risk levels are not applicable.
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borrowings are in the functional currency of the Group.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
24 FINANCIAL INSTRUMENTS continued
Interest rate risk management
The Group is exposed to interest rate risk arising from its short-term borrowings, details of which are
set out in note 18(b).
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the
liquidity risk management section of this note.
Interest rate sensitivity analysis
The Group analyses interest sensitivity on a yearly basis. The sensitivity analysis below has been
determined based on the exposure to floating rate liabilities. The analysis is prepared assuming the
amount of liability outstanding at balance sheet date was outstanding for the whole year. A 0.5%
increase or decrease is used when reporting interest rate risk internally to key management personnel
and represents management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 0.5% higher and all other variables were held constant, the Group’s profit
for the year ended 31 December 2023 would have decreased by £43k (2022: £56k), for a decrease
of 0.5% in interest rate the profit would have increased by the same amount.
Foreign exchange risk
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to
exchange rate fluctuations arise. The Group’s principal exposure is to movement in the Euro exchange
rate, but it anticipates that a significant proportion of its future income will be received in this currency,
thus helping to reduce its exposure in this area.
Foreign currency sensitivity analysis
The Group is mainly exposed to the currency of Germany (the Euro) and of the US (the US dollar).
The Group’s companies hold asset and liabilities denominated in different currencies than their
functional currency. As the nature of these assets is in their majority short term and usually any assets
held in a foreign currency are used to match liabilities denominated in this currency the overall effect
of any currency fluctuations does not result in a material exposure to foreign exchange risk. Therefore,
a foreign currency sensitivity analysis is not considered to be appropriate.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built
an appropriate liquidity risk management framework for the management of the Group’s short,
medium and long-term funding and liquidity management requirements. The Group manages liquidity
risk by maintaining adequate reserves and borrowing facilities, by continuously monitoring forecast
and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
76 Proteome Sciences plc
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
24 FINANCIAL INSTRUMENTS continued
Liquidity and interest risk tables
The following tables detail the Group and Company’s remaining contractual maturity for its non-
derivative financial liabilities including both interest and principal cash flows and the interest rates
applied. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Group and Company can be required to pay. Payments
relating to lease liabilities under IFRS 16 are shown under note 26.
Up to 3
months
As at December 2023 £’000
Trade and other payables* 559
Loans and borrowings 11,235
Short term lease 2
Total 11,796
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
70
–
7
77
–
–
–
–
–
–
–
–
–
–
–
–
* Including accruals, other provisions and contract liabilities
Liquidity risk management
Up to 3
months
As at December 2022 £’000
Trade and other payables 927
Loans and borrowings 11,262
Short term lease 3
Total 12,192
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
–
–
4
4
–
–
–
–
–
–
–
–
–
–
–
–
There are pension provisions existing for the German entity of the Group, which amounted at
31 December 2023 to £0.42m (2022: £0.44m), which can result in future Cash outflows from the
Group.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
25 RELATED PARTY TRANSACTIONS
(a) Transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and were as follows:
1) Loans advanced to subsidiary undertakings:
At 1 January 2022
Provision for impairment
At 31 December, 2022
At 1 January 2023
Loan repayment in the year
At 31 December, 2023
2) Loan from subsidiary undertaking:
At 1 January, 2022
Loan advances during the year
Exchange adjustment
At 31 December, 2022
At 1 January, 2023
Loan advances during the year
Exchange adjustment
At 31 December, 2023
Proteome
Sciences R&D
£’000
7,549
–
7,549
7,549
–
7,549
301
–
17
318
318
–
(7)
311
Electrophoretics
Ltd
£’000
795
(75)
720
720
870
1,590
389
(97)
–
292
292
(242)
–
50
Total
£’000
8,344
(75)
8,269
8,269
870
9,139
690
(97)
17
610
610
(242)
(7)
361
Further details of the Company’s shares in and loans to its subsidiary undertakings are set out
in note 15.
(b) C.D.J. Pearce, a Director of the Company and therefore a related party, has made a loan facility
available to the Company full details of which are set out in note 18 on page 62.
(c) M Diggle, a Director of the Company is also a Director of Vulpes Investment Management (VIM)
and is therefore a related party, VIM has made a loan facility available to the Company which has
been repaid in full, details of which are set out in note 18 on page 63.
(d) Details of the remuneration of the directors is set out in note 10, including details of pension
contributions made by the Company and information in connection with their long-term benefits
is shown in the Directors’ Report under the heading ‘Directors and their interests’.
(e) Key management personnel compensation.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
25 RELATED PARTY TRANSACTIONS continued
Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the Group. Key management personnel for the year-ended 31 December
2023 and the comparative period were as follows:
Mariola Söhngen (Chief Executive Officer)
Ian Pike (Chief Scientific Officer)
Richard Dennis (Chief Commercial Officer)
Abdelghani Omari (Chief Financial Officer)
Stefan Fuhrmann (Finance Director)
Christopher Pearce Chairman (Non-Executive Director)
Roger McDowell (Non-Executive Director)
Martin Diggle (Non-Executive Director)
Ursula Ney (Non-Executive Director)
Key management personnel compensation was as follows:
Salary
National Insurance Contributions
Other long-term benefits
Defined benefit scheme costs
Share based payment expense (relating to directors)
Consultancy fee
2023
£’000
1,034
87
51
–
195
–
1,367
2022
£’000
968
93
39
–
278
–
1,403
26 LEASES
In the case of the Group there are four leases recognised under IFRS 16 comprising one for the
Frankfurt operation of the Group. In August 2023 the Group extended a 5-year lease contract for the
Frankfurt operation, by 2 years until 31 December 2026. In May 2023 and a lease for a mass
spectrometry instrument located in Frankfurt starting in November 2021 and ends after 4 years in
November 2025. The Group additionally entered into a building lease for its US operations starting
in August 2023 and ending in July 2027, with an early termination option after 2 years. Furthermore,
the Group entered into a lease of equipment for its US operations in October 2023, with the lease
ending in December 2028.
The rental lease and the resulting right-of-use asset is classified as land and buildings the laboratory
instrument lease is classified as fixture and fittings. Both leases do not contain variable elements or
break out clauses. Similarly, there are no special restoration clauses attached, there are no restrictions
or covenants in place and they do not include an option for a sale and lease back transaction.
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
26 LEASES continued
Lease liabilities are measured at the present value of the contractual payments due to the lessor over
the term of the lease term, with the discount rate determined by reference to the Groups internal rate
of return, as there is no inherent rate to the lease readily determinable. The internal rate of return
(ICR) which is the Barclays interbank rate for the year + 2.5%, (overall 6.00%) which was applied
over the duration of the lease reflecting the refinancing rate agreed for the loans made available by
its major shareholders, which are its main source of external finance and reflects the incremental
borrowing rate.
Right-of-use asset
At 1 January 2023
Additions
Amortisation
Foreign exchange movements
At 31 December 2023
Right-of-use asset
At 1 January 2022
Additions
Amortisation
Foreign exchange movements
At 31 December 2022
Land and
buildings
£’000
Equipment
£’000
306
701
(165)
(14)
828
567
1,409
(196)
(83)
1,697
Land and
buildings
£’000
Equipment
£’000
324
52
(98)
28
306
726
–
(193)
34
567
Total
£’000
873
2,110
(361)
(97)
2,525
Total
£’000
1,050
52
(291)
62
873
Interest on lease liability for the period amounted to £57k (2022: £37k). This results in slightly higher
costs at the beginning of the lease and lower costs at the end of the lease in comparison to the
actual lease payments.
Lease Liability
At 1 January 2023
Additions
Interest accruing for the year
Lease payments
Foreign exchange movements
At 31 December 2023
80 Proteome Sciences plc
Land and
buildings
£’000
Equipment
£’000
249
752
45
(219)
(6)
821
404
1,409
12
(334)
(72)
1,419
Total
£’000
653
2,161
57
(553)
(78)
2,240
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NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 31 December 2023
26 LEASES continued
At 1 January 2022
Additions
Interest accruing for the year
Lease payments
Foreign exchange movements
At 31 December 2022
Land and
buildings
£’000
Equipment
£’000
352
11
21
(149)
14
249
510
–
16
(145)
23
403
Total
£’000
862
11
37
(293)
36
653
Maturity analysis of discounted lease payments
Up to 3
months
As at December 2023 £’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Over
5 years
£’000
Lease liabilities 152
457
593
1,038
–
Up to 3
months
As at December 2022 £’000
Between
3 and 12
months
£’000
Between
1 and 2
years
£’000
Between
2 and 5
years
£’000
Lease liabilities 75
225
234
119
Over
5 years
£’000
–
Information of the right-of-use asset and its amortisation are represented in note 14 as well.
The rent for the UK office, which amounts to a total liability of £9k, is not considered a lease under
IFRS 16 because there is no control over the asset.
27 EVENTS AFTER THE BALANCE SHEET DATE
There have been no significant events which have occurred subsequent to the reporting date.
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNUAL GENERAL MEETING
(Registered in England and Wales No: 02879724)
Notice is hereby given that the 30th Annual General Meeting of Proteome Sciences plc will be held at
the offices of Allenby Capital Limited, 5 St Helen’s Place, London, EC3A 6SB on Thursday 16 May 2024
at 12 noon and the Company will also provide access online through the Investor Meet Company platform
(see notes) for the purpose of considering and, if thought fit, passing the following Resolutions of which
numbers 1 to 7 will be proposed as Ordinary Resolutions and number 8 will be proposed as a Special
Resolution.
1 To receive the financial statements and the reports of the directors and of the auditors for the year
ended 31 December 2023.
2 To re-appoint Christopher Pearce as a director of the Company in accordance with Article 109(b) of
the Articles of Association of the Company.
3 To re-appoint Ursula Ney as a director of the Company in accordance with Article 109(b) of the
Articles of Association of the Company.
4 To re-appoint Mariola Söhngen as a director of the Company in accordance with Article 109(b) of
the Articles of Association of the Company.
5 To re-appoint Richard Dennis as a director of the Company in accordance with Article 109(b) of the
Articles of Association of the Company.
6 To re-appoint Cooper Parry Group Limited as auditors of the Company in accordance with
section 489 of the Companies Act 2006 until the conclusion of the next general meeting of the
Company at which audited accounts are laid before the members and to authorise the directors to
fix their remuneration.
7 THAT in substitution for all existing authorities the directors of the Company be and are hereby
authorised generally and unconditionally pursuant to and in accordance with section 551 of the
Companies Act 2006 to exercise all the powers of the Company to allot shares or to grant rights to
subscribe for or convert any security into shares in the Company up to an aggregate nominal amount
of £983,940.19 until the conclusion of the next Annual General Meeting of the Company or 30 June
2025, whichever is the earlier, but so that this authority shall allow the Company to make offers or
agreements before the expiry of this authority which would, or might, require shares to be allotted or
rights to subscribe for or to convert securities into shares to be granted after such expiry.
8 THAT subject to, and upon Resolution 7 above, having been passed and becoming effective, the
directors be and are hereby authorised and empowered pursuant to section 570 of the Companies
Act 2006 (the “Act”) to allot equity securities, as defined in section 560 of the Act, as if section 561(1)
of the Act did not apply to any such allotment, provided that this power shall be limited to:
(a) the allotment of equity securities in connection with an offer by way of a rights issue, or any other
pre-emptive offer, to the holders of ordinary shares in proportion (as nearly as may be) to their
respective holdings of ordinary shares on a record date fixed by the directors and to the holders
of other equity securities as required by the rights of those securities or as the directors otherwise
consider necessary but subject to such exclusions or other arrangements as the directors may
deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates,
legal or practical problems in or under the law of any territory or the requirements of any
regulatory body or stock exchange; and
(b) the allotment (otherwise than pursuant to sub-paragraph (a) of equity securities which are or are
to be wholly paid up in cash up to an aggregate nominal amount of £590,364.11.
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNUAL GENERAL MEETING
(Registered in England and Wales No: 02879724)
and provided further that the authority and power conferred by this Resolution shall expire at the
conclusion of the next Annual General Meeting of the Company or on 30 June 2025, whichever is
the earlier, unless such authority is renewed or extended at or prior to such time, save that the
Company may before such expiry make any offer, agreement or other arrangement which would or
might require equity securities to be allotted after the expiry of this authority and the directors may
then allot equity securities in pursuant of such an offer or agreement as if the authority and power
hereby conferred had not expired.
By order of the Board
Victoria Birse
Company Secretary
9 April 2024
Registered office
Coveham House
Downside Bridge Road
Cobham
Surrey
KT11 3EP
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Proteome Sciences plc 83
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNUAL GENERAL MEETING
(Registered in England and Wales No: 02879724)
Notice of Meeting Notes:
The following notes explain your general rights as a shareholder and your right to attend and vote at this
Meeting or to appoint someone else to vote on your behalf
1. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company
of the number of votes they may cast), shareholders must be registered in the Register of Members of
the Company at close of trading on 14 May 2024 Changes to the Register of Members after the relevant
deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting.
2. Executive directors’ service agreements and copies of the terms and condition of appointment of non-
executive directors will be available for inspection at the registered office of the Company from the date
of this notice and at the AGM venue for 15 minutes prior to the commencement of the meeting.
3. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to
attend and to speak and vote on their behalf at the Meeting. A shareholder may appoint more than one
proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a
different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder
of the Company.
4.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order
in which the names of the joint holders appear in the Company’s Register of Members in respect of the
joint holding (the first named being the most senior).
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of
votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting
at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any
other matter which is put before the Meeting.
6. Electronic voting – via Link Investor Centre
•
Link Investor Centre is a free app for smartphone and tablet provided by Link Group (the company’s
registrar) It allows you to securely manage and monitor your shareholdings in real time, take part in
online voting, keep your details up to date, access a range of information including payment history
and much more. The app is available to download on both the Apple App Store and Google Play, or
by scanning the relevant QR code below.
• You may request a hard copy form of proxy directly from the registrars, Link Group 0371 664 0300
Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines are open between 09:00 - 17:30,
Monday to Friday excluding public holidays in England and Wales.
•
in the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below.
In order for a proxy appointment to be valid a form of proxy must be completed. In each case the form of
proxy must be received by Link Group, PXS, Central Square, 29 Wellington Street, LEEDS, LS1 4DL by 12
noon on 14 May 2024.
7.
If you return more than one proxy appointment, either by paper or electronic communication, the
appointment received last by the Registrar before the latest time for the receipt of proxies will take
precedence. You are advised to read the terms and conditions of use carefully. Electronic communication
facilities are open to all shareholders and those who use them will not be disadvantaged.
8. The return of a completed form of proxy, electronic filing or any CREST Proxy Instruction (as described in
note 11 below) will not prevent a shareholder from attending the Meeting and voting in person if he/she
wishes to do so.
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NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNUAL GENERAL MEETING
(Registered in England and Wales No: 02879724)
9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the Meeting (and any adjournment of the Meeting) by using the procedures
described in the CREST Manual (available from www.euroclear.com). CREST Personal Members or other
CREST sponsored members, and those CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate
action on their behalf.
10. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with
Euroclear UK & International Limited’s specifications and must contain the information required for such
instructions, as described in the CREST Manual. The message must be transmitted so as to be received
by the issuer’s agent (ID RA10) by 12 Noon on 14 May 2024. For this purpose, the time of receipt will be
taken to mean the time (as determined by the timestamp applied to the message by the CREST application
host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST
should be communicated to the appointee through other means.
11. CREST members and, where applicable, their CREST sponsors or voting service providers should note
that Euroclear UK & International Limited does not make available special procedures in CREST for any
particular message. Normal system timings and limitations will, therefore, apply in relation to the input of
CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member, or sponsored member, or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by means of the CREST system by any particular
time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system
providers are referred, in particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction
in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
12. Unless otherwise indicated on the Form of Proxy, CREST voting or any other electronic voting channel
instruction, the proxy will bote as they think fit or, at their discretion, withhold the voting.
13. Any corporation which is a shareholder can appoint one or more corporate representatives who may
exercise on its behalf all of its powers as a shareholder provided that no more than one corporate
representative exercises powers in relation to the same shares.
14. As at 9 April 2024 (being the latest practicable business day prior to the publication of this Notice), the
Company’s ordinary issued share capital consists of 295,182,056 ordinary shares, carrying one vote each.
Therefore, the total voting rights in the Company as at 9 April 2024 are 295,182,056.
15. Any shareholder attending the Meeting has the right to ask questions. The Company must cause to be
answered any such question relating to the business being dealt with at the Meeting but no such answer
need be given if: (a) to do so would interfere unduly with the preparation for the Meeting or involve the
disclosure of confidential information; (b) the answer has already been given on a website in the form of
an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the
Meeting that the question be answered.
16. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006)
provided in either this Notice or any related documents to communicate with the Company for any
purposes other than those expressly stated.
The Company will also provide access to the proceedings of the AGM online through the Investor Meet Company
platform. However, shareholders will not be able to vote online during the Meeting and are therefore urged to
submit their votes via proxy as early as possible. Shareholders are also invited to submit questions for the Board
to consider. Questions can be pre submitted in advance of the AGM via the Investor Meet Company Platform up
to 9am on 15 May 2024 being the working day before the AGM, or via the Investor Meet Platform at any time
during the AGM itself. The Board will respond to key questions during the meeting and will provide all such
answers on the Investor Meet Company as soon as possible thereafter.
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Proteome Sciences plc 85
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NOTICE OF ANNUAL GENERAL MEETING
(Registered in England and Wales No: 02879724)
Shareholders who wish to attend the AGM online should register for the event in advance via the following
Investor Meet link:
https://www.investormeetcompany.com/proteome-sciences-plc/register-investor
Explanatory notes on the resolutions:
Resolutions 1 to 7 (inclusive) are ordinary resolutions; 8 is a special resolution. To be passed, ordinary
resolutions require more than 50% of votes cast to be in favour of the resolution whilst special resolutions
require at least 75% of the votes cast to be in favour of the resolution. Votes withheld do not count towards
the total votes cast for or against a resolution.
Resolution 1
The directors must present to members the accounts and the reports of the directors and auditors in respect
of each financial year.
Resolution 2 to 5
Under the provisions of Article 109(b) of the Articles of Association of the Company directors are required to
retire at the third Annual General Meeting after they were last elected or re-elected. Accordingly, resolutions
2 to 5 which are being proposed as separate resolutions deal with the proposed re-appointment of those
directors due to retire by rotation at this meeting, namely Christiopher Pearce, Ursula Ney, Mariola Söhngen
and Richard Dennis
The Board has no hesitation in recommending the re-appointment of the Directors to shareholders. In making these
recommendations, the Board confirms that it has given careful consideration to the Board’s balance of skills,
knowledge and experience and is satisfied that each of the Directors putting themselves forward for election has
sufficient time to discharge their duties effectively, taking into account their other commitments.
Resolution 6
Cooper Parry Group Limited are being proposed for re-appointment as the auditors of the Company until the
conclusion of the next general meeting at which accounts are presented. The directors are to be given
authority to fix the remuneration of the auditors.
Resolution 7
The Company's power to issue additional securities is exercised by the directors. The directors must be
authorised by ordinary resolution of the shareholders to exercise that power. The resolution will give the
directors a general authority to allot shares up to an aggregate nominal value of £983,940.18 being the
equivalent of one-third of the Company’s issued ordinary share capital at the date of this notice. The authority
shall expire at the next Annual General Meeting or on 30 June 2025, whichever is earlier.
Resolution 8
The directors are seeking the annual renewal of this authority in accordance with best practice and to ensure
the Company has maximum flexibility in managing its capital resources.
When shares are to be allotted for cash, Section 561 of the Companies Act 2006 provides that existing
shareholder have pre-emption rights and that any new shares are offered first to such shareholders in
proportion to their existing shareholdings. This resolution is seeking to authorise the directors to allot shares
of up to an aggregate nominal amount of £590,364.11 otherwise than on a pro-rata basis. This represents
approximately 20% of the Company’s issued share capital at the date of this notice. The authority shall expire
at the next Annual General Meeting or on 30 June 2025, whichever is earlier.
The directors are seeking the annual renewal of this authority in line with the authorities granted to dis-apply
the pre-emption provisions in previous years and to ensure the Company has maximum flexibility in managing
its capital resources.
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Proteome Sciences plc
Registered number: 02879724
Report and Financial Statements
for the year ended 31 December 2023
Perivan.com
267703