PYC Therapeutics Limited
Annual Report 2012

Plain-text annual report

08 Otoño Annual Report and Financial Statements For the Year Ended 30 June 2012 Company Registration No. 4225086 Contents Contents Contents Officers and Professional Advisers Officers and Professional Advisers Chairman’s Statement Chairman’s Statement Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement Officers and Professional Advisers The Directors' Report The Directors' Report Chairman’s Statement Independent Auditor’s Report to the members Independent Auditor’s Report to the members Chairman and Chief Executive Officer’s Statement Income Statement Income Statement The Directors' Report Statement of financial position Statement of financial position Independent Auditor’s Report to the members Statement of changes in equity Statement of changes in equity Income Statement Cash Flow Statement Cash Flow Statement Statement of financial position Notes on the Financial Statements Notes on the Financial Statements Statement of changes in equity Notice of Annual General Meeting Notice of Annual General Meeting Cash Flow Statement Form of Proxy Form of Proxy Notes on the Financial Statements Notice of Annual General Meeting Form of Proxy 3 3 4 4 5 5 3 8 8 4 14 14 5 16 16 8 17 17 14 18 18 16 19 19 17 20 20 18 33 33 36 19 36 20 33 36 Form of Proxy Directors’ Report - continued Liquidity risk Form of Proxy I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) foreseeable needs and to invest cash assets safely and profitably. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 Fair values December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). Fair values of financial instruments equate to the best value as disclosed in the financial information. where indicated below (see notes below). ORDINARY RESOLUTIONS There are no material differences between the fair value of financial instruments and the amount at Against Withheld For ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year which they are stated in the financial statements. ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. Statement of Directors’ responsibilities 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix The directors are responsible for preparing the Annual Report and the financial statements in their remuneration. their remuneration. 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the accordance with applicable law and regulations. Company to allot relevant securities up to an aggregate nominal amount of £150,000. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS UK company law requires the directors to prepare financial statements for the company in accordance 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority with International Financial Reporting Standards ("IFRS") as adopted by the EU. Company law requires conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ the directors to prepare such financial statements in accordance with IFRS, the Companies Act 2006 and SPECIAL RESOLUTIONS notice. notice. Article 4 of the IAS Regulation. 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ For Against Withheld The financial statements are required by law, and IFRS as adopted by the EU, to give a true and fair Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… view of the state of affairs of the company. …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 NOTES In preparing the company financial statements, the directors are required to: 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. a. select suitable accounting policies and then apply them consistently; 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the NOTES 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other b. make judgements and estimates that are reasonable and prudent; than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible c. state whether they have been prepared in accordance with IFRS as adopted by the EU; for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint d. prepare the financial statements on the going concern basis unless it is inappropriate to presume will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed that the Company will continue in business. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 The directors are responsible for keeping proper accounting records which disclose with reasonable 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 accuracy at any time the financial position of the company and to enable them to ensure that the abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. Any alteration to the form of proxy should be initialled. financial statements comply with the requirements of the Companies Act 2006. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. They are also responsible for safeguarding the assets of the company and hence for taking reasonable 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting steps for the prevention and detection of fraud and other irregularities. personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in relevant "Vote withheld" box. 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. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of The directors are also responsible for the maintenance and integrity of the Physiomics Plc website. authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. relation to the submission of a proxy appointment via CREST. 4TU not later than 48 hours before the time of the meeting. relation to the submission of a proxy appointment via CREST. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those precedence. expressly stated. precedence. expressly stated. 2 2 2 36 36 9 Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers Chairman and Chief Executive Officer’s Statement Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers DIRECTORS DIRECTORS Introduction The Magdalen Centre Robert Robinson Avenue Oxford Science Park Officers and Professional Advisers The Magdalen Centre The Magdalen Centre Robert Robinson Avenue Robert Robinson Avenue Oxford Science Park Oxford Science Park ORDINARY RESOLUTIONS ORDINARY RESOLUTIONS There was a loss for the year after taxation amounting to £539,577 (2011 loss: £644,532). In view of 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year SECRETARY SECRETARY SECRETARY ended 30 June 2012. ended 30 June 2012. accumulated losses, and given the stage of the company’s development, the Directors are unable to SECRETARY R J Jones R J Jones R J Jones REGISTERED OFFICE REGISTERED OFFICE REGISTERED OFFICE DIRECTORS DIRECTORS DIRECTORS Dr P B Harper Dr P B Harper Dr P B Harper Dr M P Chadwick Dr M P Chadwick Dr M P Chadwick Dr C D Chassagnole Dr C D Chassagnole Dr C D Chassagnole Oxford Oxford Oxford OX4 4GA OX4 4GA OX4 4GA AUDITOR AUDITOR AUDITOR NOTES NOTES The Company faces many risks on the way to building shareholder value. The process of winning major 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. contracts in a competitive environment is rarely simple and can be delayed for reasons outside the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the Company’s control. This means the Company faces major uncertainties in its cash flow. meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 10 Orange Street Shipleys LLP Shipleys LLP Shipleys LLP Shipleys LLP 10 Orange Street 10 Orange Street 10 Orange Street Haymarket Haymarket Haymarket London London London WC2H 7DQ WC2H 7DQ WC2H 7DQ BANKER BANKER BANKER Form of Proxy Form of Proxy Directors’ Report Left Blank Intentionally I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, ended 30 June 2012. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. The Directors submit their report and the audited financial statements of Physiomics Plc for the year Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) Principal Activities and Performance Review as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 DIRECTORS December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will The Company is principally engaged in providing services to pharmaceutical companies in the areas of exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form Dr P B Harper where indicated below (see notes below). where indicated below (see notes below). outsourced systems and computational biology. Dr M P Chadwick Dr C D Chassagnole For For Against Withheld Against Withheld 2. To re-appoint Paul Harper as a Director. 2. To re-appoint Paul Harper as a Director. recommend the payment of a dividend. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix R J Jones Performance Indicators their remuneration. their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the The Directors consider that the key performance indicators are those that communicate the financial Company to allot relevant securities up to an aggregate nominal amount of £150,000. Company to allot relevant securities up to an aggregate nominal amount of £150,000. REGISTERED OFFICE SPECIAL RESOLUTIONS SPECIAL RESOLUTIONS performance and strength of the company as a whole, these being revenue, profitability and 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority The Magdalen Centre shareholders’ funds. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. Robert Robinson Avenue 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. notice. The turnover of the Company increased to £135,306 (2011: £53,345) Oxford Science Park • The operating loss was £577,922 (2011: £693,795) Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… • At the 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511) …………………………………………………………………………………………. …………………………………………………………………………………………. Future Risks Date …………………………………………………………………………………………………….………… 2012 Date …………………………………………………………………………………………………….………… 2012 Oxford OX4 4GA AUDITOR 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Addressing the Risks Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you The Board addresses the financial uncertainties by careful budget monitoring and by quickly responding will need to appoint someone other than the Chairman and give them the relevant instructions directly. will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint to variations. If there are delays in signing contracts then recruitment and capital expenditure is frozen more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the until the anticipated income is achieved. proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed WC2H 7DQ Haymarket London the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. Interest rate risk 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 relevant "Vote withheld" box. 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 BANKER 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 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 The Company finances its operations by cash and short term deposits. The Company’s policy on interest abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. National Westminster Bank Plc Woollen Hall Woollen Hall 6. Any alteration to the form of proxy should be initialled. 6. Any alteration to the form of proxy should be initialled. rate management is agreed at board level and is reviewed on an ongoing basis. Woollen Hall 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal Castle Way Castle Way or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. Other creditors, accruals and deferred income values do not bear interest. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in Southampton Southampton SO14 2DE SO14 2DE SO14 2DE Castle Way Southampton SO14 2DE Interest rate profile respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 The Company had no bank borrowings at the 30 June 2012. SOLICITOR 4TU not later than 48 hours before the time of the meeting. 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those precedence. precedence. expressly stated. expressly stated. Taylor Vinters LLP Merlin Place, Milton Road, Cambridge CB4 0DP Kingdom. Kingdom. Kingdom. Kingdom. 36 36 8 SOLICITOR SOLICITOR SOLICITOR Merlin Place, Merlin Place, Taylor Vinters LLP Taylor Vinters LLP Taylor Vinters LLP Merlin Place, Milton Road, Cambridge Milton Road, Milton Road, Cambridge Cambridge CB4 0DP CB4 0DP CB4 0DP National Westminster Bank Plc National Westminster Bank Plc National Westminster Bank Plc Woollen Hall Castle Way Southampton Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chief Operating Officer Officers and Professional Advisers DIRECTORS REGISTRAR REGISTRAR Roger Jones, FCCA Roger Jones, FCCA Company secretary Company Secretary Dr P B Harper Dr M P Chadwick Dr C D Chassagnole Chairman Chief Executive Officer Chief Operating Officer Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chief Operating Officer Officers and Professional Advisers Officers and Professional Advisers Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chief Operating Officer Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chief Operating Officer Officers and Professional Advisers Officers and Professional Advisers The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, Dr Mark Chadwick, PhD, MBA Mark Chadwick, PhD, MBA since these usually take the form of pilot studies, the Directors believe that there are good Chief Executive Officer Chief Executive Officer Chairman prospects for increased business and revenue flow from such customers. In particular, such Chairman Chief Executive Officer prospects could arise from internal policy decisions to use Virtual Tumour as a standard Chief Executive Officer Chief Operating Officer modality in drug discovery programmes. In addition, growing the customer base has increased Chief Operating Officer our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Dr P B Harper Dr P B Harper DIRECTORS Dr M P Chadwick DIRECTORS Dr M P Chadwick Chairman Dr C D Chassagnole Dr C D Chassagnole Chief Executive Officer Dr P B Harper Dr P B Harper Chief Operating Officer Dr M P Chadwick SECRETARY Dr M P Chadwick SECRETARY Dr C D Chassagnole Dr C D Chassagnole R J Jones R J Jones SECRETARY SECRETARY DIRECTORS REGISTERED OFFICE Dr PB Harper, PhD Paul Harper, PhD REGISTERED OFFICE DIRECTORS R J Jones DIRECTORS Chairman R J Jones Chairman Dr P B Harper DIRECTORS The Magdalen Centre The Magdalen Centre Dr P B Harper Dr M P Chadwick Dr P B Harper REGISTERED OFFICE Robert Robinson Avenue REGISTERED OFFICE Robert Robinson Avenue Dr M P Chadwick Dr C D Chassagnole Dr P B Harper Dr M P Chadwick Oxford Science Park Oxford Science Park Dr C D Chassagnole Dr M P Chadwick The Magdalen Centre Dr C D Chassagnole Oxford The Magdalen Centre Officers and Professional Advisers Oxford SECRETARY Dr C D Chassagnole Robert Robinson Avenue OX4 4GA Robert Robinson Avenue Officers and Professional Advisers OX4 4GA SECRETARY Oxford Science Park SECRETARY Oxford Science Park R J Jones SECRETARY Oxford Oxford R J Jones DIRECTORS OX4 4GA R J Jones AUDITOR OX4 4GA AUDITOR REGISTERED OFFICE DIRECTORS REGISTRAR REGISTRAR REGISTRAR R J Jones REGISTERED OFFICE REGISTRAR Dr P B Harper Chairman REGISTERED OFFICE Shipleys LLP Capita Registrars Shipleys LLP Capita Registrars Dr P B Harper Chairman The Magdalen Centre Capita Registrars Capita Registrars Capita Registrars Dr M P Chadwick Chief Executive Officer REGISTERED OFFICE AUDITOR REGISTRAR 10 Orange Street The Registry REGISTRAR AUDITOR 10 Orange Street The Registry The Magdalen Centre Dr M P Chadwick Chief Executive Officer Robert Robinson Avenue The Registry The Registry The Registry Capita Registrars Dr C D Chassagnole Chief Operating Officer The Magdalen Centre 34 Beckenham Road Haymarket Haymarket 34 Beckenham Road Dr Christophe Chassagnole, PhD Christophe Chassagnole, PhD Robert Robinson Avenue Oxford Science Park The Registry Dr C D Chassagnole Chief Operating Officer 34 Beckenham Road 34 Beckenham Road 34 Beckenham Road The Magdalen Centre Shipleys LLP Capita Registrars Robert Robinson Avenue Beckenham London Capita Registrars Shipleys LLP London Beckenham Oxford Science Park Oxford 34 Beckenham Road Chief Operating Officer Beckenham Beckenham Beckenham SECRETARY Robert Robinson Avenue 10 Orange Street The Registry Oxford Science Park Chief Operating Officer Kent WC2H 7DQ The Registry 10 Orange Street WC2H 7DQ Kent Oxford OX4 4GA Beckenham SECRETARY Kent Kent Kent Oxford Science Park Haymarket 34 Beckenham Road Oxford BR3 2YU 34 Beckenham Road Haymarket BR3 2YU OX4 4GA BR3 2YU BR3 2YU BR3 2YU Kent R J Jones Oxford London Beckenham OX4 4GA Beckenham London NOMINATED ADVISOR, BROKER REGISTRAR REGISTERED OFFICE BR3 2YU R J Jones OX4 4GA WC2H 7DQ Kent NOMINATED ADVISOR, BROKER AND BANKER Kent WC2H 7DQ BANKER NOMINATED ADVISOR, BROKER AND Technology Development AUDITOR REGISTRAR NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND REGISTERED OFFICE Capita Registrars AND FINANCIAL ADVISER BR3 2YU R J Jones FINANCIAL ADVISER BR3 2YU FINANCIAL ADVISER REGISTRAR AUDITOR REGISTERED OFFICE NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER FINANCIAL ADVISER FINANCIAL ADVISER AUDITOR WH Ireland Limited The Registry The Magdalen Centre Capita Registrars Shipleys LLP FINANCIAL ADVISER The Magdalen Centre AUDITOR NOMINATED ADVISOR, BROKER AND BANKER REGISTERED OFFICE WH Ireland Limited National Westminster Bank Plc NOMINATED ADVISOR, BROKER AND BANKER WH Ireland Limited National Westminster Bank Plc Virtual Tumour product improvements (i) Capita Registrars Shipleys LLP 10 Orange Street The Registry The Magdalen Centre WH Ireland Limited WH Ireland Limited WH Ireland Limited Robert Robinson Avenue Shipleys LLP FINANCIAL ADVISER Robert Robinson Avenue 11 St James's Square 34BeckenhamRoad 11 St James's Square Woollen Hall FINANCIAL ADVISER 11 St James's Square Woollen Hall The Registry 10 Orange Street 34 Beckenham Road Haymarket WH Ireland Limited Robert Robinson Avenue 11 St James's Square 11 St James's Square 11 St James's Square Oxford Science Park Shipleys LLP 10 Orange Street The Magdalen Centre Manchester Castle Way Manchester Oxford Science Park Beckenham Manchester Castle Way Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 34 Beckenham Road Haymarket Beckenham London Oxford Science Park 11 St James's Square Manchester Manchester Manchester Oxford 10 Orange Street WH Ireland Limited National Westminster Bank Plc Haymarket Robert Robinson Avenue Southampton M2 3WH WH Ireland Limited National Westminster Bank Plc M2 3WH Southampton Oxford, OX44GA Kent, BR3 2YU M2 3WH Beckenham London Kent WC2H 7DQ Oxford Manchester M2 3WH M2 3WH M2 3WH OX4 4GA Haymarket 11 St James's Square Woollen Hall London Oxford Science Park particular by reducing the data requirements to calibrate the model. The Company has begun SO14 2DE 11 St James's Square Woollen Hall SO14 2DE Kent WC2H 7DQ BR3 2YU OX4 4GA M2 3WH London Manchester Castle Way WC2H 7DQ Oxford a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ Manchester Castle Way BR3 2YU WC2H 7DQ Southampton M2 3WH OX4 4GA SOLICITOR M2 3WH Southampton SOLICITOR cultures to replace xenografts, so that Physiomics could start to make predictions even before NOMINATED ADVISOR, BROKER AND AUDITOR SOLICITOR BANKER REGISTRAR AUDITOR SO14 2DE SO14 2DE NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER REGISTRAR AUDITOR BANKER xenograft experiments are initiated. To date the collaborators have tested one cell line and are Bircham Dyson Bell LLP Shipleys LLP National Westminster Bank Plc Taylor Vinters LLP Taylor Vinters LLP FINANCIAL ADVISER Capita Registrars Shipleys LLP BANKER SOLICITOR AUDITOR Merlin Place, looking to expand the collaboration to test multiple cell lines relevant to different types of SOLICITOR 10 Orange Street 50 Broadway Willow Court , Minns Business Park Merlin Place, National Westminster Bank Plc WH Ireland Limited Capita Registrars Shipleys LLP The Registry 10 Orange Street Milton Road, Milton Road, cancer. WH Ireland Limited National Westminster Bank Plc The Registry 10 Orange Street Woollen Hall 11 St James's Square 34 Beckenham Road Haymarket Haymarket Westminster 7 West Way Taylor Vinters LLP National Westminster Bank Plc Shipleys LLP Cambridge Taylor Vinters LLP Cambridge 11 St James's Square Woollen Hall 34 Beckenham Road Haymarket Manchester Castle Way London Beckenham National Westminster Bank Plc Merlin Place, Woollen Hall 10 Orange Street CB4 0DP London London Oxford Merlin Place, CB4 0DP Manchester Castle Way Beckenham London M2 3WH Southampton WC2H 7DQ Kent Woollen Hall Milton Road, Castle Way Haymarket Milton Road, SW1H 0BLOX2 0JB WC2H 7DQ M2 3WH Southampton SO14 2DE WC2H 7DQ Kent BR3 2YU Castle Way Cambridge Southampton London (ii) Cambridge SO14 2DE BR3 2YU Southampton CB4 0DP SO14 2DE WC2H 7DQ Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United CB4 0DP Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United SOLICITOR NOMINATED ADVISOR, BROKER AND BANKER SO14 2DE Kingdom. The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to Physiomics Plc is a limited liability company incorporated in England & Wales and Kingdom. SOLICITOR NOMINATED ADVISOR, BROKER AND BANKER FINANCIAL ADVISER SOLICITOR develop and calibrate the model using literature data, will allow us to evaluate the predictive domiciled in UnitedKingdom. Taylor Vinters LLP FINANCIAL ADVISER SOLICITOR Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United BANKER Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Taylor Vinters LLP Merlin Place, National Westminster Bank Plc WH Ireland Limited power of the model against known outcomes. The second phase involves using client data to Kingdom. Taylor Vinters LLP Kingdom. Merlin Place, WH Ireland Limited National Westminster Bank Plc Milton Road, 11 St James's Square Woollen Hall Taylor Vinters LLP Merlin Place, Milton Road, Cambridge 11 St James's Square Woollen Hall Manchester Castle Way Merlin Place, Milton Road, Cambridge CB4 0DP Manchester Castle Way M2 3WH Southampton Milton Road, Cambridge 3 CB4 0DP M2 3WH Southampton SO14 2DE Cambridge CB4 0DP 3 3 SO14 2DE CB4 0DP SOLICITOR SOLICITOR Taylor Vinters LLP Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. Kingdom. National Westminster Bank Plc Woollen Hall Castle Way Southampton SO14 2DE Virtual Tumour Clinical BANKER BANKER SECRETARY 3 5 3 3 3 3 3 REGISTRAR REGISTRAR Capita Registrars Capita Registrars The Registry The Registry 34 Beckenham Road 34 Beckenham Road Beckenham Beckenham Kent Kent BR3 2YU BR3 2YU NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER FINANCIAL ADVISER WH Ireland Limited WH Ireland Limited 11 St James's Square 11 St James's Square Manchester Manchester M2 3WH M2 3WH Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. Taylor Vinters LLP Merlin Place, Kingdom. Merlin Place, Milton Road, Milton Road, Cambridge Cambridge CB4 0DP CB4 0DP Kingdom. Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. 3 3 3 3 Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United SOLICITOR Taylor Vinters LLP Merlin Place, Milton Road, Cambridge CB4 0DP Kingdom. 3 3 Chairman Chief Executive Officer Chief Operating Officer REGISTRAR Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 2YU NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER WH Ireland Limited 11 St James's Square Manchester M2 3WH 3 Chairman’s Statement Summary of Results in the year ended 30 June 2012 • • • • Fundraising in April 2012 generated cash of £555,000 before issue expenses. where indicated below (see notes below). receive. The turnover of the Company more than doubled to £135,306 (2011: £53,345). The operating loss reduced to £577,922 (2011: £693,795). On 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511). With a now fully validated Virtual Tumour technology, Physiomics has concentrated its efforts on product extension, new product development and increasing the customer base. In summary we have Signed up our second top tier global pharma customer. Signed up our third major pharma company, a top-five pharma company. Initiated our development of Virtual Tumour Clinical to enable optimisation of drug regimens in humans. Commenced using client project data to develop Virtual Tumour Clinical. Developed a new database product which allows users to rapidly search through pre- clinical and clinical dosing regimens. This product is expected to be launched in 2013. Developed a new model to predict drug cardiac toxicity based on laboratory data. Identified a number of potential partners with the potential to join forces to increase the scope of the company’s offerings. Dr Paul Harper, Non-Executive Chairman Chairman and Chief Executive Officer’s Statement - continued Left Blank Intentionally Form of Proxy Form of Proxy I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) While approaches to smaller biotechnology companies have not translated into revenue in the ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares period, they continue to be another important target in particular in the US. Nevertheless, □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 the company has signed a revenue sharing deal with ValiRx. This model provides the promise December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will of significant downstream revenues to augment the short-term service fees we typically exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form ORDINARY RESOLUTIONS The Company is also seeking to expand its reach in the US and signed up a new business For Against Withheld ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year development consultant, David Jobes, who is based on the East Coast. ended 30 June 2012. 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year For Against Withheld 2. To re-appoint Paul Harper as a Director. their remuneration. Outlook 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the where indicated below (see notes below). ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. SPECIAL RESOLUTIONS Company to allot relevant securities up to an aggregate nominal amount of £150,000. The directors believe the pharmaceutical market place remains in some disarray, with several 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority high-profile downsizing announcements coupled with regular strategy reviews which impact conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. on development priorities. The financial status of our nearest market, the EU, especially over 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ the past year, is a factor that all fee-for-service providers must work with. We believe that our notice. notice. menu driven approach to providing focused services has been a contributory factor to our ability to add two new global pharma customers to our portfolio. The Company has also Signature(s)…………………………………………………………………………………………………………………………………………………… successfully raised further equity funds and is expecting to be in a strong position to …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 contemplate corporate deal-making as well as progressing with development of its flagship NOTES product, Virtual Tumour Clinical. NOTES their remuneration. SPECIAL RESOLUTIONS Company to allot relevant securities up to an aggregate nominal amount of £150,000. 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ Signature(s)…………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the The Company is currently looking at opportunities to further strengthen its financial position meeting in person, your proxy appointment will automatically be terminated. both to enable it to undertake corporate deals and for future working capital, if necessary. One 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the such option under consideration is a Standby Equity Distribution Agreement (SEDA) and a Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible further announcement will be made in due course if the Company enters into such an for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. arrangement. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the In the short term, the most likely source of significant revenue growth is an extension of the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. relationships with the existing customers and continuing to sign up new clients particularly 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 large pharmaceutical companies. In the longer term, the Company is planning to develop a 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 potentially game-changing technology in Virtual Tumour Clinical. The Directors believe that abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. Any alteration to the form of proxy should be initialled. there is currently no adequate technology in the market that can optimise drug combination 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal dosing and scheduling for clinical trials, and certainly not for individual patients. This or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting represents an unmet need which Physiomics is uniquely positioned to exploit by developing its personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. existing technology. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 4TU not later than 48 hours before the time of the meeting. relation to the submission of a proxy appointment via CREST. Dr Paul Harper, Non-Executive Chairman precedence. expressly stated. Dr Mark Chadwick, Chief Executive Officer 4TU not later than 48 hours before the time of the meeting. relation to the submission of a proxy appointment via CREST. precedence. expressly stated. 4 36 36 7 Form of Proxy Form of Proxy Left Blank Intentionally I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year For For Against Withheld Against Withheld where indicated below (see notes below). where indicated below (see notes below). ORDINARY RESOLUTIONS ORDINARY RESOLUTIONS ended 30 June 2012. ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. Company to allot relevant securities up to an aggregate nominal amount of £150,000. their remuneration. their remuneration. SPECIAL RESOLUTIONS SPECIAL RESOLUTIONS 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………. …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 Date …………………………………………………………………………………………………….………… 2012 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 relevant "Vote withheld" box. 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 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. abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. Any alteration to the form of proxy should be initialled. 6. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 4TU not later than 48 hours before the time of the meeting. relation to the submission of a proxy appointment via CREST. relation to the submission of a proxy appointment via CREST. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those precedence. precedence. expressly stated. expressly stated. notice. notice. NOTES NOTES 36 36 Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement Introduction Introduction The vision and strategy for Physiomics remains unchanged, and the Company has made good The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. combination dosing strategies and clinical outcomes. Technology Development Technology Development (i) (i) Virtual Tumour product improvements Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. cancer. (ii) (ii) Virtual Tumour Clinical Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to power of the model against known outcomes. The second phase involves using client data to 5 5 Chairman and Chief Executive Officer’s Statement - continued calibrate and test the model. The third phase will be to use the calibrated model to guide clinical decision-making on drug/drug combination dosing and scheduling. (iii) Drug combinations and regimens database The database should be of interest to drug researchers and clinicians alike. It collates multiple sources of data, both literature and proprietary, into an easily searchable web-based format. The beta version of the database is completed and is now undergoing quality improvement, data checking and testing internally. It expected to be released commercially in the 2013. The database will be accessed by annual subscription. (iv) Cardiac toxicity prediction service A new modelling platform has been implemented in-house to predict which drug candidates are likely to exhibit toxic effects on the heart using only laboratory-based calibration data. This is a particular problem in the industry, with several high profile failures in the past due to cardiac toxicity. This technology has already been implemented and adopted by some large pharmaceutical companies. Our new service will make the technology accessible to a broader number of companies who lack expertise and resources for in-house implementation. In the first phase, Physiomics has already implemented the modelling platform and started to develop new functionalities in collaboration with our new Scientific Advisory Board member, Dr Jonathan Swinton. The Company is now seeking collaborators who have data sets that can be used to test and improve the platform. This new service should start commercially in 2013. Business Development Strategy The continuing strategy of the Company to target large pharmaceutical companies is starting to bear fruit, as evidenced by the recent announcements. Our experience is that, once a pilot study has been completed, such companies look to apply the technology to other projects. To date, the pilot studies have led to successful validation by each of the companies concerned. There is then an opportunity for Virtual Tumour to become part of the standard protocol used by the company to evaluate the performance of their lead molecules. The pharmaceutical company could then benefit from improved timelines and reduced cost relative to traditional methods. The ultimate business goal is therefore to get a number of large pharma companies to sign up for annual contracts covering a number of projects and then to extend this to the use of Virtual Tumour Clinical to aid clinical trial design. Alternatively, granting non-exclusive licenses to the technology has been discussed with some potential customers, although this is not a short-term prospect. The Company completed its first workshop at a conference which was highly successful. This format included case study presentations and interactive discussions and will be repeated at future relevant events. 9. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut- 9. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut- Chairman and Chief Executive Officer’s Statement off time for receipt of proxy appointments (see below) also apply in relation to amended instructions; any amended proxy off time for receipt of proxy appointments (see below) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard- Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard- copy proxy form, please contact the Company at its registered office. copy proxy form, please contact the Company at its registered office. Introduction If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of The vision and strategy for Physiomics remains unchanged, and the Company has made good proxies will take precedence. proxies will take precedence. 10. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating 10. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating progress towards its declared goals in the period. Signing up two new major pharmaceutical your intention to revoke your proxy appointment to the Company’s registered office. In the case of a member which is a company, your intention to revoke your proxy appointment to the Company’s registered office. In the case of a member which is a company, companies to utilise Virtual Tumour represents an important landmark in establishing the the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney Company's technology platform in the drug discovery process in oncology. In addition to for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. of such power or authority) must be included with the revocation notice. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest The revocation notice must be received by the Company no later than 13 December 2012 at 11.00am. The revocation notice must be received by the Company no later than 13 December 2012 at 11.00am. that our strategy is working. While the initial revenues for first projects are always modest, If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the since these usually take the form of pilot studies, the Directors believe that there are good paragraph directly below, your proxy appointment will remain valid. paragraph directly below, your proxy appointment will remain valid. prospects for increased business and revenue flow from such customers. In particular, such If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. prospects could arise from internal policy decisions to use Virtual Tumour as a standard 11. CREST members who wish to appoint a proxy or proxies by using the CREST electronic proxy appointment service may do so for 11. CREST members who wish to appoint a proxy or proxies by using the CREST electronic proxy appointment service may do so for modality in drug discovery programmes. In addition, growing the customer base has increased the Meeting and any adjournment of it by using the procedures described in the CREST Manual. In order for a proxy appointment the Meeting and any adjournment of it by using the procedures described in the CREST Manual. In order for a proxy appointment our awareness of the potential for new decision and forecasting tools, leading us to develop made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in Virtual Tumour Clinical. It continues to be the view of the Directors that development of a accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for such instructions, as accordance with Euroclear UK & Ireland 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 Capita (ID RA10) not later than 48 hours described in the CREST Manual. The message must be transmitted so as to be received by Capita (ID RA10) not later than 48 hours clinical version of Virtual Tumour will be a major source of future revenues, since a tool with before the time fixed for the AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the before the time fixed for the AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the this capability has been requested by most of our current and potential customers. The timestamp applied to the message by the CREST Applications Host) from which Capita is able to retrieve the message by enquiry to timestamp applied to the message by the CREST Applications Host) from which Capita is able to retrieve the message by enquiry to CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee Company has also developed two new products, namely its drug combinations and regimens through other means. Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular through other means. Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular database and cardiac toxicity prediction model. These are designed to augment our credentials messages and normal system timings and limitations will apply in relation to the input of a CREST Proxy Instruction. It is the messages and normal system timings and limitations will apply in relation to the input of a CREST Proxy Instruction. It is the as a business committed to providing predictive tools to the pharma and healthcare Industry. responsibility of the CREST member concerned to take such action as shall be necessary to ensure that a message is transmitted by responsibility of the CREST member concerned to take such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. The Company may treat as invalid a CREST Proxy Instruction in the means of the CREST system by any particular time. The Company may treat as invalid a CREST Proxy Instruction in the Such tools are used by professionals to improve the outcomes of drug design, development, circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. combination dosing strategies and clinical outcomes. 12. In order to be valid, any form of proxy, power of attorney or other authority under which it is signed, or a notarially certified 12. In order to be valid, any form of proxy, power of attorney or other authority under which it is signed, or a notarially certified or office copy of such power or authority, must reach the Company’s Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham or office copy of such power or authority, must reach the Company’s Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Technology Development Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 13. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its 13. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its (i) Virtual Tumour product improvements powers as a member provided that no more than one corporate representative exercises powers over the same share. powers as a member provided that no more than one corporate representative exercises powers over the same share. 14. You may not use any electronic address provided either in this notice of annual general meeting, or any related documents 14. You may not use any electronic address provided either in this notice of annual general meeting, or any related documents Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in (including the chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly (including the chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly particular by reducing the data requirements to calibrate the model. The Company has begun stated. stated. 15. On 14 November 2012, the Company's issued share capital comprised 1,498,550,074 ordinary shares of 0.04p each. Each 15. On 14 November 2012, the Company's issued share capital comprised 1,498,550,074 ordinary shares of 0.04p each. Each a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ ordinary share carries the right to vote at the AGM and, therefore, the total number of voting rights in the Company on 14 ordinary share carries the right to vote at the AGM and, therefore, the total number of voting rights in the Company on 14 cultures to replace xenografts, so that Physiomics could start to make predictions even before November 2012 is 1,498,550,074 ordinary shares. November 2012 is 1,498,550,074 ordinary shares. xenograft experiments are initiated. To date the collaborators have tested one cell line and are 16. The Directors' letters of appointment and service contracts will be available for inspection at Tower 42, 33rd Floor, 25 Old 16. The Directors' letters of appointment and service contracts will be available for inspection at Tower 42, 33rd Floor, 25 Old looking to expand the collaboration to test multiple cell lines relevant to different types of Broad Street, London, EC2N 1HQ from 14 November 2012 until the time of the Meeting. Broad Street, London, EC2N 1HQ from 14 November 2012 until the time of the Meeting. cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 6 5 35 35 equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired. by this resolution has expired. Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement - continued This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot equity securities as if either section 89(1) of the 1985 Act or section 561(1) of the 2006 Act did not equity securities as if either section 89(1) of the 1985 Act or section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or agreed to be made apply but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities. pursuant to such authorities. Special resolution – notice period for general meetings Special resolution – notice period for general meetings 6. That a general meeting of the Company, other than an annual general meeting, may be called on 14 6. That a general meeting of the Company, other than an annual general meeting, may be called on 14 clear days’ notice provided this authority expires at the conclusion of the next annual general clear days’ notice provided this authority expires at the conclusion of the next annual general meeting of the Company after the date of passing of this resolution. meeting of the Company after the date of passing of this resolution. By order of the Board By order of the Board Roger Jones Roger Jones Company Secretary Company Secretary 14 November 2012 14 November 2012 NOTES NOTES 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at: registered on the Company's register of members at: 6.00pm on 13 December 2012; or, 6.00pm on 13 December 2012; or, • • • • shall be entitled to attend and vote at the Meeting. shall be entitled to attend and vote at the Meeting. if this Meeting is adjourned, at 6.00pm on the day two business days prior to the adjourned meeting, if this Meeting is adjourned, at 6.00pm on the day two business days prior to the adjourned meeting, 2. 2. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. 3. The return of a completed Proxy Form, other such instrument or any CREST Proxy Instruction (as described in note 11) will not 3. The return of a completed Proxy Form, other such instrument or any CREST Proxy Instruction (as described in note 11) will not prevent a shareholder attending the AGM and voting in person if he/she wishes to do so. prevent a shareholder attending the AGM and voting in person if he/she wishes to do so. 4. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to 4. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them. Chairman) and give your instructions directly to them. 5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You 5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company. the Company. 6. 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 6. 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 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. vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. 7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint 7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be completed, signed and sent or delivered to the Company's Registrars, Capita a proxy using the proxy form, the form must be completed, signed and sent or delivered to the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU and received no later than 11.00am on 13 December Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU and received no later than 11.00am on 13 December In the case of a member who is a company, the proxy must be executed under its common seal or signed on its behalf by an officer In the case of a member who is a company, the proxy must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. of the company or an attorney for the company. 8. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. alone entitled to vote in respect of that share. 2012. 2012. 34 34 Introduction While approaches to smaller biotechnology companies have not translated into revenue in the period, they continue to be another important target in particular in the US. Nevertheless, The vision and strategy for Physiomics remains unchanged, and the Company has made good the company has signed a revenue sharing deal with ValiRx. This model provides the promise of significant downstream revenues to augment the short-term service fees we typically progress towards its declared goals in the period. Signing up two new major pharmaceutical receive. companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to The Company is also seeking to expand its reach in the US and signed up a new business development consultant, David Jobes, who is based on the East Coast. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good Outlook prospects for increased business and revenue flow from such customers. In particular, such The directors believe the pharmaceutical market place remains in some disarray, with several prospects could arise from internal policy decisions to use Virtual Tumour as a standard high-profile downsizing announcements coupled with regular strategy reviews which impact modality in drug discovery programmes. In addition, growing the customer base has increased on development priorities. The financial status of our nearest market, the EU, especially over our awareness of the potential for new decision and forecasting tools, leading us to develop the past year, is a factor that all fee-for-service providers must work with. We believe that our menu driven approach to providing focused services has been a contributory factor to our Virtual Tumour Clinical. It continues to be the view of the Directors that development of a ability to add two new global pharma customers to our portfolio. The Company has also clinical version of Virtual Tumour will be a major source of future revenues, since a tool with successfully raised further equity funds and is expecting to be in a strong position to this capability has been requested by most of our current and potential customers. The contemplate corporate deal-making as well as progressing with development of its flagship Company has also developed two new products, namely its drug combinations and regimens product, Virtual Tumour Clinical. database and cardiac toxicity prediction model. These are designed to augment our credentials The Company is currently looking at opportunities to further strengthen its financial position as a business committed to providing predictive tools to the pharma and healthcare Industry. both to enable it to undertake corporate deals and for future working capital, if necessary. One Such tools are used by professionals to improve the outcomes of drug design, development, such option under consideration is a Standby Equity Distribution Agreement (SEDA) and a combination dosing strategies and clinical outcomes. further announcement will be made in due course if the Company enters into such an arrangement. Technology Development In the short term, the most likely source of significant revenue growth is an extension of the relationships with the existing customers and continuing to sign up new clients particularly large pharmaceutical companies. In the longer term, the Company is planning to develop a (i) potentially game-changing technology in Virtual Tumour Clinical. The Directors believe that Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in there is currently no adequate technology in the market that can optimise drug combination dosing and scheduling for clinical trials, and certainly not for individual patients. This particular by reducing the data requirements to calibrate the model. The Company has begun represents an unmet need which Physiomics is uniquely positioned to exploit by developing its a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ existing technology. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of Dr Paul Harper, Non-Executive Chairman cancer. Virtual Tumour product improvements Dr Mark Chadwick, Chief Executive Officer (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 5 7 Directors’ Report Chairman and Chief Executive Officer’s Statement Notice of Annual General Meeting The Directors submit their report and the audited financial statements of Physiomics Plc for the year ended 30 June 2012. Notice is hereby given that the annual general meeting (AGM) of Physiomics Plc (the Company) will be held on 17 December 2012 at 11.00am at the offices of Taylor Vinters LLP, Tower 42, 33rd Floor, 25 Old Broad Street, London, Introduction Principal Activities and Performance Review The Company is principally engaged in providing services to pharmaceutical companies in the areas of outsourced systems and computational biology. There was a loss for the year after taxation amounting to £539,577 (2011 loss: £644,532). In view of accumulated losses, and given the stage of the company’s development, the Directors are unable to recommend the payment of a dividend. Performance Indicators The Directors consider that the key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being revenue, profitability and shareholders’ funds. The turnover of the Company increased to £135,306 (2011: £53,345) • The operating loss was £577,922 (2011: £693,795) • At the 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511) Future Risks The Company faces many risks on the way to building shareholder value. The process of winning major contracts in a competitive environment is rarely simple and can be delayed for reasons outside the Company’s control. This means the Company faces major uncertainties in its cash flow. Addressing the Risks The Board addresses the financial uncertainties by careful budget monitoring and by quickly responding to variations. If there are delays in signing contracts then recruitment and capital expenditure is frozen until the anticipated income is achieved. Interest rate risk The Company finances its operations by cash and short term deposits. The Company’s policy on interest rate management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and deferred income values do not bear interest. Interest rate profile The Company had no bank borrowings at the 30 June 2012. EC2N 1HQ for the following purposes The vision and strategy for Physiomics remains unchanged, and the Company has made good ORDINARY BUSINESS progress towards its declared goals in the period. Signing up two new major pharmaceutical To consider and, if thought fit, pass the following ordinary resolutions: companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to 1. To receive and adopt the Directors’ and Auditor’s Report and the Company’s Financial Statements signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest for the year ended 30 June 2012. that our strategy is working. While the initial revenues for first projects are always modest, 2. To re-appoint Paul Harper as a Director of the Company. since these usually take the form of pilot studies, the Directors believe that there are good 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the prospects for increased business and revenue flow from such customers. In particular, such conclusion of the next general meeting at which annual accounts of the Company are laid and to prospects could arise from internal policy decisions to use Virtual Tumour as a standard authorise the Directors to fix their remuneration. SPECIAL BUSINESS modality in drug discovery programmes. In addition, growing the customer base has increased To consider and, if thought fit, pass the resolutions set out in paragraphs 4 to 6 (inclusive): our awareness of the potential for new decision and forecasting tools, leading us to develop Ordinary resolution – power to allot securities Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with 4. That the Directors be and they are generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the 2006 Act) to exercise all the powers of the Company to allot shares this capability has been requested by most of our current and potential customers. The in the Company, or to grant rights to subscribe for or to convert any security into shares in the Company has also developed two new products, namely its drug combinations and regimens Company (relevant securities), up to an aggregate nominal amount of £150,000 provided that this database and cardiac toxicity prediction model. These are designed to augment our credentials authority is for a period expiring at the next annual general meeting of the Company but the as a business committed to providing predictive tools to the pharma and healthcare Industry. Company may before such expiry make offers or agreements which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities in Such tools are used by professionals to improve the outcomes of drug design, development, pursuance of such offer or agreement notwithstanding that the authority conferred by this combination dosing strategies and clinical outcomes. resolution has expired. This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the 2006 Act, but without prejudice to the allotment of Technology Development any shares already made or to be made pursuant to such authorities. Special resolution – disapplication of pre-emption rights Virtual Tumour product improvements (i) 5. That subject to the passing of resolution 4 in the Notice the Directors be given the general power to allot equity securities (as defined by section 560 of the Companies Act 2006 (the 2006 Act)) for Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in cash pursuant to the authority conferred by resolution 4 in the Notice as if section 561(1) of the particular by reducing the data requirements to calibrate the model. The Company has begun 2006 Act did not apply to any such allotment, provided that this power shall be limited to the a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ allotment of equity securities: cultures to replace xenografts, so that Physiomics could start to make predictions even before in connection with an offer of such securities by way of rights or other pro-rata offer to (a) xenograft experiments are initiated. To date the collaborators have tested one cell line and are holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings of such shares, but subject to such exclusions or other arrangements as the Directors looking to expand the collaboration to test multiple cell lines relevant to different types of may deem necessary or expedient in relation to fractional entitlements, record dates or any legal or practical problems under the laws of any territory, or the requirements of any cancer. regulatory body or stock exchange; and (b) (ii) Virtual Tumour Clinical £150,000; otherwise than pursuant to sub-paragraph (a) above up to an aggregate nominal amount of The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to and shall expire on the conclusion of the next annual general meeting of the Company after the passing develop and calibrate the model using literature data, will allow us to evaluate the predictive of this resolution, save that the Company may before such expiry, make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot power of the model against known outcomes. The second phase involves using client data to 8 5 33 Notes to the Financial Statements - continued 19 FINANCIAL INSTRUMENTS The Company’s financial instruments comprise cash and short term deposits. The Company has various other financial instruments, such as trade debtors and creditors that arise directly from its operations, which have been excluded from the disclosures other than the currency disclosures. The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. The policies for managing these are regularly reviewed and agreed by the board. It is and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall be undertaken. Interest rate risk The Company finances its operations by cash and short term deposits. The Company’s policy on interest rate management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and deferred income values do not bear interest. The Company had no bank borrowings at the 30 June 2012. Interest rate profile Liquidity risk Fair values The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Fair values of financial instruments equate to the best value as disclosed in the financial information. There are no material differences between the fair value of financial instruments and the amount at which they are stated in the financial statements. 20 RELATED PARTY TRANSACTIONS Remuneration of key management personnel on page 10. 21 ULTIMATE CONTROLLING PARTY The remuneration of the directors, who are the key management personnel of the Company, is set out The Company does not currently have an ultimate controlling party and did not have one in this reporting year or the preceding reporting year. Chairman and Chief Executive Officer’s Statement Directors’ Report - continued Liquidity risk Introduction Fair values Statement of Directors’ responsibilities The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Fair values of financial instruments equate to the best value as disclosed in the financial information. There are no material differences between the fair value of financial instruments and the amount at Company's technology platform in the drug discovery process in oncology. In addition to which they are stated in the financial statements. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard UK company law requires the directors to prepare financial statements for the company in accordance modality in drug discovery programmes. In addition, growing the customer base has increased with International Financial Reporting Standards ("IFRS") as adopted by the EU. Company law requires the directors to prepare such financial statements in accordance with IFRS, the Companies Act 2006 and our awareness of the potential for new decision and forecasting tools, leading us to develop Article 4 of the IAS Regulation. Virtual Tumour Clinical. It continues to be the view of the Directors that development of a The financial statements are required by law, and IFRS as adopted by the EU, to give a true and fair clinical version of Virtual Tumour will be a major source of future revenues, since a tool with view of the state of affairs of the company. this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. c. state whether they have been prepared in accordance with IFRS as adopted by the EU; In preparing the company financial statements, the directors are required to: a. select suitable accounting policies and then apply them consistently; b. make judgements and estimates that are reasonable and prudent; d. prepare the financial statements on the going concern basis unless it is inappropriate to presume Technology Development that the Company will continue in business. (i) Virtual Tumour product improvements The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in financial statements comply with the requirements of the Companies Act 2006. particular by reducing the data requirements to calibrate the model. The Company has begun They are also responsible for safeguarding the assets of the company and hence for taking reasonable a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ steps for the prevention and detection of fraud and other irregularities. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. The directors are also responsible for the maintenance and integrity of the Physiomics Plc website. 32 5 9 (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to Directors’ Report - continued Substantial shareholdings The Company has been informed that on 30 June 2012 the following shareholders held substantial holdings in the issued ordinary shares of the Company. TD Direct Investing Nominees (Europe) Limited Barclayshare Nominees Limited HSDL Nominees Limited XCAP Nominees Limited LR Nominees Limited HSBC Client Holdings Nominee (UK) Limited James Capel (Nominees) Limited Hargreaves Lansdown (Nominees) Limited Dr Paul Harper Investor Nominees Limited Number of Ordinary shares Holding % 261,269,879 17.4% 229,537,807 15.3% 179,966,502 12.0% 112,293,428 95,266,733 78,251,702 70,705,050 63,799,652 52,570,787 46,696,065 7.5% 6.4% 5.2% 4.7% 4.3% 3.5% 3.1% No other person has reported an interest of more than 3% in the ordinary shares. On 30 June 2012 Dr Mark Chadwick held 3,970,151 ordinary shares and Dr Christophe Chassagnole held 15,189,740 ordinary shares. The holding percentages were 0.26% and 1.01% respectively. Directors’ remuneration Details of Directors’ remuneration in the year ended 30 June 2012 is set out below: Emoluments £ Benefits £ Pension contributions £ Total £ Dr P B Harper Dr C D Chassagnole 35,000 58,941 Dr M P Chadwick 105,144 - - - - 35,000 3,030 61,971 - 105,144 ___________ ______ ___________ 199,085 ========== - ====== 3,030 ========== ______ 202,115 ====== Total 10 Chairman and Chief Executive Officer’s Statement Notes to the Financial Statements - continued 18 SHARE BASED PAYMENT TRANSACTIONS Introduction The Company operates a share option scheme under the Enterprise Management Initiative Scheme The vision and strategy for Physiomics remains unchanged, and the Company has made good (“EMI”). The following share options have been granted over ordinary shares of 0.04p each and remain progress towards its declared goals in the period. Signing up two new major pharmaceutical exercisable under the scheme: companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest Exercise price Expiry date Cancelled Exercised Awarded Granted Granted at 30 June 2011 in year at 30 June 2012 p Christophe Chassagnole 7,499,453 that our strategy is working. While the initial revenues for first projects are always modest, 0.383 06-Sep-17 7,499,453 Christophe Chassagnole since these usually take the form of pilot studies, the Directors believe that there are good 5,624,590 5,624,590 18-Dec-18 0.15 Christophe Chassagnole 11,856,584 Christophe Chassagnole 3,233,125 prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased 24,980,625 -4,996,125 0.40 0.34 28-Feb-20 08-Nov-21 0.27 05-Dec-20 0.34 08-Nov-21 Mark Chadwick Mark Chadwick 3,233,127 Mark Chadwick our awareness of the potential for new decision and forecasting tools, leading us to develop 4,996,125 4,996,125 18-Dec-21 0.293 Other staff Other staff Other staff Other staff Total 3,490,000 3,448,824 Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The 10,547,616 10,547,616 28-Feb-20 0.40 Company has also developed two new products, namely its drug combinations and regimens 67,447,692 22,189,691 - -4,996,125 84,641,258 database and cardiac toxicity prediction model. These are designed to augment our credentials 10,727,314 0.383 0.15 06-Sep-17 18-Dec-18 0.34 08-Nov-21 11,856,584 3,233,125 19,984,500 3,233,127 3,490,000 3,448,824 10,727,314 as a business committed to providing predictive tools to the pharma and healthcare Industry. Certain performance conditions for EMI share options are unmet at the date of these statements. All Such tools are used by professionals to improve the outcomes of drug design, development, other options are vested in full. combination dosing strategies and clinical outcomes. The Company also operates an unapproved share option scheme. The following share options have been granted over ordinary shares of 0.04p each and remain exercisable under the scheme: Technology Development (i) Virtual Tumour product improvements Granted Awarded Exercised Cancelled at 30 June 2011 in year Granted at 30 June 2012 Exercise price Expiry date p Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ 1,293,250 cultures to replace xenografts, so that Physiomics could start to make predictions even before 11,285,501 1,293,250 9,992,251 - - xenograft experiments are initiated. To date the collaborators have tested one cell line and are 0.15 0.40 0.34 18-Dec-18 28-Feb-20 08-Nov-21 2,327,710 7,664,541 1,293,250 2,327,710 7,664,541 Paul Harper Paul Harper Paul Harper Total All performance conditions for unapproved options have been met and are vested in full. looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. The fair value of share options awarded during the year was determined using the Black-Scholes pricing model. In addition to the information disclosed above, the assumptions employed in the pricing model were as follows – expected volatility: 20%, expected dividends: nil, risk-free interest rate: 3.75% per annum. Were performance conditions are unmet a probability of success factor has been applied to (ii) Virtual Tumour Clinical such awards. The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 5 31 Notes to the Financial Statements - continued Chairman and Chief Executive Officer’s Statement Directors’ Report - continued Payment policy The share premium account consists of proceeds from the issue of shares in excess of their par value (which is included in the share capital account). The share-based compensation reserve represents the credit arising on the charge for share options calculated in accordance with IFRS 2. Share premium account Share-based compensation reserve £ £ 2,795,735 49,877 2,845,612 Total £ 577,594 (37,500) 407,000 (45,660) - - - - 577,594 (37,500) - - 407,000 (45,660) ---------------------- ---------------------- ---------------------- 3,335,829 71,271 3,407,100 21,394 21,394 9,296 9,296 ---------------------- ---------------------- ---------------------- 3,697,169 80,567 ==================== =================== 3,777,736 ==================== £ (2,458,477) (644,532) ---------------------- (3,103,009) (539,577) ---------------------- (3,642,586) ==================== 15 CAPITAL RESERVES Balance at 1 July 2010 Issue of share capital Share issue costs Share-based compensation Balance at 30 June 2011 Issue of share capital Share issue costs Share-based compensation Balance at 30 June 2012 16 RETAINED EARNINGS Balance at 1 July 2010 Loss for the year Balance at 30 June 2011 Loss for the year Balance at 30 June 2012 17 CAPITAL COMMITMENTS 30 Introduction Post balance sheet events There are no material post balance sheet events. Statement as to disclosure of information to auditors The Company pays its suppliers as it would wish to be paid and supports initiatives aimed at ensuring good practice in this area. Trade creditors of the Company were equivalent to 58 days purchases (2011: The vision and strategy for Physiomics remains unchanged, and the Company has made good 57 days), based on the average daily amount invoiced by suppliers to the Company during the year. progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, The directors in office on 14 November 2012 have confirmed that, as far as they are aware, there is no since these usually take the form of pilot studies, the Directors believe that there are good relevant audit information of which the auditors are unaware. Each of the directors have confirmed prospects for increased business and revenue flow from such customers. In particular, such that they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to prospects could arise from internal policy decisions to use Virtual Tumour as a standard the auditors. modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a The Board of Directors is accountable to the Company’s shareholders for good corporate governance. The company takes corporate governance seriously and the statement below sets out how the Board clinical version of Virtual Tumour will be a major source of future revenues, since a tool with apply the principles of good corporate governance. this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials The Company supports the concept of an effective Board leading and controlling the Company. The as a business committed to providing predictive tools to the pharma and healthcare Industry. Board is responsible for formulating and approving the strategy of the business and meets at least six times per year. Various matters are specifically reserved for Board decision, ensuring that the Board Such tools are used by professionals to improve the outcomes of drug design, development, maintains full control over strategic, financial, organisational, risk and compliance issues. Management combination dosing strategies and clinical outcomes. supply the Board with appropriate and timely information, while the directors are encouraged to seek any further information they consider necessary. Corporate Governance Directors Technology Development The Board comprises two executive directors, who fulfill the main operational roles in the Company, and a non-executive Chairman. Due to the size of the Company, the Board does not consider the appointment of a senior non-executive director to be necessary. A full list of the directors is shown above. Virtual Tumour product improvements (i) Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. At 30 June 2011 and 30 June 2012 the Company had no capital commitments. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 5 11 Directors’ Report - continued Accountability The Board endeavours to present a balanced and comprehensible assessment of the Company’s situation and prospects in all of its published statements, including interim reports, price-sensitive announcements, reports to regulators and information supplied to comply with statutory requirements. The Audit Committee consists of Christophe Chassagnole and Roger Jones and is chaired by Paul Harper. The Committee meets at least three times per year to consider matters relating to the Company’s financial position and financial reporting. The Audit Committee reviews the independence and objectivity of the external auditors, as well as the amount of non-audit work undertaken by Shipleys LLP to satisfy the Committee that this will not compromise their independence. Details of the fees paid to Shipleys LLP during the current accounting period are given in note 3 to the accounts. There are no areas of work where Shipleys LLP are prohibited from carrying out work. Remuneration Committee The Remuneration Committee has been established primarily to determine the remuneration, terms and conditions of employment of the executive directors of the Company. The Committee comprises Mark Chadwick and Roger Jones and is chaired by Paul Harper. It meets at least twice a year. The primary concern of the Committee is to establish a system of rewards and incentives that aim to align the interests of the executive directors with the long-term interests of the share-holders. These are based on the achievement of both scientific and commercial milestones while taking no account the financial position of the Company at this stage in its development. Any remuneration issues concerning non- executive directors are resolved by this Committee and no director participates in decisions that concern his own remuneration. Going Concern After making appropriate enquiries, the Directors have a reasonable expectation that the Company will safeguard the Company’s assets. The risk management process and internal control systems are designed to manage rather than eliminate the risk of failing to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss. The key features of the Company’s system of internal control are as follows: a clearly defined organisational structure and set of objectives the executive directors play a significant role in the day to day operation of the business detailed monthly management accounts are produced by an independent third party for the Board to review and take appropriate action Chairman and Chief Executive Officer’s Statement Notes to the Financial Statements - continued 13 LOANS Introduction There were no loans with directors at 30 June 2011 and 30 June 2012. The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical 14 SHARE CAPITAL companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, 2012 2011 Ordinary shares of 0.04p each since these usually take the form of pilot studies, the Directors believe that there are good Number Number prospects for increased business and revenue flow from such customers. In particular, such Authorised: prospects could arise from internal policy decisions to use Virtual Tumour as a standard 25,000,000,000 25,000,000,000 modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop ==================== ====================== Virtual Tumour Clinical. It continues to be the view of the Directors that development of a Issued and fully paid: clinical version of Virtual Tumour will be a major source of future revenues, since a tool with £ £ this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens Balance at 1 July 2010 database and cardiac toxicity prediction model. These are designed to augment our credentials 399,690 249,856 as a business committed to providing predictive tools to the pharma and healthcare Industry. Issue of share capital Such tools are used by professionals to improve the outcomes of drug design, development, 149,834 51,730 combination dosing strategies and clinical outcomes. ---------------------- ---------------------- 451,420 399,690 As at 30 June 2011 Technology Development Issue of share capital (i) Virtual Tumour product improvements 148,000 51,730 Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in ---------------------- ---------------------- As at 30 June 2012 particular by reducing the data requirements to calibrate the model. The Company has begun 599,420 451,420 a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ ================= ================= The Company has one class of ordinary shares which carry no right to fixed income. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of On 26 April 2012 the Company issued 370,000,000 ordinary shares of 0.04p at a price of 0.15p per ordinary share for working capital purposes. cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 12 5 29 Notes on the Financial Statements - continued 11 PROPERTY PLANT AND EQUIPMENT Cost At 1 July 2011 Additions At 30 June 2012 Depreciation At 1 July 2011 Provided in the year At 30 June 2012 Net book value 30 June 2012 30 June 2011 12 OTHER FINANCIAL ASSETS AND LIABILITIES Trade and other receivables are as follows: Trade receivables Prepayments Other receivables Corporation tax recoverable Trade and other payables are as follows: Amounts payable relating to the purchase of goods and services Other payables Accruals Fixtures and computers £ 47,473 1,907 --------------------- 49,380 --------------------- 40,000 3,153 --------------------- 43,153 --------------------- 6,227 7,473 2012 £ 2011 £ 27,500 35,531 26,383 32,460 ------------------------ 121,874 ============= - 37,225 26,084 41,394 ------------------------ 104,703 ============= 60,770 10,223 34,536 ------------------------- 105,529 ============== 84,600 9,905 17,535 ------------------------- 112,040 ============== Trade payables of the Company were equivalent to 58 days of purchases (2011: 57 days). The directors consider the carrying amount of trade payables approximates to their fair value. Chairman and Chief Executive Officer’s Statement Directors’ Report - continued Internal Control Introduction Annual General Meeting The Annual General Meeting of the Company will be held at the offices of Taylor Vinters LLP, Tower 42, 33rd Floor, 25 Old Broad Street, London, EC2N 1HQ at 11.00 am on 17 December 2012. The Company values the views of its shareholders and recognises their interest in the Company’s strategy, performance and the ability of the Board. The AGM provides an opportunity for two-way The vision and strategy for Physiomics remains unchanged, and the Company has made good communication and all shareholders are encouraged to attend and participate. Separate resolutions will be put to shareholders at the AGM, giving them the opportunity to discuss matters of interest. The progress towards its declared goals in the period. Signing up two new major pharmaceutical Company counts all proxy votes and will indicate the level of proxies lodged on each resolution, after companies to utilise Virtual Tumour represents an important landmark in establishing the each has been dealt with on a show of hands. Company's technology platform in the drug discovery process in oncology. In addition to The Company uses its website www.physiomics-plc.com as another means of providing information to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest shareholders and other interested parties. The website displays the annual report and accounts, interim that our strategy is working. While the initial revenues for first projects are always modest, results and other relevant announcements. since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Dr Paul Harper Chairman 14 November 2012 By order of the board Technology Development (i) Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 28 13 5 Independent Auditors Report to the shareholders of Physiomics Plc Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued We have audited the financial statements of Physiomics Plc for the year ended 30 June 2012 which comprise the income statement, the statement of financial position, the cash flow statement, the statement of changes in equity and the related notes. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. Opinion on financial statements In our opinion: the financial statements give a true and fair view of the state of the company's affairs as at 30 June 2012 and of its loss for the year then ended; the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. 14 9 FINANCIAL INSTRUMENTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION Introduction The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical Held for trading companies to utilise Virtual Tumour represents an important landmark in establishing the 2012 £ 2011 £ Current financial assets Company's technology platform in the drug discovery process in oncology. In addition to Trade and other receivables Cash and cash equivalents signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, 121,874 690,950 104,703 729,615 since these usually take the form of pilot studies, the Directors believe that there are good ---------------------- ---------------------- prospects for increased business and revenue flow from such customers. In particular, such 812,824 834,318 Current financial liabilities prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased Trade and other payables our awareness of the potential for new decision and forecasting tools, leading us to develop 105,529 112,040 ================= ================= Virtual Tumour Clinical. It continues to be the view of the Directors that development of a --------------------- --------------------- 105,529 112,040 clinical version of Virtual Tumour will be a major source of future revenues, since a tool with ================= ================= this capability has been requested by most of our current and potential customers. The 10 INTANGIBLE FIXED ASSETS Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Patents, trade marks and software Such tools are used by professionals to improve the outcomes of drug design, development, £ Cost At 1 July 2011 combination dosing strategies and clinical outcomes. Additions Technology Development Virtual Tumour product improvements At 30 June 2012 (i) Amortisation At 1 July 2011 Provided in the year Net book value 30 June 2012 30 June 2011 cancer. Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun 49,887 4,712 a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ --------------------- At 30 June 2012 cultures to replace xenografts, so that Physiomics could start to make predictions even before 54,599 xenograft experiments are initiated. To date the collaborators have tested one cell line and are --------------------- looking to expand the collaboration to test multiple cell lines relevant to different types of 75,646 - --------------------- 75,646 --------------------- (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 21,047 25,759 27 5 Notes on the Financial Statements - continued 7 TAXATION (a) Analysis of charge in the year Chairman and Chief Executive Officer’s Statement Independent Auditor’s Report to the shareholders of Physiomics Plc – continued Introduction Opinion on other matters prescribed by the Companies Act 2006 Matters on which we are required to report by exception The vision and strategy for Physiomics remains unchanged, and the Company has made good In our opinion the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements. progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good adequate accounting records have not been kept by the company, or returns adequate for our prospects for increased business and revenue flow from such customers. In particular, such audit have not been received from branches not visited by us; or prospects could arise from internal policy decisions to use Virtual Tumour as a standard the financial statements are not in agreement with the accounting records and returns; or modality in drug discovery programmes. In addition, growing the customer base has increased certain disclosures of directors' remuneration specified by law and not made; or we have not received all the information and explanations we require for our audit. our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Benjamin Bidnell (senior statutory auditor) For and on behalf of Shipleys LLP statutory auditor 10 Orange Street Haymarket London WC2H 7DQ Technology Development 14 November 2012 (i) Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 15 5 Research and Development tax credit: current year 32,460 41,394 Research and Development tax credit: prior year Total current tax (b) Factors affecting current tax charge The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The timing differences are explained below: Loss on ordinary activities before taxation Tax on loss on ordinary activities at standard corporation tax rate of 19.51% (2011: 20%) Expenses not deductible for tax purposes Capital allowances (less than)/ in excess of depreciation Unrelieved tax losses and other deductions arising in the year Research and Development tax credit: current and prior year Total current tax At 30 June 2012 tax losses of approximately £2,488,000 (2011: £2,046,000) remained available to carry forward against future taxable trading profits. 8 EARNINGS PER SHARE The calculations of loss per share are based on the following losses and numbers of shares. 2012 2011 £ 211 £ - ---------------------- ---------------------- 32,671 ============ 41,394 ============ 2012 £ 2011 £ (572,248) (685,926) ============= ============= (111,646) (137,185) - (117) 528 1,285 111,763 135,372 32,671 41,394 ------------------------ ------------------------ 32,671 41,394 =============== =============== 2012 £ 2011 £ (539,577) ============= No. (644,532) ============= No. 1,195,271,385 1,026,913,773 ================= (0.045p) ================= ================= (0.063p) ================= Loss on ordinary activities after tax Weighted average no of shares: For basic and diluted loss per share Basic and diluted loss per share 26 Income Statement for the year ended 30 June 2012 Income Statement for the year ended 30 June 2012 Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued Year ended Year ended Year ended Year ended The vision and strategy for Physiomics remains unchanged, and the Company has made good Revenue Revenue 2 2 135,306 135,306 53,345 53,345 Notes Notes 30-Jun-12 30-Jun-12 30-Jun-11 30-Jun-11 £ £ £ £ Net operating expenses Net operating expenses Share-based compensation Share-based compensation (703,932) (703,932) (725,746) (725,746) (9,296) (9,296) (21,394) (21,394) Operating loss Operating loss 3 3 (577,922) (577,922) (693,795) (693,795) Finance income Finance income Finance costs Finance costs 4 5 4 5 5,674 5,674 7,869 7,869 - - - - Loss before taxation Loss before taxation (572,248) (572,248) (685,926) (685,926) UK corporation tax UK corporation tax 7 7 32,671 32,671 41,394 41,394 Loss for the year attributable to equity shareholders Loss for the year attributable to equity shareholders (539,577) (539,577) (644,532) (644,532) Loss per share (pence) Loss per share (pence) Basic and diluted Basic and diluted 8 8 (0.045) p (0.045) p (0.063) p (0.063) p 4 FINANCE INCOME Introduction progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the 2012 £ 2011 £ Bank interest receivable Company's technology platform in the drug discovery process in oncology. In addition to 7,869 5,674 signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest ================= ================= 5 FINANCE COSTS that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard Interest payable modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop ================= ================= 6 STAFF COSTS Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens 2012 £ 2011 £ database and cardiac toxicity prediction model. These are designed to augment our credentials Staff costs during the year Wages and salaries as a business committed to providing predictive tools to the pharma and healthcare Industry. 107,968 120,971 Such tools are used by professionals to improve the outcomes of drug design, development, Social security costs 12,492 11,546 2012 £ - 2011 £ - Pension costs combination dosing strategies and clinical outcomes. - 3 ------------------------- ------------------------- 119,514 133,463 ================ ================ ================= ================ - 4 Technology Development Average number of employees Virtual Tumour product improvements (i) Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Details of the remuneration of directors are included in the Directors’ report on page 10. particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 16 16 25 5 Notes on the Financial Statements - continued Chairman and Chief Executive Officer’s Statement Statement of financial position as at 30 June 2012 Company Number: 4225086 1 CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT There was no material accounting estimates or areas of judgements required. 2 REVENUE AND SEGMENTAL REPORTING The principal activities are the provision of outsourced systems and computational biology services to pharmaceutical companies. This activity comprises a single segment of operation of a sole UK base and entirely UK based assets. Revenue was derived in the UK and European Union from its principal activity. 3 OPERATING PROFIT Operating Loss is stated after charging Research and development Current year expenditure Depreciation charge for the year - Owned assets Amortisation charge for the year Audit services, refer to below 2012 £ 2011 £ 149,409 257,809 3,153 4,712 1,643 4,689 12,000 12,000 ================= ================= Payable to: 2012 £ 2011 £ Amounts payable for both audit and non-audit services Audit services – Statutory audit Shipleys LLP 10,000 10,000 Tax services – Compliance services Shipleys LLP 2,000 2,000 ------------------------- 12,000 ================= ------------------------- 12,000 ================= Non-current assets Intangible assets Property, plant and equipment Investments Current assets Trade and other receivables Cash and cash equivalents Introduction Notes 21,047 6,227 1 27,275 Year ended 30-Jun-12 £ Year ended 30-Jun-11 The vision and strategy for Physiomics remains unchanged, and the Company has made good £ progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the 25,759 10 7,473 11 Company's technology platform in the drug discovery process in oncology. In addition to 1 signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest 33,233 that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good 104,703 12 prospects for increased business and revenue flow from such customers. In particular, such 729,615 prospects could arise from internal policy decisions to use Virtual Tumour as a standard 834,318 9 modality in drug discovery programmes. In addition, growing the customer base has increased 867,551 our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with (112,040) 9,12 this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens (112,040) database and cardiac toxicity prediction model. These are designed to augment our credentials 755,511 as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. 121,874 690,950 812,824 (105,529) (105,529) 840,099 734,570 Total assets Current liabilities Trade and other payables Total liabilities Net assets Capital and reserves Share capital Capital reserves Retained earnings Equity shareholders' funds Technology Development (i) Virtual Tumour product improvements 14 15 16 599,420 3,777,736 (3,642,586) 734,570 451,420 3,407,100 (3,103,009) 755,511 The financial statements were approved by the Board of Directors and authorised for issue on 14 November 2012 and are signed on its behalf by: Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. Dr Paul Harper Chairman 24 5 17 (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to Statement of changes in equity for the year ended 30 June 2012 Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements – continued Share capital £ Share premium account £ Share-based compensation reserve £ Retained earnings £ Total shareholders' funds £ At 30 June 2010 399,690 2,795,735 49,877 (2,458,477) 786,825 Share issue (net of costs) Loss for the year Share-based compensation 51,730 - - 540,094 - - - - 21,394 - (644,532) - 591,824 (644,532) 21,394 At 30 June 2011 451,420 3,335,829 71,271 (3,103,009) 755,511 Share issue (net of costs) Loss for the year Share-based compensation 148,000 - - 361,340 - - - - 9,296 - (539,577) - 509,340 (539,577) 9,296 At 30 June 2012 599,420 3,697,169 80,567 (3,642,586) 734,570 Adoption of International accounting standards Introduction In the current financial year, the Company has adopted the following Standards and Interpretations The vision and strategy for Physiomics remains unchanged, and the Company has made good issued by the IASB and the International Financial Reporting Interpretations Committee: progress towards its declared goals in the period. Signing up two new major pharmaceutical IAS 24 – Related Party Disclosures companies to utilise Virtual Tumour represents an important landmark in establishing the IAS 32 (Amendment) (October 2009) – Classification of Rights Issues Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest IAS 39 (Amendment) (July 2008) – Eligible Hedged Items that our strategy is working. While the initial revenues for first projects are always modest, IFRS 1 (revised November 2008) – First-Time Adoption of International Financial Reporting Standards since these usually take the form of pilot studies, the Directors believe that there are good IFRS 1 (Amendment) (July 2009) – Additional Exemptions for First-Time Adopters prospects for increased business and revenue flow from such customers. In particular, such IFRS 1 (Amendment) (January 2010) – Limited Exemption from Comparative IFRS 7 Disclosures for First- prospects could arise from internal policy decisions to use Virtual Tumour as a standard time Adopters modality in drug discovery programmes. In addition, growing the customer base has increased IFRS 3 (revised January 2008) – Business Combinations our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a IFRS 7 Amendment - Financial Instrument Disclosures: Transfers of Financial Assets clinical version of Virtual Tumour will be a major source of future revenues, since a tool with Annual Improvements to IFRSs 2009 and IFRSs 2010 this capability has been requested by most of our current and potential customers. The IFRIC 14 (Amendment) – Prepayments of a Minimum Funding Requirement Company has also developed two new products, namely its drug combinations and regimens IFRIC 17 – Distributions of Non-cash Assets to Owners database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. IFRIC 18 – Transfers of Assets from Customers Such tools are used by professionals to improve the outcomes of drug design, development, IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments combination dosing strategies and clinical outcomes. Adoption of these Standards and Interpretations did not have any effect on the financial statements of the Company, or result in changes in accounting policy or additional disclosure. Technology Development The IASB and IFRIC have issued a number of Standards and Interpretations with an effective date after (i) Virtual Tumour product improvements the date of these financial statements. The new Standards and Interpretations issued include: Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in IAS 12 Amendment - Deferred Tax: Recovery of Underlying Assets is effective from 1 January 2012 particular by reducing the data requirements to calibrate the model. The Company has begun IAS 19 (revision) – Employee Benefits is effective from 1 January 2013 a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ IAS 27 (revised 2011) - Separate Financial Statements is effective from 1 January 2013 cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities is effective from 1 January 2013 looking to expand the collaboration to test multiple cell lines relevant to different types of IFRS 9 – Financial Instruments – effective from 1 January 2013 cancer. IFRS 11 - Joint Arrangements is effective from 1 January 2013 IFRS 12 - Disclosures of Interest in Other Entities is effective from 1 January 2013 Virtual Tumour Clinical (ii) IFRS 13 - Fair Value Measurement is effective from 1 January 2013 The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to The Directors anticipate that the adoption of these Standards and Interpretations in future periods will develop and calibrate the model using literature data, will allow us to evaluate the predictive have no material impact on the Company’s financial statements. power of the model against known outcomes. The second phase involves using client data to 18 5 23 Notes on the Financial Statements - continued Foreign currency Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating result. Leased assets and obligations Where assets are financed by leasing agreements that give rights approximating to ownership (“finance leases”), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable during the lease terms. The corresponding leasing commitments are shown as obligations to the lessor. Lease payments are treated as consisting of capital and interest elements, and the interest is charged to the profit and loss in proportion to the All other leases are ‘operating leases’ and the annual rentals are charged to the income statement on a remaining balance outstanding. straight-line basis over the lease term. Government Grants Deferred government grants in respect of capital expenditure are treated as deferred income and are credited to the income statement over the estimated useful life of the assets to which they relate. Government grants of a revenue nature are credited to the profit and loss account in the same period as the related expenditure. Share based payments of a binomial model. Investments Taxation The Company issues equity settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date is expensed on a straight-line basis over an estimated vesting period. Fair value is measured by use Participating interests are stated at cost less amounts written off in the Company balance sheet. Tax currently payable is based on the taxable profit for the period which may differ from net profit reported in the income statement. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay further tax, or a right to pay less tax in future. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise from the gains or losses in tax assessments in period different from those in which they are recognised in the financial statements. Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be sufficient taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse. Chairman and Chief Executive Officer’s Statement Cash Flow Statement for the year ended 30 June 2012 Cash flows from operating activities: Operating loss Amortisation and depreciation Share-based compensation (Increase) decrease in receivables Decrease in payables Decrease in deferred income Introduction Year ended 30-Jun-12 £ Year ended 30-Jun-11 The vision and strategy for Physiomics remains unchanged, and the Company has made good £ progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to (693,795) signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest 6,332 that our strategy is working. While the initial revenues for first projects are always modest, 21,394 since these usually take the form of pilot studies, the Directors believe that there are good 13,394 (2,006) prospects for increased business and revenue flow from such customers. In particular, such (21,132) prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased (675,813) our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a 33,037 clinical version of Virtual Tumour will be a major source of future revenues, since a tool with - this capability has been requested by most of our current and potential customers. The (642,776) Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, 7,869 combination dosing strategies and clinical outcomes. (7,356) (577,922) 7,865 9,296 (26,106) (6,510) - 5,674 (1,907) 41,605 - (593,377) (551,772) Interest received Purchase of non-current assets, net of grants received UK corporation tax received Interest paid Net cash generated from operating activities Cash flows from investing activities: Cash generated from operations Net cash received by investing activities Technology Development 3,767 513 Cash outflow before financing Virtual Tumour product improvements (i) (548,005) (642,263) Net cash from financing activities Cash flows from financing activities: Issue of ordinary share capital (net of expenses) Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 591,824 particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ 591,824 cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are (50,439) looking to expand the collaboration to test multiple cell lines relevant to different types of 780,054 cancer. (38,665) 509,340 509,340 729,615 Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year 22 19 5 Cash and cash equivalents at end of year (ii) Virtual Tumour Clinical 690,950 729,615 The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to Notes on the Financial Statements Basis of preparation Physiomics Plc has adopted International Financial Reporting Standards (“IFRS”), IFRIC interpretations and the Companies Act 2006 as applicable to companies reporting under IFRS. The financial statements have been prepared on the historical cost basis. The significant accounting policies are set out below. Accounting policies Revenue recognition The revenue shown in the income statement relates to amounts received or receivable from the provision of outsourced systems and computational biology services to pharmaceutical companies. Revenue from the provision of its principal activities are recognised when the Company has transferred to the buyer the significant risks and rewards of ownership, has no continuing managerial involvement or control to the degree normally associated with ownership and can reliably measure the economic benefits of the transaction. Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those of segments operating in other economic environments. Going concern The accounts have been prepared on the going concern basis. The Company primarily operates in the relatively defensive pharmaceutical industry which we expect to be less affected by current economic conditions compared to other industries. The Company had £690,950 of cash and cash equivalents as at 30 June 2012 (2011: £729,615). The Board operates an investment policy under which the primary objective is to invest in low-risk cash or cash equivalent investments to safeguard the principal. The Company’s forecasts, taking into account likely revenue streams, show that the Company has sufficient funds to operate for the foreseeable future. After reviewing the Company’s forecasts, the Directors believe that the Company is adequately placed to manage its business and financing risks successfully despite the current uncertain economic outlook. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts. Intangible assets Intangible assets acquired separately from third parties are recognised as assets and measured at cost. Following initial recognition, intangible assets are measured at cost or fair value at the date of acquisition less any amortisation and any impairment losses. Amortisation costs are included within the net operating expenses disclosed in the income statement. Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued Intangible assets are amortised over their useful lives as follows: Introduction Useful Life Method Software The vision and strategy for Physiomics remains unchanged, and the Company has made good Straight line 15 years progress towards its declared goals in the period. Signing up two new major pharmaceutical Useful lives are also examined on an annual basis and adjustments, where applicable are made on a companies to utilise Virtual Tumour represents an important landmark in establishing the prospective basis. The Company does not have any intangible assets with indefinite lives. Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest Property, plant and equipment that our strategy is working. While the initial revenues for first projects are always modest, All items are initially recorded at cost. since these usually take the form of pilot studies, the Directors believe that there are good Impairment of assets prospects for increased business and revenue flow from such customers. In particular, such Property, plant and equipment and intangible assets are reviewed for impairment whenever events or prospects could arise from internal policy decisions to use Virtual Tumour as a standard changes in circumstances indicate that the carrying amount may not be recoverable. An impairment modality in drug discovery programmes. In addition, growing the customer base has increased loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. our awareness of the potential for new decision and forecasting tools, leading us to develop The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For Virtual Tumour Clinical. It continues to be the view of the Directors that development of a purposes of assessing impairment, assets that do not individually generate cash flows are assessed as part of the cash generating unit to which they belong. Cash generating units are the lowest levels for clinical version of Virtual Tumour will be a major source of future revenues, since a tool with which there are cash flows that are largely independent of the cash flows from other assets or groups of this capability has been requested by most of our current and potential customers. The assets. Company has also developed two new products, namely its drug combinations and regimens Depreciation database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Depreciation is calculated to write off the cost of an asset over its useful economic life as follows: Such tools are used by professionals to improve the outcomes of drug design, development, Leasehold improvements - the remaining life of the lease combination dosing strategies and clinical outcomes. Fixtures and computers - three years, straight-line basis Technology Development Research and development expenditure Expenditure on research activity is recognised as an expense in the period in which it is incurred. Virtual Tumour product improvements (i) remote. Trade and other receivables Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Trade receivables are recognised and carried at the lower of their original invoiced value and particular by reducing the data requirements to calibrate the model. The Company has begun recoverable amount. Balances are written off when the probability of recovery is considered to be a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before Financial liability and equity xenograft experiments are initiated. To date the collaborators have tested one cell line and are Financial liabilities and equity instruments are classified according to the substance of the contractual looking to expand the collaboration to test multiple cell lines relevant to different types of arrangements entered into. An equity instrument is any contract that evidences a residual interest in cancer. the assets of the Company after deducting all of its liabilities. Cash and cash equivalents (ii) Virtual Tumour Clinical Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 20 21 5 Notes on the Financial Statements Physiomics Plc has adopted International Financial Reporting Standards (“IFRS”), IFRIC interpretations and the Companies Act 2006 as applicable to companies reporting under IFRS. The financial statements have been prepared on the historical cost basis. The significant accounting Basis of preparation policies are set out below. Accounting policies Revenue recognition benefits of the transaction. Segment reporting other economic environments. Going concern The revenue shown in the income statement relates to amounts received or receivable from the provision of outsourced systems and computational biology services to pharmaceutical companies. Revenue from the provision of its principal activities are recognised when the Company has transferred to the buyer the significant risks and rewards of ownership, has no continuing managerial involvement or control to the degree normally associated with ownership and can reliably measure the economic A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those of segments operating in The accounts have been prepared on the going concern basis. The Company primarily operates in the relatively defensive pharmaceutical industry which we expect to be less affected by current economic conditions compared to other industries. The Company had £690,950 of cash and cash equivalents as at 30 June 2012 (2011: £729,615). The Board operates an investment policy under which the primary objective is to invest in low-risk cash or cash equivalent investments to safeguard the principal. The Company’s forecasts, taking into account likely revenue streams, show that the Company has sufficient funds to operate for the foreseeable After reviewing the Company’s forecasts, the Directors believe that the Company is adequately placed to manage its business and financing risks successfully despite the current uncertain economic outlook. Accordingly, they continue to adopt the going concern basis in preparing the annual report and Intangible assets acquired separately from third parties are recognised as assets and measured at cost. Following initial recognition, intangible assets are measured at cost or fair value at the date of acquisition less any amortisation and any impairment losses. Amortisation costs are included within the net operating expenses disclosed in the income statement. future. accounts. Intangible assets 20 Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued Intangible assets are amortised over their useful lives as follows: Introduction Useful Life Method 15 years Software Straight line Impairment of assets Property, plant and equipment All items are initially recorded at cost. The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Useful lives are also examined on an annual basis and adjustments, where applicable are made on a Company's technology platform in the drug discovery process in oncology. In addition to prospective basis. The Company does not have any intangible assets with indefinite lives. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment modality in drug discovery programmes. In addition, growing the customer base has increased loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. our awareness of the potential for new decision and forecasting tools, leading us to develop The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For Virtual Tumour Clinical. It continues to be the view of the Directors that development of a purposes of assessing impairment, assets that do not individually generate cash flows are assessed as clinical version of Virtual Tumour will be a major source of future revenues, since a tool with part of the cash generating unit to which they belong. Cash generating units are the lowest levels for this capability has been requested by most of our current and potential customers. The which there are cash flows that are largely independent of the cash flows from other assets or groups of Company has also developed two new products, namely its drug combinations and regimens assets. database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Depreciation is calculated to write off the cost of an asset over its useful economic life as follows: Leasehold improvements - the remaining life of the lease Depreciation Fixtures and computers Technology Development Research and development expenditure - three years, straight-line basis Expenditure on research activity is recognised as an expense in the period in which it is incurred. Virtual Tumour product improvements (i) Trade and other receivables Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Trade receivables are recognised and carried at the lower of their original invoiced value and particular by reducing the data requirements to calibrate the model. The Company has begun recoverable amount. Balances are written off when the probability of recovery is considered to be a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ remote. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are Financial liabilities and equity instruments are classified according to the substance of the contractual looking to expand the collaboration to test multiple cell lines relevant to different types of arrangements entered into. An equity instrument is any contract that evidences a residual interest in cancer. the assets of the Company after deducting all of its liabilities. Financial liability and equity Cash and cash equivalents (ii) Virtual Tumour Clinical Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 21 5 Notes on the Financial Statements - continued Foreign currency Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating result. Leased assets and obligations Where assets are financed by leasing agreements that give rights approximating to ownership (“finance leases”), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable during the lease terms. The corresponding leasing commitments are shown as obligations to the lessor. Lease payments are treated as consisting of capital and interest elements, and the interest is charged to the profit and loss in proportion to the remaining balance outstanding. All other leases are ‘operating leases’ and the annual rentals are charged to the income statement on a straight-line basis over the lease term. Government Grants Deferred government grants in respect of capital expenditure are treated as deferred income and are credited to the income statement over the estimated useful life of the assets to which they relate. Government grants of a revenue nature are credited to the profit and loss account in the same period as the related expenditure. Share based payments The Company issues equity settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date is expensed on a straight-line basis over an estimated vesting period. Fair value is measured by use of a binomial model. Investments Participating interests are stated at cost less amounts written off in the Company balance sheet. Taxation Tax currently payable is based on the taxable profit for the period which may differ from net profit reported in the income statement. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay further tax, or a right to pay less tax in future. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise from the gains or losses in tax assessments in period different from those in which they are recognised in the financial statements. Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be sufficient taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse. Chairman and Chief Executive Officer’s Statement Cash Flow Statement for the year ended 30 June 2012 Introduction Year ended 30-Jun-12 Year ended 30-Jun-11 The vision and strategy for Physiomics remains unchanged, and the Company has made good £ £ progress towards its declared goals in the period. Signing up two new major pharmaceutical Cash flows from operating activities: companies to utilise Virtual Tumour represents an important landmark in establishing the Operating loss Company's technology platform in the drug discovery process in oncology. In addition to Amortisation and depreciation signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest Share-based compensation that our strategy is working. While the initial revenues for first projects are always modest, 21,394 9,296 (577,922) 7,865 (693,795) 6,332 (Increase) decrease in receivables since these usually take the form of pilot studies, the Directors believe that there are good (26,106) 13,394 Decrease in payables prospects for increased business and revenue flow from such customers. In particular, such Decrease in deferred income prospects could arise from internal policy decisions to use Virtual Tumour as a standard (2,006) (21,132) (6,510) - Cash generated from operations modality in drug discovery programmes. In addition, growing the customer base has increased (593,377) (675,813) our awareness of the potential for new decision and forecasting tools, leading us to develop UK corporation tax received Virtual Tumour Clinical. It continues to be the view of the Directors that development of a 41,605 33,037 Interest paid clinical version of Virtual Tumour will be a major source of future revenues, since a tool with - - this capability has been requested by most of our current and potential customers. The Net cash generated from operating activities Company has also developed two new products, namely its drug combinations and regimens (551,772) (642,776) Cash flows from investing activities: database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Interest received Such tools are used by professionals to improve the outcomes of drug design, development, Purchase of non-current assets, net of grants received combination dosing strategies and clinical outcomes. 5,674 (1,907) 3,767 7,869 (7,356) 513 Net cash received by investing activities Technology Development Cash outflow before financing Virtual Tumour product improvements (i) (548,005) (642,263) Cash flows from financing activities: Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Issue of ordinary share capital (net of expenses) particular by reducing the data requirements to calibrate the model. The Company has begun 509,340 591,824 Net cash from financing activities a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ 509,340 591,824 cultures to replace xenografts, so that Physiomics could start to make predictions even before Net (decrease) increase in cash and cash equivalents xenograft experiments are initiated. To date the collaborators have tested one cell line and are (38,665) (50,439) looking to expand the collaboration to test multiple cell lines relevant to different types of Cash and cash equivalents at beginning of year cancer. 729,615 780,054 Cash and cash equivalents at end of year (ii) Virtual Tumour Clinical 690,950 729,615 The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 22 19 5 Share Share-based Share premium compensation Retained shareholders' capital account reserve earnings £ £ £ £ Total funds £ At 30 June 2010 399,690 2,795,735 49,877 (2,458,477) 786,825 Share issue (net of costs) 51,730 540,094 Loss for the year Share-based compensation (644,532) 21,394 591,824 (644,532) 21,394 At 30 June 2011 451,420 3,335,829 71,271 (3,103,009) 755,511 - - - - - - - - - - - - - - - - Share issue (net of costs) 148,000 361,340 Loss for the year Share-based compensation (539,577) 9,296 509,340 (539,577) 9,296 At 30 June 2012 599,420 3,697,169 80,567 (3,642,586) 734,570 Statement of changes in equity for the year ended 30 June 2012 Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements – continued Adoption of International accounting standards Introduction IAS 24 – Related Party Disclosures IAS 39 (Amendment) (July 2008) – Eligible Hedged Items IAS 32 (Amendment) (October 2009) – Classification of Rights Issues IFRS 1 (Amendment) (July 2009) – Additional Exemptions for First-Time Adopters IFRS 1 (revised November 2008) – First-Time Adoption of International Financial Reporting Standards In the current financial year, the Company has adopted the following Standards and Interpretations issued by the IASB and the International Financial Reporting Interpretations Committee: IFRS 1 (Amendment) (January 2010) – Limited Exemption from Comparative IFRS 7 Disclosures for First- time Adopters The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. IFRS 7 Amendment - Financial Instrument Disclosures: Transfers of Financial Assets IFRIC 14 (Amendment) – Prepayments of a Minimum Funding Requirement IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments IFRS 3 (revised January 2008) – Business Combinations Annual Improvements to IFRSs 2009 and IFRSs 2010 IFRIC 17 – Distributions of Non-cash Assets to Owners IFRIC 18 – Transfers of Assets from Customers Adoption of these Standards and Interpretations did not have any effect on the financial statements of the Company, or result in changes in accounting policy or additional disclosure. Technology Development (i) Virtual Tumour product improvements The IASB and IFRIC have issued a number of Standards and Interpretations with an effective date after the date of these financial statements. The new Standards and Interpretations issued include: IAS 19 (revision) – Employee Benefits is effective from 1 January 2013 IAS 12 Amendment - Deferred Tax: Recovery of Underlying Assets is effective from 1 January 2012 Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities is effective from 1 January 2013 looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. IAS 27 (revised 2011) - Separate Financial Statements is effective from 1 January 2013 IFRS 9 – Financial Instruments – effective from 1 January 2013 18 5 23 IFRS 13 - Fair Value Measurement is effective from 1 January 2013 The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the Company’s financial statements. The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to IFRS 11 - Joint Arrangements is effective from 1 January 2013 IFRS 12 - Disclosures of Interest in Other Entities is effective from 1 January 2013 Virtual Tumour Clinical (ii) Notes on the Financial Statements - continued Chairman and Chief Executive Officer’s Statement Statement of financial position as at 30 June 2012 Company Number: 4225086 1 CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT There was no material accounting estimates or areas of judgements required. 2 REVENUE AND SEGMENTAL REPORTING The principal activities are the provision of outsourced systems and computational biology services to pharmaceutical companies. This activity comprises a single segment of operation of a sole UK base and entirely UK based assets. Revenue was derived in the UK and European Union from its principal activity. 3 OPERATING PROFIT Operating Loss is stated after charging Research and development Current year expenditure Depreciation charge for the year - Owned assets Amortisation charge for the year Audit services, refer to below 2012 £ 2011 £ 149,409 257,809 3,153 4,712 1,643 4,689 12,000 12,000 ================= ================= Amounts payable for both audit and non-audit services Audit services – Statutory audit Shipleys LLP 10,000 10,000 Payable to: 2012 £ 2011 £ Tax services – Compliance services Shipleys LLP 2,000 2,000 ------------------------- 12,000 ================= ------------------------- 12,000 ================= Introduction Notes Year ended 30-Jun-12 Year ended 30-Jun-11 £ 1 £ 1 The vision and strategy for Physiomics remains unchanged, and the Company has made good Non-current assets progress towards its declared goals in the period. Signing up two new major pharmaceutical Intangible assets companies to utilise Virtual Tumour represents an important landmark in establishing the 21,047 25,759 10 Property, plant and equipment Company's technology platform in the drug discovery process in oncology. In addition to 6,227 7,473 11 Investments signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, 27,275 33,233 Current assets Trade and other receivables since these usually take the form of pilot studies, the Directors believe that there are good Cash and cash equivalents prospects for increased business and revenue flow from such customers. In particular, such 121,874 690,950 104,703 729,615 12 prospects could arise from internal policy decisions to use Virtual Tumour as a standard 812,824 834,318 9 modality in drug discovery programmes. In addition, growing the customer base has increased Total assets our awareness of the potential for new decision and forecasting tools, leading us to develop 840,099 867,551 Virtual Tumour Clinical. It continues to be the view of the Directors that development of a Current liabilities Trade and other payables clinical version of Virtual Tumour will be a major source of future revenues, since a tool with 9,12 (105,529) (112,040) this capability has been requested by most of our current and potential customers. The Total liabilities Company has also developed two new products, namely its drug combinations and regimens (105,529) (112,040) database and cardiac toxicity prediction model. These are designed to augment our credentials Net assets as a business committed to providing predictive tools to the pharma and healthcare Industry. 734,570 755,511 Such tools are used by professionals to improve the outcomes of drug design, development, Capital and reserves Share capital combination dosing strategies and clinical outcomes. Capital reserves Technology Development Retained earnings Equity shareholders' funds (i) Virtual Tumour product improvements 14 15 16 599,420 3,777,736 (3,642,586) 734,570 451,420 3,407,100 (3,103,009) 755,511 Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun The financial statements were approved by the Board of Directors and authorised a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ for issue on 14 November 2012 and are signed on its behalf by: cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of Dr Paul Harper Chairman cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 24 5 17 Income Statement for the year ended 30 June 2012 Income Statement for the year ended 30 June 2012 Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued 4 FINANCE INCOME Introduction Year ended Year ended Year ended Year ended Notes Notes 30-Jun-12 30-Jun-12 30-Jun-11 30-Jun-11 £ £ £ £ Revenue Revenue 2 2 135,306 135,306 53,345 53,345 Net operating expenses Net operating expenses Share-based compensation Share-based compensation (703,932) (703,932) (725,746) (725,746) (9,296) (9,296) (21,394) (21,394) Operating loss Operating loss 3 3 (577,922) (577,922) (693,795) (693,795) Finance income Finance income Finance costs Finance costs 4 5 4 5 5,674 5,674 7,869 7,869 - - - - Loss before taxation Loss before taxation (572,248) (572,248) (685,926) (685,926) UK corporation tax UK corporation tax 7 7 32,671 32,671 41,394 41,394 Loss for the year attributable to equity shareholders Loss for the year attributable to equity shareholders (539,577) (539,577) (644,532) (644,532) Loss per share (pence) Loss per share (pence) Basic and diluted Basic and diluted 8 8 (0.045) p (0.045) p (0.063) p (0.063) p Bank interest receivable 5 FINANCE COSTS Interest payable 6 STAFF COSTS 5,674 ================= 2012 £ The vision and strategy for Physiomics remains unchanged, and the Company has made good 2011 progress towards its declared goals in the period. Signing up two new major pharmaceutical £ companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to 7,869 ================= signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good 2011 prospects for increased business and revenue flow from such customers. In particular, such £ prospects could arise from internal policy decisions to use Virtual Tumour as a standard - modality in drug discovery programmes. In addition, growing the customer base has increased ================= our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. 120,971 Such tools are used by professionals to improve the outcomes of drug design, development, 12,492 - combination dosing strategies and clinical outcomes. ------------------------- ------------------------- 133,463 ================ ================ 107,968 11,546 - Technology Development ================= 2012 £ 2012 £ 2011 £ 119,514 - Staff costs during the year Wages and salaries Social security costs Pension costs Average number of employees Virtual Tumour product improvements (i) 4 ================= ================ 3 Details of the remuneration of directors are included in the Directors’ report on page 10. Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 16 16 25 5 Notes on the Financial Statements - continued 7 TAXATION (a) Analysis of charge in the year Research and Development tax credit: current year Research and Development tax credit: prior year Total current tax (b) Factors affecting current tax charge 2012 £ 2011 £ 32,460 41,394 211 - ---------------------- ---------------------- 32,671 ============ 41,394 ============ The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The timing differences are explained below: Loss on ordinary activities before taxation Tax on loss on ordinary activities at standard corporation tax rate of 19.51% (2011: 20%) Expenses not deductible for tax purposes Capital allowances (less than)/ in excess of depreciation Unrelieved tax losses and other deductions arising in the year Research and Development tax credit: current and prior year 2012 £ (572,248) ============= 2011 £ (685,926) ============= (111,646) (137,185) - (117) 528 1,285 111,763 135,372 32,671 ------------------------ 41,394 ------------------------ Total current tax 41,394 =============== =============== At 30 June 2012 tax losses of approximately £2,488,000 (2011: £2,046,000) remained available to carry forward against future taxable trading profits. 32,671 8 EARNINGS PER SHARE The calculations of loss per share are based on the following losses and numbers of shares. Loss on ordinary activities after tax Weighted average no of shares: For basic and diluted loss per share Basic and diluted loss per share 26 2012 £ 2011 £ (539,577) ============= No. (644,532) ============= No. 1,195,271,385 1,026,913,773 ================= (0.063p) ================= ================= (0.045p) ================= Chairman and Chief Executive Officer’s Statement Independent Auditor’s Report to the shareholders of Physiomics Plc – continued Introduction Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the directors' report for the financial year for which the The vision and strategy for Physiomics remains unchanged, and the Company has made good financial statements are prepared is consistent with the financial statements. progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Matters on which we are required to report by exception Company's technology platform in the drug discovery process in oncology. In addition to We have nothing to report in respect of the following matters where the Companies Act 2006 requires signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest us to report to you if, in our opinion: that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good adequate accounting records have not been kept by the company, or returns adequate for our prospects for increased business and revenue flow from such customers. In particular, such audit have not been received from branches not visited by us; or prospects could arise from internal policy decisions to use Virtual Tumour as a standard the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law and not made; or modality in drug discovery programmes. In addition, growing the customer base has increased we have not received all the information and explanations we require for our audit. our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens Benjamin Bidnell (senior statutory auditor) For and on behalf of Shipleys LLP statutory auditor database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. 10 Orange Street Haymarket London WC2H 7DQ Technology Development 14 November 2012 (i) Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 15 5 We have audited the financial statements of Physiomics Plc for the year ended 30 June 2012 which comprise the income statement, the statement of financial position, the cash flow statement, the statement of changes in equity and the related notes. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. Opinion on financial statements In our opinion: the financial statements give a true and fair view of the state of the company's affairs as at 30 June 2012 and of its loss for the year then ended; the financial statements have been properly prepared in accordance with IFRSs as adopted by the financial statements have been prepared in accordance with the requirements of the the European Union; Companies Act 2006. Independent Auditors Report to the shareholders of Physiomics Plc Chairman and Chief Executive Officer’s Statement Notes on the Financial Statements - continued 9 FINANCIAL INSTRUMENTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION Introduction Current financial assets Trade and other receivables Cash and cash equivalents Current financial liabilities Trade and other payables 2012 £ Held for trading 121,874 690,950 The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical 2011 companies to utilise Virtual Tumour represents an important landmark in establishing the £ Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest 104,703 that our strategy is working. While the initial revenues for first projects are always modest, 729,615 since these usually take the form of pilot studies, the Directors believe that there are good ---------------------- ---------------------- 834,318 prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased 112,040 our awareness of the potential for new decision and forecasting tools, leading us to develop --------------------- --------------------- Virtual Tumour Clinical. It continues to be the view of the Directors that development of a 112,040 clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Patents, trade marks and software £ 812,824 ================= 105,529 ================= ================= ================= 105,529 10 INTANGIBLE FIXED ASSETS Cost At 1 July 2011 Additions Technology Development At 30 June 2012 (i) Virtual Tumour product improvements 75,646 - --------------------- 75,646 --------------------- Amortisation At 1 July 2011 Provided in the year Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 49,887 particular by reducing the data requirements to calibrate the model. The Company has begun 4,712 a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ --------------------- 54,599 cultures to replace xenografts, so that Physiomics could start to make predictions even before --------------------- xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of 21,047 cancer. 25,759 At 30 June 2012 Net book value 30 June 2012 30 June 2011 14 27 5 (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to Notes on the Financial Statements - continued Chairman and Chief Executive Officer’s Statement Directors’ Report - continued 11 PROPERTY PLANT AND EQUIPMENT Cost At 1 July 2011 Additions At 30 June 2012 Depreciation At 1 July 2011 Provided in the year At 30 June 2012 Net book value 30 June 2012 30 June 2011 12 OTHER FINANCIAL ASSETS AND LIABILITIES Trade and other receivables are as follows: Trade receivables Prepayments Other receivables Corporation tax recoverable Trade and other payables are as follows: Fixtures and computers £ 47,473 1,907 --------------------- 49,380 --------------------- 40,000 3,153 --------------------- 43,153 --------------------- 6,227 7,473 2012 £ 2011 £ 27,500 35,531 26,383 32,460 ------------------------ 121,874 ============= - 37,225 26,084 41,394 ------------------------ 104,703 ============= Internal Control Introduction The Company values the views of its shareholders and recognises their interest in the Company’s strategy, performance and the ability of the Board. The AGM provides an opportunity for two-way communication and all shareholders are encouraged to attend and participate. Separate resolutions will The vision and strategy for Physiomics remains unchanged, and the Company has made good be put to shareholders at the AGM, giving them the opportunity to discuss matters of interest. The progress towards its declared goals in the period. Signing up two new major pharmaceutical Company counts all proxy votes and will indicate the level of proxies lodged on each resolution, after companies to utilise Virtual Tumour represents an important landmark in establishing the each has been dealt with on a show of hands. Company's technology platform in the drug discovery process in oncology. In addition to The Company uses its website www.physiomics-plc.com as another means of providing information to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest shareholders and other interested parties. The website displays the annual report and accounts, interim that our strategy is working. While the initial revenues for first projects are always modest, results and other relevant announcements. since these usually take the form of pilot studies, the Directors believe that there are good Annual General Meeting prospects for increased business and revenue flow from such customers. In particular, such The Annual General Meeting of the Company will be held at the offices of Taylor Vinters LLP, Tower prospects could arise from internal policy decisions to use Virtual Tumour as a standard 42, 33rd Floor, 25 Old Broad Street, London, EC2N 1HQ at 11.00 am on 17 December 2012. modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop By order of the board Virtual Tumour Clinical. It continues to be the view of the Directors that development of a Dr Paul Harper Chairman 14 November 2012 clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. Technology Development (i) Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 84,600 9,905 17,535 ------------------------- 112,040 ============== Trade payables of the Company were equivalent to 58 days of purchases (2011: 57 days). The directors consider the carrying amount of trade payables approximates to their fair value. Amounts payable relating to the purchase of goods and services Other payables Accruals 60,770 10,223 34,536 ------------------------- 105,529 ============== 28 13 5 Directors’ Report - continued Accountability The Board endeavours to present a balanced and comprehensible assessment of the Company’s situation and prospects in all of its published statements, including interim reports, price-sensitive announcements, reports to regulators and information supplied to comply with statutory requirements. The Audit Committee consists of Christophe Chassagnole and Roger Jones and is chaired by Paul Harper. The Committee meets at least three times per year to consider matters relating to the Company’s financial position and financial reporting. The Audit Committee reviews the independence and objectivity of the external auditors, as well as the amount of non-audit work undertaken by Shipleys LLP to satisfy the Committee that this will not compromise their independence. Details of the fees paid to Shipleys LLP during the current accounting period are given in note 3 to the accounts. There are no areas of work where Shipleys LLP are prohibited from carrying out work. Remuneration Committee The Remuneration Committee has been established primarily to determine the remuneration, terms and conditions of employment of the executive directors of the Company. The Committee comprises Mark Chadwick and Roger Jones and is chaired by Paul Harper. It meets at least twice a year. The primary concern of the Committee is to establish a system of rewards and incentives that aim to align the interests of the executive directors with the long-term interests of the share-holders. These are based on the achievement of both scientific and commercial milestones while taking no account the financial position of the Company at this stage in its development. Any remuneration issues concerning non- executive directors are resolved by this Committee and no director participates in decisions that concern his own remuneration. Going Concern After making appropriate enquiries, the Directors have a reasonable expectation that the Company will safeguard the Company’s assets. The risk management process and internal control systems are designed to manage rather than eliminate the risk of failing to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss. The key features of the Company’s system of internal control are as follows: a clearly defined organisational structure and set of objectives the executive directors play a significant role in the day to day operation of the business detailed monthly management accounts are produced by an independent third party for the Board to review and take appropriate action Chairman and Chief Executive Officer’s Statement Notes to the Financial Statements - continued 13 LOANS Introduction There were no loans with directors at 30 June 2011 and 30 June 2012. Authorised: 14 SHARE CAPITAL Ordinary shares of 0.04p each 2012 The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest 2011 that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good Number prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. ==================== ====================== 25,000,000,000 25,000,000,000 399,690 Number 249,856 149,834 51,730 £ £ ---------------------- ---------------------- Issued and fully paid: Balance at 1 July 2010 Issue of share capital As at 30 June 2011 Technology Development 451,420 399,690 (i) Issue of share capital Virtual Tumour product improvements 148,000 51,730 As at 30 June 2012 ================= The Company has one class of ordinary shares which carry no right to fixed income. Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of On 26 April 2012 the Company issued 370,000,000 ordinary shares of 0.04p at a price of 0.15p per cancer. ordinary share for working capital purposes. ================= 599,420 451,420 ---------------------- ---------------------- 12 5 29 (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to Notes to the Financial Statements - continued 15 CAPITAL RESERVES Balance at 1 July 2010 Issue of share capital Share issue costs Share-based compensation Balance at 30 June 2011 Issue of share capital Share issue costs Share-based compensation Balance at 30 June 2012 Share premium account £ Share-based compensation reserve £ Total £ 2,795,735 49,877 2,845,612 577,594 (37,500) - - 577,594 (37,500) - ---------------------- 3,335,829 21,394 ---------------------- 71,271 21,394 ---------------------- 3,407,100 407,000 (45,660) - - 407,000 (45,660) - ---------------------- 3,697,169 ==================== 9,296 ---------------------- 80,567 =================== 9,296 ---------------------- 3,777,736 ==================== The share premium account consists of proceeds from the issue of shares in excess of their par value (which is included in the share capital account). The share-based compensation reserve represents the credit arising on the charge for share options calculated in accordance with IFRS 2. 16 RETAINED EARNINGS Balance at 1 July 2010 Loss for the year Balance at 30 June 2011 Loss for the year Balance at 30 June 2012 17 CAPITAL COMMITMENTS At 30 June 2011 and 30 June 2012 the Company had no capital commitments. £ (2,458,477) (644,532) ---------------------- (3,103,009) (539,577) ---------------------- (3,642,586) ==================== Chairman and Chief Executive Officer’s Statement Directors’ Report - continued Payment policy Introduction The Company pays its suppliers as it would wish to be paid and supports initiatives aimed at ensuring good practice in this area. Trade creditors of the Company were equivalent to 58 days purchases (2011: The vision and strategy for Physiomics remains unchanged, and the Company has made good 57 days), based on the average daily amount invoiced by suppliers to the Company during the year. progress towards its declared goals in the period. Signing up two new major pharmaceutical Post balance sheet events companies to utilise Virtual Tumour represents an important landmark in establishing the There are no material post balance sheet events. Company's technology platform in the drug discovery process in oncology. In addition to Statement as to disclosure of information to auditors signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest The directors in office on 14 November 2012 have confirmed that, as far as they are aware, there is no that our strategy is working. While the initial revenues for first projects are always modest, relevant audit information of which the auditors are unaware. Each of the directors have confirmed since these usually take the form of pilot studies, the Directors believe that there are good that they have taken all the steps that they ought to have taken as directors in order to make prospects for increased business and revenue flow from such customers. In particular, such themselves aware of any relevant audit information and to establish that it has been communicated to prospects could arise from internal policy decisions to use Virtual Tumour as a standard the auditors. modality in drug discovery programmes. In addition, growing the customer base has increased Corporate Governance our awareness of the potential for new decision and forecasting tools, leading us to develop The Board of Directors is accountable to the Company’s shareholders for good corporate governance. Virtual Tumour Clinical. It continues to be the view of the Directors that development of a The company takes corporate governance seriously and the statement below sets out how the Board clinical version of Virtual Tumour will be a major source of future revenues, since a tool with apply the principles of good corporate governance. this capability has been requested by most of our current and potential customers. The Directors Company has also developed two new products, namely its drug combinations and regimens The Company supports the concept of an effective Board leading and controlling the Company. The database and cardiac toxicity prediction model. These are designed to augment our credentials Board is responsible for formulating and approving the strategy of the business and meets at least six as a business committed to providing predictive tools to the pharma and healthcare Industry. times per year. Various matters are specifically reserved for Board decision, ensuring that the Board Such tools are used by professionals to improve the outcomes of drug design, development, maintains full control over strategic, financial, organisational, risk and compliance issues. Management combination dosing strategies and clinical outcomes. supply the Board with appropriate and timely information, while the directors are encouraged to seek any further information they consider necessary. Technology Development The Board comprises two executive directors, who fulfill the main operational roles in the Company, and a non-executive Chairman. Due to the size of the Company, the Board does not consider the (i) Virtual Tumour product improvements appointment of a senior non-executive director to be necessary. A full list of the directors is shown above. Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 30 5 11 Chairman and Chief Executive Officer’s Statement Notes to the Financial Statements - continued 18 SHARE BASED PAYMENT TRANSACTIONS Introduction Awarded Cancelled Exercised in year Granted at 30 June 2011 7,499,453 5,624,590 11,856,584 Granted at 30 June 2012 7,499,453 5,624,590 11,856,584 3,233,125 Christophe Chassagnole Christophe Chassagnole Christophe Chassagnole Christophe Chassagnole The vision and strategy for Physiomics remains unchanged, and the Company has made good The Company operates a share option scheme under the Enterprise Management Initiative Scheme progress towards its declared goals in the period. Signing up two new major pharmaceutical (“EMI”). The following share options have been granted over ordinary shares of 0.04p each and remain exercisable under the scheme: companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to Exercise price Expiry date signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest p that our strategy is working. While the initial revenues for first projects are always modest, 06-Sep-17 0.383 since these usually take the form of pilot studies, the Directors believe that there are good 0.15 18-Dec-18 0.40 28-Feb-20 prospects for increased business and revenue flow from such customers. In particular, such 08-Nov-21 0.34 prospects could arise from internal policy decisions to use Virtual Tumour as a standard 05-Dec-20 -4,996,125 modality in drug discovery programmes. In addition, growing the customer base has increased 08-Nov-21 our awareness of the potential for new decision and forecasting tools, leading us to develop 18-Dec-21 Virtual Tumour Clinical. It continues to be the view of the Directors that development of a 06-Sep-17 clinical version of Virtual Tumour will be a major source of future revenues, since a tool with 18-Dec-18 28-Feb-20 this capability has been requested by most of our current and potential customers. The 08-Nov-21 Company has also developed two new products, namely its drug combinations and regimens -4,996,125 database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. Certain performance conditions for EMI share options are unmet at the date of these statements. All Such tools are used by professionals to improve the outcomes of drug design, development, other options are vested in full. combination dosing strategies and clinical outcomes. Other staff Other staff Other staff Other staff Total Mark Chadwick Mark Chadwick Mark Chadwick 3,490,000 3,448,824 10,547,616 10,727,314 3,490,000 3,448,824 10,547,616 19,984,500 3,233,127 4,996,125 0.383 0.15 0.40 0.34 3,233,127 4,996,125 0.27 0.34 0.293 67,447,692 24,980,625 22,189,691 10,727,314 84,641,258 3,233,125 - The Company also operates an unapproved share option scheme. The following share options have been granted over ordinary shares of 0.04p each and remain exercisable under the scheme: Technology Development Directors’ remuneration Details of Directors’ remuneration in the year ended 30 June 2012 is set out below: (i) Virtual Tumour product improvements Granted at 30 June 2011 Awarded Exercised in year Cancelled Granted at 30 June 2012 Exercise price Expiry date p Paul Harper Paul Harper Paul Harper Total 2,327,710 7,664,541 Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 18-Dec-18 particular by reducing the data requirements to calibrate the model. The Company has begun 28-Feb-20 a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ 08-Nov-21 cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. 2,327,710 7,664,541 1,293,250 11,285,501 1,293,250 1,293,250 0.15 0.40 0.34 9,992,251 - - All performance conditions for unapproved options have been met and are vested in full. The fair value of share options awarded during the year was determined using the Black-Scholes pricing model. In addition to the information disclosed above, the assumptions employed in the pricing model were as follows – expected volatility: 20%, expected dividends: nil, risk-free interest rate: 3.75% per annum. Were performance conditions are unmet a probability of success factor has been applied to such awards. Virtual Tumour Clinical (ii) The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 5 31 Directors’ Report - continued Substantial shareholdings The Company has been informed that on 30 June 2012 the following shareholders held substantial holdings in the issued ordinary shares of the Company. TD Direct Investing Nominees (Europe) Limited Barclayshare Nominees Limited HSDL Nominees Limited XCAP Nominees Limited LR Nominees Limited HSBC Client Holdings Nominee (UK) Limited James Capel (Nominees) Limited Hargreaves Lansdown (Nominees) Limited Dr Paul Harper Investor Nominees Limited Number of Holding Ordinary shares % 261,269,879 17.4% 229,537,807 15.3% 179,966,502 12.0% 112,293,428 95,266,733 78,251,702 70,705,050 63,799,652 52,570,787 46,696,065 7.5% 6.4% 5.2% 4.7% 4.3% 3.5% 3.1% No other person has reported an interest of more than 3% in the ordinary shares. On 30 June 2012 Dr Mark Chadwick held 3,970,151 ordinary shares and Dr Christophe Chassagnole held 15,189,740 ordinary shares. The holding percentages were 0.26% and 1.01% respectively. Emoluments Benefits Pension £ £ contributions Total £ £ - 35,000 3,030 61,971 Dr P B Harper Dr C D Chassagnole 35,000 58,941 Dr M P Chadwick 105,144 - 105,144 ___________ ______ ___________ 199,085 3,030 ========== ====== ========== ______ 202,115 ====== - - - - Total 10 Notes to the Financial Statements - continued Chairman and Chief Executive Officer’s Statement Directors’ Report - continued 19 FINANCIAL INSTRUMENTS The Company’s financial instruments comprise cash and short term deposits. The Company has various other financial instruments, such as trade debtors and creditors that arise directly from its operations, which have been excluded from the disclosures other than the currency disclosures. The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. The policies for managing these are regularly reviewed and agreed by the board. It is and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall be undertaken. Interest rate risk The Company finances its operations by cash and short term deposits. The Company’s policy on interest rate management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and deferred income values do not bear interest. Interest rate profile The Company had no bank borrowings at the 30 June 2012. Liquidity risk The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Fair values Fair values of financial instruments equate to the best value as disclosed in the financial information. There are no material differences between the fair value of financial instruments and the amount at which they are stated in the financial statements. 20 RELATED PARTY TRANSACTIONS Remuneration of key management personnel The remuneration of the directors, who are the key management personnel of the Company, is set out on page 10. 21 ULTIMATE CONTROLLING PARTY The Company does not currently have an ultimate controlling party and did not have one in this reporting year or the preceding reporting year. Liquidity risk Introduction The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The vision and strategy for Physiomics remains unchanged, and the Company has made good Fair values progress towards its declared goals in the period. Signing up two new major pharmaceutical Fair values of financial instruments equate to the best value as disclosed in the financial information. companies to utilise Virtual Tumour represents an important landmark in establishing the There are no material differences between the fair value of financial instruments and the amount at Company's technology platform in the drug discovery process in oncology. In addition to which they are stated in the financial statements. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest Statement of Directors’ responsibilities that our strategy is working. While the initial revenues for first projects are always modest, The directors are responsible for preparing the Annual Report and the financial statements in since these usually take the form of pilot studies, the Directors believe that there are good accordance with applicable law and regulations. prospects for increased business and revenue flow from such customers. In particular, such UK company law requires the directors to prepare financial statements for the company in accordance prospects could arise from internal policy decisions to use Virtual Tumour as a standard with International Financial Reporting Standards ("IFRS") as adopted by the EU. Company law requires modality in drug discovery programmes. In addition, growing the customer base has increased the directors to prepare such financial statements in accordance with IFRS, the Companies Act 2006 and our awareness of the potential for new decision and forecasting tools, leading us to develop Article 4 of the IAS Regulation. Virtual Tumour Clinical. It continues to be the view of the Directors that development of a The financial statements are required by law, and IFRS as adopted by the EU, to give a true and fair clinical version of Virtual Tumour will be a major source of future revenues, since a tool with view of the state of affairs of the company. this capability has been requested by most of our current and potential customers. The In preparing the company financial statements, the directors are required to: Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials a. select suitable accounting policies and then apply them consistently; as a business committed to providing predictive tools to the pharma and healthcare Industry. b. make judgements and estimates that are reasonable and prudent; Such tools are used by professionals to improve the outcomes of drug design, development, c. state whether they have been prepared in accordance with IFRS as adopted by the EU; combination dosing strategies and clinical outcomes. d. prepare the financial statements on the going concern basis unless it is inappropriate to presume Technology Development that the Company will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable (i) Virtual Tumour product improvements accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in They are also responsible for safeguarding the assets of the company and hence for taking reasonable particular by reducing the data requirements to calibrate the model. The Company has begun steps for the prevention and detection of fraud and other irregularities. a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ The directors are also responsible for the maintenance and integrity of the Physiomics Plc website. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 32 5 9 The Directors submit their report and the audited financial statements of Physiomics Plc for the year Directors’ Report ended 30 June 2012. Principal Activities and Performance Review The Company is principally engaged in providing services to pharmaceutical companies in the areas of outsourced systems and computational biology. There was a loss for the year after taxation amounting to £539,577 (2011 loss: £644,532). In view of accumulated losses, and given the stage of the company’s development, the Directors are unable to recommend the payment of a dividend. Performance Indicators The Directors consider that the key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being revenue, profitability and shareholders’ funds. The turnover of the Company increased to £135,306 (2011: £53,345) • The operating loss was £577,922 (2011: £693,795) • At the 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511) The Company faces many risks on the way to building shareholder value. The process of winning major contracts in a competitive environment is rarely simple and can be delayed for reasons outside the Company’s control. This means the Company faces major uncertainties in its cash flow. Future Risks Addressing the Risks The Board addresses the financial uncertainties by careful budget monitoring and by quickly responding to variations. If there are delays in signing contracts then recruitment and capital expenditure is frozen until the anticipated income is achieved. Interest rate risk The Company finances its operations by cash and short term deposits. The Company’s policy on interest rate management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and deferred income values do not bear interest. Interest rate profile The Company had no bank borrowings at the 30 June 2012. Chairman and Chief Executive Officer’s Statement Notice of Annual General Meeting Notice is hereby given that the annual general meeting (AGM) of Physiomics Plc (the Company) will be held on 17 Introduction December 2012 at 11.00am at the offices of Taylor Vinters LLP, Tower 42, 33rd Floor, 25 Old Broad Street, London, EC2N 1HQ for the following purposes ORDINARY BUSINESS To consider and, if thought fit, pass the following ordinary resolutions: SPECIAL BUSINESS To consider and, if thought fit, pass the resolutions set out in paragraphs 4 to 6 (inclusive): Ordinary resolution – power to allot securities for the year ended 30 June 2012. The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to 1. To receive and adopt the Directors’ and Auditor’s Report and the Company’s Financial Statements signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, 2. To re-appoint Paul Harper as a Director of the Company. since these usually take the form of pilot studies, the Directors believe that there are good 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the prospects for increased business and revenue flow from such customers. In particular, such conclusion of the next general meeting at which annual accounts of the Company are laid and to authorise the Directors to fix their remuneration. prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with 4. That the Directors be and they are generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the 2006 Act) to exercise all the powers of the Company to allot shares this capability has been requested by most of our current and potential customers. The in the Company, or to grant rights to subscribe for or to convert any security into shares in the Company has also developed two new products, namely its drug combinations and regimens Company (relevant securities), up to an aggregate nominal amount of £150,000 provided that this database and cardiac toxicity prediction model. These are designed to augment our credentials authority is for a period expiring at the next annual general meeting of the Company but the Company may before such expiry make offers or agreements which would or might require relevant as a business committed to providing predictive tools to the pharma and healthcare Industry. securities to be allotted after such expiry and the Directors may allot relevant securities in Such tools are used by professionals to improve the outcomes of drug design, development, pursuance of such offer or agreement notwithstanding that the authority conferred by this combination dosing strategies and clinical outcomes. resolution has expired. This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the 2006 Act, but without prejudice to the allotment of any shares already made or to be made pursuant to such authorities. Technology Development Special resolution – disapplication of pre-emption rights Virtual Tumour product improvements (i) 5. That subject to the passing of resolution 4 in the Notice the Directors be given the general power to allot equity securities (as defined by section 560 of the Companies Act 2006 (the 2006 Act)) for Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in cash pursuant to the authority conferred by resolution 4 in the Notice as if section 561(1) of the particular by reducing the data requirements to calibrate the model. The Company has begun 2006 Act did not apply to any such allotment, provided that this power shall be limited to the a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ allotment of equity securities: cultures to replace xenografts, so that Physiomics could start to make predictions even before in connection with an offer of such securities by way of rights or other pro-rata offer to (a) holders of ordinary shares in proportion (as nearly as may be practicable) to their respective xenograft experiments are initiated. To date the collaborators have tested one cell line and are holdings of such shares, but subject to such exclusions or other arrangements as the Directors looking to expand the collaboration to test multiple cell lines relevant to different types of may deem necessary or expedient in relation to fractional entitlements, record dates or any legal or practical problems under the laws of any territory, or the requirements of any cancer. regulatory body or stock exchange; and 8 5 33 (b) (ii) otherwise than pursuant to sub-paragraph (a) above up to an aggregate nominal amount of Virtual Tumour Clinical £150,000; The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to and shall expire on the conclusion of the next annual general meeting of the Company after the passing develop and calibrate the model using literature data, will allow us to evaluate the predictive of this resolution, save that the Company may before such expiry, make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot power of the model against known outcomes. The second phase involves using client data to equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired. equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired. Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement - continued This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot equity securities as if either section 89(1) of the 1985 Act or section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities. This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot equity securities as if either section 89(1) of the 1985 Act or section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities. Special resolution – notice period for general meetings Special resolution – notice period for general meetings 6. That a general meeting of the Company, other than an annual general meeting, may be called on 14 6. That a general meeting of the Company, other than an annual general meeting, may be called on 14 clear days’ notice provided this authority expires at the conclusion of the next annual general clear days’ notice provided this authority expires at the conclusion of the next annual general meeting of the Company after the date of passing of this resolution. meeting of the Company after the date of passing of this resolution. By order of the Board Roger Jones Company Secretary 14 November 2012 By order of the Board Roger Jones Company Secretary 14 November 2012 NOTES NOTES 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at: 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at: • • • • 6.00pm on 13 December 2012; or, 6.00pm on 13 December 2012; or, if this Meeting is adjourned, at 6.00pm on the day two business days prior to the adjourned meeting, if this Meeting is adjourned, at 6.00pm on the day two business days prior to the adjourned meeting, shall be entitled to attend and vote at the Meeting. shall be entitled to attend and vote at the Meeting. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or 2. 2. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. 3. The return of a completed Proxy Form, other such instrument or any CREST Proxy Instruction (as described in note 11) will not prevent a shareholder attending the AGM and voting in person if he/she wishes to do so. 3. The return of a completed Proxy Form, other such instrument or any CREST Proxy Instruction (as described in note 11) will not prevent a shareholder attending the AGM and voting in person if he/she wishes to do so. 4. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them. 4. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them. 5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company. 5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company. 6. 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. 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. 7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be completed, signed and sent or delivered to the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU and received no later than 11.00am on 13 December 2012. 7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be completed, signed and sent or delivered to the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU and received no later than 11.00am on 13 December 2012. In the case of a member who is a company, the proxy must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. In the case of a member who is a company, the proxy must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. alone entitled to vote in respect of that share. Introduction While approaches to smaller biotechnology companies have not translated into revenue in the period, they continue to be another important target in particular in the US. Nevertheless, The vision and strategy for Physiomics remains unchanged, and the Company has made good the company has signed a revenue sharing deal with ValiRx. This model provides the promise of significant downstream revenues to augment the short-term service fees we typically progress towards its declared goals in the period. Signing up two new major pharmaceutical receive. companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to The Company is also seeking to expand its reach in the US and signed up a new business development consultant, David Jobes, who is based on the East Coast. signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good Outlook prospects for increased business and revenue flow from such customers. In particular, such The directors believe the pharmaceutical market place remains in some disarray, with several prospects could arise from internal policy decisions to use Virtual Tumour as a standard high-profile downsizing announcements coupled with regular strategy reviews which impact modality in drug discovery programmes. In addition, growing the customer base has increased on development priorities. The financial status of our nearest market, the EU, especially over our awareness of the potential for new decision and forecasting tools, leading us to develop the past year, is a factor that all fee-for-service providers must work with. We believe that our menu driven approach to providing focused services has been a contributory factor to our Virtual Tumour Clinical. It continues to be the view of the Directors that development of a ability to add two new global pharma customers to our portfolio. The Company has also clinical version of Virtual Tumour will be a major source of future revenues, since a tool with successfully raised further equity funds and is expecting to be in a strong position to this capability has been requested by most of our current and potential customers. The contemplate corporate deal-making as well as progressing with development of its flagship Company has also developed two new products, namely its drug combinations and regimens product, Virtual Tumour Clinical. database and cardiac toxicity prediction model. These are designed to augment our credentials The Company is currently looking at opportunities to further strengthen its financial position as a business committed to providing predictive tools to the pharma and healthcare Industry. both to enable it to undertake corporate deals and for future working capital, if necessary. One Such tools are used by professionals to improve the outcomes of drug design, development, such option under consideration is a Standby Equity Distribution Agreement (SEDA) and a combination dosing strategies and clinical outcomes. further announcement will be made in due course if the Company enters into such an arrangement. Technology Development In the short term, the most likely source of significant revenue growth is an extension of the relationships with the existing customers and continuing to sign up new clients particularly large pharmaceutical companies. In the longer term, the Company is planning to develop a Virtual Tumour product improvements (i) potentially game-changing technology in Virtual Tumour Clinical. The Directors believe that Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in there is currently no adequate technology in the market that can optimise drug combination dosing and scheduling for clinical trials, and certainly not for individual patients. This particular by reducing the data requirements to calibrate the model. The Company has begun represents an unmet need which Physiomics is uniquely positioned to exploit by developing its a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ existing technology. cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of Dr Paul Harper, Non-Executive Chairman cancer. Dr Mark Chadwick, Chief Executive Officer (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 34 34 5 7 Chairman and Chief Executive Officer’s Statement - continued Chairman and Chief Executive Officer’s Statement 9. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut- 9. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut- off time for receipt of proxy appointments (see below) also apply in relation to amended instructions; any amended proxy off time for receipt of proxy appointments (see below) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard- Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard- copy proxy form, please contact the Company at its registered office. copy proxy form, please contact the Company at its registered office. Introduction The revocation notice must be received by the Company no later than 13 December 2012 at 11.00am. The revocation notice must be received by the Company no later than 13 December 2012 at 11.00am. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of The vision and strategy for Physiomics remains unchanged, and the Company has made good proxies will take precedence. proxies will take precedence. progress towards its declared goals in the period. Signing up two new major pharmaceutical 10. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating 10. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating companies to utilise Virtual Tumour represents an important landmark in establishing the your intention to revoke your proxy appointment to the Company’s registered office. In the case of a member which is a company, your intention to revoke your proxy appointment to the Company’s registered office. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney Company's technology platform in the drug discovery process in oncology. In addition to for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest of such power or authority) must be included with the revocation notice. of such power or authority) must be included with the revocation notice. that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the prospects for increased business and revenue flow from such customers. In particular, such paragraph directly below, your proxy appointment will remain valid. paragraph directly below, your proxy appointment will remain valid. prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased 11. CREST members who wish to appoint a proxy or proxies by using the CREST electronic proxy appointment service may do so for 11. CREST members who wish to appoint a proxy or proxies by using the CREST electronic proxy appointment service may do so for our awareness of the potential for new decision and forecasting tools, leading us to develop the Meeting and any adjournment of it by using the procedures described in the CREST Manual. In order for a proxy appointment the Meeting and any adjournment of it by using the procedures described in the CREST Manual. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in Virtual Tumour Clinical. It continues to be the view of the Directors that development of a accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for such instructions, as accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for such instructions, as clinical version of Virtual Tumour will be a major source of future revenues, since a tool with described in the CREST Manual. The message must be transmitted so as to be received by Capita (ID RA10) not later than 48 hours described in the CREST Manual. The message must be transmitted so as to be received by Capita (ID RA10) not later than 48 hours before the time fixed for the AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the before the time fixed for the AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the this capability has been requested by most of our current and potential customers. The timestamp applied to the message by the CREST Applications Host) from which Capita is able to retrieve the message by enquiry to timestamp applied to the message by the CREST Applications Host) from which Capita is able to retrieve the message by enquiry to Company has also developed two new products, namely its drug combinations and regimens CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee database and cardiac toxicity prediction model. These are designed to augment our credentials through other means. Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular through other means. Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages and normal system timings and limitations will apply in relation to the input of a CREST Proxy Instruction. It is the messages and normal system timings and limitations will apply in relation to the input of a CREST Proxy Instruction. It is the as a business committed to providing predictive tools to the pharma and healthcare Industry. responsibility of the CREST member concerned to take such action as shall be necessary to ensure that a message is transmitted by responsibility of the CREST member concerned to take such action as shall be necessary to ensure that a message is transmitted by Such tools are used by professionals to improve the outcomes of drug design, development, means of the CREST system by any particular time. The Company may treat as invalid a CREST Proxy Instruction in the means of the CREST system by any particular time. 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. circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. combination dosing strategies and clinical outcomes. 12. In order to be valid, any form of proxy, power of attorney or other authority under which it is signed, or a notarially certified 12. In order to be valid, any form of proxy, power of attorney or other authority under which it is signed, or a notarially certified or office copy of such power or authority, must reach the Company’s Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham or office copy of such power or authority, must reach the Company’s Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. Technology Development 13. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its 13. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share. powers as a member provided that no more than one corporate representative exercises powers over the same share. Virtual Tumour product improvements (i) Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 14. You may not use any electronic address provided either in this notice of annual general meeting, or any related documents 14. You may not use any electronic address provided either in this notice of annual general meeting, or any related documents (including the chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly (including the chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly particular by reducing the data requirements to calibrate the model. The Company has begun stated. stated. a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ 15. On 14 November 2012, the Company's issued share capital comprised 1,498,550,074 ordinary shares of 0.04p each. Each 15. On 14 November 2012, the Company's issued share capital comprised 1,498,550,074 ordinary shares of 0.04p each. Each cultures to replace xenografts, so that Physiomics could start to make predictions even before ordinary share carries the right to vote at the AGM and, therefore, the total number of voting rights in the Company on 14 ordinary share carries the right to vote at the AGM and, therefore, the total number of voting rights in the Company on 14 November 2012 is 1,498,550,074 ordinary shares. November 2012 is 1,498,550,074 ordinary shares. xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of 16. The Directors' letters of appointment and service contracts will be available for inspection at Tower 42, 33rd Floor, 25 Old 16. The Directors' letters of appointment and service contracts will be available for inspection at Tower 42, 33rd Floor, 25 Old Broad Street, London, EC2N 1HQ from 14 November 2012 until the time of the Meeting. Broad Street, London, EC2N 1HQ from 14 November 2012 until the time of the Meeting. cancer. (ii) Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to 6 5 35 35 calibrate and test the model. The third phase will be to use the calibrated model to guide clinical decision-making on drug/drug combination dosing and scheduling. (iii) Drug combinations and regimens database The database should be of interest to drug researchers and clinicians alike. It collates multiple sources of data, both literature and proprietary, into an easily searchable web-based format. The beta version of the database is completed and is now undergoing quality improvement, data checking and testing internally. It expected to be released commercially in the 2013. The database will be accessed by annual subscription. (iv) Cardiac toxicity prediction service A new modelling platform has been implemented in-house to predict which drug candidates are likely to exhibit toxic effects on the heart using only laboratory-based calibration data. This is a particular problem in the industry, with several high profile failures in the past due to cardiac toxicity. This technology has already been implemented and adopted by some large pharmaceutical companies. Our new service will make the technology accessible to a broader number of companies who lack expertise and resources for in-house implementation. In the first phase, Physiomics has already implemented the modelling platform and started to develop new functionalities in collaboration with our new Scientific Advisory Board member, Dr Jonathan Swinton. The Company is now seeking collaborators who have data sets that can be used to test and improve the platform. This new service should start commercially in 2013. Business Development Strategy The continuing strategy of the Company to target large pharmaceutical companies is starting to bear fruit, as evidenced by the recent announcements. Our experience is that, once a pilot study has been completed, such companies look to apply the technology to other projects. To date, the pilot studies have led to successful validation by each of the companies concerned. There is then an opportunity for Virtual Tumour to become part of the standard protocol used by the company to evaluate the performance of their lead molecules. The pharmaceutical company could then benefit from improved timelines and reduced cost relative to traditional methods. The ultimate business goal is therefore to get a number of large pharma companies to sign up for annual contracts covering a number of projects and then to extend this to the use of Virtual Tumour Clinical to aid clinical trial design. Alternatively, granting non-exclusive licenses to the technology has been discussed with some potential customers, although this is not a short-term prospect. The Company completed its first workshop at a conference which was highly successful. This format included case study presentations and interactive discussions and will be repeated at future relevant events. Form of Proxy Form of Proxy Left Blank Intentionally I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). where indicated below (see notes below). ORDINARY RESOLUTIONS ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year ended 30 June 2012. ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix their remuneration. their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS SPECIAL RESOLUTIONS 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. notice. For For Against Withheld Against Withheld Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………. …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 Date …………………………………………………………………………………………………….………… 2012 NOTES NOTES 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 relevant "Vote withheld" box. 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 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. abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. Any alteration to the form of proxy should be initialled. 6. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. precedence. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. expressly stated. Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement Introduction Introduction The vision and strategy for Physiomics remains unchanged, and the Company has made good The vision and strategy for Physiomics remains unchanged, and the Company has made good progress towards its declared goals in the period. Signing up two new major pharmaceutical progress towards its declared goals in the period. Signing up two new major pharmaceutical companies to utilise Virtual Tumour represents an important landmark in establishing the companies to utilise Virtual Tumour represents an important landmark in establishing the Company's technology platform in the drug discovery process in oncology. In addition to Company's technology platform in the drug discovery process in oncology. In addition to signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest that our strategy is working. While the initial revenues for first projects are always modest, that our strategy is working. While the initial revenues for first projects are always modest, since these usually take the form of pilot studies, the Directors believe that there are good since these usually take the form of pilot studies, the Directors believe that there are good prospects for increased business and revenue flow from such customers. In particular, such prospects for increased business and revenue flow from such customers. In particular, such prospects could arise from internal policy decisions to use Virtual Tumour as a standard prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased modality in drug discovery programmes. In addition, growing the customer base has increased our awareness of the potential for new decision and forecasting tools, leading us to develop our awareness of the potential for new decision and forecasting tools, leading us to develop Virtual Tumour Clinical. It continues to be the view of the Directors that development of a Virtual Tumour Clinical. It continues to be the view of the Directors that development of a clinical version of Virtual Tumour will be a major source of future revenues, since a tool with clinical version of Virtual Tumour will be a major source of future revenues, since a tool with this capability has been requested by most of our current and potential customers. The this capability has been requested by most of our current and potential customers. The Company has also developed two new products, namely its drug combinations and regimens Company has also developed two new products, namely its drug combinations and regimens database and cardiac toxicity prediction model. These are designed to augment our credentials database and cardiac toxicity prediction model. These are designed to augment our credentials as a business committed to providing predictive tools to the pharma and healthcare Industry. as a business committed to providing predictive tools to the pharma and healthcare Industry. Such tools are used by professionals to improve the outcomes of drug design, development, Such tools are used by professionals to improve the outcomes of drug design, development, combination dosing strategies and clinical outcomes. combination dosing strategies and clinical outcomes. Technology Development Technology Development (i) (i) Virtual Tumour product improvements Virtual Tumour product improvements Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in particular by reducing the data requirements to calibrate the model. The Company has begun particular by reducing the data requirements to calibrate the model. The Company has begun a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ cultures to replace xenografts, so that Physiomics could start to make predictions even before cultures to replace xenografts, so that Physiomics could start to make predictions even before xenograft experiments are initiated. To date the collaborators have tested one cell line and are xenograft experiments are initiated. To date the collaborators have tested one cell line and are looking to expand the collaboration to test multiple cell lines relevant to different types of looking to expand the collaboration to test multiple cell lines relevant to different types of cancer. cancer. (ii) (ii) Virtual Tumour Clinical Virtual Tumour Clinical The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to develop and calibrate the model using literature data, will allow us to evaluate the predictive develop and calibrate the model using literature data, will allow us to evaluate the predictive power of the model against known outcomes. The second phase involves using client data to power of the model against known outcomes. The second phase involves using client data to 36 36 5 5 Chairman’s Statement Summary of Results in the year ended 30 June 2012 • • • • Fundraising in April 2012 generated cash of £555,000 before issue expenses. The turnover of the Company more than doubled to £135,306 (2011: £53,345). The operating loss reduced to £577,922 (2011: £693,795). On 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511). With a now fully validated Virtual Tumour technology, Physiomics has concentrated its efforts on product extension, new product development and increasing the customer base. In summary we have Signed up our second top tier global pharma customer. Signed up our third major pharma company, a top-five pharma company. Initiated our development of Virtual Tumour Clinical to enable optimisation of drug regimens in humans. Commenced using client project data to develop Virtual Tumour Clinical. Developed a new database product which allows users to rapidly search through pre- clinical and clinical dosing regimens. This product is expected to be launched in 2013. Developed a new model to predict drug cardiac toxicity based on laboratory data. Identified a number of potential partners with the potential to join forces to increase the scope of the company’s offerings. Dr Paul Harper, Non-Executive Chairman Chairman and Chief Executive Officer’s Statement - continued Form of Proxy Left Blank Intentionally Form of Proxy I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. While approaches to smaller biotechnology companies have not translated into revenue in the Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares period, they continue to be another important target in particular in the US. Nevertheless, □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) the company has signed a revenue sharing deal with ValiRx. This model provides the promise as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how of significant downstream revenues to augment the short-term service fees we typically my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form receive. where indicated below (see notes below). of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). For Against Withheld Against Withheld The Company is also seeking to expand its reach in the US and signed up a new business development consultant, David Jobes, who is based on the East Coast. For ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. Outlook ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. The directors believe the pharmaceutical market place remains in some disarray, with several high-profile downsizing announcements coupled with regular strategy reviews which impact on development priorities. The financial status of our nearest market, the EU, especially over the past year, is a factor that all fee-for-service providers must work with. We believe that our menu driven approach to providing focused services has been a contributory factor to our ability to add two new global pharma customers to our portfolio. The Company has also Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… successfully raised further equity funds and is expecting to be in a strong position to …………………………………………………………………………………………. …………………………………………………………………………………………. contemplate corporate deal-making as well as progressing with development of its flagship Date …………………………………………………………………………………………………….………… 2012 Date …………………………………………………………………………………………………….………… 2012 product, Virtual Tumour Clinical. NOTES NOTES 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. The Company is currently looking at opportunities to further strengthen its financial position 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the both to enable it to undertake corporate deals and for future working capital, if necessary. One meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other such option under consideration is a Standby Equity Distribution Agreement (SEDA) and a than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible further announcement will be made in due course if the Company enters into such an for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you arrangement. will need to appoint someone other than the Chairman and give them the relevant instructions directly. will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the In the short term, the most likely source of significant revenue growth is an extension of the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed relationships with the existing customers and continuing to sign up new clients particularly the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the large pharmaceutical companies. In the longer term, the Company is planning to develop a relevant "Vote withheld" box. 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 relevant "Vote withheld" box. 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 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 potentially game-changing technology in Virtual Tumour Clinical. The Directors believe that abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. there is currently no adequate technology in the market that can optimise drug combination 6. Any alteration to the form of proxy should be initialled. 6. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal dosing and scheduling for clinical trials, and certainly not for individual patients. This or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. represents an unmet need which Physiomics is uniquely positioned to exploit by developing its 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in existing technology. respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. precedence. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. expressly stated. Dr Mark Chadwick, Chief Executive Officer Dr Paul Harper, Non-Executive Chairman 4 36 7 36 Form of Proxy Form of Proxy Directors’ Report Left Blank Intentionally I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers For For R J Jones Against Withheld Against Withheld DIRECTORS Future Risks REGISTERED OFFICE Principal Activities and Performance Review The Directors submit their report and the audited financial statements of Physiomics Plc for the year ended 30 June 2012. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). where indicated below (see notes below). The Company is principally engaged in providing services to pharmaceutical companies in the areas of outsourced systems and computational biology. ORDINARY RESOLUTIONS ORDINARY RESOLUTIONS There was a loss for the year after taxation amounting to £539,577 (2011 loss: £644,532). In view of 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year SECRETARY accumulated losses, and given the stage of the company’s development, the Directors are unable to ended 30 June 2012. ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 2. To re-appoint Paul Harper as a Director. recommend the payment of a dividend. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix Performance Indicators their remuneration. their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the The Directors consider that the key performance indicators are those that communicate the financial Company to allot relevant securities up to an aggregate nominal amount of £150,000. Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS SPECIAL RESOLUTIONS performance and strength of the company as a whole, these being revenue, profitability and 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority shareholders’ funds. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. notice. Dr P B Harper Dr M P Chadwick Dr C D Chassagnole The turnover of the Company increased to £135,306 (2011: £53,345) • The operating loss was £577,922 (2011: £693,795) • At the 30 June 2012 the surplus of shareholders’ funds was £734,570 (2011: £755,511) The Magdalen Centre Robert Robinson Avenue Oxford Science Park Oxford OX4 4GA The Board addresses the financial uncertainties by careful budget monitoring and by quickly responding to variations. If there are delays in signing contracts then recruitment and capital expenditure is frozen until the anticipated income is achieved. The Company faces many risks on the way to building shareholder value. The process of winning major contracts in a competitive environment is rarely simple and can be delayed for reasons outside the Shipleys LLP 10 Orange Street Company’s control. This means the Company faces major uncertainties in its cash flow. Haymarket London WC2H 7DQ Signature(s)…………………………………………………………………………………………………………………………………………………… Signature(s)…………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………. …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 Date …………………………………………………………………………………………………….………… 2012 NOTES NOTES 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 relevant "Vote withheld" box. 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 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 The Company finances its operations by cash and short term deposits. The Company’s policy on interest National Westminster Bank Plc abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. rate management is agreed at board level and is reviewed on an ongoing basis. Woollen Hall 6. Any alteration to the form of proxy should be initialled. 6. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal Castle Way or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. Southampton 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in SO14 2DE respect of that share. respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. precedence. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. expressly stated. Other creditors, accruals and deferred income values do not bear interest. The Company had no bank borrowings at the 30 June 2012. Addressing the Risks Interest rate profile Interest rate risk SOLICITOR AUDITOR BANKER Taylor Vinters LLP Merlin Place, Milton Road, Cambridge CB4 0DP DIRECTORS DIRECTORS DIRECTORS Dr P B Harper Dr P B Harper Dr P B Harper Dr M P Chadwick Dr M P Chadwick Dr M P Chadwick Dr C D Chassagnole Dr C D Chassagnole Dr C D Chassagnole SECRETARY SECRETARY SECRETARY R J Jones R J Jones R J Jones REGISTERED OFFICE REGISTERED OFFICE REGISTERED OFFICE The Magdalen Centre The Magdalen Centre Robert Robinson Avenue Robert Robinson Avenue Oxford Science Park Oxford Science Park Oxford Oxford OX4 4GA OX4 4GA The Magdalen Centre Robert Robinson Avenue Oxford Science Park Oxford OX4 4GA AUDITOR AUDITOR AUDITOR Shipleys LLP Shipleys LLP Shipleys LLP 10 Orange Street 10 Orange Street 10 Orange Street Haymarket Haymarket Haymarket London London London WC2H 7DQ WC2H 7DQ WC2H 7DQ BANKER BANKER BANKER National Westminster Bank Plc National Westminster Bank Plc Woollen Hall Woollen Hall Castle Way Castle Way Southampton Southampton SO14 2DE SO14 2DE National Westminster Bank Plc Woollen Hall Castle Way Southampton SO14 2DE SOLICITOR SOLICITOR SOLICITOR Taylor Vinters LLP Taylor Vinters LLP Taylor Vinters LLP Merlin Place, Merlin Place, Merlin Place, Milton Road, Milton Road, Milton Road, Cambridge Cambridge Cambridge CB4 0DP CB4 0DP CB4 0DP Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. Kingdom. Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. 8 36 36 Officers and Professional Advisers Chairman and Chief Executive Officer’s Statement Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers Officers and Professional Advisers DIRECTORS Introduction DIRECTORS Dr P B Harper Dr P B Harper DIRECTORS Dr M P Chadwick DIRECTORS Dr M P Chadwick Chairman Dr C D Chassagnole Dr C D Chassagnole Dr P B Harper Chief Executive Officer Dr M P Chadwick Chief Operating Officer SECRETARY The vision and strategy for Physiomics remains unchanged, and the Company has made good Chairman Chairman Chairman progress towards its declared goals in the period. Signing up two new major pharmaceutical Chief Operating Officer Chief Executive Officer Chief Executive Officer Chief Executive Officer Chief Operating Officer Chief Operating Officer Chief Operating Officer Dr P B Harper companies to utilise Virtual Tumour represents an important landmark in establishing the Chairman R J Jones R J Jones SECRETARY SECRETARY Dr M P Chadwick SECRETARY Dr C D Chassagnole Dr C D Chassagnole Company's technology platform in the drug discovery process in oncology. In addition to Officers and Professional Advisers signing Lilly Inc. earlier, adding two further top tier pharma companies this year would suggest Officers and Professional Advisers Officers and Professional Advisers Chief Operating Officer Chief Operating Officer Chief Executive Officer that our strategy is working. While the initial revenues for first projects are always modest, REGISTERED OFFICE Dr PB Harper, PhD Paul Harper, PhD REGISTERED OFFICE since these usually take the form of pilot studies, the Directors believe that there are good DIRECTORS Dr Mark Chadwick, PhD, MBA Mark Chadwick, PhD, MBA DIRECTORS prospects for increased business and revenue flow from such customers. In particular, such DIRECTORS Dr P B Harper Chief Executive Officer Chief Executive Officer Chairman R J Jones R J Jones Chairman Chairman DIRECTORS Officers and Professional Advisers Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chairman Chief Executive Officer Officers and Professional Advisers The Magdalen Centre The Magdalen Centre REGISTERED OFFICE Robert Robinson Avenue REGISTERED OFFICE Robert Robinson Avenue Oxford Science Park Oxford Science Park The Magdalen Centre Oxford Dr P B Harper Dr M P Chadwick Dr M P Chadwick Dr C D Chassagnole prospects could arise from internal policy decisions to use Virtual Tumour as a standard modality in drug discovery programmes. In addition, growing the customer base has increased Chief Operating Officer Dr C D Chassagnole Dr M P Chadwick Dr C D Chassagnole Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Chairman Chairman Chief Executive Officer Chief Executive Officer Chief Operating Officer Dr P B Harper Dr P B Harper Dr M P Chadwick our awareness of the potential for new decision and forecasting tools, leading us to develop Dr C D Chassagnole Chief Operating Officer Oxford OX4 4GA The Magdalen Centre Officers and Professional Advisers Robert Robinson Avenue Robert Robinson Avenue Officers and Professional Advisers Oxford Science Park SECRETARY SECRETARY SECRETARY OX4 4GA SECRETARY R J Jones Oxford Science Park Virtual Tumour Clinical. It continues to be the view of the Directors that development of a R J Jones Oxford Oxford DIRECTORS OX4 4GA AUDITOR OX4 4GA AUDITOR DIRECTORS clinical version of Virtual Tumour will be a major source of future revenues, since a tool with R J Jones this capability has been requested by most of our current and potential customers. The REGISTERED OFFICE REGISTRAR REGISTRAR R J Jones REGISTRAR REGISTRAR REGISTRAR Dr P B Harper REGISTRAR Shipleys LLP Shipleys LLP AUDITOR Dr P B Harper Dr M P Chadwick 10 Orange Street AUDITOR REGISTERED OFFICE The Magdalen Centre REGISTERED OFFICE Capita Registrars Capita Registrars REGISTERED OFFICE Capita Registrars Company has also developed two new products, namely its drug combinations and regimens Haymarket 10 Orange Street Dr M P Chadwick Dr C D Chassagnole Capita Registrars database and cardiac toxicity prediction model. These are designed to augment our credentials The Magdalen Centre Robert Robinson Avenue Chief Executive Officer Chief Operating Officer The Registry The Registry The Registry The Magdalen Centre Haymarket Dr Christophe Chassagnole, PhD Christophe Chassagnole, PhD Robert Robinson Avenue Oxford Science Park Dr C D Chassagnole as a business committed to providing predictive tools to the pharma and healthcare Industry. Robert Robinson Avenue The Magdalen Centre Dr M P Chadwick Capita Registrars 34 Beckenham Road 34 Beckenham Road 34 Beckenham Road 34 Beckenham Road Chief Operating Officer Roger Jones, FCCA Roger Jones, FCCA The Registry Shipleys LLP 34 Beckenham Road Dr P B Harper SECRETARY 10 Orange Street Chief Operating Officer Chief Operating Officer 34 Beckenham Road Oxford Science Park Oxford WC2H 7DQ 10 Orange Street WC2H 7DQ SECRETARY Haymarket Beckenham Oxford OX4 4GA Beckenham Beckenham Robert Robinson Avenue Oxford Science Park Beckenham Kent Kent Oxford Science Park Oxford Kent Such tools are used by professionals to improve the outcomes of drug design, development, Company secretary Company Secretary Dr C D Chassagnole London Shipleys LLP London Chairman Capita Registrars Capita Registrars Chairman Chief Executive Officer REGISTRAR The Registry REGISTRAR The Registry DIRECTORS Beckenham Capita Registrars Beckenham Kent The Registry The Registry Kent BR3 2YU 34 Beckenham Road 34 Beckenham Road BR3 2YU Beckenham Beckenham SECRETARY NOMINATED ADVISOR, BROKER REGISTRAR OX4 4GA Kent AND FINANCIAL ADVISER NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND BR3 2YU Capita Registrars REGISTRAR R J Jones FINANCIAL ADVISER FINANCIAL ADVISER BR3 2YU REGISTRAR NOMINATED ADVISOR, BROKER AND NOMINATED ADVISOR, BROKER AND Kent combination dosing strategies and clinical outcomes. OX4 4GA BR3 2YU BR3 2YU BR3 2YU OX4 4GA Oxford Haymarket R J Jones London Kent London BANKER WC2H 7DQ BANKER R J Jones REGISTERED OFFICE WC2H 7DQ BR3 2YU REGISTERED OFFICE Technology Development AUDITOR REGISTERED OFFICE NOMINATED ADVISOR, BROKER AND AUDITOR FINANCIAL ADVISER FINANCIAL ADVISER FINANCIAL ADVISER AUDITOR BANKER The Magdalen Centre The Magdalen Centre FINANCIAL ADVISER National Westminster Bank Plc National Westminster Bank Plc The Magdalen Centre Robert Robinson Avenue 10 Orange Street Shipleys LLP Shipleys LLP Robert Robinson Avenue 11 St James's Square Virtual Tumour product improvements WH Ireland Limited WH Ireland Limited WH Ireland Limited Shipleys LLP Woollen Hall WH Ireland Limited AUDITOR BANKER (i) WH Ireland Limited NOMINATED ADVISOR, BROKER AND REGISTERED OFFICE NOMINATED ADVISOR, BROKER AND WH Ireland Limited Capita Registrars The Registry FINANCIAL ADVISER 11 St James's Square FINANCIAL ADVISER 11 St James's Square 34BeckenhamRoad Capita Registrars The Registry The Registry 34 Beckenham Road The Magdalen Centre Manchester Manchester Beckenham 11 St James's Square 11 St James's Square 11 St James's Square 10 Orange Street Shipleys LLP Manchester Woollen Hall Oxford Castle Way Robert Robinson Avenue Oxford Science Park WH Ireland Limited 10 Orange Street Haymarket Castle Way Oxford Science Park Oxford Science Park National Westminster Bank Plc 11 St James's Square National Westminster Bank Plc Southampton Southampton Woollen Hall Oxford, OX44GA Manchester WC2H 7DQ OX4 4GA London London Oxford Physiomics is constantly striving to improve the value-adding capability of Virtual Tumour, in 34 Beckenham Road Beckenham Haymarket Manchester Manchester 10 Orange Street Manchester Robert Robinson Avenue WH Ireland Limited Haymarket particular by reducing the data requirements to calibrate the model. The Company has begun Oxford Science Park M2 3WH M2 3WH M2 3WH Haymarket London M2 3WH M2 3WH M2 3WH WH Ireland Limited 11 St James's Square Kent, BR3 2YU Beckenham 11 St James's Square Kent a collaboration with the Swiss company, InSphero, aimed at using in vitro 3D ‘spheroid’ Manchester Manchester WC2H 7DQ London WC2H 7DQ WC2H 7DQ Kent BR3 2YU Oxford BR3 2YU OX4 4GA Beckenham Kent Kent BR3 2YU M2 3WH M2 3WH REGISTRAR REGISTRAR Capita Registrars Capita Registrars The Registry The Registry 34 Beckenham Road 34 Beckenham Road Beckenham cultures to replace xenografts, so that Physiomics could start to make predictions even before NOMINATED ADVISOR, BROKER AND REGISTRAR BANKER BR3 2YU AUDITOR BANKER Taylor Vinters LLP Bircham Dyson Bell LLP xenograft experiments are initiated. To date the collaborators have tested one cell line and are National Westminster Bank Plc Shipleys LLP REGISTRAR NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER NOMINATED ADVISOR, BROKER AND BANKER Capita Registrars FINANCIAL ADVISER AUDITOR NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER BANKER BANKER SOLICITOR Merlin Place, 50 Broadway 10 Orange Street Shipleys LLP looking to expand the collaboration to test multiple cell lines relevant to different types of Willow Court , Minns Business Park 10 Orange Street National Westminster Bank Plc WH Ireland Limited Capita Registrars The Registry National Westminster Bank Plc Woollen Hall 7 West Way National Westminster Bank Plc Woollen Hall Castle Way Castle Way Southampton National Westminster Bank Plc Woollen Hall Oxford Woollen Hall Castle Way Milton Road, SW1H 0BLOX2 0JB WC2H 7DQ Cambridge Southampton SO14 2DE Virtual Tumour Clinical Castle Way Southampton Cambridge CB4 0DP (ii) SO14 2DE Southampton SO14 2DE The Registry 34 Beckenham Road WH Ireland Limited 11 St James's Square Shipleys LLP Haymarket 34 Beckenham Road Beckenham Manchester 11 St James's Square 10 Orange Street Beckenham Kent Kent BR3 2YU BR3 2YU London M2 3WH Manchester Haymarket WC2H 7DQ M2 3WH London WC2H 7DQ FINANCIAL ADVISER WH Ireland Limited WH Ireland Limited 11 St James's Square 11 St James's Square Manchester Manchester M2 3WH M2 3WH BANKER CB4 0DP BANKER Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and The work to adapt Virtual Tumour to work in humans is progressing. The first phase, to NOMINATED ADVISOR, BROKER AND SOLICITOR Kingdom. Kingdom. SO14 2DE NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United develop and calibrate the model using literature data, will allow us to evaluate the predictive domiciled in UnitedKingdom. Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United power of the model against known outcomes. The second phase involves using client data to National Westminster Bank Plc FINANCIAL ADVISER WH Ireland Limited Taylor Vinters LLP Taylor Vinters LLP Taylor Vinters LLP Merlin Place, SOLICITOR Kingdom. BANKER SOLICITOR SOLICITOR Taylor Vinters LLP Merlin Place, WH Ireland Limited 11 St James's Square SO14 2DE Woollen Hall SO14 2DE OX4 4GA Castle Way M2 3WH Castle Way Southampton SOLICITOR Southampton SOLICITOR SO14 2DE AUDITOR SOLICITOR SO14 2DE AUDITOR Taylor Vinters LLP Shipleys LLP SOLICITOR Merlin Place, Milton Road, Milton Road, Haymarket 10 Orange Street Taylor Vinters LLP Westminster Taylor Vinters LLP Cambridge Cambridge cancer. London Haymarket Merlin Place, London Merlin Place, CB4 0DP CB4 0DP WC2H 7DQ Milton Road, London Merlin Place, Milton Road, Milton Road, Cambridge Cambridge CB4 0DP CB4 0DP 3 11 St James's Square Manchester National Westminster Bank Plc Manchester M2 3WH M2 3WH 3 3 3 Woollen Hall Castle Way Southampton SO14 2DE Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. SOLICITOR Taylor Vinters LLP Kingdom. Taylor Vinters LLP Merlin Place, Kingdom. Kingdom. National Westminster Bank Plc Milton Road, Woollen Hall Merlin Place, Woollen Hall Castle Way Milton Road, Cambridge Castle Way Southampton Cambridge CB4 0DP Southampton SO14 2DE CB4 0DP 3 SO14 2DE SOLICITOR SOLICITOR Merlin Place, Milton Road, Milton Road, Cambridge Cambridge CB4 0DP CB4 0DP Kingdom. Taylor Vinters LLP Merlin Place, Milton Road, Cambridge CB4 0DP Kingdom. 3 5 3 3 3 3 3 Chairman Chief Executive Officer Chief Operating Officer REGISTRAR Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 2YU NOMINATED ADVISOR, BROKER AND FINANCIAL ADVISER WH Ireland Limited 11 St James's Square Manchester M2 3WH 3 Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Kingdom. 3 3 3 3 Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in United Contents Contents Contents Officers and Professional Advisers Officers and Professional Advisers Chairman’s Statement Chairman’s Statement Chairman and Chief Executive Officer’s Statement Chairman and Chief Executive Officer’s Statement Officers and Professional Advisers The Directors' Report The Directors' Report Chairman’s Statement Independent Auditor’s Report to the members Independent Auditor’s Report to the members Chairman and Chief Executive Officer’s Statement Income Statement Income Statement The Directors' Report Statement of financial position Statement of financial position Independent Auditor’s Report to the members Statement of changes in equity Statement of changes in equity Income Statement Cash Flow Statement Cash Flow Statement Statement of financial position Notes on the Financial Statements Notes on the Financial Statements Statement of changes in equity Notice of Annual General Meeting Notice of Annual General Meeting Cash Flow Statement Form of Proxy Form of Proxy Notes on the Financial Statements Notice of Annual General Meeting Form of Proxy 3 3 4 4 5 5 3 8 8 4 14 14 5 16 16 8 17 17 14 18 18 16 19 19 17 20 20 18 33 33 19 36 36 20 33 36 Form of Proxy Directors’ Report - continued Form of Proxy I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, I/We (block capital)……………………………………………………………………………………………………………….……………………….…………….……………..…….……………..………..……, Liquidity risk Fair values of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) foreseeable needs and to invest cash assets safely and profitably. as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). Fair values of financial instruments equate to the best value as disclosed in the financial information. There are no material differences between the fair value of financial instruments and the amount at ORDINARY RESOLUTIONS Against Withheld 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year which they are stated in the financial statements. ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. Statement of Directors’ responsibilities 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix The directors are responsible for preparing the Annual Report and the financial statements in their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the accordance with applicable law and regulations. Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS UK company law requires the directors to prepare financial statements for the company in accordance 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority with International Financial Reporting Standards ("IFRS") as adopted by the EU. Company law requires conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ the directors to prepare such financial statements in accordance with IFRS, the Companies Act 2006 and notice. Article 4 of the IAS Regulation. For of (block capital)…………………………………………………………………………………………………………………………………………………………………………………….…………………………….. Being a member/members of Physiomics Plc hereby appoint the chairman of the meeting or (see note 1 and 2) ………………………………………………………………………………………………………………………………………in respect of ………………………………………………………Ordinary Shares □ (Please indicate here with an ‘X’ if this appointment is one of multiple appointments being made.) as my/our proxy to attend and on a poll to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 17 December 2012 at 11.00am and at any adjournment thereof. I/we direct, by inserting a cross or other mark in the appropriate box below, how my/our votes are to be cast on each of the resolutions to be proposed at the meeting as indicated below. If no indication is given, the proxy will exercise his/her discretion as to how he/she votes and as to whether or not he/she abstains from voting. Please complete, sign and date this form where indicated below (see notes below). For Against Withheld ORDINARY RESOLUTIONS 1. To receive and adopt the Directors' and Auditor’s report and the Company’s financial statements for the year ended 30 June 2012. 2. To re-appoint Paul Harper as a Director. 3. To confirm the appointment of Shipleys LLP as auditors of the Company to hold office until the conclusion of the next general meeting of the Company at which annual accounts are laid and to authorise the Directors to fix their remuneration. 4. That the Directors be and they are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £150,000. SPECIAL RESOLUTIONS 5. That the Directors be given the general power to allot equity securities for cash pursuant to the authority conferred by the resolution 4 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment. 6. To authorise the Company to convene general meetings (other than annual general meetings) on 14 clear days’ notice. The financial statements are required by law, and IFRS as adopted by the EU, to give a true and fair Signature(s)…………………………………………………………………………………………………………………………………………………… view of the state of affairs of the company. …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 NOTES In preparing the company financial statements, the directors are required to: 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. a. select suitable accounting policies and then apply them consistently; 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other b. make judgements and estimates that are reasonable and prudent; than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible c. state whether they have been prepared in accordance with IFRS as adopted by the EU; for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. d. prepare the financial statements on the going concern basis unless it is inappropriate to presume 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the that the Company will continue in business. proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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 The directors are responsible for keeping proper accounting records which disclose with reasonable 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 accuracy at any time the financial position of the company and to enable them to ensure that the abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 6. Any alteration to the form of proxy should be initialled. financial statements comply with the requirements of the Companies Act 2006. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. They are also responsible for safeguarding the assets of the company and hence for taking reasonable 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting steps for the prevention and detection of fraud and other irregularities. personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of The directors are also responsible for the maintenance and integrity of the Physiomics Plc website. authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. Signature(s)…………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………. Date …………………………………………………………………………………………………….………… 2012 NOTES 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes. 2. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 3. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the box. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish you proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy is one of multiple instructions being given. 5. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. 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. Any alteration to the form of proxy should be initialled. 7. All forms of proxy should be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a Company, either under seal or under hand of a duly authorised officer or attorney of the Company and returned in the same envelope. 8. In the case of joint holders the signature of any one holder is sufficient. If more than one joint holder of any share is present at the meeting personally or by proxy, that one present whose name stands first on the register of members in respect of that share is alone entitled to vote in respect of that share. 9. To be valid this form of proxy and any power of attorney or other authority under which it is signed or a notarially certified copy of such power of authority must be lodged at the offices of the Company's Registrars, Capita Registrars, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the meeting. 10. CREST members should use the CREST electronic proxy appointment service and refer to Note 10 of the Notice of Annual General Meeting in relation to the submission of a proxy appointment via CREST. 11. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 12. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting. 13. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated. 2 2 2 36 36 9 

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