ANNUAL REPORT
FOR THE YEAR ENDED
31 JANUARY 2012
158556 TISSUE REGENIX Annual Report.indd 2
04/05/2012 13:17
Tissue Regenix Group plc
DIRECTORS
John Samuel (Executive Chairman)
Antony Odell (Managing Director)
Ian Jefferson (Chief Financial Officer)
Michael Bretherton (Non-Executive Director)
Alan Aubrey (Non-Executive Director)
Alan Miller (Non-Executive Director)
Alexander Stevenson (Non-Executive Director)
COMPANY SECRETARY
Ian Jefferson
COMPANY WEBSITE
www.tissueregenix.com
COMPANY NUMBER
5969271 (England & Wales)
REGISTERED OFFICE
The Biocentre
Innovation Way
Heslington
York
North Yorkshire
YO10 5NY
AUDITOR
KPMG Audit Plc
1 The Embankment
Neville Street
Leeds
LS1 4DW
NOMINATED ADVISER AND BROKER
Peel Hunt Limited
Moor House
120 London Wall
London
EC2Y 5ET
REGISTRAR
Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
LEGAL ADVISER
DLA Piper UK LLP
Princes Exchange
Princes Square
Leeds
LS1 4BY
Contents
Chairmans’ Statement
Directors’ Report
Directors’ Remuneration Report
Corporate Governance Statement
Statement of Directors’ Responsibilities
Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Statement of Changes in Equity
Company Statement of Financial Position
Company Statement of Cash Flows
Notes to the Company Information
Notice of Annual General Meeting
Tissue Regenix Group plc
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4
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42
Annual Report for the year ended 31 January 2012 1
Tissue Regenix Group plc
Chairman’s Statement
Overview
We continue to make good progress in the development of a number of products,
addressing a range of needs across multiple therapeutic areas, utilising our proprietary
platform technology, dCell®. Our goal is to become a global leader in regenerative
medicine. The successful share placing in December 2011, which raised £25m (before
expenses), has greatly enhanced our momentum by allowing us to develop a number
of products in parallel.
The dCell Process
The dCell® process is protected by a library of patents and is used to create biological
scaffolds by decellularising human or animal tissue. These scaffolds are intended to
replace damaged or diseased parts of the human body and have been shown to be
capable of regeneration, thereby becoming integrated into the patient. Because the
scaffolds are inert on implantation and the subsequent regeneration has been shown
to occur through natural bodily functions, they are classified as medical devices and
therefore follow a regulatory pathway which is typically faster and less costly than, for
example, pharmaceutical products.
Product Development
Cardiac
We are continuing to prepare the data required to support the development of a dCell®
version of an existing bioprosthetic heart valve, which has already been used in over
1200 patients. The dCell® process has been used with human donor valves in over
140 patients and with encouraging results covering a period of over five years.
Discussions are at an early stage to develop commercial agreements with tissue
banks and work has commenced on both aortic and pulmonary replacement porcine
heart valves. Although at an early stage we believe these products have the potential
to represent a tremendous advance in this field.
Dermis
The pilot study of the use of human donor decellularised skin in the treatment of
chronic wounds, which was initiated with our UK development partner NHSBT,
continues with very early but promising results. We expect preliminary clinical data to
be available towards the end of 2012. This product will also be evaluated for use in
plastic surgery and burns. A porcine donor version is also under examination.
Vascular
Two year follow up data for the dCell® Vascular Patch will be available later this year
and we continue to build clinical evidence and experience to assist in its
commercialisation. Dialogue with the FDA continues in respect of approval of its use
in the USA and we are preparing additional data that they have requested. Thus far
its use has been mainly in the femoral position (arteries of the thigh) and we are
examining how it may best be used by surgeons in carotid applications (arteries of
the head and neck). A pre-pilot study for a cardiac patch is under way and showing
early signs of promise and we expect a study of its use in patching the Dura will be
underway soon. Also we continue to progress the Arterial-Vascular graft, which can
be used to replace damaged veins and arteries, with our development partners in
Brazil.
2 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Orthopaedic
The preclinical trial of our porcine meniscal repair product is nearing its end and we
expect data to be available in the second half of the year. There is a very large but
un-met clinical need for this product and initial surgeon feedback has been
encouraging. We have also begun to refine production processes for a porcine
ligament repair product and will commence preclinical work shortly.
Financial Review
During the year we raised £25.0m (before expenses) through a placing of shares
achieved in very demanding market conditions, with support from a major new
institutional shareholder, Invesco Asset Management Limited, plus a number of our
existing shareholders. The purpose of the fund-raising was to enable the development
of a number of products simultaneously. As at the year end the cash balance was
£28.0m (2011: £5.9m). Operating income of £0.1m (2011: £0.2m) was comprised
mainly of grant income. Administrative expenses increased to £3.1m (2011: £2.1m)
primarily due to increased development spend on new product trials and additional
staff costs incurred as we began to scale up to develop multiple products concurrently.
As a result of these investments, the operating loss for the period increased to £3.0m
(2011: £1.9m excluding £3.7m of deemed cost on reverse acquisition).
The Board and external recognition
There have been no changes in the composition of the Board since the previously
announced appointment of Ian Jefferson as Chief Financial Officer on 13 June 2011.
I am however delighted that external recognition has been given to our development
partners at Leeds University. The Institute of Medical and Biological Engineering at
the University was awarded the Queens Diamond Jubilee Award for Higher and
Further Education for their work in the field of regenerative medical devices.
Outlook
The chronic global shortage of donor tissue will result in clinical demand for products
to address this issue continuing to increase. Tissue Regenix’s programmes in Cardiac,
Orthopaedics, Vascular and Advanced Woundcare are ideally placed to provide long
term solutions to replace and regenerate diseased or aging body parts. Markets like
advanced wound care (which has estimated revenues of $5bn per year globally)
continue to grow as conditions such as chronic wounds and diabetic foot ulcers place
huge burdens on healthcare systems and are prime candidates for products based
on our technology platform. The fundraising which we successfully achieved in 2011
leaves me confident that we are now ideally positioned to capitalise on major market
needs and become a leader in regenerative medicine. Our product pipeline continues
to progress well and we are looking forward to being in a position to advance these
through a range of trials with the intention of commercialising them in due course.
John Samuel
Executive Chairman
9 May 2012
Annual Report for the year ended 31 January 2012 3
Tissue Regenix Group plc
Directors’ Report
The Directors present their report and consolidated financial statements for the year
ended 31 January 2012.
Principal activity
The principal activity of the Group was that of exploiting innovative platform
technologies in the field of tissue engineering and regenerative medicine. The
Company is incorporated and domiciled in the UK.
Review of the business and future developments
A review of the Group’s performance and future prospects is included in the
Chairman’s statement on pages 2 and 3.
Key performance indicators
Key Group performance indicators are set out below:
31 January 2012 31 January 2011
£’000 £’000
Net assets 27,879 6,218
Loss attributable to equity holders pre cost of acquisition (2,687) (1,678)
Deemed cost of reverse acquisition – (3,749)
Total loss attributable to equity holders (2,687) (5,427)
Cash and cash equivalents 28,021 5,889
Results and dividends
The loss for the year attributable to equity holders pre exceptional items was £2,687k
(2011: £1,678k). The directors do not recommend the payment of a dividend (2011:
nil).
Share capital and funding
Full details of the Group and Company’s share capital movements during the year
are given in note 13 of the financial statements.
Directors and their interests
The following directors held office in the year.
John Samuel
Antony Odell
Ian Jefferson
Michael Bretherton
Alan Aubrey
Alan Miller
Alexander Stevenson
(appointed 13 June 2011)
Directors’ interests in the shares of the Company, including family interests are
included in the Remuneration Report on pages 9 to 12.
Directors’ indemnity insurance
The Group has maintained insurance throughout the year for its directors and officers
against the consequences of actions brought against them in relation to their duties
for the Group.
4 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Profile of the directors
John Samuel, Executive Chairman
John Samuel joined Tissue Regenix Limited as Chairman in March 2008. John
qualified as a Chartered Accountant with Price Waterhouse and has held a number
of senior finance positions in industry, including as Financial Director of Whessoe plc
and Ellis & Everard plc. He was formerly the CEO of the Molnlycke Health Care Group,
a global provider of single use surgical and wound care products to the healthcare
sector. Until January 2010 he was a Partner with Apax Partners Llp. Currently, he is
also Chairman of Xeros Ltd.
Antony Odell, Managing Director
Antony Odell joined Tissue Regenix Limited as a consultant from January 2008 and
was appointed to the Board of Tissue Regenix Limited in October 2008. Antony has
extensive commercial experience in the medical technology sector. As well as working
as co-director of Xeno Medical, a medical technology consultancy, he was CEO for a
UK NHS cardiovascular device spin-out, Tayside Flow Technologies Ltd. Antony has
a strong corporate sector background having worked for J&J Medical for almost
10 years in European business development roles for Drug Delivery & Vascular
Access and General Manager (UK) for Fresenius (Critical Care & Diagnostics).
Ian Jefferson, Chief Financial Officer
Ian Jefferson joined Tissue Regenix Group Plc as Chief Financial Officer in June 2011.
Ian was formerly Chief Executive Officer of AIM listed, COE Group Plc. Having initially
joined COE as CFO in 2007 he became CEO in 2008, restructured the Group and
then successfully planned and executed its sale. Prior to COE, Ian held a number of
senior finance positions within LSE-quoted companies, most recently as Group
Financial Controller of 600 Group Plc. He has a comprehensive financial and
operations background and extensive experience of organisational transformation
and M&A. A qualified chartered accountant Ian holds a BSc in Physics with Electronics
from Manchester University and an MSc in Applied Radiation Physics from
Birmingham University.
Michael Bretherton, Non-Executive Director
Michael Bretherton graduated in Economics from the University of Leeds and then
worked as an accountant and manager with Pricewaterhouse for 7 years in both
London and the Middle East. He subsequently worked for the Plessey Company Plc
before being appointed Finance Director of Bridgend Group Plc in 1988 where he
held the position for 12 years. More recently, he has worked at the property and
services company, Mapeley Limited as Financial Operations Director and then at the
entertainment software games developer, Lionhead Studios Limited. Michael currently
is a director of ORA Capital Partners Limited, which is one of the significant investors
in Tissue Regenix, as well as a number of other AIM listed companies.
Alan Aubrey, Non-Executive Director
Alan was the joint founder and Chief Executive of Techtran Group Ltd, the
first company in Europe to offer a complete outsourced technology transfer function
to universities. Techtran was acquired by IP Group in 2005. Alan is also Non-Executive
Chairman of Proactis, an AIM-listed software company based in York. From 1995-2002
Alan was a partner in KPMG where he specialised in providing advice to fast growing
Annual Report for the year ended 31 January 2012 5
Tissue Regenix Group plc
Directors’ Report
technology businesses. Alan holds a BA in Economics from the University of Leeds
and a MBA with Distinction from the University of Bradford. He is a fellow of the Institute
of Chartered Accountants of England and Wales. Alan is also Chairman of the
Department for Business, Innovation & Skills (BIS) Audit and Risk Committee.
Alan Miller, Non-Executive Director
Alan Miller is a founding partner of SCM Private, the wealth management company,
which was set up in 2009. He was formerly the Chief Investment Officer and founding
shareholder of New Star Asset Management from 2001 until 2007. Prior to that, he
was a Director at Jupiter Asset Management having spent his early career as a senior
fund manager at Gartmore Investment Management. Alan is also a Non-Executive
Director of several private companies including Pharminox Ltd, a pharmaceutical
company specialising in cancer research. Alan has a degree in Commerce
(Accounting) from Birmingham University and is a member of the Chartered Institute
of Management Accountants.
Alexander Stevenson, Non-Executive Director
Alex Stevenson joined Tissue Regenix Limited as a Non-Executive Director in
December 2007. Alex is a Director of Aquarius Equity Partners, one of the significant
investors in Tissue Regenix. He began his career as a scientist, before focusing
on identification, establishment and growth of high value technology businesses. Alex
worked for Techtran from formation through to its sale to main market listed IP Group
in 2005. Following the acquisition, Alex worked in a variety of roles within IP Group
and managed investments in portfolio companies including Avacta and Syntopix
(where he was also CEO), both of which listed on AIM in 2006. Most recently, Alex
was a founder and Chief Operating Officer of Modern Biosciences plc, the drug
development subsidiary of IP Group.
Substantial shareholders
As at 31 March 2012, shareholders holding more than 3% of the share capital of Tissue
Regenix Group plc were:
Name of shareholder Number of shares % of voting rights
Invesco Limited 186,457,019 28.58
ORA (Guernsey) Limited 129,435,477 19.83
Techtran Group Limited 89,884,942 13.77
University of Leeds 33,980,127 5.21
The Northern Entrepreneurs Fund LLP 30,512,434 4.67
IP Venture Fund 24,794,730 3.80
Henderson Global Investors 23,808,207 3.65
John Samuel* 23,588,928 3.61
Alan Miller 22,861,655 3.50
*
Includes 10,740,000 shares held jointly by the director and the Tissue Regenix Employee Share Trust.
Risk management
Details of the Group’s financial risk management objectives and policies are disclosed
in note 11 to the financial statements.
6 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
The main risks arising from the Group’s activities are market risk and liquidity risk.
The Directors review and agree policies for managing risk at least annually.
Market risk
Interest rate risk
The Group has no external financing facilities therefore its interest rate risk is limited
to the level of interest received on its cash surpluses. Interest rate risk is partially
mitigated by using an element of fixed rate deposit accounts.
Liquidity risk
The Company seeks to manage liquidity by ensuring sufficient funds are available to
meet foreseeable needs and to invest cash assets safely and profitably. The Group
had cash balances of £28,021k as at 31 January 2012 (2011: £5,889k) which the
Directors consider to be sufficient to continue in business for the foreseeable future.
In order to minimise risk to the Group’s capital, funds are invested across a number
of financial institutions with strong credit ratings. Cash forecasts are updated regularly
to ensure that there is sufficient cash available for foreseeable requirements.
Credit risk
The Company’s principal financial asset is cash. The credit risk associated with cash
is limited because the Group only holds cash with banks with high credit ratings.
Donations
No charitable or political donations were made in the year (2011: nil).
Policy on payment of suppliers
The Group does not follow any code or standard payment practice. The Group’s policy
is to agree the terms of payment with key suppliers. For all other suppliers, terms are
agreed for each transaction. The Group endeavours to abide by the terms of payment
with suppliers.
Employment policies
The Group supports employment of disabled people where possible through
recruitment, by retention of those who become disabled and generally through
training, career development and promotion.
The Group is committed to keeping employees as fully-informed as possible with
regard to the Group’s performance and prospects and seeks their views, wherever
possible, on matters which affect them as employees.
Statement as to disclosure of information to the auditor
The Directors who were in office on the date of approval of these financial statements
have confirmed, that as far as they are aware, that there is no relevant audit information
of which the auditor is unaware. Each of the Directors have confirmed that they have
taken all the steps that they ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish that it has been
communicated to the auditor.
Annual Report for the year ended 31 January 2012 7
Tissue Regenix Group plc
Directors’ Report
Auditor
During the year the Group decided to change auditors and the appointment of KPMG
Audit Plc was approved by the board on 1 March 2012. In accordance with
section 489 of the Companies Act 2006, a resolution to appoint KPMG Audit Plc will
be put to the members at the Annual General Meeting.
On behalf of the Board
Antony Odell
Director
9 May 2012
8 Annual Report for the year ended 31 January 2012
Directors’ Remuneration Report
Tissue Regenix Group plc
It is the Company’s policy that Executive Directors should have contracts with an
indefinite term providing for a maximum of six months’ notice. In the event of early
termination, the Directors’ contracts provide for compensation up to a maximum of
basic salary for the notice period.
Non-executive Directors are employed on letters of appointment which may be
terminated on not less than three months’ notice.
Companies with securities listed on AIM do not need to comply with the UKLA Listing
Rules. The Remuneration Committee is however committed to maintaining high
standards of corporate governance and disclosure and has applied the guidelines
as far as practical given the current size and development of the Company.
Remuneration Committee
The Remuneration Committee’s primary responsibilities are to review the performance of
the Executive Directors of the Company and to determine the broad policy and framework
for their remuneration and the terms and conditions of their service and that of senior
management (including the remuneration of and grant of options to such persons under
any share scheme adopted by the Company). The Remuneration Committee comprises
Alexander Stevenson, who is chairman of the committee, Alan Aubrey and Alan Miller.
The committee meets no less than twice in each financial year.
The main elements of the remuneration packages for Executive Directors and senior
management are:
Basic annual salary (including directors’ fees)
The base salary is reviewed annually at the beginning of each year. The review
process is undertaken by the Remuneration Committee and takes into account several
factors, including the current position and development of the Group, individual
contribution and market salaries for comparable organisations.
Discretionary annual bonus
All Executive Directors and senior managers are eligible for a discretionary annual
bonus which is paid in accordance with a bonus scheme developed by the
Remuneration Committee. This takes into account individual contribution, business
performance and commercial progress, along with financial results.
Share incentive schemes
The Group operates a share option plan, under which certain directors’ and senior
management have been granted options to subscribe for ordinary shares. All options
are equity settled. The options are subject to service and performance conditions,
have an exercise price of between 0.5 pence and 14.25 pence and the vesting period
is generally 1-3 years. If the options remain unexercised after a period of 10 years
from the date of grant, the options expire. The Group has no legal or constructive
obligation to repurchase or settle the options in cash.
In addition, certain Executive Directors are eligible to acquire interests in ordinary
shares in the Company to be owned jointly with the trustee of the Tissue Regenix
Group Employee Share Trust (EBT) and under which, subject to meeting performance
criteria conditions, most of any future increase in the value of the shares will accrue
to the employees.
Annual Report for the year ended 31 January 2012 9
Tissue Regenix Group plc
Directors’ Remuneration Report
Remuneration Policy for Non-Executive Directors
Remuneration for Non-Executive Directors is set by the Chairman and the Executive
Members of the Board. Non-Executives do not participate in bonus schemes or share
incentive schemes.
Directors’ remuneration
The remuneration of the main Board Directors’ of Tissue Regenix who served in the
year to 31 January 2012 was:
Salary & Total Total
fees Bonus Benefits 2012 2011
£’000 £’000 £’000 £’000 £’000
Antony Odell (note 2 & 3) 140 89 – 229 136
John Samuel (note 3) 100 – – 100 65
Ian Jefferson (note 1 & 3) 77 18 – 95 -
Michael Bretherton (note 3) 12 – – 12 11
Alan Aubrey 15 – – 15 9
Alexander Stevenson 10 – – 10 13
Alan Miller 15 – – 15 13
Total 369 107 – 476 247
Note 1
Note 2
Note 3
Represents remuneration from 13 June 2011, being the date Ian Jefferson joined the Company.
£39k of Antony Odell’s bonus relates to the prior year.
In addition certain directors hold employee share scheme interests in the company. Fair value
share based payment charges recognised in the consolidated statement of comprehensive
income attributable to these directors are; John Samuel £59,000 (2011: £53,000), Antony Odell
£30,000 (2011: £203,000), Ian Jefferson £28,000 (2011: £nil) and Michael Bretherton £5,000
(2011: £2,000).
Directors’ shareholdings
Directors’ interests in the shares of the Company, including family interests at
31 January 2012 were:
Ordinary shares of 0.5p each
2012 2012 2011 2011
Number % Number %
John Samuel (note 4) 23,588,928 3.61% 22,861,655 4.87%
Antony Odell (note 4) 5,572,800 0.85% 5,572,800 1.19%
Ian Jefferson (note 4) 1,009,404 0.03% – –
Michael Bretherton (note 4) 1,200,000 0.18% 1,200,000 0.26%
Alan Aubrey (note 5 & 6) 2,389,259 0.37% 2,389,259 0.51%
Alan Miller 21,486,988 3.29% 21,486,988 4.57%
Alexander Stevenson (note 6) – – – –
Note 4
Note 5
Note 6
Includes shares held jointly by the director and EBT as set out below.
Shares are held through IP2IPO Nominees Limited.
Alan Aubrey holds approximately 0.4 per cent. of the issued share capital of IP Group plc, the
holding company of Techtran Group Limited and a 0.17 per cent. limited partnership interest in
IP Venture Fund. In addition, Alan Aubrey has a 3 per cent. direct interest in the Northern
Entrepreneurs Fund LLP and approximately a 0.24 per cent. indirect interest in the same through
his shareholding in Axiomlab Group plc, the parent company of Inhoco 2835 Limited which has
a 3 per cent. interest in the Northern Entrepreneurs Fund LLP. Further, Alan Aubrey and
Alexander Stevenson are participants in the Northern Entrepreneurs Fund Co-investment LLP
which holds 1,731,665 shares in Tissue Regenix Group Plc. Alan and Alexander would be entitled
10 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Directors’ interests in jointly owned EBT shares and share options
Directors’ interests in shares owned jointly with the Trustees of the Tissue Regenix
Group Employee Share Trust (EBT) and in share options to acquire ordinary shares
of 0.5 pence each in the Company at 31 January 2012 were:
At At
1 February Granted 31 January Exercise
2011 during year 2012 price
Approved EMI
scheme options
Antony Odell 8,307,608 – – – 8,307,608
Antony Odell 1,187,200 – – – 1,187,200
Ian Jefferson – – – 872,727 872,727
John Samuel 2,400,000 – – – 2,400,000
EBT scheme shares
Antony Odell 5,372,800 – – – 5,372,800
Ian Jefferson – – 827,586 827,586
John Samuel 10,740,000 – – – 10,740,000
Michael Bretherton 600,000 – – – 600,000
0.73 pence
5.00 pence
13.75 pence
5.00 pence
5.00 pence
14.50 pence
5.00 pence
5.00 pence
There are no performance conditions outstanding in relation to the 8,307,608 options
granted to Antony Odell prior to the reverse acquisition all of which were eligible to
be exercised at 31 January 2011.
All of the other options and EBT share interests are subject to employment period
and performance conditions which allows for vesting in three equal proportions on or
after the three consecutive annual anniversaries from the date of grant subject to the
Company’s share price performance. For Antony Odell and John Samuel the share
price is required to reach 10 pence per share, 15 pence per share and 20 pence per
share by the respective three vesting dates and for Ian Jefferson the share price is
required to reach 15 pence per share, 20 pence per share and 25 pence per share
by the respective three vesting dates.
At 31 January 2012, the employment period and performance conditions had been
met in relation to 395,733 EMI share options and 1,790,933 EBT shares held by Antony
Odell and 800,000 EMI share options and 3,580,000 EBT shares held by John
Samuel. These shares were therefore eligible to vest. Also, at 31 January 2012, the
performance conditions had been met in relation to a further 395,733 EMI shares
options and 1,790,933 EBT shares held by Antony Odell and 800,000 EMI share
options and 3,580,000 EBT shares held by John Samuel. These shares will become
eligible to vest on completion of the associated employment period condition on
30 June 2012.
The Tissue Regenix Group Employee Share Trust (“the EBT”) was established with
Osiris Management Services Limited appointed as trustee (“the Trustee”) to enable
the Trust to acquire ordinary shares in the Company and to make interests in those
shares available for the benefit of current and future employees of the Company and
its subsidiaries.
Antony Odell, John Samuel and Michael Bretherton have interests in ordinary shares
in the Company which were acquired jointly with the Trustee in the market on 29 June
2010 at a price of 5 pence per share. Ian Jefferson has an interest in ordinary shares
Annual Report for the year ended 31 January 2012 11
Tissue Regenix Group plc
Directors’ Remuneration Report
in the Company which were acquired jointly with the Trustee in the market on 25 July
2012 at a price of 14.25 pence. The shares were all acquired pursuant to certain
conditions set out in Joint Owned Equity agreements (“JOE’s”). Subject to meeting
the performance criteria conditions set out in the JOE’s, most of any future increase
in the value of the shares will accrue to the employees provided that they have not
ceased employment with the Group on or before the date that these conditions are
met.
The employees are also under certain circumstances able to benefit from an increase
in the value of the Shares on a takeover, change of control, scheme of arrangement
or a voluntary winding-up of the Company. Where the performance conditions are
not met, the Trustee has an option to acquire the interests of the employees in the
Shares at a price equal to the original purchase cost they paid so that none of any
increase in the value of the Shares will accrue to them.
The market price of the shares at 31 January 2012 was 13.62 pence per share, the
highest and lowest prices during the year were 15.00 pence and 11.00 pence
respectively.
Further details of all share options and jointly owned shares held by the Trustee are
set out in note 17 to the financial statements.
On behalf of the Board
Alexander Stevenson
Chairman of the Remuneration Committee
9 May 2012
12 Annual Report for the year ended 31 January 2012
Corporate Governance Statement
Tissue Regenix Group plc
Corporate governance
The Directors recognise the importance of sound corporate governance and observe
the principals of the UK Corporate Governance Code, to the extent that they consider
them appropriate for the Group’s size, throughout the accounting year.
The Board
The Board currently comprises three Executive Directors and four Non-Executive
Directors.
Audit Committee
The Audit Committee’s primary responsibilities are to monitor the integrity of the
financial affairs and statements of the Company, to ensure that the financial
performance of the Company and any subsidiary of the Company is properly
measured and reported on, to review reports from the Companies auditors relating to
the accounting and internal controls and to make recommendations relating to the
appointment of the external auditors.
The Audit Committee comprises Alan Miller, who acts as chairman of the committee,
Alan Aubrey and Alex Stevenson.
Internal Control
The Board is responsible for maintaining a sound system of internal control. The
Board’s measures are designed to manage, not eliminate risk, and such a system
provides reasonable but not absolute assurance against material misstatement or
loss. The board confirms that it has established the procedures necessary to
implement the guidance “Internal Control Guidance for Directors on the Combined
Code” (The Turnbull Report).
Some key features of the internal control system are:
(i) Management accounts information, budgets, forecasts and business risk issues
are regularly reviewed by the Board who meet at least ten times per year;
(ii) The Company has operational, accounting and employment policies in place;
(iii) The Board actively identifies and evaluates the risks inherent in the business
and ensures that appropriate controls and procedures are in place to manage
these risks; and
(iv) There is a clearly defined organisational structure and there are well-established
financial reporting and control systems.
Going Concern
At 31 January 2012, the Group had £28,021k of cash and cash equivalents available
to it. The Directors have considered their obligation, in relation to the assessment of
the going concern of the Group and each statutory entity within it and have reviewed
the current budget cash forecasts and assumptions as well as the main risk factors
facing the Group.
After due enquiry, the Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they continue
to adopt the going concern basis in preparing the financial statements.
Annual Report for the year ended 31 January 2012 13
Tissue Regenix Group plc
Statement of Directors’ Responsibilities
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and Company financial
statements for each financial year. The Directors are required by the AIM rules of the
London Stock Exchange to prepare Group financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the European
Union (“EU”) and have elected under company law to prepare the Company financial
statements in accordance with IFRS as adopted by the EU.
The financial statements are required by law and IFRS as adopted by the EU to
present fairly the financial position of the Group and Company and the financial
performance of the Group. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their achieving a fair
presentation.
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 the Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Company financial statements, the Directors are
required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRS as adopted by
the EU;
d. prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group’s and the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Group and
Company and to enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate
and inancial information included on the Tissue Regenix Group website,
www.tissueregenix.com.
Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
14 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Report of the Independent Auditor to the
Members of Tissue Regenix Group Plc
We have audited the group and parent company financial statements (“the financial
statements”) which comprise, the Consolidated and Parent Company Statements of
Financial Position, the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statements of Cash Flows, the Consolidated and
Parent Company Statements of Changes in Equity and the related notes. The financial
reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union and, as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Respective responsibilities of directors and auditor
As more fully explained in the Directors’ Responsibilities Statement set out on 14, 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 (APB’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 APB’s
website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion
• the financial statements give a true and fair view of the state of the group’s and
the parent’s affairs as at 31 January 2012 and of the group’s loss for the year
then ended;
• the group financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union;
• the parent financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union and as applied in accordance with
the Companies Act 2006; and
• 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 Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements.
Annual Report for the year ended 31 January 2012 15
Tissue Regenix Group plc
Report of the Independent Auditor to the
Members of Tissue Regenix Group 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.
Jeremy Gledhill
KPMG Audit Plc, Statutory Auditor
Chartered Accountants
1 The Embankment
Neville Street
Leeds
LS1 4DW
9 May 2012
16 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 January 2012
2012 2011
Notes £’000 £’000
OPERATING INCOME 4 109 173
Administrative expenses 4 (3,097) (2,117)
Deemed cost on reverse acquisition 16 – (3,749)
Operating loss (2,988) (5,693)
Finance income 6 62 28
Loss before taxation (2,926) (5,665)
Taxation 7 239 238
Loss after tax attributable to equity holders of the parent (2,687) (5,427)
Loss and total comprehensive expense for the year (2,687) (5,427)
Loss per share
Basic and diluted on loss from continuing operations (0.57)p (1.48)p
There are no items of other comprehensive income. The loss for the year arises from the Group’s continuing operations.
Annual Report for the year ended 31 January 2012 17
Tissue Regenix Group plc
Consolidated Statement of Changes in Equity
For the year ended 31 January 2012
Share
Reverse Issued Based Revenue
Share Share Merger Acquisition Equity Payment Deficit
Capital Premium Reserve Reserve Capital Reserve Reserve Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 31 January 2010
600 4,333 – (1,054) 3,879 1 (2,593) 1,287
Loss and total comprehensive
expense for the year
Reverse acquisition
Issue of shares
Expenses on issue of shares
Employee interest in jointly
owned shares
Share based payment expense
– – – – – – (5,427) (5,427)
1,210 – 10,884 (6,094) 6,000 – – 6,000
533 4,803 – – 5,336 – (836) 4,500
– (481) – – (481) – – (481)
– – – – – – 8 8
– – – – – 331 – 331
At 31 January 2011
2,343 8,655 10,884 (7,148) 14,734 332 (8,848) 6,218
Loss and total comprehensive
expense for the year
Issue of shares
Expenses on issue of shares
Employee interest in jointly
owned shares
Share based payment expense
– – – – – – (2,687) (2,687)
919 24,094 – – 25,013 – (4) 25,009
– (784) – – (784) – – (784)
– – – – – – 1 1
– – – – – 122 – 122
At 31 January 2012
3,262 31,965 10,884 (7,148) 38,963 454 (11,538) 27,879
18 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Consolidated Statement of Financial Position
As at 31 January 2012
2012 2011
Notes £’000 £’000
Assets
Non-current assets
Property, plant and equipment 9 157 189
Total non-current assets 157 189
Current assets
Trade and other receivables 10 350 393
Cash and cash equivalents 11 28,021 5,889
Total current assets 28,371 6,282
Total assets 28,528 6,471
Liabilities
Current liabilities
Trade and other payables 12 (649) (253)
Total liabilities (649) (253)
Net assets 27,879 6,218
Equity
Share capital 13 3,262 2,343
Share premium 13 31,965 8,655
Merger reserve 13 10,884 10,884
Reverse acquisition reserve 13 (7,148) (7,148)
Issue equity capital 38,963 14,734
Share based payment reserve 454 332
Revenue reserve 14 (11,538) (8,848)
Total equity 27,879 6,218
Approved by the Board of Directors and authorised for issue on 9 May 2012.
John Samuel
Executive Chairman
Ian Jefferson
Chief Financial Officer
Company number: 5969271
Annual Report for the year ended 31 January 2012 19
Tissue Regenix Group plc
Consolidated Statement of Cash Flows
For the year ended 31 January 2012
2012 2011
Notes £’000 £’000
Operating activities
Operating loss (2,988) (5,693)
Adjustment for non-cash items:
Depreciation of property, plant and equipment 9 62 46
Share based payment 17 122 331
Deemed cost of reverse acquisition 16 – 3,749
Tax refunded 280 183
Operating cash outflow (2,524) (1,384)
Decrease/(increase) in trade and other receivables 2 (68)
Increase/(decrease) in trade and other payables 396 (24)
Net cash outflow from operations (2,126) (1,476)
Investing activities
Interest received 62 28
Purchases of property, plant and equipment 9 (30) (100)
Net cash outflow from investing activities 32 (72)
Financing activities
Cash acquired on reverse acquisition 16 – 2,327
Proceeds from issue of share capital 13 25,009 4,500
Sale of joint interest in shares to employees 14 1 8
Expenses on issue of share capital 13 (784) (481)
Net cash inflow from financing activities 24,226 6,354
Increase in cash and cash equivalents 22,132 4,806
Cash and cash equivalents at start of year 5,889 1,083
Cash and cash equivalents at end of year 28,021 5,889
20 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Notes to the Financial Statements
For the year ended 31 January 2012
1. BASIS OF PREPARATION
The financial statements of Tissue Regenix Group plc are audited consolidated financial statements for the year to
31 January 2012. These include audited comparatives for the year to 31 January 2011.
The Group financial statements consolidate the financial statements of Tissue Regenix Group plc and the entities it
controls, its subsidiaries.
Going Concern
As at 31 January 2012, the Group had £28 million of cash and cash equivalents available to it. The Directors have
considered their obligation, in relation to the assessment of the going concern of the Group and each statutory entity
within it and have reviewed the current budget cash forecasts and assumptions as well as the main risk factors
facing the Group as set out on pages 29 to 30.
After due enquiry, the Directors consider that the Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial
statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared under the historical cost convention in accordance with
International Financial Reporting Standards as adopted by the European Union.
Historical Cost Convention
The financial information has been prepared on the historic cost basis. The principal accounting policies applied
are set out below.
SEGMENTAL REPORTING
At 31 January 2012, the Group operated in one business segment, that of the development and commercialisation
of innovative platform technologies in the field of tissue engineering and regenerative medicine.
All of the Group’s assets are held in the UK and all of its capital expenditure arises in the UK.
REVENUE
Revenue is measured as the fair value of the consideration received or receivable in the normal course of business,
net of discounts, VAT and other sales related taxes and is recognised to the extent that it is probable that the economic
benefits associated with the transaction will flow in to the Company.
Grant income is recognised as earned based on contractual conditions, generally as expenses are incurred.
FOREIGN CURRENCIES
Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the
transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting date. Gains and losses arising on retranslation are charged to
profit or loss as they are incurred. The functional and presentational currency of the Group is British pounds.
RESEARCH AND DEVELOPMENT
Research costs are charged to profit or loss as they are incurred. An intangible asset arising from development
expenditure on an individual project is recognised only when all of the following criteria can be demonstrated.
Annual Report for the year ended 31 January 2012 21
Tissue Regenix Group plc
Notes to the Financial Statements
The criteria for recognising expenditure as an asset are:
• it is technically feasible to complete the product and the Company is satisfied that appropriate regulatory hurdles
have been, or will be achieved;
• management intends to complete the product and use or sell it;
• there is an ability to use or sell the product;
• it can be demonstrated how the product will generate probable future economic benefits;
• adequate technical, financial and other resources are available to complete the development, use or sell the
product; and
• expenditure attributable to the product can be reliably measured.
Such intangible assets are amortised on a straight-line basis from the point at which the assets are ready for use
over the period of the expected benefit, and are reviewed for an indication of impairment at each reporting date.
Other development costs are charged against profit or loss as incurred since the criteria for their recognition as an
asset are not met.
The costs of an internally generated intangible asset comprise all directly attributable costs necessary to create,
produce and prepare the asset to be capable of operating in the manner intended by management. Directly
attributable costs include employee costs incurred on technical development, testing and certification, materials
consumed and any relevant third party cost. The costs of internally generated developments are recognised as
intangible assets and are subsequently measured in the same way as externally acquired intangible assets. However,
until completion of the development project, the assets are subject to impairment testing only.
No development costs to date have been capitalised as intangible assets.
LEASES
Rentals payable under operating leases, which are leases where the lessor retains a significant proportion of the
risks and benefits of the asset are charged in the statement of comprehensive income on a straight line basis over
the expected lease term.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment assets are stated at historical cost.
Depreciation is provided on all property, plant and equipment assets at rates calculated to write each asset down to
its estimated residual value evenly over its expected useful life, as follows:
Laboratory equipment
Computer equipment
Office furniture and equipment:
over 5 years
over 3 years
over 5 years
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any).
22 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Discounted cash flow valuation techniques are generally applied for assessing recoverable amounts using 3 year
forward looking cash flow projections and terminal value estimates, together with discount rates appropriate to the
risk of the related cash generating units.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
SHARE BASED PAYMENTS
Share options
Equity settled share-based payment transactions are measured with reference to the fair value at the date of grant,
recognised on a straight line basis over the vesting period, based on the company’s estimate of shares that will
eventually vest. Fair value is measured using the Black-Scholes model unless the options are subject to market
conditions when the binomial model is used.
At each reporting date before vesting, the cumulative expense is calculated, representing the extent to which the
vesting period has expired and management’s best estimate of the achievement or otherwise of non-market
conditions and the number of equity instruments that will ultimately vest. The movement in cumulative expense since
the previous reporting date is recognised in the statement of comprehensive income, with a corresponding entry in
equity.
Jointly held shares
Where an employee acquires an interest in shares in the Company jointly with the Tissue Regenix Employee Share
Trust, the fair value benefit at the purchase date is recognised as an expense, with a corresponding increase to
equity share based payment reserve on a straight-line basis, over the vesting period.
The fair value benefit is measured using a Binomial valuation model, taking into account the terms and conditions
upon which the jointly owned shares were purchased.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of
non-transferability, sale restrictions, and behavioral considerations.
FINANCIAL ASSETS AND LIABILITIES
Trade and other receivables
Trade and other receivables do not carry any interest and are initially recognised at fair value. They are subsequently
measured at amortised cost using the effective interest rate method, less any provision for impairment.
Impairment provisions are recognised when there is objective evidence that the Group will be unable to collect all
of the amounts due under the terms receivable, the amount of such a provision being the difference between the
net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.
Trade and other payables
Trade and other payables are not interest bearing and are initially recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than 12 months.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax from proceeds.
Annual Report for the year ended 31 January 2012 23
Tissue Regenix Group plc
Notes to the Financial Statements
TAXATION
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. The Group’s liability for current tax is calculated
by using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets
and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are 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. Deferred tax is calculated at the tax
rates that are expected to apply to the period when the asset is realised or the liability is settled using tax rates that
have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited to profit or
loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also
dealt with in equity.
CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. Actual results
may differ from these estimates. The estimates and assumptions that have the most significant effects on the carrying
amounts of the assets and liabilities in the financial information are discussed below:
Equity settled share-based payments
The estimation of share-based payment costs requires the selection of an appropriate valuation method,
consideration as to the inputs necessary for the valuation model chosen and the estimation of the number of awards
that will ultimately vest. Inputs subject to judgement relate to the future volatility of the share price of comparable
companies, the Group’s expected dividend yields, risk free interest rates and expected lives of the options. The
Directors draw on a variety of sources to aid in the determination of the appropriate data to use in such calculations.
The share based payment charge for the year was £122,000 (31 January 2011: £331,000).
Research and development costs
Careful judgement by the Directors is applied when deciding whether the recognition requirements for capitalising
development costs have been met. This is necessary as the economic success of any product development is
uncertain and may be subject to future technical problems. Judgements are based on the information available at
each reporting date which includes the progress with testing and certification and progress on, for example,
establishment of commercial arrangements with third parties. In addition, all internal activities related to research
and development of new products are continuously monitored by the Directors. To date, no development costs have
been capitalised.
24 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
ACCOUNTING STANDARDS AND INTERPRETATIONS NOT APPLIED
At the date of authorisation of these financial statements, the following standards and interpretations relevant to the
Group that have not been applied in these financial statements were in issue but not yet effective or endorsed (unless
otherwise stated):
IIAS 12
IFRS
IAS 1
IFRS 1
IFRS 10
IAS 27
IFRS 11
IAS 28
IFRS 12
IFRS 13
IAS 27
IAS 28
IAS 19
IFRS 7
IAS 32
IFRS 9
Income Taxes (amendments)
Financial Instruments
Presentation of Items of Other Comprehensive Income (amendments)
Government loans (amendments)
Consolidated Financial Statements
Separate Financial Statements
Joint Arrangements
Amendments to IAS 28
Disclosure of Interests in Other Entities
Fair Value Measurement
Separate Financial Statements
Investments in Associates and Joint Ventures
Defined Benefit Plans (amendments)
Disclosures – Offsetting Financial Assets and Financial Liabilities
Offsetting Financial Assets and Financial Liabilities (amendments)
Financial Instruments
Effective Date
1 January 2012
1 January 2013
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2014
1 January 2015
The Directors anticipate that the adoption of these Standards and Interpretations in future years will have no material
impact on the financial statements of the Group.
No Standards or Interpretations adopted in the year had any material impact on the financial statements of the
Group.
3. SEGMENTAL REPORTING
At 31 January 2012, the Group operated in one business segment, that of the development and commercialisation
of innovative platform technologies in the field of tissue engineering and regenerative medicine.
All of the Group’s assets are held in the UK and all of its capital expenditure arises in the UK.
Annual Report for the year ended 31 January 2012 25
Tissue Regenix Group plc
Notes to the Financial Statements
4. LOSS FROM OPERATIONS
Loss from operations is stated after crediting:
Grant income
Loss from operations is stated after charging to administrative expenses:
Depreciation of plant and equipment (see note 9)
Operating lease rentals – land and buildings
Staff costs
Foreign exchange losses
Research and development (inclusive of research and development personnel)
Auditors remuneration:
– fees payable to Company’s auditor for the audit of the Company’s accounts
– auditing the accounts of subsidiaries pursuant to legislation
Other services:
– fees in relation to acquisition and AIM listing
– fees in relation to establishing the Tissue Regenix Employee Share Trust
– fees in relation to taxation
Total auditor’s remuneration
5. STAFF COSTS
The average monthly number of persons (including directors)
employed by the Group during the year was:
Directors
Laboratory and administration staff
The aggregate remuneration, including directors, comprised:
Wages and salaries
Share based expense (see note 17)
Social security costs
Directors’ remuneration included comprised:
Emoluments for qualifying services
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
107
62
129
1,330
3
1,089
10
5
–
–
5
20
173
46
95
1,108
2
653
12
10
50
30
–
102
Year to
31 January
2012
Number
Year to
31 January
2011
Number
7
19
26
6
13
19
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
1,094
122
114
1,330
598
704
331
73
1,108
505
Directors’ emoluments disclosed above include £227,000 paid to the highest paid director (2011: £136,000) as well
as share based payments benefit of £122,000 (2011: £258,000). There are no pension benefits for directors.
26 Annual Report for the year ended 31 January 2012
6. FINANCE INCOME
Bank interest receivable
7. TAXATION
Tax on loss on ordinary activities
Current tax:
UK corporation tax credit on losses of period
Tax credits received in respect of prior periods
Deferred tax:
Origination and reversal of temporary timing differences
Tax credit on loss on ordinary activities
Tissue Regenix Group plc
Year to
31 January
2012
£’000
62
Year to
31 January
2011
£’000
28
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
(239)
–
(239)
–
(239)
(167)
(71)
(238)
–
(238)
The charge for the year can be reconciled to the loss before tax per the Statement of Comprehensive Income as
follows:
Factors affecting the current tax charges
The tax assessed for the year varies from the small company rate of corporation tax as explained below:
The tax assessed for the period varies from the small company
rate of corporation tax as explained below:
Loss on ordinary activities before tax
Tax at the standard rate of corporation tax 20% (2011: 21%)
Effects of:
Expenses not deductable for tax purposes
Capital allowances in excess of depreciation
Research and development tax credits received
Surrender of research and development relief for repayable tax credit
Research and development enhancement
Adjustment to prior year research and development relief
Unutilised tax losses
Tax credit for the year
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
(2,926)
(585)
(1,959)
(411)
25
–
(239)
382
(186)
–
364
(239)
69
(14)
(167)
250
(118)
(71)
224
(238)
Annual Report for the year ended 31 January 2012 27
Tissue Regenix Group plc
Notes to the Financial Statements
Deferred Tax
Tax losses
Losses available to carry forward against future trading profits
Deferred tax asset – unrecognised*
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
4,624
925
2,806
589
* The Company has not recognised a deferred tax asset relating to these losses as their recoverability is uncertain.
8. LOSS PER SHARE (BASIC AND DILUTED)
Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted
average number of ordinary shares in issue during the year excluding own shares held jointly by the Tissue Regenix
Employee Share Trust and certain employees. Diluted loss per share is calculated by adjusting the weighted average
number of ordinary shares in issue during the year to assume conversion of all dilutive potential ordinary shares.
Loss attributable to the equity holders of the parent
Pre deemed cost on reverse acquisition
Deemed cost on reverse acquisition
Total loss attributable to the equity holders of the parent
Weighted average number of ordinary shares in issue during the year
Loss per share
Basic and diluted on loss for the year
Pre deemed cost on reverse acquisition
Post deemed cost on reverse acquisition
Year to
31 January
2012
£’000
Year to
31 January
2011
£’000
(2,687)
–
(2,687)
(1,678)
(3,749)
(5,427)
No.
469,184,667
No.
366,159,076
(0.57)p
(0.57)p
(0.46)p
(1.48)p
The Company has issued employee options over 16,036,328 ordinary shares and there are 17,540,386 jointly owned
shares which are potentially dilutive. There is however, no dilutive effect of these issued options as there is a loss for
each of the years concerned.
28 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
9. PROPERTY, PLANT AND EQUIPMENT
Laboratory
Equipment
£’000
Fixtures &
Fittings
£’000
Computer
Equipment
£’000
Total
£’000
Cost
At 31 January 2010
Additions
At 31 January 2011
Additions
At 31 January 2012
Depreciation
At 31 January 2010
Charge for the year
At 31 January 2011
Charge for the year
At 31 January 2012
Net book value
At 31 January 2012
At 31 January 2011
At 31 January 2010
10. TRADE AND OTHER RECEIVABLES
Other receivables
Prepayments and accrued income
124
76
200
9
209
27
33
60
41
101
108
140
97
32
4
36
–
36
3
7
10
8
18
18
26
29
15
20
35
21
56
6
6
12
13
25
31
23
9
2012
£’000
299
51
350
171
100
271
30
301
36
46
82
62
144
157
189
135
2011
£’000
351
42
393
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
No provisions are held against receivables and no amounts past due have been impaired.
11. RISK MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES
The Company’s activities expose it to a variety of financial risks: market risk, specifically interest rate risk, credit risk
and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Company’s financial performance.
The management of these risks is vested in the Board of Directors. The policies for managing each of these risks
are summarised below:
Management of market risk
(i) Interest rate risk
As the Company has no significant borrowings the risk is limited to the potential reduction in interest received on
cash surpluses held. Interest rate risk is managed in accordance with the liquidity requirement of the Group, with a
minimal amount of its cash surpluses held within an instant access account, which has a variable interest rate
attributable to it, to ensure that sufficient funds are available to cover the working capital requirements of the Company.
Annual Report for the year ended 31 January 2012 29
Tissue Regenix Group plc
Notes to the Financial Statements
Interest rate sensitivity
The principal impact to the Company is the result of interest-bearing cash and cash equivalent balances held as set
out below:
Fixed rate Floating rate Total
£’000 £’000 £’000
Cash and cash equivalents 26,576 1,445 28,021
31 January 2012
Fixed rate Floating rate Total
£’000 £’000 £’000
Cash and cash equivalents 5,850 39 5,889
31 January 2011
Due to the high proportion of funds held on a fixed deposit, the impact of a 5 per cent. increase/decrease in interest
rates would have an immaterial impact on the loss in each year.
Management of credit risk
The Company is exposed to credit risk from its operating activities, it principally arises from short term bank deposits.
The Company seeks to minimise this risk by only depositing funds with banks with a high credit rating.
The maximum exposure to credit risk on the Company’s financial assets is represented by their carrying amounts
as outlined in the categorisation of financial instruments table below.
The Company does not consider that any changes in fair value of financial assets or liabilities in the year are
attributable to credit risk.
Management of liquidity risk
The Company seeks to manage liquidity risk to ensure that sufficient liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably.
No maturity analysis for financial liabilities is presented, as the Directors consider that liquidity risk is not material.
The Company had cash and cash equivalents at each reporting date is set out below.
Cash and cash equivalents
AA
A
BBB
2012
£’000
132
26,347
1,542
28,021
2011
£’000
3,353
1,022
1514
5,889
The above has been split by the Fitch rating system and gives an analysis of the credit rating of the financial
institutions where cash balances are held.
Capital risk management
The Company manages its capital to ensure that the Company will be able to continue as a going concern while
maximising the return to stakeholders. The Company’s overall strategy is to minimise costs and liquidity risk.
The capital structure of the Company consists of equity attributable to the owners of the Company, comprising issued
capital, reserves and retained earnings as disclosed in note 13 and 14 and in the Statement of Changes in Equity.
30 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Categorisation of financial instrument
Total
Financial assets/(liabilities) £’000 £’000 £’000
Financial
liabilities at
amortised
cost
Loans and
receivables
At 31 January 2012
Trade and other receivables
Cash and cash equivalents
Trade and other payables
TOTAL
299
28,021
–
28,320
–
–
(324)
(324)
299
28,021
(324)
27,996
Total
Financial assets/(liabilities) £’000 £’000 £’000
Financial
liabilities at
amortised
cost
Loans and
receivables
At 31 January 2011
Trade and other receivables
Cash and cash equivalents
Trade and other payables
TOTAL
The Company had no financial instruments measured at fair value.
12. TRADE AND OTHER PAYABLES
Trade payables
Taxes and social security
Accruals
351
5,889
–
6,240
–
–
(199)
(199)
2012
£’000
287
37
325
649
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
Trade payables, split by the currency they will be settled are shown below:
Sterling
US Dollars
Euros
Trade payables
2012
£’000
281
2
4
287
351
5,889
(199)
6,041
2011
£’000
168
32
53
253
2011
£’000
144
3
21
168
Annual Report for the year ended 31 January 2012 31
Tissue Regenix Group plc
Notes to the Financial Statements
13. SHARE CAPITAL
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Number
Reverse
acquisition
reserve
£’000
Allotted, issued and fully paid shares
Ordinary shares of 0.1 p each
as at 31 January 2010
600,000,000
600
4,333
Share consolidation 1 for 5 in to
Ordinary shares of 0.5p each
Issued to acquire the entire issued
share capital of Tissue Regenix Limited
Issued for cash
Issued to Tissue Regenix Employee
Share Trust
Arising on reverse acquisition of
Tissue Regenix Limited
Expenses on issue of shares
Total Ordinary shares of 0.5 p each
as at 31 January 2011
(480,000,000)
–
241,885,103
90,000,000
1,210
450
–
–
4,050
16,712,800
83
753
–
–
–
–
–
(481)
Issued for cash
181,818,182
909
24,091
Share options exercised
1,136,376
6
4
–
3
–
(784)
827,586
–
Issued to Tissue Regenix Employee
hare Trust
Expenses on issue of shares
Total Ordinary shares of 0.5p each
as at 31 January 2012
–
–
10,884
–
–
–
–
Total
£’000
4,933
–
12,094
4,500
836
–
–
–
–
–
(7,148)
(7,148)
–
(481)
–
–
–
–
–
–
–
–
25,000
9
4
(784)
652,380,047
3,262
31,965
10,884
(7,148)
38,963
As permitted by the provisions of the Companies Act 2006, the Company does not have an upper limit to its
authorised share capital.
On 29 December 2011 the Company issued 181,818,182 ordinary shares of 0.5 pence each for a cash price of
13.75 pence per share raising a gross amount of £25,000,000.
32 Annual Report for the year ended 31 January 2012
468,597,903
2,343
8,655
10,884
(7,148)
14,734
Tissue Regenix Group plc
14. MOVEMENT IN REVENUE RESERVE AND OWN SHARES
Deficit
Revenue
Reserve
£’000 £’000 £’000
Retained
Earnings Deficit
Own shares
At 31 January 2010
Purchase of own shares
Employee interest in jointly owned shares
Loss for the year
At 31 January 2011
Purchase of own shares
Employee interest in jointly owned shares
Loss for the year
At 31 January 2012
15. COMMITMENTS
(2,593)
–
–
(5,427)
(8,020)
–
–
(2,687)
–
(836)
8
–
(828)
(4)
1
–
(2,593)
(836)
8
(5,427)
(8,848)
(4)
1
(2,687)
(10,707)
(831)
(11,538)
Operating lease commitments
The Group leases premises under non-cancellable operating lease agreements. The future aggregate minimum
lease and service charge payments under non-cancellable operating leases are as follows:
Land and buildings:
Amounts due within one year
Amounts due in one to five years
2012
£’000
2011
£’000
11
–
11
51
–
51
16. ACQUISITION OF SUBSIDIARY UNDERTAKING
On 29 June 2010 the Company acquired 100 percent. of the issued share capital of Tissue Regenix Limited for
consideration satisfied by the issue of 241,885,103 ordinary shares of 0.5 pence each.
The transaction was accounted for as a reverse acquisition equity transaction as if Tissue Regenix Limited had issued
new shares in exchange for Oxeco plc’s cash and other assets. The substance of the transaction is that of a share
issue fund raising under which Tissue Regenix Limited received cash and bank balances of £2,327,000 representing
103 percent. of the value of the net assets of Oxeco plc and the associated costs of the transaction have therefore
been charged directly against equity share capital.
Annual Report for the year ended 31 January 2012 33
Tissue Regenix Group plc
Notes to the Financial Statements
The fair value of the shares issued was determined from the perspective of Tissue Regenix Limited as the market
capitalisation value of Oxeco plc immediately prior to the acquisition. Based on an Oxeco plc market price of 5 pence
per share, being the market price at which new money was also raised by the Company by the issue of shares for
cash on the acquisition date, gave an implied fair value of Oxeco plc at acquisition of £6,000,000 which is £3,749,000
higher than the value of the net assets deemed acquired as set out below:
Net assets acquired:
Bank and cash
Trade and other receivables
Trade and other payables
Deemed cost on reverse acquisition
Fair value of reverse acquisition
£’000
2,327
16
(92)
2,251
3,749
6,000
The difference between the fair value of the consideration and the fair value of the net assets deemed acquired was
recorded as a deemed cost on reverse acquisition in the statement of comprehensive income.
The fair value of the assets deemed to have been acquired was assessed as the book value on the acquisition date.
Oxeco plc changed its name to Tissue Regenix Group plc on completion of the acquisition on 29 June 2010 and
was re-admitted to AIM on that same day.
17. SHARE BASED PAYMENTS
Share options and shares held in employee benefit trust (“EBT”)
The Company operates a share option plan, under which certain employees have been granted options to subscribe
for ordinary shares. All options are equity settled. The options have an exercise price of between 0.5p to 14.25p and
a vesting period between 1 and 3 years. If the options remain unexercised after a period of 10 years from the date
of grant, the options expire. The Group has no legal or constructive obligation to repurchase or settle the options in
cash.
The Group also operates a jointly owned EBT share scheme for senior management under which the trustee of the
Group sponsored EBT has acquired shares in the Group jointly with a number of employees. The shares were
acquired pursuant to certain conditions, set out in Jointly Owned Equity agreements (“JOE’s”). Subject to meeting
the performance criteria conditions set out in the JOE’s, the employees are able to benefit from most of any future
increase in the value of the jointly owned EBT shares. The fair value benefit is measured using the Binomial model,
taking into account the terms and conditions upon which the jointly owned shares were purchased.
34 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
The number and weighted average exercise prices of share options and EBT shares are as follows:
Weighted
average
Number of share interests exercise
EMI Unapproved EBT price
options options shares Total per share (£)
At 31 January 2010 524 129 – 653 125.000
Exercised in the year (29) (57) – (86) 0.010
Adjustment on reverse acquisition 10,849,809 1,716,947 – 12,566,756
(124.430)
Issued in the year 3,587,200 – 16,712,800 20,300,000 0.050
At 31 January 2011 14,437,504 1,717,019 16,712,800 32,867,323 0.033
Exercised in the year (826,376) (310,000) – (1,136,376)
(0.073)
Issued in the year 1,018,181 – 827,586 1,845,767 0.141
At 31 January 2012 14,629,309 1,407,019 17,540,386 33,576,714 0.040
On 29 June 2010 the Company acquired 100 percent. of the share capital of Tissue Regenix Limited for a
consideration satisfied by the issue of 241,885,103 ordinary sharesof 0.5p each in a ratio of 21,919.81 for 1.
Consequently the share options issued by Tissue Regenix Limited were replaced with share options in Tissue Regenix
Group plc. No changes were made to the options other than an adjustment to the number of options, which were
increased by a factor of 21,919.81 and the adjustment to the exercise price which was decreased by a factor of
21,919.81. See note 13 for further details.
There were 12,626,680 share options outstanding at 31 January 2012 which were eligible to be exercised. The
remaining options were not eligible to be exercised as these are subject to employment period and market based
vesting conditions, some of which had not been met at 31 January 2012.
The performance conditions in relation to these options allows for vesting in three equal proportions on or after the
three consecutive annual anniversaries from the date of grant subject to the Company’s share price reaching certain
hurdle values by the respective vesting dates.
There were 5,570,933 of the jointly held EBT shares which were eligible to vest as at 31 January 2012. The remaining
shares were not eligible to vest because the related employment period conditions and some of the performance
conditions under the JOE’s had not been met.
The fair value benefit received on share options granted is measured using either the Black Scholes model or the
Binomial model as appropriate taking in to account the effects of the vesting and performance conditions, expected
exercise price and the payment of the dividends by the Company. The fair value benefit received on EBT shares is
measured using the Binomial model, taking into accounts the terms and conditions upon which the jointly owned
shares were purchased. The following table lists the inputs to the models used:
Options
EBT shares
Options
Granted year Granted year Granted year Granted year
to 31 January to 31 January to 31 January to 31 January
2011
EBT shares
2012
2012
2011
Dividend yield – – – –
Expected volatility 47% 47% 50% 50%
Risk free interest rate (%) 0.9 0.9 0.9 0.5
Expected vesting life of EBT shares and options (years) 4 4 3 1
Weighted average share price (£) 0.1425 0.1375 0.05 0.05
Annual Report for the year ended 31 January 2012 35
Tissue Regenix Group plc
Notes to the Financial Statements
Any share options and employee interests in jointly owned EBT shares which are not exercised within 10 years from
the date of grant will expire.
A charge has been recognised in the statement of comprehensive income for each year as follows:
Granted year Granted period
to 31 January to 31 January
2012 2011
£’000 £’000
Share options 33 264
Jointly owned shares 89 67
Total share based payments 122 331
18. RELATED PARTY TRANSACTIONS
Trading transactions with
Year ended Year ended
31 January 31 January
2012 2011
£’000 £’000
Transactions with significant shareholders:
Staff secondment and sundry office running costs – 7
Patent support costs 20 30
Laboratory facility costs – 3
Reverse acquisition fees – 19
Management fees – 5
Amounts due to related parties at the year end – 7
Transactions with Key Management Personnel
The Company’s key management personnel comprise only the Directors of the Company.
During the year the Company entered into the following transactions in which the Directors had an interest:
Directors’ remuneration:
Remuneration received by the Directors from the Company is set out below:
Year ended Year ended
31 January 31 January
2012 2011
£’000 £’000
Short-term employment benefits* 476 272
* In addition, certain directors hold share options and jointly owned shares in the Company for which a fair value share based charge of £122,000
has been recognised in the consolidated statement of comprehensive income (2011: £258,000).
During the year ended 31 January 2012, the Company entered into numerous transactions with its subsidiary
company which net off on consolidation – these have not been shown above.
19. ULTIMATE CONTROLLING PARTY
The directors believe that there is no ultimate controlling party.
36 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Company Statement of Changes in Equity
Attributable to the equity holders of the Company
Share
Capital
£’000
Share
Premium
£’000
Merger
reserve
£’000
Share
Based
Payment
Reserve
£’000
Revenue
Deficit
Reserve
£’000
Total
£’000
At 31 January 2010
Total expense and other comprehensive
loss for the year
600
4,333
–
–
–
–
Shares issued to acquire Tissue
Regenix Limited
Shares issued for cash
Shares issued to the Tissue
Regenix Employee Share Trust
Expenses on issue of shares
Share based payment expense
At 31 January 2011
Total expense and other
comprehensive loss for the year
Shares issued for cash
Share options exercised
Shares issued to the Tissue
Regenix Employee Share Trust
Expenses on issue of shares
Share based payment expense
1,210
450
-
4,050
10,884
–
83
–
–
753
(481)
-
–
–
–
2,343
8,655
10,884
–
909
6
4
–
–
–
24,091
3
–
(784)
–
–
–
–
–
–
–
At 31 January 2012
3,262
31,965
10,884
–
–
–
–
–
–
259
259
–
–
–
–
–
122
381
(2,638)
2,295
(582)
(582)
–
–
–
–
–
12,094
4,500
836
(481)
259
(3,228)
18,913
(841)
–
–
(841)
25,000
9
–
–
–
4
(784)
122
(4,069)
42,423
Annual Report for the year ended 31 January 2012 37
Tissue Regenix Group plc
Company Statement of Financial Position
2012 2011
Notes £’000 £’000
Assets
Non-current assets
Investments C3 12,922 12,922
Total non-current assets 12,922 12,922
Current assets
Trade and other receivables C4 59 72
Intercompany loan balance C5 1,812 544
Cash and cash equivalents 27,877 5,459
29,748 6,075
Total Assets 42,670 18,997
Liabilities
Current liabilities
Trade and other payables C6 (247) (84)
Total Liabilities (247) (84)
Net Assets 42,423 18,913
Equity
Share capital 13 3,262 2,343
Share premium 13 31,965 8,655
Merger reserve 13 10,884 10,884
Issue equity capital 46,111 21,882
Share based payment reserve 381 259
Revenue reserve (4,069) (3,228)
Total Equity 42,423 18,913
Approved by the Board of Directors and authorised for issue on 9 May 2012.
John Samuel
Executive Chairman
Company number: 5969271
Ian Jefferson
Finance Director
38 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Company Statement of Cash Flows
2012 2011
Notes £’000 £’000
Operating activities
Loss before interest and tax (900) (602)
Adjustment for non-cash items:
Share based payments 122 259
Tax received – –
Impairment of loan to subsidiary undertaking – –
Operating cash outflow (778) (343)
Decrease/(increase) in trade and other receivables 13 (61)
Increase in trade and other payables 163 52
Net cash generated from operations (602) (352)
Investing Activities
Interest received 62 20
Loan to subsidiary undertaking C6 (1,268) (544)
Net cash generated from investing activities (1,206) (524)
Financing Activities
Proceeds from issue of share capital 13 25,009 4,500
Sale of joint interest in shares to employees 1 –
Expenses on issue of share capital 13 (784) (481)
Net cash used in financing activities 24,226 4,019
Increase in cash and cash equivalents 22,418 3,143
Cash and cash equivalents at start of year 5,459 2,316
Cash and cash equivalents at end of year 27,877 5,459
Annual Report for the year ended 31 January 2012 39
Tissue Regenix Group plc
Notes to the Company Information
C1. PRINCIPAL ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by the Companies Act 2006 and in
accordance with IFRS.
The principal accounting policies adopted are the same as for those set out in the Group’s financial statements.
C2. COMPANY RESULTS
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
parent company’s statement of comprehensive income. The parent company’s result for the year ended 31 January
2012 was a loss of £841k.
The audit fee for the company is set out in note 4 of the Group’s financial statements.
C3. INVESTMENT IN SUBSIDIARY COMPANIES
At 31 January 2012, the Company held the following investments in subsidiaries;
Share of issued capital and voting rights
Sector 2012 2011
Undertaking
Regenerative medicine 100% 100%
Tissue Regenix Limited
Dormant 85% 85%
Oxray Limited
2012 2011
Cost £’000 £’000
At 1 February 14,707 1,785
Additions – 12,922
At 31 January 14,707 14,707
Impairment
At 1 February (1,785) (1,785)
At 31 January (1,785) (1,785)
Carrying value at 31 January 12,922 12,922
The company’s investment in Oxray Limited has been written down to nil and the Company is dormant.
40 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
C4. TRADE RECEIVABLES
2012 2011
£’000 £’000
Prepayments & accrued income 37 33
Social Security and other taxes 22 39
59 72
C5. CURRENT ASSETS
2012 2011
£’000 £’000
Intercompany loan 1,812 544
A loan of £1,812k was advanced to Tissue Regenix Limited in the year. No interest was payable on the loan.
C6. TRADE PAYABLES
2012 2011
£’000 £’000
Trade Creditors 127 48
Social Security and other taxes 17 11
Accruals 103 25
247 84
Annual Report for the year ended 31 January 2012 41
Tissue Regenix Group plc
Notice of Annual General Meeting
Notice is given that the 2012 annual general meeting of Tissue Regenix Group plc (“Company”) will be held at
DLA Piper UK LLP, Princes Exchange, Princes Square, Leeds, LS1 4BY, on 11 June 2012 at 10 am for the following
purposes:
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
1.
To receive the Company's annual accounts and directors' and auditors' reports for the year ended 31 January
2012.
2. To reappoint Michael Bretherton, who retires by rotation, as a director of the Company.
3. To reappoint Alan Miller, who retires by rotation, as a director of the Company.
4. To reappoint Alexander Stevenson, who retires by rotation, as a director of the Company.
5. To reappoint Ian Jefferson, who has been appointed by the board since the last annual general meeting, as a
director of the Company.
6. To reappoint KPMG Audit plc as auditors of the Company.
7.
To authorise the directors to determine the remuneration of the auditors.
8. That, pursuant to section 551 of the Companies Act 2006 (“Act”), the directors be and are generally and
unconditionally authorised to exercise all powers of the Company to allot Relevant Securities:
8.1 comprising equity securities (as defined in section 560(1) of the Act) up to an aggregate nominal amount of
£2,176,083 (such amount to be reduced by the aggregate nominal amount of Relevant Securities allotted
pursuant to paragraph 8.2 of this resolution) in connection with a rights issue:
8.1.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as practicable) to
the respective numbers of ordinary shares held by them; and
8.1.2 to holders of other equity securities in the capital of the Company, as required by the rights of those
securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in
relation to treasury shares, fractional entitlements, record dates or any legal or practical problems under the
laws of any territory or the requirements of any regulatory body or stock exchange; and
8.2 otherwise than pursuant to paragraph 8.1 of this resolution, up to an aggregate nominal amount of £1,088,041
(such amount to be reduced by the aggregate nominal amount of Relevant Securities allotted pursuant to
paragraph 8.1 of this resolution in excess of £1,088,042), provided that (unless previously revoked, varied or
renewed) these authorities shall expire at the conclusion of the next annual general meeting of the Company
after the passing of this resolution or on 11 September 2013 (whichever is the earlier), save that, in each
case, the Company may make an offer or agreement before the authority expires which would or might
require Relevant Securities to be allotted after the authority expires and the directors may allot Relevant
Securities pursuant to any such offer or agreement as if the authority had not expired.
42 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
In this resolution, “Relevant Securities” means shares in the Company or rights to subscribe for or to convert
any security into shares in the Company; a reference to the allotment of Relevant Securities includes the
grant of such a right; and a reference to the nominal amount of a Relevant Security which is a right to
subscribe for or to convert any security into shares in the Company is to the nominal amount of the shares
which may be allotted pursuant to that right.
These authorities are in substitution for all existing authorities under section 551 of the Act (which, to the
extent unused at the date of this resolution, are revoked with immediate effect).
To consider and, if thought fit, to pass the following resolutions as special resolutions:
9. That, subject to the passing of resolution 8 and pursuant to section 570 of the Act, the directors be and are
generally empowered to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant
to the authorities granted by resolution 8 as if section 561(1) of the Act did not apply to any such allotment,
provided that this power shall be limited to:
9.1 the allotment of equity securities in connection with an offer of equity securities (whether by way of a rights
issue, open offer or otherwise, but, in the case of an allotment pursuant to the authority granted by paragraph
8.1 of resolution 8, such power shall be limited to the allotment of equity securities in connection with a
rights issue):
9.1.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as practicable) to
the respective numbers of ordinary shares held by them; and
9.1.2 to holders of other equity securities in the capital of the Company, as required by the rights of those
securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient
in relation to treasury shares, fractional entitlements, record dates or any legal or practical problems under
the laws of any territory or the requirements of any regulatory body or stock exchange; and
9.2 the allotment of equity securities pursuant to the authority granted by paragraph 8.2 of resolution 8 (otherwise
than pursuant to paragraph 9.1 of this resolution) up to an aggregate nominal amount of £326,412, and
(unless previously revoked, varied or renewed) this power shall expire at the conclusion of the next annual
general meeting of the Company after the passing of this resolution or on 11 September 2013 (whichever
is the earlier), save that the Company may make an offer or agreement before this power expires which
would or might require equity securities to be allotted for cash after this power expires and the directors
may allot equity securities for cash pursuant to any such offer or agreement as if this power had not expired.
This power is in substitution for all existing powers under section 570 of the Act (which, to the extent unused
at the date of this resolution, are revoked with immediate effect).
10. That, pursuant to section 701 of the Companies Act 2006 (“Act”), the Company be and is generally and
unconditionally authorised to make market purchases (within the meaning of section 693(4) of the Act) of ordinary
shares of 0.5p each in the capital of the Company (“Shares”), provided that:
10.1 the maximum aggregate number of Shares which may be purchased is 65,282,501;
10.2 the minimum price (excluding expenses) which may be paid for a Share is 0.5p;
Annual Report for the year ended 31 January 2012 43
Tissue Regenix Group plc
Notice of Annual General Meeting
10.3 the maximum price (excluding expenses) which may be paid for a Share is an amount equal to 105 per
cent of the average of the middle market quotations for a Share as derived from the Daily Official List of
the London Stock Exchange plc for the five business days immediately preceding the day on which the
purchase is made, and (unless previously revoked, varied or renewed) this authority shall expire at the
conclusion of the next annual general meeting of the Company after the passing of this resolution or on
11 September 2013 (whichever is the earlier), save that the Company may enter into a contract to
purchase Shares before this authority expires under which such purchase will or may be completed or
executed wholly or partly after this authority expires and may make a purchase of Shares pursuant to
any such contract as if this authority had not expired.
By order of the board Registered office
Ian Jefferson The Biocentre
Secretary Innovation Way
Heslington
York
YO10 5NY
9 May 2012 Registered in England and Wales No. 05969271
44 Annual Report for the year ended 31 January 2012
Tissue Regenix Group plc
Notes
Entitlement to attend and vote
1.
The right to vote at the meeting is determined by reference to the register of members. Only those shareholders
registered in the register of members of the Company as at 6.00pm on 7 June 2012 (or, if the meeting is
adjourned, 6.00pm on the date which is two working days before the date of the adjourned meeting) shall be
entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that
time. Changes to entries in the register of members after that time shall be disregarded in determining the rights
of any person to attend or vote (and the number of votes they may cast) at the meeting.
Proxies
2. A shareholder is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights
to attend and to speak and vote at the meeting. A proxy need not be a shareholder of the Company.
A shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed
to exercise the rights attached to a different share or shares held by that shareholder. Failure to specify the
number of shares each proxy appointment relates to or specifying a number which when taken together with
the numbers of shares set out in the other proxy appointments is in excess of the number of shares held by the
shareholder may result in the proxy appointment being invalid.
A proxy may only be appointed in accordance with the procedures set out in notes 3 to 4 below and the notes
to the proxy form.
The appointment of a proxy will not preclude a shareholder from attending and voting in person at the meeting.
3. A form of proxy is enclosed. When appointing more than one proxy, complete a separate proxy form in relation
to each appointment. Additional proxy forms may be obtained by contacting the Company's registrar on 0871
664 0300 (calls cost 10p per minute plus network extras) or the proxy form may be photocopied. State clearly
on each proxy form the number of shares in relation to which the proxy is appointed.
To be valid, a proxy form must be received by post or (during normal business hours only) by hand at the offices
of the Company's registrar, Capita Registrars PXS, 34 Beckenham Road, Beckenham BR3 4TU, no later than
10 am on 9 June 2012 (or, if the meeting is adjourned, no later than 48 hours before the time of any adjourned
meeting).
4. CREST members who wish to appoint a proxy or proxies for the meeting (or any adjournment of it) through the
CREST electronic proxy appointment service may do so by using the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK &
Ireland Limited's specifications and must contain the information required for such instructions, as described in
the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an
amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted
so as to be received by Capita Registrars (ID RA10) no later than 10 am on 9 June 2012 (or, if the meeting is
adjourned, no later than 48 hours before the time of any adjourned meeting). For this purpose, the time of receipt
will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications
Host) from which Capita Registrars is able to retrieve the message by enquiry to CREST in the manner prescribed
Annual Report for the year ended 31 January 2012 45
Tissue Regenix Group plc
Notice of Annual General Meeting
by CREST. After this time, any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that
his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that
a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to
those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
Corporate representatives
5. A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at the
meeting. Each such representative may exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder, provided that (where there is more than one
representative and the vote is otherwise than on a show of hands) they do not do so in relation to the same
shares.
Documents available for inspection
6. The following documents will be available for inspection during normal business hours at the registered office
of the Company from the date of this notice until the time of the meeting. They will also be available for inspection
at the place of the meeting from at least 15 minutes before the meeting until it ends.
6.1 Copies of the service contracts of the executive directors.
6.2 Copies of the letters of appointment of the non executive directors.
Biographical details of directors
7. Biographical details of all those directors who are offering themselves for reappointment at the meeting are set
out on page 5 of the enclosed annual report and accounts.
46 Annual Report for the year ended 31 January 2012
sterling 158556
Tissue Regenix Group plc
The Biocentre
Innovation Way
Heslington
York, YO10 5NY
United Kingdom
www.tissueregenix.com
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