Quixant Plc

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Highlights

Chairman’s statement

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4

Chief Executive’s report 6

Financial review

Financial statements

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15

Company information 63

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HIGHLIGHTS

• Revenue growth of 31% to $41.8 million (2014: $31.9 million)

• Adjusted EBITDA1 increased 28% to $10.1 million (2014: $7.9 million)

• Adjusted profit before tax1 increased 28% to $9.2 million (2014: $7.2 million)

• Adjusted fully diluted EPS2 of $0.113 per share (2014: $0.0941 per share)

• Proposed full year dividend of 1.5p per share (2014: 1.2p)

• Net cash from operating activities of $6.3 million (2014: $2.1 million)

1 Adjusted by adding back $0.20 million in respect of share based payments (2014: $0.16 million)

and $1.17 million in respect of acquisition costs (2014: $nil).

2 Adjusted by adding back $1.37 million in respect of share based payments and acquisition costs

and subtracting the associated tax effect of $0.27 million (2014: $0.16 million adjustment less tax

effect of $0.032 million).

OPERATIONAL HIGHLIGHTS

• Achieved broad based growth in revenue with reduced customer concentration.

• Commenced volume shipments of gaming monitors.

• Completed the earnings enhancing acquisition of Densitron Technologies plc
for £7.66m financed by cash and debt which provides strong sales force with
experience selling into markets outside gaming.

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I am pleased to report on another strong year of
growth and business success for Quixant in 2015,
delivering record results. Through continued execution
of our corporate strategy, we have achieved significant
growth in both revenue and profits and have also
invested to ensure a robust foundation for growth into
2016 and beyond. 

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We have seen growth across a range of
size of customer in 2015 and reduced
customer concentration. We also have
a healthy pipeline of “design-ins”
which we believe sets us in good stead
for future growth. The “design-in”
step represents a lengthy period of
collaboration between the engineering
teams of Quixant and the customer in
order to develop the customer’s game
and integrate Quixant’s products into
their machines. 

As well as continuing to grow our
market share in our core business of
computer gaming platforms in 2015,
we have also started to reap the
benefits from our decision to establish
a business in gaming monitors. We
have the opportunity to sell typically
two or more monitors for every one
computer board we sell per gaming
machine. We have grown our resources
to build our gaming monitors
business and have already seen further
success in securing new business in
early 2016 for monitors.

In September 2015 we announced an
offer to purchase Densitron
Technologies plc for £7.66m, financed
through a combination of the
Company’s cash reserves and new
banking facilities. We completed the
acquisition on 10 November 2015.
Densitron supplies standard and
custom electronic display solutions to
industrial markets globally and has
around 60 staff located in North
America, Europe and Asia. We believe
there are significant opportunities for
Quixant’s products to be sold into
other vertical markets outside gaming
and have already seen some evidence
of this. Densitron has an established
and experienced global sales force
which has long term trusted
relationships with companies in a
wide range of industrial markets.
Through leveraging these relationships,
Quixant has a significant opportunity
to sell products into these other
markets, as all display solutions
require some type of computer or
electronics to drive them. We expect
the acquisition to be earnings
enhancing in the first full year of
ownership. 

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We paid a full year dividend of 1.2p
per share in May 2015 and, aligned
to our progressive dividend policy
and continued strengthening in the
balance sheet, the Board is pleased to
propose a 2016 full year dividend of
1.5p per share, a growth of 25% on
the prior period. 

Quixant has significant headroom to
grow its market share in the gaming
industry and we are confident of our
prospects for continued strong
growth in this area. The acquisition
of Densitron brings further
opportunities for diversification into
other markets and possible
enhancement of this growth. We
have had a strong start to 2016 and
are well positioned to achieve our
growth targets for the year.

Michael Peagram Chairman

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T I am delighted to report on another year of
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robust growth in 2015. Adjusted pre-tax
profits for the year were $9.2 million, growth
of 28% on the prior period, on the back of
revenues of $41.8 million (2014: $31.9 million).
We have achieved this strong growth alongside
investment into the business to position us well
for continued success in 2016 and beyond.
During the year, which marked the tenth
anniversary since foundation of the Company,
we reached several important milestones in
the development of Quixant business. 

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Broad based revenue growth

Our growth in 2015 was broad based.
We saw increased sales to Tier 1
customers which was the primary
engine to growth. Pleasingly, we also
saw strong performance from several
Tier 3 customers which we have been
working with for several years. They
have launched new products which
have been well received by the
market and as a result their rate of
consumption of computer platforms
has grown. This underlines the
benefits Quixant brings in enabling
customers’ R&D teams to focus on
game development.

We have continued to consolidate our
position in several Tier 1 customer
projects where we are designed in
but have yet to deliver volume. We
expect to see continued strengthened
sales to Tier 1 customers in 2016.

Our customer concentration
diminished in 2015, with Ainsworth
falling to 43% of total revenue over
the year (2014: 58%). In total, we
shipped just under 34,000 units in
2015 (2014: 28,500). Based on a
2015 independent industry survey
conducted by G3 Magazine, which
suggests that the annual new/
replacement cycle for machines is
475,000 per annum, this would
imply Quixant occupied a 7% market
share in new/replacement machines. 

New product development

We launched QMax-1, a new flagship
computer platform, and several new
monitor products to the gaming
market in 2015. QMax-1 represents a
new tier of performance for all-in-
one gaming platforms. By utilising an
innovative design, we have harnessed
the power of games console level
graphics into a compact package
which combines all of Quixant’s
benefits, including optimised gaming
features, longevity of supply and high
reliability. We had a product ready to
demonstrate before AMD had
publically announced the chipset on
which it was based and formally
launched QMax-1 on the same day as
AMD’s public announcement. So far

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reception from customers has been
positive towards QMax-1 as a
solution for their high end casino
products. 

In February 2016 at the ICE Exhibition
in London, we launched the QXi-
6000 as successor to the mid-range
QXi-4000. The QXi-6000 is well
suited to customers who need a
compact, fan-less solution, high
performance graphics and the
capability to drive up to three
screens. Both QMax-1 and the QXi-
6000 are optimised for 4K Ultra HD
graphics and video.

During the year, we were granted
two new patents in the UK and US.
The technology described by these
patents is incorporated into the
majority of Quixant’s current product
range and therefore the UK patent
helpfully enables us to take advantage
of the UK Patent Box regime.

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CHIEF EXECUTIVE’S REPORT

Based on this earlier success, in 2015
we invested in an expert sales team
based in Germany to lead our global
gaming monitors business. We believe
there are substantial opportunities for
growth in this area, both into
Quixant’s existing customers and into
new customers. We believe there are
also opportunities for us to innovate
in gaming monitors in conjunction
with our computer products. 

Monitor products

Quixant was founded to design,
manufacture and supply computer
platforms to the manufacturers of
electronic gaming machines. In doing
so, we created a strong culture of
innovation and exceptional
engineering design capabilities
which, combined with our Taiwanese
manufacturing capabilities and
understanding of the gaming market,
enabled us to create computer
products which lead the market. We
have become a trusted technology
partner with many customers who
see us not only as a supplier of
computer products but also as an
innovative technology solutions
provider. Some of these customers
have publically communicated this
message. 

As a result, we have identified
opportunities to supply our
customers with other components
which are connected with the
computer platform. In particular we
have developed our own range of
gaming monitors which are also high
value components in gaming
machines. We developed our monitor
products range with the underpinning
principle that customers faced the
same constraints in terms of
regulation, reliability and quality for
monitor products as for computer
platforms. By moving into this area,
Quixant has been able to extend its
advantages to customers for another
component in their machines and has
been able to introduce combined
technology benefits. We commenced
volume shipments of monitors to our
first customer around the middle of
the year and have a strong order
book into 2016.

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QUIXANT GROUP
OFFICE LOCATIONS

Los Angeles, USA

Las Vegas, USA

Cambridge, UK

London, UK

Newcastle, UK

Helsinki, Finland

Munich, Germany

Nantes, France

Rome, Italy

Taipei, Taiwan

Tokyo, Japan

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CHIEF EXECUTIVE’S REPORT

Acquisition of Densitron

Over the last few years we have been
approached by a number of
customers outside gaming who have
identified the strengths Quixant can
bring to their business in their
markets. In the past, we have elected
not to pursue these opportunities in
order to focus on our core business.
However, we have always believed
that at the appropriate time we
would seek to expand our business
into other markets.

The acquisition of Densitron brings a
global sales team with strong
business and a broad base of
customers who operate in a range of

industrial markets. The team has
proven expertise in the sale of
complex electronic display solutions
to these markets and has built a
significant and stable business in
doing so. We believe the acquisition
provides a strong platform from
which to develop our business in
industrial markets outside gaming. 

Prior to the acquisition, Densitron
was an AIM listed company with over
40 years’ experience in the electronic
technology sector. Densitron provides
a range of solutions to its customers,
many of which are bespoke
comprising a range of complex
technologies. We believe the sales
team have the skills to consult and
identify customer requirements and
expertise in the solutions available in
the market to guide the customer in
making the correct choice, which has
earned them the reputation of being
a trusted partner.

Quixant’s skills and strengths,
particularly in its Taiwanese
procurement, quality control and
manufacturing management
capabilities complements Densitron’s
strength in sales. We believe this has
the potential to enhance profitability,
product quality, engineering design
capability and purchasing power.

Densitron’s business in 2015 saw
growth in revenue and operating
profit in line with its budgets and
following completion made a small
positive contribution to Quixant’s
2015 financial performance. 

We have been working hard since
completion of the acquisition to
globally harmonise Densitron’s
systems and policies. In 2016 we will
continue efforts in this area to create
an enhanced global infrastructure on
which to grow the business.

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ICE Totally Gaming ExCeL London February 2016

G2E Las Vegas October 2015

Investing for the future

Excluding Densitron, our headcount
increased by 13% from 70 to 79 in
2015. 46% of our staff at 31 December
2015 were directly responsible for
product development. 32% of our
overheads were directly attributable
to R&D activities, representing
reinvestment of 6% of revenue and
14% of gross profit into R&D. 

When combined with Densitron, total
Group headcount at 31 December
2015 was 139.

In a business with operations which
span three continents, good
communication and collaboration
tools are essential to success. Quixant
invested in this area in 2015 by
rolling out a global video
conferencing system and a
collaborative digital whiteboard
solution. The latter enables
participants in two or more locations
to engage in a common shared
electronic whiteboard space to
brainstorm and collaborate on ideas.
Users can also present, annotate and
modify a range of content
interactively which enhances the
product development process across
the Group by enabling remotely
located colleagues to work as if they
are in one location. 

Outlook

Quixant’s opportunity in its core
gaming platforms business continues
to strengthen as the trend for the
largest of the gaming machine
manufacturers to outsource gathers
momentum. Combined with a
buoyant start in the gaming monitors
business and the potential growth
that Densitron brings into other
markets, the Group is well aligned to
deliver strong growth in line with our
expectations for 2016 and beyond. 

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Nicholas Jarmany Chief Executive

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Revenue

Quixant delivered record revenues of
$41.8 million, up 31% from 2014
($31.9 million). The acquisition of
Densitron made a contribution of
$5.2 million to revenue following
completion. 

Within Quixant’s gaming business,
revenue growth was driven by the
continuing development of our
commercial relationships, particularly
in the Tier 1 and Tier 3 space, with
Europe proving in aggregate to be a
strong region for growth. In addition
to our established range of computer
platforms, we commenced volume
shipments of our gaming monitors in
2015. We have broadened our
customer base both in number to 126
(2014: 89) and across geographies.

As a supplier of key components in
gaming machines which are subject
to heavy regulation, we are required
by customers to supply a consistent
product over a period of several
years. As a result, we typically hold
multi-year supply contracts with our
larger customers. This provides us
with a degree of repeatability and
security to our revenue stream.

Profit 

Our gross profit for the year was
$17.3 million (2014: $14.1 million),
representing a gross margin of 41%
(2014: 44%). This reduction reflects
the lower margins which can be
earned on gaming monitors and
Densitron’s display solutions. 

Adjusted EBITDA increased 28% to
$10.1 million (2014: $7.9 million).
Adjusted profit before tax increased
28% to $9.2 million (2014: 
$7.2 million). Adjustments to EBITDA
and profit before tax are to add 
back share based payments and
acquisition costs of $1.4 million
(2014: $0.16 million). 

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We continue to re-invest in the
business to ensure our product
offering remains a market leading
proposition. Excluding Densitron,
gross expenditure on R&D was 
$2.3 million, (2014: $2.1 million) or
14% of gross profit (2014: 15%).
These costs relate to our development
activities undertaken in Taiwan and
Italy. $1.1 million of these
development costs were capitalised
(2014: $1.0 million), with amortisation
for the year on total capitalised
development costs $0.4 million
(2014: $0.4 million). 

Balancing the investment requirements
of the business to support future
growth with careful management of
increases resulted in an overhead
spend of $9.5 million, including
exceptional costs of $1.4m (2014:
$7.0 million). Following completion,
Densitron contributed $1.0 million to
overheads. Our headcount increase to
79 people (2014: 70) was the biggest
contributor to our increased spend. 

Taxation

There is a tax charge for the year of
$1.4 million (2014: $0.9 million). 
This constitutes a corporation tax
charge, which includes prior period
adjustments, of $0.121 million
(2014: $0.271 million) and a deferred
tax charge of $0.175 million (2014:
$0.044 million). The Group continues
to benefit from enhanced tax reliefs
available in respect of qualifying R&D
expenditure. 

Foreign Exchange

To minimise foreign currency exposure
the Group transacts and reports in US
Dollars as far as is practicable. With
effect from 1 January 2016 Densitron
have converted to accounting in US
Dollars. Where significant non-US

Dollar expenses can be forecast with
respect to timing and value, the
Board may take the decision to hedge
against unfavourable exchange rate
movements. 

Earnings Per Share

Basic earnings per share increased 5%
to $0.0993 (2014: $0.0946).

Fully diluted earnings per share
increased 5% to $0.0967 (2014:
$0.0922). 

Adjusted fully diluted earnings per
share increased 20% to $0.113
(2014: $0.0941).

The calculations of earnings per share
are included at Note 10. 

Balance Sheet

The Group maintains a strong
balance sheet with net assets of
$25.7 million (2014: $20.5 million).

Tangible non-current assets have
grown primarily because of the
acquisition of our new office in Italy
and the inclusion of investment land
owned by Densitron, which is valued at
$0.7 million. Intangible non-current
assets increased by $13.2 million to
$15.4 million, mainly due to goodwill
arising on the acquisition together
with the recognition of intangibles
acquired with Densitron.

Current assets mainly comprise
inventory and trade receivables.
Excluding the impact of the acquisition,
we held inventory of $6.3 million
(2014: $5.5 million). This is consistent
with our inventory strategy, which is
structured such as to hold buffer
inventory of key product lines. This is
a competitive advantage Quixant can
offer over other suppliers. Trade
receivables of $16.7 million (2014:
$9.2 million) reflect the fact that our
revenues are typically weighted
towards the second half of the year. 

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FINANCIAL REVIEW

Outlook

The 2016 financial year has started
well and we are confident of another
year of strong growth in line with our
expectations. 

Cresten Preddy Finance Director

Non-current liabilities now include
the banking facilities of $7.4 million
required to support the Densitron
acquisition as well as the long-term
borrowings acquired. 

All liabilities are within the Group’s
payment profile. 

Cash Flow 

The Group continued to generate
high levels of operating cash over the
year. The cash generated amounted
to $6.3 million (2014: $2.1 million).
Investment in our inventory strategy
previously mentioned was first
implemented in 2014 which is a key
reason current period operating cash
is significantly higher than that of the
prior period. 

To support our growth aspirations
the Group spent $12.8 million (2014:
$2.4 million) on investing activities.
This is primarily accounted for by
$10.6 million (2014: $nil) of costs
relating to acquisitions.

New financing cash flows for the
period under review principally relate
to an inflow of $7.4 million in respect
of new banking facilities and an
outflow in respect of repayments on
borrowings. 

Our overall cash outflow during the
period was $0.8 million (2014: 
$2.3 million) which gave a cash and
cash equivalents balance at the year-
end of $3.9 million (2014: 
$4.7 million). We are in the process
of reviewing Group treasury strategy
following the acquisition. 

Dividend

The Board intends to maintain a
progressive dividend policy whilst
continuing to invest in and to develop
the Group’s businesses. As such the
Board proposes a dividend in respect
of the year of 1.5p per share (2014:
1.2p per share) payable on 19 May
2016 to all shareholders on the
register at the close of business on 
13 May 2016. The corresponding ex-
dividend date is 12 May 2016. 

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FINANCIAL
STATEMENTS

Quixant Gaming Platforms

QUIXANT PLC ANNUAL REPORT & ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2015

QMax-1

QX-50

Corporate governance 16

Strategic report 17

QX-40

QXi-6000

Directors’ report 19

Statement of Directors’ responsibilities 22

Independent auditor’s report to the 

members of Quixant plc 23

Consolidated statement of profit and loss 

and other comprehensive income 25

Balance sheets 26

QXi-4000

QXi-300

Statement of changes in equity 28

QXi-307

QXi-306

Cash flow statements 31

Notes 32

Quixant Gaming Monitors

PCAP Touchscreen
Monitors

General Monitors

Button Decks

Curved Screen Monitors

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CORPORATE GOVERNANCE

The Directors recognise the value and importance of high standards of corporate governance.

Since admission to AIM in May 2013, the Board has been designed to voluntarily comply, where applicable, with
selected key provisions of the UK Corporate Governance Code. The Company does not currently claim full compliance
with the requirements of the code.

The Company also follows the recommendations on corporate governance from the Quoted Companies Alliance for
companies with shares traded on AIM.

Given the size of the Company and the constitution of the Board, the following is a brief summary of the main aspects
of corporate governance currently in place.

With effect from the admission to the AIM market, the Board has established an Audit Committee and a Remuneration
Committee with formally delegated responsibilities.

The Remuneration Committee is chaired by Michael Peagram. Its other member is Guy van Zwanenberg. This
committee reviews the performance of the Executive Directors and makes recommendations to the Board on matters
relating to their remuneration and terms of employment.

The Audit Committee is chaired by Guy van Zwanenberg. Its other member is Michael Peagram. The Committee
determines the terms of engagement of the Group’s auditors and, in consultation with them, the scope of the audit. 
It receives and reviews reports from management and the Group’s auditors relating to the interim and annual financial
statements and the accounting and internal control systems in use by the Group. The Audit Committee has unrestricted
access to the Group’s auditors. Under its terms of reference, the Audit Committee monitors, amongst other matters,
the integrity of the Group’s financial statements. The Committee is responsible for monitoring the effectiveness of the
external audit process and making recommendations to the Board in relation to the re-appointment of the external
auditors. It is responsible for ensuring that an appropriate business relationship is maintained between the Group and
the external auditors, including reviewing non-audit services and fees. The Committee meets with Executive Directors
and management as well as meeting privately with the external auditors.

As the Board is small, there is not a separate Nominations Committee and the Board as a whole considers recommendations
for appointments to the Board.

The Directors follow the guidance set out by Rule 21 of the AIM Rules relating to dealings by Directors in the Company’s
securities and, to this end, the Company has adopted an appropriate share dealing code.

Going concern

Under Company Law, the Company’s Directors are required to consider whether it is appropriate to prepare financial
statements on the basis that the Group and Company are a going concern. The Directors have prepared trading and
cash flow forecasts for the Group covering the period to 31 December 2017. After making enquiries and considering
the impact of risks and opportunities on expected cash flows, the Directors have a reasonable expectation that the
Group has adequate cash to continue in operational existence for the foreseeable future. For this reason they have
adopted the going concern basis in preparing the financial statements.

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STRATEGIC REPORT

The Directors present their Annual Report and accounts for the year ended 31 December 2015.

Principal activities and results

The principal activity of the Group is the development and supply of computer systems. During the year, the Group
acquired Densitron Technologies plc whose principal business is the design, development and delivery of electronic
displays into the industrial marketplace and Alpha Display Europe GmbH whose principal activity is the distribution 
and delivery of monitors.

The profits for the year after taxation amounted to $6,420,000 (2014: $6,116,000) and the Directors continue to be
satisfied with the overall performance of the Group.

Further comments on the development of the business are included in the Chairman’s Statement, Chief Executive’s
Report and Financial Review on pages 4 to 14.

Key Performance Indicators

The primary financial key performance indicators of the Group are adjusted EDITDA and profit before tax, on which it
reports monthly. Adjusted EDITDA (Note 1) for the year was $10,098,000 (2014: $7,894,000) and profit before tax was
$7,788,000 (2014: $7,059,000).

The Group also monitors its order pipeline and cash balances.

Principal risks relating to the business of the Group

The Group faces competitive and strategic risks that are inherent in rapidly growing and changing markets. The Board
of the Company and its management review future strategy and risks to the business regularly. Where possible,
processes are in place to monitor and mitigate the identified risks.

Financial and trading risks are discussed in Note 24 of the consolidated financial statements.

The key business risks set out below are not an exhaustive list of the risks faced by the Group and are not intended to
be presented in any order of priority.

RISK

DESCRIPTION

MITIGATION

COMMENT

Commercial

The marketplace for the
Group’s display products is
highly competitive.

The Group continues to work
on identifying areas in which it
can add value and differentiate
its products.

The Group has the
capabilities and skills to
create highly engineered,
optimised products.

Gaming customers may decide
to design their computer
platforms and/or monitors in
house or source from another
supplier.

Quixant works closely with its
customers to ensure its product
roadmap is robust,
technologically advanced and
ahead of the competition.

Geographical
and
environmental

The Group operates across a
range of countries, all of which
carry a degree of risk, whether
it is political risk or
environmental issues.

The majority of the Group’s
operations are in OECD
countries. Despite not being an
OECD member, Taiwan has a
highly developed legal and
political system. 

The Group continues to
operate in those countries
that provide the best
opportunity for growth
whilst avoiding identified
country risk. 

A large proportion of the
revenue is generated from
customers in OECD countries. 

I

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17

Qplc

 
 
 
 
 
STRATEGIC REPORT

RISK

DESCRIPTION

MITIGATION

COMMENT

Regulation risk

Technological
risk

Additional laws and regulations
may be enacted covering issues
such as law enforcement,
pricing, taxation and quality of
products and services.

The Group’s business is
dependent upon technology
which could be superseded by
superior technology, more
competitively priced technology
or a shift in working practices,
which could affect both
potential profitability and
saleability of the Group’s
products.

The Group monitors
prospective changes in
regulation which may impact
its business.

The Group is a member of
professional bodies where
applicable.

The Group works closely with
its technology partners to
provide products which
incorporate the most advanced
technology available to our
market. The Group also
develops its own innovations to
incorporate into new products.

The Group recognises the
technology requirements
of our customers and works
with them to provide the
products they need for
their business. 

Key customer
dependency.

The Group generates a
significant but declining
portion of its revenue from a
key customer.

As the Group continues to
grow, the portion of revenue
from key customers has
declined. 

Key persons

The Group is reliant on the
experience of the executive
officers.

The executive officers are subject
to long term contracts and the
Board is developing a succession
plan. The Directors have put in
place contractual arrangements
designed to develop and
incentivise key staff.

The Board expects the
Group’s organic growth,
combined with the
acquisitions in 2015 to
further reduce the
dependency on key
customers.

Staff turnover of key
persons continues to be
low. 

The Group seeks to establish
and protect its intellectual
property rights by patents and
other protection mechanisms.

The Group works with
professional external
patent attorneys. 

Intellectual
property
protection

The Group may be unable to
successfully establish and
protect its intellectual property.
The intellectual property rights
may or may not have priority
over other parties’ claims to the
same intellectual property.

By order of the Board on 22 March 2016

Miss A C Preddy  Director
Aisle Barn  100 High Street  Balsham  Cambridge  CB21 4EP

18

Qplc

DIRECTORS’ REPORT

Statutory information

Quixant plc (‘The Company’) is a Public Limited Company incorporated in the United Kingdom (Registration number:
04316977). On 15 May 2013, the Company issued an admission document and from 21 May 2013 the Company’s
ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange (AIM).

The Company has a branch, located in Taiwan, whose operations and results are included in the standalone financial
statements of the Company.

Details of the share capital of the Company are set out in Note 23 of the consolidated financial statements.

Annual General Meeting

The date and other details of the next Annual General Meeting of the Company are contained within the notice of this
meeting, which accompanies this report. 

The Directors propose a dividend of 1.5p per share (2014: 1.2p), to be approved at the Annual General Meeting.
During the year the Company paid a dividend of 1.2p per share amounting to $1,182,000.

Substantial shareholdings

On 22 March 2016 the Company had been notified of the following significant interests in its share capital:

Shares held
Ordinary shares
of £0.001 each

% of issued 
share capital 

N C L Jarmany and his wife

16,752,923

C-T Lin and his wife

G P Mullins and his wife

Schroders Plc

Octopus Investments Nominees Limited

Hargreave Hale

River and Mercantile 
Asset Management LLP

Alexander Taylor

Mark Mullins

John Mullins

Susan Mullins

Amati Global Investors

4,589,842

4,058,641

7,152,211

4,152,059

3,321,160

3,128,000

2,622,767

2,484,981

2,432,707

2,432,707

2,022,219

25.92%

7.10%

6.28%

11.07%

6.42%

5.14%

4.84%

4.06%

3.84%

3.76%

3.76%

3.13%

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19

Qplc

 
 
 
 
 
DIRECTORS’ REPORT

Directors

The Directors who served during the year and their interests in the share capital of the Company were as follows:

Shares held
Ordinary shares 
of £0.001 each

Options granted 
£0.001 each

Exercise
price

2015 and 2014

2015 and 2014

16,752,923

4,589,842

4,058,641

-

152,174

26,087

-

-

-

-

-

-

79,000

£0.49

-

-

-

-

N C L Jarmany

C-T Lin

G P Mullins

A C Preddy

M J Peagram 

G van Zwanenberg 

There has been no change in the interests set out above between 31st December 2015 and 22nd March 2016.

Directors’ indemnity arrangements

The Group has made qualifying third party indemnity provisions for the benefit of its Directors which were made during
the year and remain in force at the date of this report. The Group has purchased and maintained throughout the year
Directors’ and Officers’ liability insurance in respect of itself and its Directors.

Research and development (R&D)

The Group continues to invest in R&D, spending $2,304,777 in its R&D and customer support programmes in the year,
of which $1,071,139 was capitalised. The Group undertakes R&D to develop and enhance its products and the Group
will continue to commit a significant level of resource and expenditure as appropriate to R&D.

Use of financial instruments

Information on both the Group’s financial risk management objectives and the Group’s policies on exposure to relevant
risks in respect of financial instruments are set out in Note 24 of the consolidated financial statements.

Political contributions

Neither the Company nor any of its subsidiaries made any political donations or incurred any political expenditure
during the year.

Disclosure of information to auditors 

The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the Company’s auditors are unaware; and each Director has
taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit
information and to establish that the Company’s auditors are aware of that information. 

20

Qplc

Auditors

In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG LLP as
auditor of the Company is to be proposed at the forthcoming Annual General Meeting. 

By order of the Board on 22 March 2016

Miss A C Preddy  Director
Aisle Barn  100 High Street  Balsham  Cambridge  CB21 4EP

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21

Qplc

 
 
 
 
 
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF 
THE DIRECTORS’ REPORT AND THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements
in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company financial statements for each financial year.
As required by the AIM Rules of the London Stock Exchange they are required to prepare the Group financial
statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and applicable
law and have elected to prepare the parent company financial statements on the same basis.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In
preparing each of the Group and parent Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group

and the parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent
Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have
general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.

22

Qplc

KPMG LLP Botanic House   100 Hills Road   Cambridge   CB2 1AR

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUIXANT PLC

We have audited the financial statements of Quixant plc for the year ended 31 December 2015 set out on pages 25 to 62.
The financial reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the EU, and as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we
are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 22, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit, and express an opinion on, the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.

Scope of the audit of the financial statements 

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website
at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as

at 31 December 2015 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the EU;

• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the

EU and applied in accordance with the provisions of the Companies Act 2006;

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which
the financial statements are prepared is consistent with the financial statements.

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23

Qplc

 
 
 
 
 
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUIXANT PLC

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have

not been received from branches not visited by us; or 

• the parent company financial statements are not in agreement with the accounting records and returns; or 

• certain disclosures of Directors’ remuneration specified by law are not made; or 

• we have not received all the information and explanations we require for our audit. 

Charles le Strange Meakin (Senior Statutory Auditor) 
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Botanic House
100 Hills Road 
Cambridge 
CB2 1AR

22 March 2016

24

Qplc

CONSOLIDATED STATEMENT OF PROFIT AND LOSS 
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014

Revenue
Cost of sales

Gross profit
Administrative expenses
Other operating expenses

Operating profit

Financial expenses

Profit before tax
Taxation

Profit for the year

Other comprehensive income for the year, net of income tax
Foreign currency translation differences

Total comprehensive income for the year

Note

3,4

5

8

9

2015
$000

2014
$000

41,829
(24,503)

31,919
(17,857)

17,326
(3,995)
(5,469)

14,062
(2,351)
(4,622)

7,862

7,089

(74)

(30)

7,788
(1,368)

7,059
(943)

6,420

6,116

(268)

(183)

6,152

5,933

Basic earnings per share
Fully diluted earnings per share

10
10

$0.0993 $0.0946
$0.0967 $0.0922

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25

Qplc

 
 
 
 
 
BALANCE SHEETS
AS AT 31 DECEMBER 2015

Note

Group

2015 

2014 

2015 

$000

$000

$000

Company

2014 1 January
2014*
$000

$000

Non-current assets
Property, plant and equipment
Intangible assets
Investment property
Investments in group companies and 

associated undertakings
Deferred tax assets

Current assets
Inventories
Tax receivable
Trade and other receivables
Cash and cash equivalents

Total assets

Current liabilities
Other interest-bearing loans and borrowings
Trade and other payables
Tax payable

Non-current liabilities
Other interest-bearing loans and borrowings
Provisions
Deferred tax liabilities

Total liabilities

Net assets

11
12
13

14
15

16

17
18

19
20

19
22
15

5,996
15,395
740

-
620

5,218
2,231
-

-
63

3,580
2,905
-

11,875
70

3,684
2,231
-

196
47

3,582
1,375
-

109
-

22,751

7,512

18,430

6,158

5,066

9,285
-
19,484
3,861

5,505
-
10,049
4,722

5,495
325
10,002
1,401

4,008
322
8,596
1,070

2,041
-
3,422
6,870

32,630

20,276

17,223

13,996

12,333

55,381

27,788

35,653

20,154

17,399

(2,994)
(15,274)
(301)

(100)
(5,410)
(211)

(605)
(10,881)
-

(100)
(4,614)
-

(173)
(2,177)
-

(18,569)

(5,721)

(11,486)

(4,714)

(2,350)

(8,744)
(750)
(1,667)

(1,200)
-
(388)

(8,448)
-
(671)

(1,200)
-
(388)

(1,986)
-
(281)

(11,161)

(1,588)

(9,119)

(1,588)

(2,267)

(29,730)

(7,309)

(20,605)

(6,302)

(4,617)

25,651

20,479

15,048

13,852

12,782

26

Qplc

Note

Group

2015 

2014 

2015 

$000

$000

$000

Company

2014 1 January
2014
$000

$000

23

23

104
5,181
470
20,299
(408)

104
5,181
273
15,061
(140)

25,646
5

20,479
-

104
5,181
470
9,613
(320)

104
5,181
273
8,431
(137)

104
5,181
113
7,339
45

15,048
-

13,852
-

12,782
-

25,651

20,479

15,048

13,852

12,782

Equity attributable to 
equity holders of the parent
Share capital
Share premium
Share based payments reserve
Retained earnings
Translation reserve

Non-controlling interest

Total equity 

* The Company balance sheet at 1 January 2014 has been presented in accordance with IFRS 1, as a result of the

parent company’s transition to IFRS. See Note 30.

These financial statements were approved and authorised for issue by the Board of Directors on 22 March 2016 and
were signed on behalf of the Board by:

Miss A C Preddy  Director

Company registered number: 04316977

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27

Qplc

 
 
 
 
 
STATEMENT OF CHANGES IN EQUITY

GROUP

Share
capital premium

Share  Translation
reserve

Share Retained
based  earnings

$000

$000

$000

payments
$000

$000

Total 

Non-
parent  controlling
interest
equity
$000
$000

Total
equity

$000

104

5,181

43

113

10,035

15,476

- 15,476

-
-

-

-
-

-

-
-

-

-
-

-

-
(183)

(183)

-
-

-

-
-

-

6,116
-

6,116
(183)

6,116

5,933

160
-

-
(1,090)

160
(1,090)

160

(1,090)

(930)

-
-

-

-
-

-

6,116
(183)

5,933

160
(1,090)

(930)

104

5,181

(140)

273

15,061

20,479

- 20,479

Balance at 
1 January 2014

Total comprehensive 
income for the period
Profit
Other comprehensive loss

Total comprehensive 
income for the period

Transactions with 
owners, recorded 
directly in equity
Share based payments 
Dividend paid

Total transactions 
with owners

Balance at 
31 December 2014

28

Qplc

Share
capital premium

Share  Translation 
reserve

Share Retained
based  earnings

$000

$000

$000

payments
$000

$000

Total 

Non-
parent  controlling
interest
equity
$000
$000

Total
equity

$000

Balance at 
1 January 2015

Total comprehensive 
income for the period
Profit 
Other comprehensive loss

Total comprehensive 
income for the period

Transactions with 
owners, recorded 
directly in equity
Share based payments 
Dividends paid

Total contributions 
by and distributions 
to owners

Transactions with owners
Acquisition of subsidiary with 
a non-controlling interest

Total transactions 
with owners

Balance at 
31 December 2015

104

5,181

(140)

273

15,061

20,479

- 20,479

-
-

-

-
-

-

-

-

-
-

-

-
-

-

-

-

-
(268)

(268)

-
-

-

6,420
-

6,420
(268)

6,420

6,152

-
-

-

-

-

197
-

-
(1,182)

197
(1,182)

197

(1,182)

(985)

-

-

-

-

-

-

-
-

-

-
-

-

5

5

6,420
(268)

6,152

197
(1,182)

(985)

5

5

104

5,181

(408)

470

20,299

25,646

5 25,651

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29

Qplc

 
 
 
 
 
STATEMENT OF CHANGES IN EQUITY

COMPANY

Share 
capital
$000

Share
premium
$000

Translation  Share based Retained
earnings
$000

payments
$000

reserve
$000

Total parent 
equity
$000

Balance at 1 January 2014 

104

5,181

45

113

7,339

12,782

Total comprehensive 
income for the period
Profit 
Other comprehensive loss 

Total comprehensive 
income for the period

Transactions with owners, 
recorded directly in equity
Share based payments 
Dividends paid

Total contributions by and 
distributions to owners

-
-

-

-
-

-

-
-

-

-
-

-

-
(182)

(182)

-
-

-

-
-

-

2,182
-

2,182
(182)

2,182

2,000

160
-

-
(1,090)

160
(1,090)

160

(1,090)

(930)

Balance at 31 December 2014

104

5,181

(137)

273

8,431

13,852

Share 
capital
$000

Share
premium
$000

Translation  Share based Retained
earnings
$000

payments
$000

reserve
$000

Total parent 
equity
$000

Balance at 1 January 2015

104

5,181

(137)

273

8,431

13,852

Total comprehensive 
income for the period
Profit 
Other comprehensive loss

Total comprehensive 
income for the period

Transactions with owners, 
recorded directly in equity
Share based payments 
Dividends paid

Total contributions by and 
distributions to owners

-
-

-

-
-

-

-
-

-

-
-

-

-
(183)

(183)

-
-

-

-
-

-

2,364
-

2,364
(183)

2,364

2,181

197
-

-
(1,182)

197
(1,182)

197

(1,182)

(985)

Balance at 31 December 2015

104

5,181

(320)

470

9,613

15,048

30

Qplc

CASH FLOW STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014

Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation, amortisation and impairment
Taxation expense
Financial expense
Equity settled share based payment expenses

(Increase) in trade and other receivables
(Increase) in inventories
Increase in trade and other payables

Interest paid
Tax paid

Note

Group

2015 
$000

2014
$000

Company

2015 
$000

2014
$000

6,420

6,116

2,363

2,182

871
1,368
74
197

8,930
(2,140)
(1,490)
2,166

7,466
(74)
(1,112)

645
943
30
160

7,894
(4,110)
(2,874)
2,682

3,592
(30)
(1,493)

684
412
53
118

3,630
(1,406)
(1,487)
6,202

6,939
(53)
(155)

609
265
30
73

3,159
(5,174)
(1,967)
2,385

(1,597)
(30)
(527)

Net cash from operating activities

6,280

2,069

6,731

(2,154)

Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired
Acquisition of property, plant and equipment
Acquisition of intangible assets 

2
11
12

(10,593)
(1,101)
(1,151)

-
(938)
(1,481)

(11,600)
(230)
(1,142)

-
(407)
(1,290)

Net cash from investing activities

(12,845)

(2,419)

(12,972)

(1,697)

Cash flows from financing activities
Proceeds from new loan
Repayment of borrowings
Dividends paid 

7,754
(868)
(1,182)

-
(859)
(1,090)

7,754
-
(1,182)

-
(859)
(1,090)

Net cash from financing activities

5,704

(1,949)

6,572

(1,949)

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January

(861)
4,722

(2,299)
7,021

331
1,070

(5,800)
6,870

Cash and cash equivalents at 31 December

18

3,861

4,722

1,401

1,070

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A

31

Qplc

 
 
 
 
 
NOTES
(forming part of the financial statements)

1   Principal accounting policies

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented
in these consolidated financial statements and in preparing an opening IFRS balance sheet for the Company at 
1 January 2014 for the purposes of the transition to Adopted IFRSs.

Quixant plc (the “Company”) develops and supplies specialist computer systems. The Company is incorporated and domiciled
in the UK. The address of the Company’s registered office is Aisle Barn, 100 High Street, Balsham, Cambridge, CB21 4EP.

The Group financial statements consolidate those of the Company, its branch in Taiwan and its subsidiaries (together
referred to as the “Group”). The parent Company financial statements present information about the Company as a
separate entity and not about its group.

Basis of preparation

Both the parent Company financial statements and the Group financial statements have been prepared and approved by
the Directors in accordance with International Financial Reporting Standards as adopted by the EU (“Adopted IFRSs”).
On publishing the parent Company financial statements here together with the Group financial statements, the
Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual profit
and loss account and related notes that form a part of these approved financial statements.

This financial information has been prepared under the historical cost convention, except that a subsidiary company
owns a plot of land in Blackheath, London which is held at a valuation. A subsidiary owns an investment property being
a plot of land at Blackheath. The land was valued by a professional firm of property consultants in 2010. Subsequently,
the Directors have estimated its value based on current market conditions. The presentation currency adopted by the
Quixant Group is US Dollars as this is the trading currency of the Group.

The preparation of financial information in conformity with Adopted IFRSs requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Quixant Group accounting
policies. The areas involving a higher degree of judgement and estimation relate to determining the point at which the
criteria for development cost capitalisation have been met and inventory and bad debt provisions respectively. In addition,
management consider the recoverable amount of goodwill and the assessment of the contingent consideration payable
to be judgemental areas. As noted below, goodwill is reviewed for impairment at each reporting date or when indicators
of impairment arise. See Note 12 for further consideration. Goodwill has increased significantly in the year due to the
acquisitions of Densitron and Quixant Deutschland, as have inventory and trade and other receivables. Contingent
consideration, as explained in Note 2, is payable in three years’ time (see Note 2 for explanation of the assumptions
considered). 

Transition to Adopted IFRSs

The parent Company is preparing its financial statements in accordance with Adopted IFRSs for the first time and
consequently has applied IFRS 1. An explanation of how the transition to Adopted IFRSs has affected the reported
financial position, financial performance and cash flows of the Company is provided in Note 30.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries
are fully consolidated from the date of acquisition, being the date on which the Group obtains control and continue to
be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for
the same reporting period as the parent Company, using consistent accounting policies. All intra-group balances,
transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

The Italian subsidiary, Quixant Italia srl, is 99% owned by the Group. The comprehensive income and equity attributable
to the non-controlling interests in this subsidiary are not material. Densitron Nordic Oy is 80% owned by the Group.
The equity attributable to the non-controlling interest in this subsidiary is accounted for as a minority interest. The
income attributable to this subsidiary is immaterial.

Separate parent Company financial statements

In the parent Company financial statements, all investments in subsidiaries, joint ventures, and associates are carried at
cost less impairment.

32

Qplc

Going concern

The Directors have prepared trading and cash flow forecasts for the Group covering the period to 31 December 2017.
After making enquiries and considering the impact of risks and opportunities on expected cash flows, the Directors
have a reasonable expectation that the Group has adequate cash to continue in operational existence for the foreseeable
future. For this reason they have adopted the going concern basis in preparing the financial statements.

Changes in accounting policies: new standards, interpretations and amendments not yet effective

The International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee
(IFRIC) have issued the following standards and interpretations with an effective date after the date of these accounts:

Adopted for use in the EU:

Improvements to IFRS 2010 – 2012
Improvements to IFRS 2011 – 2013
Limited scope amendments to IAS 19

Not currently adopted for use in the EU:

IFRS 9
IFRS 15
IFRS 17

Financial Instruments
Revenue Recognition
Leases

The Directors consider that the adoption of these standards and interpretations on the Group’s financial statements will
not be material.

Revenue recognition

Revenue represents amounts chargeable, net of value added tax, in respect of the sale of goods to customers. Revenue
is recognised at the point that risk is transferred to the customer as determined by the terms agreed in the contract.

Where invoicing takes place in advance of revenue recognition, the amounts invoiced, net of value added tax, are
recorded as deferred revenue.

Goodwill

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is
not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of
goodwill is included in the carrying amount of the investment in the investee.

Impairment excluding inventories, investment properties and deferred tax assets

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories, investment property and deferred tax
assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite
useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest
group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of
other assets or groups of assets (the “cash generating unit”). The goodwill acquired in a business combination, for the
purpose of impairment testing, is allocated to cash generating units, or (“CGU”). Subject to an operating segment
ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are
aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for
internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are
expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are
allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying
amounts of the other assets in the unit (group of units) on a pro rata basis.

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NOTES

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in
prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Property, plant and equipment

Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment.

Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost less estimated
residual value of each asset on a straight-line basis over its expected useful economic life, as follows:

Freehold buildings
Plant and machinery

20 - 50 years
between 3 and 6 years

No depreciation is provided on freehold land.

The carrying value of property, plant and equipment is reviewed for impairment if events or changes in circumstances
indicate the carrying value may not be recoverable.

Investment property

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both.
Investment properties are stated at fair value and are reviewed on an annual basis with any revision to the valuation
taken to the profit and loss account.

Intangible assets – customer relationships and order back log

In accordance with IFRS 3, on the acquisition of subsidiary companies the Group assess the identification of intangible
assets acquired which are either separate or arise from contractual or other legal rights. These assets are recognised as
intangible assets and are amortised over the period of future benefit to the Group.

Intangible assets – development costs

The Quixant Group incurs significant expenditure on the research and development of new computer products and
enhancements. The internally generated intangible asset arising from the Company’s development is recognised only if
the Company can demonstrate all of the following conditions:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale;

• The intention to complete the intangible asset and use or sell it;

• The ability to use or sell the intangible asset;

• The probability that the asset created will generate future economic benefits;

• The availability of adequate technical, financial and other resources to complete the development; and

• The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development costs not meeting these criteria and all research costs are expensed in the Consolidated Income Statement
as incurred. Capitalised development costs are amortised on a straight line basis over their expected useful economic
lives of 5 years once the related software product or enhancement is available for use.

Intangible assets – computer software

Computer software is stated at cost, net of amortisation and any provision for impairment.

Amortisation is provided on all computer software at rates calculated to write off the cost less estimated residual value
of each asset on a straight-line basis over its expected useful economic life, as follows:

Computer software

between 3 and 5 years

The carrying value of computer software is reviewed for impairment if events or changes in circumstances indicate the
carrying value may not be recoverable.

Inventories

Inventories, which comprise goods held for resale, are stated at the lower of cost and net realisable value. Cost includes
all costs in acquiring the inventories and bringing each product to its present location and condition. Net realisable
value represents the estimated selling price and costs to be incurred in marketing, selling and distribution.

34

Qplc

Foreign currencies

Transactions denominated in foreign currencies are translated into the functional currency of the relevant operation at
the rates ruling at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the
Balance Sheet date are translated at the rates ruling at that date. Non-monetary assets and liabilities that are measured
in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

On consolidation, results of overseas subsidiaries are translated using the average exchange rate for the period, unless
exchange rates fluctuate significantly. The Balance Sheets of overseas subsidiaries are translated to the Group’s
presentational currency, US Dollars, using the closing period-end rate. Exchange differences arising, if any, are taken to
a translation reserve. Such translation differences would be reclassified to profit and loss in the period in which the
operation is disposed of.

Income tax

The charge for current income tax is based on the results for the year as adjusted for items which are not taxed or
disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred income tax is accounted for using the liability method in respect of temporary differences arising from
differences between the tax bases of certain assets and liabilities and their carrying amounts in the financial statements.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference is due to goodwill
arising on a business combination or from an asset or liability, the initial recognition of which does not affect either
taxable or accounting income.

Deferred tax is charged or credited in the profit and loss account or in Other Comprehensive Income, except when it
relates to items credited or charged directly to Shareholders’ equity, in which case the deferred tax is also dealt with in
Shareholders’ equity.

Financial assets

The Group’s financial assets fall into the categories set out below, with the allocation depending to an extent on the
purpose for which the asset was acquired. Unless otherwise indicated, the carrying amounts of the Group’s financial
assets are a reasonable approximation of their fair values. 

• Trade receivables: Trade receivables do not carry interest and are stated at their nominal value as reduced by

allowances for estimated irrecoverable amounts.

• Cash and cash equivalents: Cash and cash equivalents in the Statement of Financial Position comprise cash at bank

and in hand, short-term deposits and other short-term liquid investments.

In the Cash Flow Statement, cash and cash equivalents comprise cash and cash equivalents as defined above, net of
bank overdrafts.

Financial liabilities

All of the Group’s financial liabilities are classified as financial liabilities carried at amortised cost. The Group does not
use derivative financial instruments or hedge account for any transactions.

Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reasonable approximation of
their fair values.

Financial liabilities include the following items:

• Trade payables and other short-term monetary liabilities, which are recognised at their nominal value.

• Bank borrowings, which are initially, recognised at fair value net of any transaction costs directly attributable to the
issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the
effective interest rate method, which ensures that any interest expense over the period to repayment is at a
constant rate on the balance of the liability carried in the consolidated Statement of Financial Position. Interest
expense in this context includes initial transaction costs and premiums payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.

Pension

The Group operates a defined contribution scheme to the benefit of its employees. Contributions payable are changed
to income in the year they are payable.

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35

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NOTES

Determination and presentation of operating segments

The Quixant Group determines and presents operating segments based on the information that internally is provided to
the executive management team, the body which is considered to be the Quixant Group’s Chief Operating Decision
Maker (“CODM”).

An operating segment is a component of the Quixant Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Quixant
Group’s other components. The operating segment’s operating results are reviewed regularly by the CODM to make
decisions about resources to be allocated to the segment to assess its performance, and for which discrete financial
information is available.

Share based payments

The grant date fair value of share based payments awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period in which employees become unconditionally entitled to the
awards. The fair value of the awards granted is measured using an option valuation model, taking into account the
terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect
the actual number of awards for which the related service and non-market vesting conditions are expected to be met,
such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related
service and non-market performance conditions at the vesting date. For share based payment awards with non-vesting
conditions, the grant date for fair value of the share based payment is measured to reflect such conditions and there is
no true-up for differences between expected and actual outcomes.

EBITDA reconciliation

EBITDA for the current and prior year has been derived as follows:

Profit for the year
Adding back:
Taxation expense
Financial expenses
Depreciation
Amortisation 

EBITDA
Share based payments expense
Costs arising on the acquisition of subsidiaries

Adjusted EBITDA

2   Acquisitions of subsidiaries

Acquisitions in the current period

2015
$000

2014
$000

6,420

6,116

1,368
74
312
559

8,733
197
1,168

943
30
142
503

7,734
160
-

10,098

7,894

On 10 November 2015, the Company acquired all of the ordinary shares in Densitron Technologies plc for 
GBP 7,663,601.66 ($11,600,971) being 11p per share, satisfied in cash. Densitron Technologies plc was a UK based
AIM quoted company whose primary business is the design, development and supply of electronic displays into the
industrial market place. The acquisition provides the Group with the global infrastructure and sales capability to sell
Quixant’s computer products into wider industrial markets. The acquisition will complement Quixant’s move into the
provision of displays to its gaming customers, alongside the specialised computer systems it currently supplies. In the 6
weeks to 31 December 2015 the subsidiary contributed net profit of $117,000 to the consolidated net profit after tax
for the year. If the acquisition had occurred on 1 January 2015, Group revenue would have been an estimated
$72,667,000 and net profit after tax would have been an estimated $5,441,000. In determining these amounts,
management has assumed that the fair value adjustments that arose on the date of acquisition would have been the
same if the acquisition occurred on 1 January 2015.

On 9 December 2015, the Company acquired all of the ordinary shares in Alpha Display Europe GmbH (subsequently
renamed Quixant Deutschland GmbH) for $750,000 and contingent consideration estimated as $750,000 to be
satisfied in cash. Alpha Display Europe GmbH was a private company incorporated in Germany whose primary business

36

Qplc

is the sale of electronic displays into the industrial market place. The acquisition provides the Group with additional
products which complement the current range of Quixant products and customer requirements. The acquisition will
assist Quixant’s move into the provision of displays to its gaming customers, alongside the specialised computer
systems it currently supplies. As this company was acquired in December 2015, no profit has been included for this
period to the consolidated net profit for the year. 

In January 2016, Alpha Display Europe GmbH was legally registered as Quixant Deutschland GmbH. The accounts of
Quixant Deutschland GmbH as at 31 December 2015 have been estimated for the purpose of acquisition accounting
because the financial statements have not been completed. The effect of the acquisition on all items will be adjusted 
in the 2016 financial statements.

Effect of acquisitions

The acquisitions had the following effect on the Group’s assets and liabilities.

Recognised values 
on acquisition

Acquiree’s net assets at the acquisition date:
Property, plant and equipment
Intangible assets – internally developed
Intangible assets – customer relationships and order back log
Inventories
Trade and other receivables
Cash and cash equivalents
Interest-bearing loans and borrowings
Trade and other payables
Net deferred tax liabilities

Net identifiable assets and liabilities

Consideration paid: 
Initial cash price paid
Less proceeds received in respect of Densitron treasury shares
Contingent consideration at fair value

Total consideration

Goodwill on acquisition

Densitron

$000

968
225
5,201
2,290
7,367
1,674
(3,552)
(7,715)
(547)

5,911

11,600
(83)
-

11,517

5,606

Quixant Deutschland
(formerly Alpha 
Display Europe)
– ESTIMATED
$000

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A

-
-
-
-
55
-
-
(28)
-

27

750
-
750

1,500

1,473

Goodwill has arisen on the acquisition because the consideration paid is in excess of the net identifiable assets and
liabilities. This represents the value of the underlying business including its workforce.

Contingent consideration

The Group has agreed to pay the Quixant Deutschland GmbH vendors additional consideration based on the profit
earned over the three years following acquisition. The range of the additional consideration payment is between $nil
and $3,375,000. The Group has included $750,000 as contingent consideration related to the additional
consideration, which represents its fair value at the acquisition date. The key assumptions in assessing the fair value are
the growth rate and gross profit margin as applied to future profits of Quixant Deutschland GmbH.

Acquisition related costs

The Group incurred acquisition costs of $1,168,000 relating to professional fees in respect of due diligence and advice.
These costs have been included as a cost in administrative expenses in the Group’s consolidated profit and loss account.

37

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NOTES

3   Business and geographical segments

The chief operating decision maker in the organisation is an executive management committee comprising the Board of
Directors. They have determined the operating segments detailed within this report and, on which, the business is
managed. The Group assesses the performance of the segments based on a measure of revenue and EBITDA. The
operating segments applicable to the Group are as follows:

• Quixant

A single customer accounted for 43% of reported revenues for the year ended 31 December 2015 (2014: 58%).

• Densitron Europe

• Densitron America

• Densitron France

• Densitron Japan

Revenue 
Profit/(loss) before tax 

Balance Sheet
Assets
Liabilities
Net assets/(liabilities)

Quixant

$000

36,650
7,607

42,215
18,642
23,573

Densitron
Europe
$000

Densitron
America
$000

Densitron
France
$000

Densitron 
Japan
$000

Total
2015
$000

1,977
104

5,265
6,835
(1,570)

2,106
189

4,572
2,629
1,943

411
(87)

685
(25)

41,829
7,788

1,676
1,154
522

1,653
470
1,183

55,381
29,730
25,651

The Densitron results are included for the period since acquisition on 10 November 2015 until 31 December 2015.

For the year to 31 December 2014, the Group had determined that it had only one operating and reportable segment.
All significant assets and liabilities were located within the UK, Taiwan and USA.

4   Analysis of turnover

By geographical market 
Asia 
Australia 
Europe 
North America 
Other 

5   Expenses and auditor’s remuneration

Included in profit/loss are the following:

Loss/(gain) on foreign exchange transactions
Costs arising on the acquisition of subsidiary companies
Research and development expenditure
Of which capitalised
Depreciation of owned assets
Amortisation of intangible assets

38

Qplc

2015 
$000

2014 
$000

3,958
14,479
7,274
15,976
142

1,387
13,252
2,965
14,243
72

41,829

31,919

2015 
$000

2014 
$000

1
1,168
2,305
(1,071)
312
559

(35)
-
2,127
(1,022)
142
503

Auditor’s remuneration:

Audit of these financial statements
Amounts receivable by the Company’s auditor and its associates in respect of:
Audit of financial statements of subsidiaries of the Company 
Corporate finance services 

2015 
$000

2014 
$000

107
126

87
-

6   Staff numbers and costs

The average number of persons employed by the Group (including Directors) during the year, analysed by category, was
as follows: 

Number of employees

Production and manufacturing
Research and customer service
Sales and marketing
Administrative

The aggregate payroll costs of these persons was as follows:

Wages and salaries
Share based payments (See Note 21)
Social security costs
Contributions to defined contribution plans

2015

2014

25
45
26
42

138

17
33
4
14

68

2015 
$000

2014 
$000

4,028
197
278
95

3,399
160
350
68

4,598

3,977

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7   Directors’ remuneration

EXECUTIVE DIRECTORS
N C L Jarmany
G P Mullins 
C-T Lin 
A C Preddy 

NON-EXECUTIVE DIRECTORS
M J Peagram
G van Zwanenberg

Salary/Fee

2015
$000

Share based 
payments
2015
$000

Total

Total

2015
$000

2014
$000

258
258
237
169

922

98
63

161

-
-
-
7

7

-
-

-

258
258
237
176

929

98
63

251
251
237
130

869

72
50

161

122

There were no share options exercised during the year by Directors (2014: none).

There were no directors’ advances, credits or guarantees outstanding at 31 December 2015 or 2014.

39

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NOTES

8   Finance income and expense

Total interest expense on financial liabilities measured at amortised cost

Total finance expense

9   Taxation

Recognised in the profit and loss account

Current tax expense
UK corporation tax
Foreign tax
Adjustments for prior years

Current tax expense

Deferred tax expense
Origination and reversal of temporary differences

Deferred tax expense

Total tax expense

Reconciliation of effective tax rate

Profit for the year
Total taxation expense

Profit excluding taxation

Tax using the UK corporation tax rate of 20.25% (2014:21.49%)
Non-deductible expenses
Enhanced research and development claim
Reduction in deferred tax rate to 18% (2014: 20%)
Overseas tax in excess of standard UK rate
Unrelieved losses
Over provided in prior years

Enhanced research and development claim
Other

Total taxation expense 

2015
$000

2014
$000

74

74

30

30

2015
$000

2014
$000

764
550
(121)

1,069
101
(271)

1,193

899

175

175

44

44

1,368

943

2015
$000

6,420
1,368

2014
$000

6,116
943

7,788

7,059

1,577
30
(356)
(2)
276
(36)

(121)
-

1,368

1,517
27
(376)
(8)
54
-

(139)
(132)

943

Factors that may affect future tax charges

Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and 20% (effective from 
1 April 2015 were substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to
18% (effective 1 April 2020) were substantively enacted on 26 October 2015. This will reduce the Company’s future
current tax charge accordingly. The deferred tax liability at 31 December 2015 has been calculated based on these rates.

40

Qplc

10   Earnings per ordinary share (EPS)

Earnings
Earnings for the purposes of basic and diluted EPS being 
net profit attributable to equity shareholders

Year ended
31 December 2015
$000

Year ended
31 December 2014
$000

6,420

6,116

Number of shares

Number

Number

Weighted average number of ordinary shares 
for the purpose of basic EPS

Number of shares

64,634,782

64,634,782

Effect of dilutive potential ordinary shares:

Share options

Weighted number of ordinary shares 
for the purpose of diluted EPS

Basic earnings per share
Fully diluted earnings per share

1,810,578

1,710,200

66,445,360

66,344,982

$0.0993
$0.0967

$0.0946
$0.0922

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41

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NOTES

11   Property, plant and equipment – Group

Cost
Balance at 1 January 2014 
Additions 
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Acquisitions through business combinations
Other additions
Disposals
Effect of movements in foreign exchange

Balance at 31 December 2015

Depreciation 
Balance at 1 January 2014
Depreciation charge for the year
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Depreciation charge for the year
Disposals
Effect of movements in foreign exchange

Balance at 31 December 2015

Net book value
At 1 January 2014

At 31 December 2014 and 1 January 2015

At 31 December 2015

Land and
buildings
$000

Plant and
equipment
$000

Total

$000

4,179
721
(124)

4,776

4,776
24
690
-
(195)

5,295

91
65
(4)

152

152
96
-
(4)

244

4,088

4,624

5,051

1,125
217
(21)

5,304
938
(145)

1,321

6,097

1,321
190
411
(10)
(81)

6,097
214
1,101
(10)
(276)

1,831

7,126

659
77
(9)

727

727
216
(10)
(47)

750
142
(13)

879

879
312
(10)
(51)

886

1,130

466

594

945

4,554

5,218

5,996

42

Qplc

11   Property, plant and equipment – Company 

Cost
Balance at 1 January 2014 
Additions 
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Additions
Effect of movements in foreign exchange

Balance at 31 December 2015

Depreciation
Balance at 1 January 2014
Depreciation charge for the year
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Depreciation charge for the year
Effect of movements in foreign exchange

Balance at 31 December 2015

Net book value
At 1 January 2014

At 31 December 2014 and 1 January 2015

At 31 December 2015

Land and
buildings
$000

Plant and
equipment
$000

Total

$000

3,425
68
(124)

3,369

3,369
8
(97)

3,280

90
55
(4)

141

141
64
(4)

201

3,335

3,228

3,079

749
339
(9)

4,174
407
(133)

1,079

4,448

1,079
222
(18)

4,448
230
(115)

1,283

4,563

502
124
(3)

623

623
165
(6)

782

247

456

501

592
179
(7)

764

764
229
(10)

983

3,582

3,684

3,580

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

43

Qplc

 
 
 
 
 
Goodwill

Customer  Computer 
software

relationships
and order 
back log 

$000

$000

$000

NOTES

12   Intangible assets – Group 

Cost
Balance at 1 January 2014
Additions – internally developed
Additions – externally purchased

Balance at 31 December 2014

Balance at 1 January 2015
Additions through 

business combinations

Additions – internally developed
Additions – externally purchased
Effect of movements in 

foreign exchange

Balance at 31 December 2015

Amortisation and impairment 
Balance at 1 January 2014
Amortisation for the year

Balance at 31 December 2014

Balance at 1 January 2015
Amortisation for the year
Effect of movements in foreign exchange

Balance at 31 December 2015

Net book value
At 1 January 2014

At 31 December 2014 and 1 January 2015

-
-
-

-

-

-
-
7,079

-

7,079

-
-

-

-
-
-

-

-

-

-
-
-

-

-

-
-
5,201

-

5,201

-
-

-

-
-
-

-

-

-

Internally
generated
capitalised
development 
costs
$000

1,395
1,022
-

Total

$000

1,395
1,022
459

2,417

2,876

2,417

2,876

225
1,071
-

225
1,071
12,360

79

62

3,792

16,594

142
367

509

509
477
-

986

142
503

645

645
559
(5)

1,199

1,253

1,253

1,908

2,231

2,806

15,395

-
-
459

459

459

-
-
80

(17)

522

-
136

136

136
82
(5)

213

-

323

309

At 31 December 2015

7,079

5,201

44

Qplc

Impairment testing

Goodwill has been allocated to CGUs as follows:

Quixant
Densitron Europe
Densitron America
Densitron France
Densitron Japan

Goodwill

2015
$000

1,473
2,903
2,076
485
142

7,079

2014
$000

-
-
-
-
-

-

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be
impaired. The recoverable amounts of the CGUs are determined from the higher or the fair value less costs to sell and the
calculations of value in use. The key assumptions for the value in use calculations are those regarding the discount rate,
growth rate and operating profit margins. This policy will be developed to determine appropriate discount and growth
rates. The operating profit margins used will be determined each year based on the Group’s results. No impairment was
required in the year.

The Group prepares cash flow forecasts derived from the most recent financial plan approved by the Board.

I

T
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A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

45

Qplc

 
 
 
 
 
Computer 
software

$000

Internally generated
capitalised 
development costs
$000

Total

$000

1,593
1,022
268
(7)

1,395
1,022
-
-

2,417

2,876

2,417
1,071
-
-

2,876
1,071
70
(17)

3,488

4,000

142
367
-

509

509
374
-

883

218
430
(3)

645

645
455
(5)

1,095

1,253

1,375

1,908

2,231

2,605

2,905

198
-
268
(7)

459

459
-
70
(17)

512

76
63
(3)

136

136
81
(5)

212

122

323

300

NOTES

12   Intangible assets – Company

Cost
Balance at 1 January 2014
Additions – internally developed
Additions – externally purchased
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Additions – internally developed
Additions – externally purchased
Effect of movements in foreign exchange

Balance at 31 December 2015

Amortisation
Balance at 1 January 2014
Amortisation for the year
Effect of movements in foreign exchange

Balance at 31 December 2014

Balance at 1 January 2015
Amortisation for the year
Effect of movements in foreign exchange

Balance at 31 December 2015

Net book value
At 1 January 2014

At 31 December 2014 and 1 January 2015

At 31 December 2015

46

Qplc

13   Investment property

Balance at 1 January 2015 
Acquisitions through business combinations
Effect of movements in foreign exchange

Balance at 31 December 2015 

Group

2015
$000

2014
$000

Company

2015
$000

2014
$000

-
754
(14)

740

-
-
-

-

-
-
-

-

-
-
-

-

Investment property relates to an area of land owned by the Group at Blackheath in South East London. The fair value
of the investment property was determined by external, independent property valuers, having appropriate professional
qualifications and recent experience in the location and category of the property being valued. The last valuation was
carried out on 10 May 2013. The Directors have reviewed the valuation put on the land on an annual basis and
consider that the fair value of the land does not differ from its current carrying amount and as such they do not
consider that a revaluation is required in the current year.

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

47

Qplc

 
 
 
 
 
NOTES

14   Investments in group companies and associated undertakings

The Company has the following investments in subsidiaries:

Company
Quixant USA Inc
Quixant UK Limited
Quixant Italia srl

Acquired in 2015
Densitron Technologies Limited
Densitron Europe Limited
Densitron Corporation of Japan
Densitron Corporation
Densitron France*
Densitron Nordic Oy*
Densitron Deutschland GmbH*
Densitron Land Ltd
Densitron Display Taiwan Limited
Quixant Deutschland GmbH

* Subsidiary of Densitron Europe Limited

Fixed asset investments

Balance at 1 January 2015 
Acquisitions – Group settled share based payments
Acquisitions – External 

Balance at 31 December 2015 

Principal place 
of business/ 
Country of
Incorporation

Class of
shares held

Ownership

2015

2014 

USA
UK
Italy

UK
UK
Japan
USA
France
Finland
Germany
UK
Taiwan
Germany

Ordinary
Ordinary
Ordinary

Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary

100%
100%
99%

100%
100%
100%
100%
100%
80%
100%
100%
100%
100%

100%
100%
99%

-%
-%
-%
-%
-%
-%
-%
-%
-%
-%

Company

2015
$000

2014
$000

196
79
11,600

11,875

109
87
-

196

48

Qplc

15   Deferred tax assets and liabilities – Group

Recognised deferred tax assets and liabilities 

Deferred tax assets and liabilities are attributable to the following:

Property, plant and equipment
Intangible assets – capitalised development costs
Intangible assets – acquired in business combinations
Share-based payments
Receivables
Inventory provisions
Tax value of loss carry-forwards 
Other

Net tax (assets)/liabilities

Movement in deferred tax during the year

Assets

2015
$000

2014
$000

Liabilities

2015
$000

2014
$000

-
-
-
(70)
(32)
(312)
(175)
(31)

(620)

-
-
-
(40)
-
(23)
-
-

(63)

164
521
936
-
-
-
-
46

1,667

6
382
-
-
-
-
-
-

388

1 January 2015

Recognised
in income

$000

$000

Acquired
in business 
combination
$000

Property, plant and equipment
Intangible assets – capitalised 

development costs

Intangible assets – acquired in 

business combinations

Share based payments
Receivables
Inventory provisions
Tax value of loss carry-forwards
Other

6

382

-
(40)
-
(23)
-
-

325

124

139

-
(30)
-
(82)
-
24

175

Movement in deferred tax during the prior year

1 January 2014

Property, plant and equipment
Intangible assets – capitalised development costs
Share based payments
Inventory provisions

$000

30
251
-
-

281

34

-

936
-
(32)
(207)
(175)
(9)

547

Recognised
in income
$000

(24)
131
(40)
(23)

44

31 December 2015

$000

164

521

936
(70)
(32)
(312)
(175)
15

1,047

31 December 2014

$000

6
382
(40)
(23)

325

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

49

Qplc

 
 
 
 
 
NOTES

Deferred tax assets and liabilities – Company

Recognised deferred tax assets and liabilities 

Deferred tax assets and liabilities are attributable to the following:

Property, plant and equipment
Intangible assets – capitalised development costs
Inventories
Share based payments
Exchange

Tax (assets)/liabilities
Net of tax liabilities/(assets)

Net tax (assets)/liabilities

Assets

2015
$000

2014
$000

Liabilities

2015
$000

2014
$000

-
-
(20)
(50)
-

(70)
-

(70)

-
-
(21)
(26)
-

(47)
-

(47)

131
520
-
-
20

671
-

671

6
382
-
-
-

388
-

388

Movement in deferred tax during the year

1 January 2015

Property, plant and equipment
Intangible assets – capitalised development costs
Share based payments
Inventories
Exchange

$000

6
382
(26)
(21)
-

341

Movement in deferred tax during the prior year

1 January 2014

Property, plant and equipment
Intangible assets – capitalised development costs
Share based payments
Inventories

$000

30
251
-
-

281

Recognised
in income
$000

125
138
(24)
1
20

260

Recognised
in income
$000

(24)
131
(26)
(21)

60

31 December 2015

$000

131
520
(50)
(20)
20

601

31 December 2014

$000

6
382
(26)
(21)

341

50

Qplc

16   Inventories

Raw materials and consumables
Work in progress
Finished goods

Group

Company

2015
$000

1,386
1,920
5,979

2014
$000

2,067
555
2,883

2015
$000

1,386
1,920
2,189

2014
$000

2,067
555
1,386

9,285

5,505

5,495

4,008

Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in the year
amounted to $25,991,000 (2014: $20,731,000).

17   Trade and other receivables

Trade receivables 
Amounts receivable from subsidiary undertakings
Other receivables 

Group

Company

2015
$000

16,754
-
2,730

2014
$000

9,171
-
878

2015
$000

-
9,408
594

2014
$000

-
8,114
482

19,484

10,049

10,002

8,596

All debtors are receivable within one year and are included as current assets.

A provision of $429,086 has been provided in respect of potential doubtful debts as at 31 December 2015 (31
December 2014 $149,067).

As at 31 December 2015 the following sets out the trade receivables that were past due but not impaired. These relate
to customers where there is no evidence of unwillingness or of an inability to settle the debt. The ageing of these
receivables is as follows:

30 – 60 days
61 – 90 days
Over 90 days

Group

2015
$000

2,747
371
1,805

2014
$000

2,447
1,087
-

Company

2015
$000

2014
$000

-
-
-

-
-
-

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

51

Qplc

 
 
 
 
 
NOTES

18   Cash and cash equivalents

Group

2015
$000

2014
$000

Company

2015
$000

2014
$000

Cash and cash equivalents per balance sheet

3,861

4,722

1,401

1,070

Cash and cash equivalents per cash flow statements 

3,861

4,722

1,401

1,070

19   Other interest-bearing loans and borrowings

This note provides information about the contractual terms of the Group and Company’s interest-bearing loans and
borrowings, which are measured at cost. For more information about the Group and Company’s exposure to interest
rate and foreign currency risk, see Note 24.

Non-current liabilities
Secured bank loans

Current liabilities
Current portion of secured bank loans

Terms and debt repayment schedule 

Group

2015
$000

2014
$000

Company

2015
$000

2014
$000

8,744

1,200

8,448

1,200

8,744

1,200

8,448

1,200

2,994

2,994

100

100

605

605

100

100

Loan 1 – secured on 
the Group’s freehold 
property in Taiwan

Loan 2 – secured on 
the Group assets

Loan 3 – secured on 
UK subsidiary assets

Loan 4 – Secured loan 
on subsidiary assets

Letters of credit

Letters of credit

Invoicing 
discounting 
facility

Currency

Nominal 
Year of
interest maturity

rate 

Face 
value
2015
$000

Carrying
amount
2015
$000

Face 
value 
2014
$000

Carrying 
amount
2014
$000

NTD

1.80%

2029

1,146

1,146

1,300

1,300

2.75% 
over LIBOR

5.5% 
over base

2% 
over LIBOR

2.6% 
to 2.68%

2% 
over LIBOR

2.75%
over base 

USD

GBP

USD

NTD

USD

GBP
USD
Euro

2018

7,400

7,400

2017

744

2016

235

2016

507

2016

2016

493

187
1,013
13

744

235

507

493

187
1,013
13

-

-

-

-

-

-
-
-

-

-

-

-

-

-
-
-

11,738

11,738

1,300

1,300

Loan 2 is a new loan taken out in 2015 which is a three year facility.

52

Qplc

20   Trade and other payables

Current
Trade payables 
Other tax and social security payables
Other payables and accrued expenses
Amounts payable to subsidiary undertakings

21   Employee benefits

Defined contribution plans 

Group

Company

2015
$000

13,325
82
1,867
-

2014
$000

4,195
92
1,123
-

2015
$000

6,689
-
800
3,392

2014
$000

3,865
16
733
-

15,274

5,410

10,881

4,614

The Group operates a number of defined contribution pension plans.

The total expense relating to these plans in the current year was $95,000 (2014: $68,000)

Share based payments – Group and Company 

In 2013 the Company issued share options to employees. To be able to exercise these options, employees are required
to be employed by the Company for a period of three years from the grant date. In addition exercise is conditional on
the Company achieving a minimum level of EPS growth over the vesting period.

Options have been issued over 1,895,370 (2014: 1,710,200) shares, with an exercise price of £0.49. Options issued
under the scheme expire 10 years from grant date.

The fair value of employee share options is measured using a Black Scholes model. Measurement inputs and
assumptions are as follows:

Fair value at grant date

Weighted average share price
Exercise price
Expected volatility
Option life 
Risk-free interest rate 

2015 
Issue 2

2015
Issue 1

2014
Issue 1

£0.61

£0.19

£0.19

£1.365
£1.40
56%
5 years
0.9%

£0.46
£0.49
50%
5 years
0.9%

£0.46
£0.49
50%
5 years
0.9%

The fair values at grant date of £0.61 and £0.19 was converted at the exchange rate on the grant date to give fair
values of $0.98 and $0.29 per option. The total expense recognised in the period in respect of share options is $197,000
(2014: $160,000).

The number and weighted average exercise prices of share options are as follows:

Weighted average 
exercise price
2015

Number 
of options
2015

Weighted average
exercise price
2014

Number 
of options
2014

Outstanding at the beginning of the year
Granted during the year
Lapsed during the year

£0.49
£1.40
£0.99

1,710,200
261,400
(76,230)

£0.49
-
£0.49

1,895,200
-
(185,000)

Outstanding at the end of the year

£0.59

1,895,370

£0.49

1,710,200

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

53

Qplc

 
 
 
 
 
NOTES

22   Provisions

Group

Balance at 1 January 2014 and 1 January 2015
Provisions made during the year

Balance at 31 December 2015

Non-current
Current

Total
$000

-
750

750

750
-

750

The provision is in respect of contingent consideration payable on the acquisition of Alpha Display Europe GmbH.

The Company has no provisions.

54

Qplc

23   Capital and reserves 

Share capital

On issue at 1 January and 31 December 2015 

64,634,782 64,634,782

2015
Shares

2014
Shares

Allotted, called up and fully paid ordinary shares of 0.1p

Shares classified in shareholders’ funds

2015
$000

2014
$000

104

104

104

104

104

104

104

104

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company. 

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations.

Dividends

The following dividends were recognised during the period:

1.2p (2014: 1.0p) per qualifying ordinary share

2015
$000

1,182

1,182

2014
$000

1,090

1,090

After the Balance Sheet date dividends of 1.5p per qualifying ordinary share (2014: 1.2p) were proposed by the
Directors. This dividend has not been provided for.

I

T
N
A
X
U
Q
5
1
0
2

S
T
N
U
O
C
C
A
D
N
A
T
R
O
P
E
R

L
A
U
N
N
A

55

Qplc

 
 
 
 
 
NOTES

24   Financial instruments – Group and Company

This note presents information about the Group’s objectives, policies and processes for measuring and managing risk,
and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated
financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which
all employees understand their roles and obligations.

Financial risks

The Group’s activities expose it to a number of financial risks including credit risk, cash flow risk and exchange rate risk:

Credit risk

The Group’s principal financial assets are bank balances and cash, trade and other receivables. The Group’s credit risk is
primarily attributable to its trade receivables, which were concentrated in a small number of high value customer
accounts, but following the acquisition of the Densitron Group of companies this risk has been reduced. In addition,
operations in emerging or new markets may have a higher than average risk of political or economic instability and may
carry increased credit risk. In each case the risk to the Group is the recoverability of the cash flows.

Credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by
international credit rating agencies. The credit risk on trade and other receivables is managed by agreeing appropriate
payment terms with customers, obtaining credit agency ratings of all potential customers, by requiring wherever
possible payment for goods in advance or upon delivery, and by closely monitoring customers’ balances due, to ensure
they do not become overdue. In addition careful consideration is given to operations in emerging or new markets
before the Group enters that market.

The aging of trade receivables at the Balance Sheet date is set out in Note 17.

Cash flow risk

Group cash balances and expected cash flow are monitored on a daily basis to ensure the Group has sufficient available
funds to meet its needs.

Exchange rate risk

Group exposure to exchange rate risk includes the measurement of overseas operations at the relevant exchange rate
and changes in trade payables and receivables as a result of exchange rate movements. Daily exchange rate movements
are monitored and any losses or gains incurred are taken to the profit and loss account and reported in the Group’s
internal management information. Before agreeing any overseas transactions consideration is given to utilising financial
instruments such as hedging and forward purchase contracts.

Liquidity risk

Group policy is to maintain a strong capital base so as to enhance investor, creditor and market confidence. Surplus
funds are placed on deposits with cash balances available for immediate withdrawal if required.

Capital management

Group and Company

The capital management policy is to maintain a strong capital base so as to enhance investor, creditor and market
confidence. The Board’s objective is to safeguard the Group’s ability to continue as a going concern, to sustain the
future development of the business and to provide returns for shareholders, whilst controlling the cost of capital.

The Group monitors capital on the basis of the carrying amount of equity, less cash and cash equivalents as presented
on the face of the Balance Sheet.

In order to maintain or adjust the capital structure the Group may adjust the amount of dividends paid to shareholders,
issue new shares or sell assets.

56

Qplc

There were no changes in the Group’s approach to capital management during the period. Neither the Company nor
any of its subsidiaries are subject to externally imposed capital requirements.

Total equity 
Cash and cash equivalents

Capital 

Total equity 
Other financial liabilities

Total financing 

Group

2015
$000

2014
$000

Company

2015
$000

2014
$000

25,651
(3,861)

20,479
(4,722)

15,048
(1,401)

13,852
(1,070)

21,790

15,757

13,647

12,782

Group

2015
$000

2014
$000

Company

2015
$000

2014
$000

25,651
11,738

20,479
1,300

15,048
9,053

13,852
1,300

37,389

21,779

24,101

15,152

Financial assets and liabilities

The Group’s activities are financed by cash at bank and bank borrowings.

Credit risk

Exposure to credit

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk
at the reporting date was:

Cash and cash equivalents
Trade and other receivables excluding prepayments

Group

Company

2015
$000

3,861
16,754

2014
$000

4,722
9,171

2015
$000

1,401
9,408

2014
$000

1,070
8,114

20,615

13,893

10,809

9,184

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

Australia 
USA 
Europe 
Asia 
Rest of world 

Group

2015
$000

3,464
7,432
4,789
1,068
1

2014
$000

3,820
4,566
482
299
4

16,754

9,171

Company

2015
$000

2014
$000

-
-
-
-
-

-

-
-
-
-
-

-

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NOTES

Liquidity risk

The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact
of netting agreements.

Trade and 
other payables
$000

Other financial 
liabilities
$000

Total

$000

Group 
31 December 2015
Carrying amount 

Contractual cash flows 
6 months or less 
6 to 12 months 
More than 12 months 

Group 
31 December 2014
Carrying amount 

Contractual cash flows 
6 months or less 
6 to 12 months 
More than 12 months 

Company 
31 December 2015
Carrying amount 

Contractual cash flows 
6 months or less 
6 to 12 months 
More than 12 months 

Company 
31 December 2014
Carrying amount 

Contractual cash flows 
6 months or less 
6 to 12 months 
More than 12 months 

58

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15,274

11,738

27,012

15,274
-
-

15,274

2,577
453
9,646

17,851
453
9,646

12,676

27,950

$000

$000

$000

5,410

5,328
82
-

5,410

$000

1,300

6,710

61
61
1,321

5,389
143
1,321

1,443

6,853

$000

$000

10,881

9,053

19,934

10,881
-
-

10,881

553
47
9,343

11,434
47
9,343

9,943

20,824

$000

$000

$000

4,614

4,614
-
-

4,614

1,300

5,914

61
61
1,321

4,675
61
1,321

1,443

6,057

The carrying amounts of the Group’s financial assets and liabilities may also be categorised as follows:

Current assets
Cash and cash equivalents 
Trade and other receivables excluding prepayments 

Group

Company

2015
$000

3,861
16,754

2014
$000

4,722
9,171

2015
$000

1,401
9,408

2014
$000

1,070
8,114

20,615

13,893

10,809

9,184

All of the above relate to the IAS 39 category ‘loans and receivables’ and are measured at amortised cost.

Current liabilities
Trade and other payables 
Other financial liabilities 

Non-current liabilities
Other financial liabilities 

(15,274)
(2,994)

(5,410)
(100)

(10,881)
(605)

(4,614)
(100)

(18,268)

(5,510)

(11,486)

(4,714)

(8,744)

(1,200)

(8,448)

(1,200)

(27,012)

(6,710)

(19,934)

(5,914)

All of the above relate to the IAS 39 category ‘other financial liabilities’ and are measured at amortised cost.

Liquidity needs are managed by regular review of the timing of expected receivables and the maintenance of cash on
deposit.

Currency risk

Whilst the Group experiences some revenue, cost of sales and overheads in other currencies, the majority of revenue
and cost of sales is denominated in US Dollars which is the Group’s reporting currency and therefore foreign currency
risk is considered to be limited.

Interest rate and currency profile

The Group’s financial assets comprise cash at bank. At 31 December 2015 the average interest rate earned on the
temporary closing balances was 0.05% (2014: 0.05%).

Sensitivity analysis

For the above reasons, the Group’s sensitivity to interest rates and currency exchange rates are considered immaterial.

Fair values versus carrying amounts

The Directors consider that there is no material difference between fair values and carrying amounts of financial assets
and liabilities.

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NOTES

25   Operating leases

Non-cancellable operating lease rentals are payable as follows:

Less than one year
Between one and five years

Group

Group

2015
$000

2014
$000

291
426

717

-
80

80

Company

2015
$000

2014
$000

154
-

154

-
80

80

During the year $180,000 was recognised as an expense in the profit and loss account in respect of operating leases
(2014: $126,000).

Company

During the year $126,000 was recognised as an expense in the profit and loss account in respect of operating leases
(2014: $94,000).

26   Commitments

Neither the Group nor Company had any capital commitments entered into at 31 December 2015 (2014: none).

27   Contingencies

Neither the Group nor Company had any contingencies existing at 31 December 2015 (2014: none).

28   Related parties

Group

There were no related party transactions other than transactions with key management personnel, who are the Directors
disclosed in Note 7 above.

Transactions with key management personnel

Directors of the Company and their immediate relatives control 39.58% of the voting shares of the Company. 

Other related party transactions

There are no other transactions and balances with key management not included within the Directors’ remuneration.

29   Subsequent events

There have been no significant events affecting the Company or Group since the end of the year.

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30   Explanation of transition to Adopted IFRSs – Company

As stated in Note 1, these are the Company’s first financial statements prepared in accordance with Adopted IFRSs.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 
31 December 2015, the comparative information presented in these financial statements for the year ended 
31 December 2014 and in the preparation of an opening IFRS Balance Sheet at 1 January 2014 (the Company’s date 
of transition).

In preparing its opening IFRS Balance Sheet, the Group has adjusted amounts reported previously in financial statements
prepared in accordance with its old basis of accounting (UK GAAP). An explanation of how the transition from UK GAAP
to Adopted IFRSs has affected the Group’s financial position, financial performance and cash flows is set out in the
following tables and the notes that accompany the tables.

Reconciliation of equity

UK 
GAAP

$000

-
3,704
-
109

3,813

12,333

16,146

Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax assets
Other

Current assets

Total assets

1 January 2014
Effect of
transition to 
Adopted 
IFRSs
$000

Adopted
IFRSs

UK 
GAAP

$000

$000

1,375
(122)
-
-

1,253

1,375
3,582
-
109

5,066

-
4,007
20
196

4,223

31 December 2014

Effect of  Adopted
IFRSs

transition to
Adopted 
IFRSs
$000

$000

2,231
3,684
47
196 

2,231
(323)
27
-

1,935

6,158

-

12,333

13,996

-

13,996

1,253

17,399

18,219

1,935

20,154

Current liabilities

(2,350)

-

(2,350)

(4,714)

-

(4,714)

Non-current liabilities
Deferred tax liabilities
Other

(30)
(1,986)

(2,016)

(251)
-

(251)

(281)
(1,986)

(2,267)

-
(1,200)

(1,200)

(388)
-

(388)

(388)
(1,200)

(1,588)

Total liabilities

(4,366)

(251)

(4,617)

(5,914)

(388)

(6,302)

Net assets

11,780

1,002

12,782

12,305

1,547

13,852

Equity attributable to equity 
holders of the parent
Retained earnings
Other

Total equity

6,337
5,443

11,780

Notes to the reconciliation of equity 

1,002
-

7,339
5,443

6,884
5,421

1,547
-

8,431
5,421

1,002

12,782

12,305

1,547

13,852

The above adjustments relate to the capitalisation of qualifying expenditure on research and development and the
reclassification of computer software. The research and development expenditure has now been recognised as an intangible
asset in the accounts of the Company; under UK GAAP all research and development costs were written off to profit and
loss account.

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NOTES

Intangible assets
Capitalisation of research and development
Reclassification of computer software

Property, plant and equipment
Reclassification of computer software

Non-current assets
Deferred tax

Non-current liabilities 
Deferred tax liability on capitalisation of R&D

Total

1 January 2014
$000

31 December 2014
$000

1,253
122

1,375

(122)

-

(251)

1,002

1,908
323

2,231

(323)

27

(388)

1,547

There are no significant differences between the cash flow statement presented under Adopted IFRSs and the cash flow
statement presented under UK GAAP.

62

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COMPANY INFORMATION

Directors

N C L Jarmany
G P Mullins
C-T Lin
Miss A C Preddy FCA
M J Peagram
G van Zwanenberg FCA

Company secretary

A R Milne FCIS

Registered office

Auditor

Aisle Barn
100 High Street
Balsham
Cambridge
CB21 4EP

KPMG LLP
Botanic House
100 Hills Road
Cambridge
CB2 1AR

Nominated advisor 
and Broker

finnCap
60 New Broad Street
London
EC2M 1JJ

Financial PR

Alma PR
We Work
1 Fore Street
London 
EC2Y 5EJ

Principal Bankers

Barclays Bank PLC

Legal advisors

Freeths LLP
Jones Day

Registered number

04316977

Website

www.quixant.com

Ticker

London: QXT

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CORPORATE HEADQUARTERS

Quixant plc Aisle Barn 100 High Street Balsham Cambridge CB21 4EP  UK

T +44 (0)1223 892696 F +44 (0)1223 892401 www.quixant.com