TIDMIXI

RNS Number : 1978H

IXICO plc

02 December 2020

IXICO plc

("IXICO", "the Company" or "the Group")

Financial Results for the year ended 30 September 2020

Strong double-digit revenue growth and a more than doubling of profit

IXICO plc (AIM: IXI), the AI data analytics company delivering insights in neuroscience, announces its final results for the year ended 30 September 2020, another record set of results, achieving the Company's fourth successive year of greater than 25% revenue growth and a year which has demonstrated the resilience of the business model. The Company has demonstrated double-digit revenue growth and a more than doubling of profit despite COVID-19.

Highlights

Financial

-- EBITDA* of GBP1.3 million; more than double prior year (2019: GBP0.5 million) reflecting revenue growth and sales mix arising from multi-year phase III clinical trials contracts;

-- A further year of record revenues, at GBP9.5 million (2019: GBP7.6 million) representing 26% growth over prior year;

   --      Gross margin accretion to 66.6% (2019: 65.4%) reflects sustained strong margin achievement; 
   --      Operating profit of GBP0.9 million (2019: GBP0.4 million); 
   --      Profit per share of 2.02 pence (2019: 0.92 pence); 

-- Closing cash of GBP7.9 million (2019: GBP7.3 million), with operating cash inflows of GBP1.5 million (2019: outflow of GBP0.1 million);

   --      36% increase in contracted order book of GBP21.7 million (2019: GBP15.9 million); and 

-- Net assets increase to GBP9.1 million (2019: GBP7.9 million) reflecting cash generation and investments made for future growth.

*Earnings before interest, tax, depreciation and amortisation

Commercial and Operational

-- Secured net GBP15.4 million of additional multi-year contracts across all phases of clinical development, including single largest contract signed in April 2020 in Huntington's disease ('HD') for GBP10.5 million;

-- Record contracted order book of GBP21.7 million provides strong visibility for continued growth, although ongoing COVID-19 disruption to clinical trial start-up times is anticipated to impact growth rates in the short term;

-- Expansion of key scientific collaborations to develop new artificial intelligence algorithms for imaging biomarkers; and

-- Investment in headcount, process improvement and infrastructure to underpin future profitable growth and scale of operations.

Giulio Cerroni, CEO of IXICO, said: "2020 has been a fourth successive year of greater than 25% revenue growth for IXICO and one in which we have demonstrated the resilience of our business model. In addition, the Group has more than doubled its EBITDA profitability to GBP1.3 million, generated significant operational cashflows, strengthened the balance sheet and increased its contracted order book by 36% to GBP21.7 million.

I am delighted with these financial achievements, but even more so, I am proud of the way that IXICO has responded to the COVID-19 pandemic and continued to provide valuable new insights in clinical development to our global pharmaceutical clients. Our dedicated employees adapted rapidly to the changing circumstances and redoubled their focus and efforts on supporting our clients, who in turn continue to look to IXICO for neuroimaging expertise across a wide range of therapeutic areas in new clinical trials scheduled to commence during 2021 and beyond. With a record order book and a clear investment programme, the Group is well positioned for the year ahead."

Notice of AGM

IXICO also announces that its 2021 Annual General Meeting ("AGM") will be held at IXICO plc, 4th Floor Griffin Court, 15 Long Lane, London, EC1A 9PN on 21 January 2021 at 10:30am. However, in light of the current UK Government's public health advice in response to the COVID-19 outbreak, including to limit travel and public gatherings, and the likelihood that this advice may remain in place for the foreseeable future, there are changes to the usual AGM arrangements this year. Therefore regrettably, shareholders will be unable to attend the AGM in person and, instead, the Company is facilitating arrangements for shareholders to join the AGM via virtual link, details of which will be provided closer to the time.

The full Annual Report and Accounts, along with Notice of AGM, will be posted to shareholders on 18 December 2020 and at the same time will be made available on the Company's website in accordance with AIM Rule 20.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR)

For further information please contact:

 
 IXICO plc                                      +44 20 3763 7499 
 Giulio Cerroni, Chief Executive Officer 
 Grant Nash, Chief Financial Officer 
 
 Cenkos Securities plc (Nominated 
  adviser and sole broker)                      +44 20 7397 8900 
 Giles Balleny / Max Gould (Corporate 
  Finance) 
 Michael F Johnson (Sales) 
 
 Walbrook PR Ltd                             +44 (0)20 7933 8780 
 Paul McManus / Lianne Cawthorne /          IXICO@walbrookpr.com 
 Alice Woodings 
 

About IXICO

IXICO is dedicated to delivering insights in neuroscience. Our purpose is to advance medicine and human health by turning data into clinically meaningful information, providing valuable new insights in neuroscience and our goal is to be a leading proponent of artificial intelligence in medical image analysis. We will achieve this by developing and deploying breakthrough data analytics, at scale, through our remote access technology platform, to improve the return on investment in drug development and reduce risk and uncertainty in clinical trials for our pharmaceutical clients.

   More information is available on www.IXICO.com   and follow us on Twitter @IXICOplc 

Chairman's Statement

Continued growth and profitability

I am delighted to report that IXICO has delivered 26% revenue growth and more than double the profitability compared to the prior year. This strong achievement is on the back of three previous years of similar growth and underlines the effectiveness of the strategy being pursued by the Board and leadership team. This is particularly pleasing when considered in the context of the market challenges created by COVID-19.

Overview

IXICO is an Artificial Intelligence ('AI') data analytics company delivering intelligent insights in neuroscience.

Our purpose is to advance medicine and human health in neuroscience by converting raw clinical trial data into clinically meaningful information. Our data analytics services provide insights to improve the efficiency of biopharma clinical development. Through the deployment of novel AI algorithms, we analyse and interpret brain scans and wearable biosensor data to enable better trial design, patient selection and ultimately clinical outcomes across all phases of clinical evaluation.

In FY20, we have reported record revenue, sustained strong gross margins, and achieved over double the earnings before interest, tax, depreciation and amortisation ('EBITDA') as compared to the prior year.

Despite the challenging impact of COVID-19, the Group has a contracted order book at 30 September 2020 of GBP21.7 million, which is the highest year end order book in the Group's history. This comprises multi-year contracts which give visibility to future revenue and provide confidence that we enter the new financial year with a continued growth trajectory.

We close the year with a strong balance sheet which will underpin our continued investment in the business over the coming years. Our investment programme is designed to drive our ambitious growth plans for further international market penetration and achieve our full potential in the growing neuroscience market.

Governance and people

During the year, the Group rapidly leveraged its remote working business model to seamlessly adapt to the requirement for all employees to work from home. The success and speed of this transition reflected the alignment, accountability, and agility of the IXICO team. This rapid response to the COVID-19 lockdown measures, alongside close and continued communication with our clients, meant we were able to adapt our service offering to support the additional challenges faced by clinical trials and add additional value to our client programmes. On behalf of the Board, I would like to thank all of our employees who adapted so promptly and positively to remote working and pay particular tribute to our IT, HR and team leaders who helped make it all happen.

As in any successful, high-growth business, IXICO's future depends on its people. In the past 12 months we have invested significantly in our team, increasing our headcount by more than 20%, attracting new expertise into the Group whilst developing the talent already in position. We have worked hard to promote our values - Aspiration, Ability, Agility and Accountability - to augment our positive, motivated, and effective culture which aligns our team with our Group purpose.

The Board uses the ten principles outlined in the Quoted Companies Alliance ('QCA') Corporate Governance Code to ensure it maintains appropriate governance arrangements. The Board conducts itself in a manner which places IXICO's values and the QCA principles at the core of the Group's culture.

Board

During the year we have focused as a Board on the challenges of COVID-19. The impact on clinical trials has been significant with as much as a 40% reduction in new clinical trials starting in mid-2020 compared to 2019 (and of which 20% in 2020 are COVID-19 related). The Board has worked closely with the leadership team to assess the impact of this as the pandemic continues and to ensure plans are in place to address both the short-term market slow down and expected medium and long-term rapid rebound in new clinical trials as delayed trials initiate.

At the 2021 Annual General Meeting ('AGM'), in accordance with the Company's Articles of Association, John Bradshaw and Mark Warne will stand for re-election, supported by the Board of Directors' recommendation.

Shareholders

The Group holds a stable and impressive list of leading institutions which have invested in the Company over the last three years and we would like to thank all our shareholders for their continued support and enthusiasm. As we reflect on 2020, it is also pleasing to note the continued recognition in the market of our commercially led growth strategy, and the effectiveness of this in delivering value to our clients.

Outlook

The impact of COVID-19 has been far-reaching, and the clinical trials market has not been immune, creating short-term delays to new clinical trial start ups. The Board therefore views the next financial year as an opportunity for the Group to focus on investing for a rapid initiation of clinical trials as the pandemic subsides, whilst continuing to grow. Effective investment at this time will position the Group well for continued high growth as more normal times resume.

Chief Executive's Statement

A year of growth that demonstrates the resilience of our business model

Investments in data analytics service strategy delivering profitable growth

Despite the COVID-19 impacts upon global clinical trial timelines, 2020 has been another year of significant profitable growth. Our considerably strengthened contracted order book and the ability to deploy our technology across all clinical development phases means there are compelling incentives to continue investing in the scaling of our business to achieve our ambitious long-term growth goals.

Impactful purpose and highly differentiated proposition

IXICO's purpose is to provide new insights in neuroscience to improve medicine and human health by turning data into clinically meaningful information . With an ageing population and the number of people with dementia expected to increase significantly by 2050, the urgency to develop drugs that slow down or reverse the progression of these diseases is acute.

IXICO is built on a world-renowned bedrock of scientific expertise in interrogation of imaging data in neurological disease. This means that whenever a client speaks to someone at IXICO they are speaking to a neuroscience expert and this sets the Group apart from our commercial competitors.

Scientific expertise in neurological disease

IXICO is well positioned to address the increasing use of biomarkers in neurological clinical trials. This stems from our core capability to combine our deep neuroscience expertise with access to highly curated patient data from neurological disease-specific clinical trials and pipeline of algorithms designed to measure biomarkers in the brain.

Our market position benefits from participation in disease progression studies (natural history studies) and in private-public partnerships seeking to better understand neurological diseases. It is this in-house expertise and network of collaborations that has resulted in a unique and proprietary portfolio of proven software algorithms deployed to identify biomarkers associated with a diverse range of neurological diseases.

Proven underlying resilience of the technology business model

During 2020, we demonstrated the underlying resilience of our technology and ability to support our clients whilst operating remotely. We successfully transitioned to a remote working model in response to the pandemic, providing all employees with access to support and equipment to help them work effectively. Following a detailed review of the expected impact of COVID-19 on our business, focused on close co-operation with our clients, we had no requirement to furlough employees or seek any assistance from other financial support schemes implemented by the UK Government. We responded robustly to the challenges of COVID-19 such that the impact of the pandemic to client deliverables and to our 2020 financial performance was modest.

However, whilst our existing clinical trials have broadly continued as originally planned, several new trials anticipated to initiate during 2020 have not yet commenced, which is expected to create headwinds to revenue growth into 2021. Importantly these trials are not cancelled, rather they are simply delayed and we continue to work closely with our biopharmaceutical clients to ensure that, where trial start dates have been impacted, we are ready to initiate quickly when the pandemic abates.

Our forward-looking strategy of sustained and growing profitability

Recent focus on executing our commercially led growth strategy means that the business is benefiting from revenue-driven operational leverage, positive operating cashflows and a more than doubling of profitability to GBP1.3 million EBITDA in 2020 (2019: GBP0.5 million); further bolstering an already strong balance sheet.

The business has continued to build its order book, which at the 2020 year-end stood at a record GBP21.7 million (2019: GBP15.9 million). This provides strong forward revenue visibility and further underpins management's confidence to commit to a far-reaching investment programme to build long-term market leadership positions in our target markets.

Consequently, despite the challenging COVID-19 business environment, we look to the next year with cautious optimism and firm conviction for our medium and long-term prospects. Whilst we anticipate COVID-19 will mean our growth across the next year will be more muted, our strong financial position and macro trends indicating a growing market opportunity mean we have the confidence to further accelerate our investment plans. This will include investments which are designed to further our penetration of existing and adjacent neurological disease indications, diversify and broaden our client base to address client concentration, build scale and improve efficiency to further strengthen our market position.

I sign off this year, as last year, in thanking all my colleagues at IXICO for another year of exceptional progress both operationally and financially. Our increasing market presence and sustained strong financial performance means we are more able to achieve our purpose of advancing medicine and human health in neurological disease. I look forward to 2021 being another year in which IXICO further develops its position as a globally trusted technology partner to the biopharmaceutical industry.

Financial review

Consolidating growth, profitability, and cash in a year of uncertainty

The Group has delivered another period of strong financial performance across the year to 30 September 2020. This builds on three previous years of strengthening financial performance, resulting in a transition to double-digit EBITDA profitability margins and net cash inflows.

This review includes a comparison of the financial KPIs that we use to measure our progress over the prior year, a summary of which is shown below:

 
 KPI                 2020 result   2019 result    Movement 
------------------  ------------  ------------  ----------- 
 Revenue                 GBP9.5m       GBP7.6m    GBP1.9m 
 Gross profit            GBP6.3m       GBP4.9m    GBP1.4m 
 Gross margin              66.6%         65.4%    120 bps 
 EBITDA profit           GBP1.3m       GBP0.5m    GBP0.8m 
 Operating profit        GBP0.9m       GBP0.4m    GBP0.5m 
 Profit per share          2.02p         0.92p      1.10p 
 Order book             GBP21.7m      GBP15.9m    GBP5.8m 
 Cash                    GBP7.9m       GBP7.3m    GBP0.6m 
------------------  ------------  ------------  --------- 
 

Revenue

Revenue for the year of GBP9.5 million (2019: GBP7.6 million) represents a year-on-year increase of 26%. This growth was driven by increasing traction within Phase III clinical trials as the Group's success in earlier phases has been carried through into this later, larger scale phase of the drug development process.

Gross profit

The Group reports gross profit of GBP6.3 million in the year. This is an increase of GBP1.4 million or 28% compared to 2019 and equates to a gross margin of 67% (2019: 65%). This strong gross profit performance reflects a combination of a favourable sales mix, linked to the growth in proportion of image analytics within its revenues driven by increased traction in Phase III clinical trials, and the leveraging of operational efficiencies as the Group grows.

Earnings before interest, tax, depreciation and amortisation ('EBITDA')

The Group more than doubled its EBITDA profit in the year, having become sustainably profitable for the first time in the prior year. This profit of GBP1.3 million (2019: GBP0.5 million) reflects the impact of strong revenue growth, improved operational leverage (and productivity), and control of administrative costs whilst enabling a level of investment in research and development and in sales and marketing. EBITDA was positively impacted by the introduction of IFRS 16, which requires companies to recognise depreciation and interest on leases rather than as rent directly to operating expense. This increased EBITDA by GBP0.2 million in the year (2019: GBPnil).

Operating profit

Operating expenditure in the year reflected investment in people and product development:

-- research and development expenses of GBP1.3 million (2019: GBP1.0 million) included the development of new algorithms to support image analysis as well as enhancements of the Group's platforms to enable operational scalability. The Group, in addition, capitalised GBP0.2 million of internal development expenditure in the year (2019: GBP0.2 million);

-- sales and marketing expenses were GBP1.6 million (2019: GBP1.2 million) reflecting increased investment to support continued future growth; and

-- general and administrative expenses were controlled at GBP3.2 million (2019: GBP3.0 million).

The reported operating profit of GBP0.9 million reflected 26% revenue growth , strong gross profit performance and controlled operating expenditures. This equated to an operating profit margin of 9% (2019: 5%).

Order book

The Group continues to benefit from a healthy contracted order book. At 30 September 2020 this totalled GBP21.7 million (2019: GBP15.9 million), which takes account of GBP9.5 million of business executed during the year and net GBP15.3 million of (both new and expanded) multi-year contracts secured across all phases of clinical development. This means that the Group retains a strong position to deliver continued revenue growth.

Cash

The Group reported operating cash inflows of GBP1.5 million before tax receipts in the year (2019: GBP0.1 million cash outflow) reflecting the Group's strengthening profitability and the beneficial timing of payments on customer contracts.

The Group had a closing cash balance at 30 September 2020 of GBP7.9 million (2019: GBP7.3 million) with the increase reflecting the operating cash inflows partly offset by capital investment in the Group to support future scalability and improved IT infrastructure. The strengthened, and substantial, debt-free cash balance means the Group is well positioned to invest for continued growth. Further consideration of the Group as a going concern is discussed in the Director's report.

Net assets

The Group's net asset position increased by GBP1.2 million to GBP9.1 million (2019: GBP7.9 million). This is reflective of the Group's ability to turn profitability into operating cash inflows, as well as the Group's commitment to invest in order to meet the future growth demands. This strong net asset position provides the foundation to support the Group's investment programme for the next year.

Profit per share

The Group reports a profit per share of 2.02p (2019: 0.92p) reflecting the significant uplift in financial performance achieved across the year.

The Group is delivering against its growth strategy, is profitable, and is well capitalised, providing a strong basis to further accelerate investment across 2021, despite the challenges created by COVID-19, and thereby continues to be fully focused on the execution of its commercially-led growth strategy.

Risk management

The Board holds responsibility for monitoring risks to which the Group is exposed, and for reviewing and assessing the effectiveness of the internal control framework used by the Group to manage those risks.

The Group has designed its internal controls with the aim of providing a proportionate level of assurance for the organisation, taking account of its size, stage of development and risk exposure. Whilst the Board is confident that the control framework is fit for purpose, it continues to seek ways to further mitigate against the risk of material misstatement or loss.

In assessing the risks faced by the Group, a detailed risk identification and control framework is adopted. It is the responsibility of each department head to update the risk and control matrix for their area and these are then consolidated into a single matrix which is reviewed by the Senior Leadership Team on a quarterly basis. The Board receives a summary of the risk and control matrix which sets out the current status of controls in place to manage identified risks and ranks the risks by their potential impact and likelihood on the Group's operations. This matrix also details the additional actions which are being implemented to further manage such risks. The Board reviews and challenges the Executive Directors on this risk and control matrix as necessary.

Principal risks and uncertainties

The following table presents the principal risks and uncertainties that the Board considers could have a material impact on the Group's operational results, financial condition and prospects.

These risks and uncertainties reflect the business environment within which the Group operates, together with risks in the execution of its business strategy. The risks are separated into four specific risk areas being Strategic, Financial, Operational, and Legal/Compliance & Reputational.

Strategic risks

 
 Principal Risks    Risk Context        Mitigation                                                    Change in the 
                                                                                                       Year 
 The Group fails    The Board 
 to exploit         anticipates           *    Annual review by the Board of Group strategy and       Likelihood 
 the commercial     that its                   budget priorities with progress against strategy.      reduced 
 opportunities      strategic                                                                         following 
 available to       initiatives will                                                                  further improved 
 it and does        lead                  *    Monthly leadership review of delivery of specific      strategic review 
 not deliver        to increased               strategic initiatives.                                 process 
 the full           market 
 potential          penetration and 
 for shareholder    development           *    Board appraisal of significant investments before 
 (and other         of new market              funds are committed and subsequent review of each 
 stakeholder)       opportunities              investment's delivery and performance. 
 returns            for the Group. 
 
                    The nature of the     *    External expertise and advice sought to inform 
                    neurological               strategic initiatives. 
                    drug development 
                    market 
                    means that            *    Orientation and alignment of the Senior Leadership 
                    strategic                  Team to focus on delivery and an increased pace of 
                    initiatives will           improvement implementation. 
                    inevitably 
                    include a degree 
                    of                    *    5-year strategic plan currently being refreshed to 
                    judgement risk.            reflect the Group has now achieved sustainable 
                                               profitable growth. 
                    The Group may not 
                    execute 
                    on its strategic 
                    plans 
                    as effectively or 
                    efficiently 
                    as possible, 
                    thereby 
                    failing to 
                    maximise 
                    the commercial 
                    opportunity 
                    available to it. 
                   ------------------  ------------------------------------------------------------  ----------------- 
 Changes to         New impediments 
 international      to                   *    Board review of likely risks associated with Brexit     No significant 
 trading            international             and other potential changes to the trading              impact is 
 environment        trade                     environment.                                            anticipated 
 due to political   resulting from                                                                    at the current 
 events             political                                                                         time 
                    actions such as      *    Continued focus on non-EU markets helps reduce risk 
                    Brexit                    for the Group in the event of unexpected difficulties 
                    or US trade               arising to trade between UK and EU. 
                    tariffs 
                    may disadvantage 
                    the                  *    Consultation with legal experts to assess specific 
                    Group's position          areas of Brexit risk and develop mitigation plans 
                    in                        accordingly. 
                    its marketplace. 
                   ------------------  ------------------------------------------------------------  ----------------- 
 COVID-19           COVID-19 has 
 pandemic           created              *    The Group has worked closely with clients to support    The Group's 
 creates            a significant             adjustments required to their trials due to COVID-19.   2021 revenue 
 strategic,         downturn                                                                          growth levels 
 financial and/or   in the initiation                                                                 are expected 
 operational        of                   *    The Group has been able to leverage its strong order    to be more 
 uncertainty        new clinical              book and balance sheet position to continue its         muted than 
                    trials                    investment plans.                                       in the current 
                    (and interruption                                                                 year because 
                    and                                                                               of COVID-19. 
                    delays to            *    The Group has successfully migrated and equipped all 
                    existing                  staff to working remotely effectively.                  The actions 
                    clinical trials).                                                                 of the Group 
                    This                                                                              mean it is 
                    is expected to       *    Detailed and regular forecasting and close management   confident to 
                    create                    of expenditure have given the Group confidence in its   invest to 
                    short-term growth         ability to manage the COVID-19 impact.                  support 
                    headwinds                                                                         the expected 
                    and create a                                                                      rapid initiation 
                    temporary                                                                         in new trials 
                    reduction in                                                                      once the 
                    demand                                                                            pandemic 
                    for the Group's                                                                   abates. 
                    services. 
 
                    The uncertainty 
                    over 
                    the duration of 
                    the 
                    COVID-19 pandemic 
                    may 
                    disrupt the 
                    Group's 
                    strategic plans. 
 
                    COVID-19 has 
                    required 
                    employees to work 
                    remotely 
                    which may risk an 
                    impact 
                    on productivity. 
                   ------------------  ------------------------------------------------------------  ----------------- 
 

Operational risks

 
 Principal Risks     Risk Context       Mitigation                                                    Change in the 
                                                                                                       Year 
 Failure of          A significant 
 IT infrastructure   failure              *    Investment in IT infrastructure, including use of      Likelihood 
                     of IT                     cloud services, implementation of new and upgraded     reduced due 
                     infrastructure,           systems and equipment has mitigated the risk of        to improved 
                     or a physical             prolonged down time as a result of hardware failure.   infrastructure 
                     disaster                                                                         and controls 
                     (such as fire or                                                                 implemented 
                     flood)               *    The implementation of a full disaster recovery         throughout 
                     at the Group's            infrastructure is underway and will be complete in     2020 and planned 
                     IT hosting                early 2021.                                            for 2021. 
                     centre, might 
                     disrupt 
                     the Group's 
                     operations. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 The Group is        As the Group 
  reliant on         scales,              *    The Group has increased its headcount by more than     The risk of 
  key individuals    servicing an              30% during the year. This gives the Group access to    overreliance 
  to support         increased                 both new skills and augmented existing skill sets.     on several 
  its operational    number of                                                                        key individuals 
  and service        clients and                                                                      has been 
  delivery           their projects,      *    The Group is investing in a new image capture and      reduced. 
                     so                        analysis platform which will reduce the reliance on 
                     the Group risks           key individuals and will launch during 2021.           This principal 
                     overreliance                                                                     risk remains 
                     on key                                                                           whilst the 
                     individuals.                                                                     new image 
                                                                                                      capture 
                                                                                                      and analysis 
                                                                                                      platform is 
                                                                                                      being developed. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 A cyber-attack      Any successful 
  results in         cyber-attack        *    Strengthened levels of control exist over the Group's   Likelihood 
  a breach of        may create               IT infrastructure, including ongoing investments in     reduced as 
  the Group's        operational              improved security, 'TrialTracker' platform              improved 
  IT systems         (and potentially         enhancements, upgraded firewalls and training for all   controls 
                     financial)               staff provided on data security and standard controls   and 
                     risks and may            such as password protection and policies.               infrastructure 
                     have                                                                             implemented. 
                     a significant 
                     reputational        *    The Group is investing in a full upgrade to its image   Roll out of 
                     impact for the           data capture and analysis platform. This will be        new a cloud 
                     Group.                   completed in 2021 and will further enhance the          based imaging 
                                              security of the Group's systems.                        capture and 
                                                                                                      analysis 
                                                                                                      platform 
                                         *    The Group has submitted its IT infrastructure to        in 2021 will 
                                              independent penetration tests as part of prospective    further reduce 
                                              client audits and received strong security scores.      this risk area. 
                    -----------------  ------------------------------------------------------------  ----------------- 
 

Financial risks

 
 Principal      Risk Context                                             Mitigation                                                    Change in 
 Risks                                                                                                                                 the 
                                                                                                                                       Year 
 Early          The Group's client 
 termination    contracts bear a risk                                     *    Commercial contracts can include up-front payment,      No material 
 of a           of early termination                                           close-out cost recovery and termination notice          change in 
 client's       in the event of:                                               clauses.                                                risk 
 clinical        *    an interim data review demonstrating no material                                                                 compared to 
 trial                benefit; or                                                                                                      prior year. 
                                                                          *    Material contracts are late-phase or open label 
                                                                               studies meaning they are less likely to have an early 
                 *    a serious adverse event.                                 termination event than earlier phase studies. 
               -------------------------------------------------------  ------------------------------------------------------------  ------------ 
 Loss of a      The Group has material 
 key             contracts with a single                                   *    Leadership monitors service levels across projects     New client 
 commercial      client. There is therefore                                     and has dedicated additional resources to supporting   contracts 
 relationship    a risk that, if that                                           its largest client. The strengthening of the Group's   were 
 with a          client terminated its                                          relationship with this client will reduce the          won during 
 client          relationship with the                                          likelihood of relationship damage or loss.             the year. 
                 Group, there would                                                                                                    In 
                 be a significant impact                                                                                               addition to 
                 on the Group's short                                      *    Further development of the sales pipeline, via the     this 
                 and/or medium-term                                             appointment of additional business development         however, 
                 revenue expectations.                                          resources, is targeted at new client acquisition;      further 
                                                                                accelerating the broadening of the client portfolio    contracts 
                                                                                and reducing the impact of losing a major client.      were also 
                                                                                                                                       awarded 
                                                                                                                                       by the 
                                                                                                                                       Group's 
                                                                                                                                       largest 
                                                                                                                                       client. 
                                                                                                                                       This has 
                                                                                                                                       increased 
                                                                                                                                       the Group's 
                                                                                                                                       reliance on 
                                                                                                                                       its largest 
                                                                                                                                       client. 
 
                                                                                                                                       During 
                                                                                                                                       2021, 
                                                                                                                                       the Group 
                                                                                                                                       will 
                                                                                                                                       seek to 
                                                                                                                                       further 
                                                                                                                                       diversify 
                                                                                                                                       its 
                                                                                                                                       client 
                                                                                                                                       portfolio 
                                                                                                                                       by winning 
                                                                                                                                       a greater 
                                                                                                                                       number 
                                                                                                                                       of 
                                                                                                                                       contracts 
                                                                                                                                       across a 
                                                                                                                                       broader 
                                                                                                                                       range of 
                                                                                                                                       clients. 
               -------------------------------------------------------  ------------------------------------------------------------  ------------ 
 Financial      The Group is exposed 
 risks           to financial risks                                       *    Standard controls are applied around all of these       Reduced 
 are set out     typical of all commercial                                     risks.                                                  foreign 
 in further      companies. These include                                                                                              exchange 
 detail under    the risks of a cash                                                                                                   exposure 
 note 24 to      shortfall, experiencing                                  *    The Group has a strong and strengthening cash           due to a 
 the             a significant client                                          position and a client portfolio which includes large,   greater 
 financial       payment delay, exposure                                       well-funded organisations.                              proportion 
 statements      to a foreign currency                                                                                                 of client 
 and include:    rate fluctuation which                                                                                                contracts 
 Liquidity       is against the interests                                 *    Most contracts are denominated in GBP and currency      being 
 risks           of the Group and/or                                           levels are forecast and reviewed monthly.               denominated 
 Credit risks    the Group fails to                                                                                                    in GBP. 
 Currency        plan for tax and therefore 
 risks           is exposed to tax liabilities                            *    Tax planning initiatives implemented with support of    Well 
 Tax planning    beyond the level necessary.                                   external tax advisers.                                  controlled 
 risks                                                                                                                                 trade 
                                                                                                                                       receivables 
                                                                                                                                       position 
 
                                                                                                                                       Cash 
                                                                                                                                       generative 
 
                                                                                                                                       Review of 
                                                                                                                                       tax 
                                                                                                                                       losses 
                                                                                                                                       conducted 
                                                                                                                                       during the 
                                                                                                                                       year. 
               -------------------------------------------------------  ------------------------------------------------------------  ------------ 
 

Legal/Compliance & Reputational risks

 
 Principal Risks     Risk Context       Mitigation                                                   Change in the 
                                                                                                      Year 
 Reputational        If the Group 
  damage due         provided            *    Operational checks are used to control data error,     Improved controls 
  to error or        incorrect                duplication or transfer issues and to highlight when   have reduced 
  system failure     results in               an analysis fails.                                     risk, with 
  in delivery        the course of                                                                   further system 
  of analysis        delivering                                                                      developments 
  services           its services to     *    Continued investment in training and automation to     due to be 
                     a clinical               scale controls used to identify potential errors.      implemented 
                     trial this may                                                                  in 2021 
                     impact 
                     on the trial        *    Significant upgrade to existing data platform is in 
                     and/or                   progress which will further strengthen system 
                     patient outcomes         controls in place. 
                     and 
                     result in 
                     reputational 
                     damage for the 
                     Group. 
                    -----------------  -----------------------------------------------------------  ------------------ 
 Breach of data      The Group 
  protection         captures            *    Data captured from client sites is pseudonymised on     Likelihood 
  regulations        personal data            receipt into the Group's 'TrialTracker' software.       reduced as 
                     from                                                                             the Group has 
                     clinical trial                                                                   implemented 
                     subjects.           *    Controls over the protection of personal data have      further IT 
                     As such, it is           been implemented. Data outputs to clients and key       infrastructure 
                     exposed                  stakeholders are issued following the application of    enhancements 
                     to data security         controls designed to reduce, as far as possible, the    and augmented 
                     risks.                   likelihood of unintended release.                       data management 
                                                                                                      policies and 
                                                                                                      training. 
                                         *    Data protection legislation requirements (such as 
                                              GDPR) are integrated within the Group's processing 
                                              activities and practices. 
                    -----------------  -----------------------------------------------------------  ------------------ 
 Failure to          It was a 
  comply with        requirement          *    The Board and Senior Leadership Team regularly         Risk mitigated 
  the requirements   of the VCT/EIS            reviewed the deployment of funds.                      with funds 
  of its VCT/EIS     funding                                                                          employed as 
  funding            raised by the                                                                    at May 2020. 
                     Group                *    Detailed plans, budgets and forecasts were used to 
                     in May 2018 that          guide the employment of funds. 
                     it 
                     be employed 
                     within               *    The Group engaged external expertise to review 
                     a period of 2             investments made during the course of the 2-year 
                     years.                    investment period to ensure compliance with VCT/EIS 
                     Failure to do so          funding obligations . 
                     would 
                     result in the 
                     VCT/EIS 
                     investors losing 
                     some 
                     of the tax 
                     benefits 
                     associated with 
                     their 
                     investment. 
                    -----------------  -----------------------------------------------------------  ------------------ 
 

Corporate Governance Report

The Board has adopted, and complies with, the Quoted Companies Alliance ('QCA') Corporate Governance Code ('Code') and has published a statement on the Group website that sets out, in broad terms, how the Group complies with the Code at the date of this report. The Board provides annual updates about compliance with the Code. The Board is responsible for ensuring that IXICO is managed for the long-term benefit of all shareholders, through effective and efficient decision-making. Corporate governance is an important part of the Board's role by providing oversight and guidance to help manage risk and build long-term value.

The Code comprises 10 principles, with which companies undertake to comply as part of their corporate governance arrangements. The Board conducts itself in a manner which places IXICO's values and the principles of the Code at the core of the Group's culture.

A summary of how the Group complies with these principles is outlined below with further detail being available on the Group's website (https://ixico.com/investors/governance/oversight/).

 
 Focus Area      Governance          Group Approach                                                     Further 
                  Principle                                                                              Reading 
 Deliver         1: Establish             The Group delivers insights to biopharmaceutical              Our 5-point 
 value in         a strategy              companies developing drugs to address                         growth plan 
 a manner         and business            neurological disease. To achieve our                          is detailed 
 aligned          model which             business goals, the Group is accelerating                     in the full 
 to               promotes                growth and has grown profitability in                         annual report. 
 shareholder      long-term               the financial year to 30 September 2020                       Our approach 
 and wider        value for               by:                                                           to innovation 
 stakeholder      shareholders             *    building scale and market presence for our technology   and recent 
 aspirations                                    solutions; and                                          product 
                                                                                                        launches 
                                                                                                        are described 
                                           *    developing and commercialising new products and         in the full 
                                                services.                                               annual report. 
 
 
                                          These activities promote and are delivering 
                                          long-term value for shareholders. 
                ------------------  -----------------------------------------------------------------  --------------- 
                 2: Seek to          The Board is committed to encouraging 
                  understand          open communication between itself and 
                  and meet            shareholders. The Chief Executive Officer 
                  shareholder         and Chief Financial Officer arrange 
                  needs and           to meet with major shareholders at least 
                  expectations        twice a year to update them on strategy, 
                                      progress against this strategy and obtain 
                                      feedback. The Chairman also makes himself 
                                      available for discussions with major 
                                      shareholders as and when appropriate. 
                                      Further, should the Board consider any 
                                      significant divergence from strategy 
                                      it will seek feedback from major shareholders 
                                      as part of its deliberations. 
                                      The Board uses publications on its website 
                                      and its Annual Report to keep all shareholders 
                                      informed of its progress. It uses the 
                                      AGM to invite feedback from any shareholder. 
                                      The CEO and CFO are responsible for 
                                      investor relations and any feedback 
                                      received from shareholders is communicated 
                                      to the wider Board. 
                ------------------  -----------------------------------------------------------------  --------------- 
                 3: Take into        The Group is highly conscious of the                               Our 
                  account wider       requirements of its wider stakeholders                            stakeholders 
                  stakeholder         in supporting its long-term success.                              and how 
                  and social          It views its wider stakeholders as its                            we engage 
                  responsibilities    clients, suppliers, employees and the                             with them 
                  and their           patients participating in the clinical                            are described 
                  implications        trials it serves. The Board has implemented                       in in the 
                  for long-term       approaches to support the requirements                            full annual 
                  success             of each group and, where it identifies,                           report. 
                                      or is notified of, any risks or concerns 
                                      in respect of any of these stakeholder 
                                      groups, it puts in place actions to 
                                      address these. 
                ------------------  -----------------------------------------------------------------  --------------- 
                 4: Embed                 The Board has ultimate responsibility                         The Risk 
                 effective                for the Group's system of risk management                      Management 
                 risk management,         and internal control and for reviewing                         Report is 
                 considering              its effectiveness.                                             provided 
                 both                     The Board instils control to the Group's                       above. 
                 opportunities            operations by overseeing the following: 
                 and threats,              *    competent and prudent management; 
                 throughout 
                 the organisation 
                                           *    sound planning; 
 
 
                                           *    adequate systems of control, including regular review 
                                                of risk; 
 
 
                                           *    adequate and accurate accounting records; and 
 
 
                                           *    compliance with statutory and regulatory obligations. 
                ------------------  -----------------------------------------------------------------  --------------- 
 Maintain        5: Maintain         The Board comprises the Non-Executive                              More 
 a strong        the Board           Chairman, two Executive Directors and                              information 
 and dynamic     as a                two Non-Executive Directors, one of                                on Board 
 management      well-functioning,   whom acts as Senior Independent Director.                          membership 
 framework       balanced            The Board has an appropriate balance                               is provided 
 that places     team led            between independence and knowledge of                              in the full 
 value on        by the Chair        the Group and its target markets which                             annual report. 
 developing                          allows it to discharge its duties and 
 the Group                           responsibilities effectively. 
 in an ethical                       The Directors use their independent 
 manner                              judgement and challenge matters affecting 
                                     the business whether strategic or operational. 
                                     The Non-Executive Directors are in regular 
                                     contact with the Executive Directors 
                                     and the Chairman has regular one-to-one 
                                     meetings with the Chief Executive Officer. 
                                     The Board has access to independent 
                                     external advisers to support it in its 
                                     decisions, where additional skills or 
                                     expertise is deemed necessary. 
                                     The Board has procedures in place to 
                                     deal with a situation in which a Director 
                                     has, or may have, a conflict of interest. 
                                     The Board is aware of other commitments 
                                     and interests as they are disclosed 
                                     by each Board member. 
                                     The Board meets formally (either face-to-face 
                                     or via video conference) not fewer than 
                                     four times per year in addition to the 
                                     annual strategy day. 
                                     The Board is also supported by three 
                                     subcommittees: the Audit Committee, 
                                     the Remuneration Committee and the Share 
                                     Transaction Committee. The Board and 
                                     its subcommittees all operate against 
                                     terms of reference which are summarised 
                                     on the Company website 
                                     (https://ixico.com/investors/governance/). 
                ------------------  -----------------------------------------------------------------  --------------- 
                 6: Ensure           The Board has an effective and appropriate                         Further 
                  that between        balance of skills and experience and                              details 
                  them the            is mindful of the need to continuously                            of the Board's 
                  Directors           review the needs of the business to                               skills and 
                  have the            ensure that this remains true, so that                            experience 
                  necessary           the Group can drive performance as well                           can be found 
                  up-to-date          as comply with regulations.                                       in the full 
                  experience,         The Group's Articles of Association                               annual report. 
                  skills and          require that all Directors must stand 
                  capabilities        for re-election every three years and 
                                      that any new Directors appointed during 
                                      the year must stand for election at 
                                      the AGM following their appointment. 
                ------------------  -----------------------------------------------------------------  --------------- 
                 7: Evaluate         The Board undertakes self-reviews from 
                 all elements         time to time in order to assess its 
                 of Board             performance. The Chairman provides leadership 
                 performance          to the Board and assesses the individual 
                 based on             Directors to ensure that their contribution 
                 clear and            is relevant and effective and that they 
                 relevant             are committed members of the Board. 
                 objectives, 
                 seeking 
                 continuous 
                 improvement 
                ------------------  -----------------------------------------------------------------  --------------- 
                 8: Promote          The Group operates in a highly regulated                           The Group's 
                  a corporate         environment in accordance with an integrated                      values are 
                  culture that        Management System (including ISO 13485:2016)                      described 
                  is based            which is subject to third-party audit.                            in the full 
                  on ethical          The Group is focused on a therapeutic                             annual report. 
                  values and          area which has a high unmet medical 
                  behaviours          need and our employees are motivated 
                                      to support our clients in their quest 
                                      to develop and provide safe, effective 
                                      treatments for people living with neurological 
                                      diseases. 
                                      The Group employs a diverse workforce 
                                      and embraces a culture where employees 
                                      are treated equitably within an environment 
                                      of mutual respect and understanding. 
                                      The eradication of fraud and bribery 
                                      in the way in which the Group operates 
                                      is also of great importance to securing 
                                      the trust and confidence of its clients 
                                      and partners. Therefore, the Group adopts 
                                      a zero-tolerance position to fraud and 
                                      bribery and is committed to pursuing 
                                      this approach throughout its operational 
                                      practices. 
                ------------------  -----------------------------------------------------------------  --------------- 
                 9: Maintain         The Board is collectively responsible                              The Group's 
                 governance           for the long-term success of the Group.                           risk 
                 structures           Its principal function is to provide                              management 
                 and processes        the Group with a framework of prudent                             approach 
                 that are             and effective controls, which enables                             is described 
                 fit for purpose      risk to be assessed and managed and                               above. 
                 and support          its strategy executed. Further details 
                 good                 as to how the governance processes are 
                 decision-making      structured to achieve this are outlined 
                 by the Board         within this Governance Report. 
                ------------------  -----------------------------------------------------------------  --------------- 
 Build trust     10: Communicate     The Group communicates with shareholders                           The full 
 based on        how the Group        (and other stakeholders) via its website,                         Strategic 
 open            is governed          its Annual Report and the AGM as well                             Report, 
 communication   and is performing    as via issuing RNS announcements and                              Directors' 
 with            by maintaining       presenting to major shareholders and                              report and 
 stakeholders    a dialogue           analysts.                                                         stakeholder 
                 with shareholders    This Governance Report, alongside the                             engagement 
                 and other            wider Strategic and Directors' Reports                            in the year 
                 relevant             are designed to provide full and relevant                         can be found 
                 stakeholders         updates on how the Group is governed                              in the full 
                                      and how it is performing. These are                               annual report. 
                                      drafted with both shareholders and the                            Financial 
                                      wider stakeholder community in mind.                              Review can 
                                                                                                        be found 
                                                                                                        above. 
                ------------------  -----------------------------------------------------------------  --------------- 
 

The Board and its subcommittees

The Board meets at least 4 times per year in accordance with a pre-determined meeting calendar. The Board is supported by 3 subcommittees: the Audit Committee, the Remuneration Committee and the Share Transaction Committee. The subcommittees discharge responsibilities on behalf of the Board and are entitled to such internal or external advice as is required to allow them to fulfil their duties.

The table below shows the membership of the Board and each subcommittee as at the end of 30 September 2020:

 
                                       Board         Audit Committee  Remuneration  Share Transaction 
                                                                        Committee        Committee 
                                 ------------------  ---------------  ------------ 
Charles Spicer (Non-Executive         Chairman              -              -                - 
 Chairman) 
Giulio Cerroni (Chief Executive        Member               -              -                - 
 Officer) 
Grant Nash (Chief Financial      Member & Secretary     Secretary      Secretary    Member & Secretary 
 Officer & Company Secretary) 
Mark Warne (Senior Independent         Member            Member         Chairman         Chairman 
 Non-Executive Director) 
John Bradshaw (Independent             Member           Chairman         Member             - 
 Non-Executive Director) 
-------------------------------  ------------------  ---------------  ------------  ------------------ 
 

The Board and its subcommittees receive appropriate and timely information prior to each meeting including a formal agenda. Any Director may challenge Group proposals. Decisions are taken democratically after appropriate discussion. Specific actions arising from Board meetings are agreed by the Board or relevant subcommittee and are then followed up by the Executive Directors.

The Board and subcommittees all operate against terms of reference which are summarised on the Group website (https://ixico.com/investors/governance/).

Audit Committee

The Audit Committee is chaired by John Bradshaw. Mark Warne is a member of the Committee. The terms of reference of the Audit Committee include the following responsibilities:

-- monitor the integrity of the Group's financial statements and application of accounting policies;

   --      review the effectiveness of the Group's internal control and risk management systems; and 

-- oversight of the Group's external auditors, including assessment of their independence from the Group.

Audit Committee meetings are usually held twice per financial year.

During the year, the Audit Committee reviewed other services provided by the Group's auditor and took the decision to move tax advisory and compliance services to another firm. This means the Group auditor now only provides audit services to the Group.

Remuneration Committee

The Remuneration Committee is chaired by Mark Warne. John Bradshaw is a member of the Committee.

The terms of reference of the Remuneration Committee include the following responsibilities:

-- determine and agree with the Board the framework or broad policy for the remuneration of the Executive Directors and other such members of the executive management as it is designated to consider;

-- approve the design of, and determine targets for, any performance-related pay schemes and approve the total annual payments made under such schemes;

   --      approve all long-term incentive scheme structures and option schemes; 
   --      approve all option grants for ratification by the Board; and 

-- within the terms of the agreed policy, determine the total individual remuneration package of each Executive Director including, where appropriate, bonuses, incentive payments and share options.

Remuneration Committee meetings are usually held twice per financial year.

Share Transaction Committee

The Share Transaction Committee is chaired by Mark Warne. Grant Nash is a member of the Committee.

The terms of reference of the Share Transaction Committee include the following responsibilities:

-- review, consider and, where deemed appropriate, approve the exercise of share options by option holders of the Group and the issuance of shares in connection with such exercises; and

-- review, consider and approve the request to transact shares by employees or other individuals closely related to the Group (and all ancillary matters) in accordance with the relevant policies of the Group, applicable law and any directions of the Group's nominated adviser.

The Share Transaction Committee meetings are held on an ad hoc basis as required.

Consolidated Statement of Comprehensive Income

for the years ended 30 September 2020 and 30 September 2019

 
                                                            2020      2019 
 
                                                  Note    GBP000    GBP000 
-----------------------------------------------  -----  --------  -------- 
 Revenue                                             6     9,532     7,561 
 
 Cost of sales                                           (3,186)   (2,619) 
-----------------------------------------------  -----  --------  -------- 
 Gross profit                                              6,346     4,942 
 
 Other income                                        8       606       588 
 
 Operating expenses 
 Research and development expenses                       (1,309)     (986) 
 Sales and marketing expenses                            (1,579)   (1,154) 
 General and administrative expenses                     (3,208)   (3,026) 
 Total operating expenses                           11   (6,096)   (5,166) 
-----------------------------------------------  -----  --------  -------- 
 Operating profit                                            856       364 
 
 Finance income                                               20         2 
 Finance expense                                            (18)         - 
 Profit on ordinary activities before taxation               858       366 
 
 Taxation credit                                    12        94        66 
-----------------------------------------------  -----  --------  -------- 
 
 Profit attributable to equity holders for 
  the period                                                 952       432 
-----------------------------------------------  -----  --------  -------- 
 
 Other comprehensive expense: 
 Items that will be reclassified subsequently 
  to profit or loss 
 Foreign exchange translation differences                    (1)       (1) 
-----------------------------------------------  -----  --------  -------- 
 Total other comprehensive expense                           (1)       (1) 
 
 Total comprehensive income attributable 
  to equity holders for the period                           951       431 
-----------------------------------------------  -----  --------  -------- 
 
 
 Profit per share (pence)                           13 
-----------------------------------------------  -----  --------  -------- 
 Basic profit per share                                     2.02      0.92 
 Diluted profit per share                                   2.00      0.92 
-----------------------------------------------  -----  --------  -------- 
 

Consolidated Statement of Financial Position

as at 30 September 2020, 30 September 2019 and 30 September 2018

 
 
                                               2020         2019         2018 
 
                                                        Restated     Restated 
                                    Note     GBP000       GBP000       GBP000 
-------------------------------    -----  ---------  -----------  ----------- 
 Assets 
 Non-current assets 
 Property, plant and equipment       14       1,014          316           77 
 Intangible assets                   15         796          292           32 
 Total non-current assets                     1,810          608          109 
 
 Current assets 
 Trade and other receivables         17       2,082        2,379        2,140 
 Current tax receivables             12         259          450          229 
 Cash and cash equivalents                    7,945        7,264        7,861 
---------------------------------  -----  ---------  -----------  ----------- 
 Total current assets                        10,286       10,093       10,230 
 
 Total assets                                12,096       10,701       10,339 
---------------------------------  -----  ---------  -----------  ----------- 
 
 Liabilities and equity 
 Non-current liabilities 
 Trade and other payables            18         167            -            - 
 Provisions                          19          90            -            - 
 Lease liabilities                   20          45            -            - 
---------------------------------  -----  ---------  -----------  ----------- 
 Total non-current liabilities                  302            -            - 
 
 Current liabilities 
 Trade and other payables            18       2,407        2,782        3,013 
 Provisions                          19         100            -            - 
 Lease liabilities                   20         168            -            - 
 Total current liabilities                    2,675        2,782        3,013 
 
 Total liabilities                            2,977        2,782        3,013 
 
 Equity 
 Ordinary shares                     22         471          469          467 
 Share premium                       22      84,499       84,436       84,389 
 Merger relief reserve               22       1,480        1,480        1,480 
 Reverse acquisition reserve         22    (75,308)     (75,308)     (75,308) 
 Foreign exchange translation 
  reserve                            22        (97)         (81)         (80) 
 Capital redemption reserve          22       7,456        7,456        7,456 
 Accumulated losses                         (9,382)     (10,533)     (11,078) 
---------------------------------  -----  ---------  -----------  ----------- 
 Total equity                                 9,119        7,919        7,326 
 
 Total liabilities and 
  equity                                     12,096       10,701       10,339 
---------------------------------  -----  ---------  -----------  ----------- 
 

Company Statement of Financial Position

as at 30 September 2020, 30 September 2019 and 30 September 2018

 
 
                                             2020         2019         2018 
 
                                                      Restated     Restated 
                                  Note     GBP000       GBP000       GBP000 
-----------------------------    -----  ---------  -----------  ----------- 
 Assets 
 Non-current assets 
 Investments in Group 
  undertakings                     16       5,623        5,516        5,434 
 Total non-current assets                   5,623        5,516        5,434 
 
 Current assets 
 Trade and other receivables       17       4,255        4,710          685 
 Cash and cash equivalents                  1,705        2,187        7,229 
-------------------------------  -----  ---------  -----------  ----------- 
 Total current assets                       5,960        6,897        7,914 
 
 Total assets                              11,583       12,413       13,348 
-------------------------------  -----  ---------  -----------  ----------- 
 
 Liabilities and equity 
 Current liabilities 
 Trade and other payables          18          73          112          140 
 Total current liabilities                     73          112          140 
 
 Equity 
 Ordinary shares                   22         471          469          467 
 Share premium                     22      84,499       84,436       84,389 
 Merger relief reserve             22       1,480        1,480        1,480 
 Capital redemption 
  reserve                          22       7,456        7,456        7,456 
 Accumulated losses                      (82,396)     (81,540)     (80,584) 
-------------------------------  -----  ---------  -----------  ----------- 
 Total equity                              11,510       12,301       13,208 
 
 Total liabilities and 
  equity                                   11,583       12,413       13,348 
-------------------------------  -----  ---------  -----------  ----------- 
 

Parent Company Income Statement

As permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented as part of these financial statements. The Company's loss for the financial year was GBP1,040,000 (2019: GBP1,069,000).

Consolidated Statement of Changes in Equity

for the years ended 30 September 2020 and 30 September 2019

 
                                                                           Foreign 
                                                Merger       Reverse      exchange      Capital 
                          Ordinary     Share    relief   acquisition   translation   redemption   Accumulated 
                            shares   premium   reserve       reserve       reserve      reserve        losses    Total 
                          Restated                                                     Restated 
                            GBP000    GBP000    GBP000        GBP000        GBP000       GBP000        GBP000   GBP000 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 Balance at 1 October 
  2018                       7,923    84,389     1,480      (75,308)          (80)            -      (11,078)    7,326 
 Prior period 
  adjustment 
  (note 3)                 (7,456)         -         -             -             -        7,456             -        - 
 Restated balance at 1 
  October 
  2018                         467    84,389     1,480      (75,308)          (80)        7,456      (11,078)    7,326 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 Total comprehensive 
 income/(expense) 
 Profit for the period           -         -         -             -             -            -           432      432 
 Other comprehensive 
 expense: 
 Foreign exchange 
  translation                    -         -         -             -           (1)            -             -      (1) 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 Total comprehensive 
  income/(expense)               -         -         -             -           (1)            -           432      431 
 
 Transactions with 
 owners 
 Charge in respect of 
  share 
  options                        -         -         -             -             -            -           113      113 
 Exercise of share 
  options                        2        47         -             -             -            -             -       49 
 Total transactions 
  with 
  owners                         2        47         -             -             -            -           113      162 
 
 Balance at 30 
  September 
  2019                         469    84,436     1,480      (75,308)          (81)        7,456      (10,533)    7,919 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 Total comprehensive 
 income/(expense) 
 Profit for the period           -         -         -             -             -            -           952      952 
 Other comprehensive 
 expense: 
 Realised losses on 
  foreign 
  exchange                       -         -         -             -          (15)            -            15        - 
 Foreign exchange 
  translation                    -         -         -             -           (1)            -             -      (1) 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 Total comprehensive 
  income/(expense)               -         -         -             -          (16)            -           967      951 
 Transactions with 
 owners 
 Charge in respect of 
  share 
  options                        -         -         -             -             -            -           184      184 
 Exercise of share 
  options                        2        63         -             -             -            -             -       65 
 Total transactions 
  with 
  owners                         2        63         -             -             -            -           184      249 
 Balance at 30 
  September 
  2020                         471    84,499     1,480      (75,308)          (97)        7,456       (9,382)    9,119 
-----------------------  ---------  --------  --------  ------------  ------------  -----------  ------------  ------- 
 

Company Statement of Changes in Equity

for the years ended 30 September 2020 and 30 September 2019

 
                                                                           Merger      Capital 
                                                     Ordinary     Share    relief   redemption   Accumulated 
                                                       shares   premium   reserve      reserve        losses     Total 
                                                     Restated                         Restated 
                                                       GBP000    GBP000    GBP000       GBP000        GBP000    GBP000 
---------------------------------  --------------------------  --------  --------  -----------  ------------  -------- 
 Balance at 1 October 2018                              7,923    84,389     1,480            -      (80,584)    13,208 
 Prior period adjustment (note 3)                     (7,456)         -         -        7,456             -         - 
 Restated balance at 1 October 
  2018                                                    467    84,389     1,480        7,456      (80,584)    13,208 
 
 Total comprehensive expense for 
  the period                                                -         -         -            -       (1,069)   (1,069) 
 
 Transactions with owners 
 Charge in respect of share 
  options                                                   -         -         -            -           113       113 
 Exercise of share options                                  2        47         -            -             -        49 
 Total transactions with owners                             2        47         -            -           113       162 
 
 Balance at 30 September 2019                             469    84,436     1,480        7,456      (81,540)    12,301 
---------------------------------  --------------------------  --------  --------  -----------  ------------  -------- 
 
 Total comprehensive expense for 
  the period                                                -         -         -            -       (1,040)   (1,040) 
 
 Transactions with owners 
 Charge in respect of share 
  options                                                   -         -         -            -           184       184 
 Exercise of share options                                  2        63         -            -             -        65 
 Total transactions with owners                             2        63         -            -           184       249 
 
 Balance at 30 September 2020                             471    84,499     1,480        7,456      (82,396)    11,510 
---------------------------------  --------------------------  --------  --------  -----------  ------------  -------- 
 

Consolidated and Company Statements of Cash Flows

for the years ended 30 September 2020 and 30 September 2019

 
                                                    Group              Company 
                                               2020     2019      2020      2019 
 
                                             GBP000   GBP000    GBP000    GBP000 
-----------------------------------------  --------  -------  --------  -------- 
 Cash flows from operating activities 
 Profit / (loss) for the period                 952      432   (1,040)   (1,069) 
 Finance income                                (20)      (2)       (4)      (40) 
 Finance expense                                 18        -         1         - 
 Taxation                                      (94)     (66)         -         - 
 Depreciation                                   356       72         -         - 
 Amortisation of intangibles                     82       40         -         - 
 Disposal of fixed assets                         1        -         -         - 
 Impairment of intangible assets                  2        -         -         - 
 Research and development expenditure 
  credit                                      (162)    (155)         -         - 
 Share option charge                            184      113        76        31 
                                              1,319      434     (967)   (1,078) 
 Changes in working capital 
 Decrease/(increase) in trade and 
  other receivables                             297    (239)       455   (3,983) 
 (Decrease)/increase in trade and 
  other payables                              (128)    (325)      (39)      (29) 
-----------------------------------------  --------  -------  --------  -------- 
 Cash generated from / (used in) 
  operations                                  1,488    (130)     (551)   (5,090) 
 Taxation received                              447        -         -         - 
-----------------------------------------  --------  -------  --------  -------- 
 Net cash generated from / (used 
  in) operating activities                    1,935    (130)     (551)   (5,090) 
 
 Cash flows from investing activities 
 Purchase of property, plant and 
  equipment                                   (686)    (217)         -         - 
 Purchase of intangible assets including 
  staff costs capitalised                     (456)    (300)         -         - 
 Finance income                                  20        4         4         - 
 Net cash (used in) / generated from 
  investing activities                      (1,122)    (513)         4         - 
 
 Cash flows from financing activities 
 Issue of shares                                 65       48        65        48 
 Repayment of lease liability                 (177)        -         -         - 
 Interest paid                                 (18)        -         -         - 
 Net cash (used in) / generated from 
  financing activities                        (130)       48        65        48 
 
 Movements in cash and cash equivalents 
  in the period                                 683    (595)     (482)   (5,042) 
-----------------------------------------  --------  -------  --------  -------- 
 Cash and cash equivalents at start 
  of period                                   7,264    7,861     2,187     7,229 
 Effect of exchange rate fluctuations 
  on cash held                                  (2)      (2)         -         - 
-----------------------------------------  --------  -------  --------  -------- 
 Cash and cash equivalents at end 
  of period                                   7,945    7,264     1,705     2,187 
-----------------------------------------  --------  -------  --------  -------- 
 

Notes to the financial statements

For the years ended 30 September 2020 and 30 September 2019

The financial information set out in these results does not constitute the company's statutory accounts for 2020 or 2019. Statutory accounts for the years ended 30 September 2020 and 30 September 2019 have been reported on by the Independent Auditors; their report was (i) unqualfied; (ii) did not draw attention to any matters by way of emphasis; and (iii) did not contain a statement under 498 (2) or 498 (3) of the Companies act 2006.

Statutory accounts for the year ended 30 September 2019 have been filed with the Registrar of Companies. The statutory accounts for the year ended 30 September 2020 will be delivered to the Registrar in due course. Copies of the Annual Report 2020 will be posted to shareholders on or about 18 December 2020.

   1.       Presentation of the financial statements 
   a.       General information 

IXICO plc (the 'Company') is a public limited company incorporated in England and Wales and is admitted to trading on the AIM market of the London Stock Exchange under the symbol IXI. The address of its registered office is 4th Floor, Griffin Court, 15 Long Lane, London EC1A 9PN.

The Company is a parent of a number of subsidiaries detailed in note 16 , together referred to throughout as 'the Group'. The Group is an established provider of technology-enabled services to the global biopharmaceutical industry. The Group's services are used to select patients for clinical trials and assess the safety and efficacy of new drugs in development within the field of neurological disease.

   b.       Basis of preparation 

The consolidated financial statements have been prepared on a going concern basis and in accordance with IFRS as adopted by the EU, IFRIC interpretations and the Companies Act 2006 applicable to companies operating under IFRS.

The consolidated financial statements comprise a Statement of Comprehensive Income, a Statement of Financial Position, a Statement of Changes in Equity, a Statement of Cash Flows, and accompanying notes. These financial statements have been prepared under the historical cost convention modified by the revaluation of certain financial instruments.

The consolidated financial statements are presented in Great British Pounds ('GBP' or 'GBP') and are rounded to the nearest thousand unless otherwise stated. This is the predominant functional currency of the Group, and is the currency of the primary economic environment in which it operates. Foreign currency transactions are accounted in accordance with the policies set out below.

   c.       Basis of consolidation 

The consolidated financial statements incorporate the accounts of the Company and its subsidiary companies adjusted to eliminate intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions. The Company's subsidiaries are detailed in note 16 . When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

The Group controls a subsidiary when the Group is exposed to, or has rights to, variable returns from its involvement with a subsidiary and has the ability to affect those returns through its power over a subsidiary. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.

The results of subsidiary companies are included in the consolidated financial statements from the date that control commences until the date that control ceases. The assets and liabilities of foreign operations are translated into GBP at exchange rates prevailing at the end of the reporting period. Income statements and cash flows of foreign operations are translated into GBP at average monthly exchange rates which approximate foreign exchange rates at the date of the transaction. Foreign exchange differences arising on retranslation are recognised directly in a separate translation reserve.

   d.       Going concern 

At the time of approving the consolidated financial statements, the Directors have considered the expected future performance together with the Group's estimated future cash inflows from existing long-term contracts and sales pipeline.

The ongoing COVID-19 pandemic is causing significant uncertainty across global markets for the short and medium term. During 2020, the Group reacted quickly to this by preparing a series of financial scenario forecasts based on discussions with clients over the likely impact of the pandemic on their clinical trials. In parallel the Group moved rapidly to a fully remote model, which included providing additional equipment to employees enabling all to work from home effectively and allowing the Group to trade uninterrupted throughout the year.

In assessing going concern, management has prepared detailed sensitised forecasts which consider different scenarios throughout the course of the next 12 months. These include the risk to current projects and expected future sales pipelines, the ability for patients to attend imaging centres (due to global COVID-19 lockdown restrictions) and potential delays in new trial start-up timelines. The Directors have considered these forecasts, alongside the Group's strong balance sheet and cash balance as well as the ability for the Group to mitigate costs if necessary.

After due consideration of these forecasts, the Directors concluded with confidence that the Group has adequate financial resources to continue in operation for the foreseeable future.

   2.       New and amended accounting standards and interpretations 
   a.       Adoption of new accounting standards for the year ended 30 September 2020 

The Group has adopted all new and amended accounting standards and interpretations issued by the International Accounting Standards Board ('IASB') that are mandatory for the current reporting period. Analysis of the impacts of these standards are set out below.

IFRS 16 - Leases

The Group adopted IFRS 16 from 1 October 2019. IFRS 16 requires a lessee to recognise lease assets and liabilities, previously accounted for as operating leases, on the Statement of Financial Position. Subsequently, depreciation of the lease assets and interest on the lease liabilities is recognised within the Statement of Comprehensive Income over the remaining term of the lease. The Group has applied the modified retrospective approach requiring the Group to calculate lease assets and liabilities at the beginning of the current period and therefore the comparative information has not been restated and continues to be reported under IAS 17.

The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease liability in connection with all operating leases except for those identified as low-value or having a remaining lease term of less than 12 months which continue to be recognised on a straight-line basis as a lease expense over the remaining lease term. The incremental borrowing rate used for discounting purposes and applied to the lease liabilities recognised under the new Standard is 6%, being the expected rate at which the Group could reasonably borrow at from banking institutions.

The following is a reconciliation of the financial statement line items from IAS 17 to IFRS 16 at 30 September 2019 to the carrying amount at 1 October 2019:

 
                                   Carrying amount   Remeasurement   Carrying amount 
                                   at 30 September                      at 1 October 
                                              2019                              2019 
                                                            GBP000 
                                            GBP000                            GBP000 
-------------------------------  -----------------  --------------  ---------------- 
 Property, plant and equipment                 316             462               778 
 Provisions                                      -              90                90 
 Lease liabilities                               -             372               372 
-------------------------------  -----------------  --------------  ---------------- 
 

The following is a reconciliation of total operating lease commitments at 30 September 2019 (as disclosed in the financial statements to 30 September 2019) to the lease liabilities recognised at 1 October 2019:

 
                                                    GBP000 
------------------------------------------------   ------- 
 Total operating lease commitments disclosed 
  at 30 September 2019                                 441 
 Recognition exemptions: Leases of low-value           (1) 
                                                   ------- 
 Operating lease liabilities before discounting        440 
 Discounted using incremental borrowing rate          (68) 
 Total lease liabilities recognised under 
  IFRS 16 at 1 October 2019                            372 
-------------------------------------------------  ------- 
 
   b.       Accounting developments affecting financial statements in subsequent periods 

At the date of authorisation of these financial statements, several new, but not yet effective, standards and amendments to existing standards and interpretations have been published by the IASB. The standards and amendments that are not yet effective and have not been adopted early by the Group include:

   --       Amendments to References to Conceptual Framework in IFRS Standards 
   --       Definition of Material (Amendments to IAS 1 and IAS 8) 
   --       Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) 

The Directors anticipate, based on current business processes, that the introduction of the above standards and amendments will not have a material impact on the Group and Company financial statements and therefore the impact of these changes on the financial statements have not been made.

   3.       Prior period adjustment 

During the year to 30 September 2016, a subdivision of shares occurred, dividing the existing share capital of 15,215,664 ordinary shares of nominal value GBP0.50 into 15,215,664 ordinary shares of nominal value GBP0.01 and 15,215,664 deferred shares of nominal value GBP0.49. The deferred shares were rendered effectively worthless by virtue of the rights attached to them. On 22 December 2016, the deferred shares were repurchased for GBP1 and subsequently cancelled, however no accounting entries were made in respect of this transaction.

As a result of the deferred share cancellation, the share capital for the years ended 30 September 2017, 30 September 2018 and 30 September 2019 is overstated by GBP7,455,675, whilst the capital redemption reserve is understated in the same periods by GBP7,455,675.

 
 
                                                  Share capital     Capital redemption 
                                                                               reserve 
 
                                                         GBP000                 GBP000 
-------------------------------------------      --------------  --------------------- 
 Balance as at 30 September 2017                          7,727                      - 
 
   Repurchase and cancellation of deferred 
   shares                                               (7,456)                  7,456 
 
 Restated balance as at 30 September 2017                   271                  7,456 
-----------------------------------------------  --------------  --------------------- 
 
 Balance as at 30 September 2018                          7,923                      - 
 
   Repurchase and cancellation of deferred 
   shares                                               (7,456)                  7,456 
 
 Restated balance as at 30 September 2018                   467                  7,456 
-----------------------------------------------  --------------  --------------------- 
 
 Balance as at 30 September 2019                          7,925                      - 
 
   Repurchase and cancellation of deferred 
   shares                                               (7,456)                  7,456 
 
 Restated balance as at 30 September 2019                   469                  7,456 
-----------------------------------------------  --------------  --------------------- 
 
 

There is no impact on total profit or loss in any year and subsequently no impact on taxation. The number of shares in issue in each of the periods was correct and therefore there is no impact on the earnings per share or diluted earnings per share in each of the periods.

   4.       Significant accounting policies 
   4.1    Revenue 

Revenue is principally derived from service revenue. This revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

In determining whether to recognise revenue, the Group follows a 5-step process:

   1.     Identifying the contract with a client; 
   2.     Identifying the performance obligations; 
   3.     Determining the transaction price; 
   4.     Allocating the transaction price to the performance obligations; and 
   5.     Recognising revenue when/as performance obligation(s) are satisfied. 

Each type of revenue has separate recognition criteria depending on the type of service provided. These services are agreed at the inception of a project through contracts with clients. A critical part of the contract is a detailed schedule of work that provides the list of services to be provided by the Group. Performance obligations are attached to each service, with revenue being recognised once these are satisfied. The transaction price associated to each performance obligation is allocated based on their relative stand-alone selling price.

Revenue types

The Group's contracts comprise a variety of performance obligations. These obligations are all considered streams of a single revenue type, being service revenue. The Group's most significant streams of service revenue are outlined below and have the respective recognition criteria:

Project and site set-up

At the point a client approaches the Group to complete work, a project manager is assigned. The project manager co-ordinates the project set-up and ongoing delivery of the service. At inception, the project manager will also prepare the clinical study protocol and other essential study documents.

Once the project and/or the site is set up, all performance obligations are satisfied. These services are therefore recognised at a point in time, being when the Group has delivered the relevant material to the client.

Project and site management

Each contract requires various project management activities, provided by the project manager. These services are provided throughout the duration of a contract. Site management services are provided throughout the duration of a site being operational, typically being shorter than the project management cycle.

The services provided for project and site management represents a provision of on going services. Therefore, revenue for these items is recognised on a straight-line basis.

Site training and materials

A contract will typically include training of each individual site. Various materials are prepared in advance and provided to clients as tools for site training. Site training is provided either through live online training or through a self-paced training module. These activities are combined in one revenue transaction per site.

Revenue from site training is recognised when each site has completed the training activity.

TrialTracker configuration and access

The TrialTracker platform delivers a robust and comprehensive set of centralised imaging services designed to efficiently manage the complex imaging workflow from: image upload, quality control, reading and analysis. The platform also allows for reporting and data transfer.

The Group has identified 2 separate performance obligations in the TrialTracker platform:

1. A set-up fee is recognised at a point in time once TrialTracker access is provided to the client;

2. An ongoing access fee is recognised over the duration of the project, with revenue being recognised on a straight-line basis.

Data reading and analysis

The Group provides data analysis services across a range of biomarkers, providing high-quality, clinically meaningful data. Fees are charged to clients on a 'per data read'.

As these services have no ongoing obligations from the Group, revenue is recognised once the data read and analysis has taken place.

Data management and quality control

Ensuring data are managed appropriately and that the data are of a high quality is critical in the delivery of the Group's service. The data management and imaging teams work in collaboration to ensure ongoing integrity of data.

The performance of data management represents the provision of an on going service and so the straight-line method of recognition is used.

Revenue recorded from data quality control is recognised at a point in time when the Group has delivered the service to the client.

Scientific reports

Scientific reports are provided at interim points and at the end of a study. Such reports contain data analysis and statistical interpretation.

These reports represent an individual performance obligation with no further work required by the Group. Revenue from these services is recognised at a point in time when the Group provides the report to the client.

Licence revenue

Revenue relating to licensing is entirely attributable to TrialTracker. Each agreement will grant the user rights to use the software and receive associated technical support during the licence period.

The licence is a distinct performance obligation and revenue is recognised over the contract term.

Change orders

Throughout the duration of a contract, the client may request additional services or service changes to be made. For revenue recognition purposes, the Group treats a change order or contract modification to a client agreement as a separate contract, if both:

   --      the scope changes due to the addition of 'distinct' services; and 

-- the price change reflects the services stand-alone selling prices ('SSP') under the circumstances of the modified contract.

The revenue recognition for the change order is applied in the same way as the original contract, as detailed above, with the original client agreement remaining unchanged.

   4.2    Other income 

Government grants

A government grant is recognised only when there is reasonable assurance that the Group will comply with any conditions attached to the grant and the grant will be received. The grants are recognised as income over the period necessary to match them with the related costs, for which they are intended to compensate, on a systematic basis. The Group recognises grant income as an item of other income.

Research and Development Expenditure Credit ('RDEC')

The Group has elected to take advantage of the RDEC introduced in the Finance Act 2013. A company may surrender corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a corporation tax refund. Relief is given as a taxable credit on 13% (which increased from 12% from 1 April 2020) of qualifying research and development expenditure. The Group recognises research and development expenditure credit as an item of other income, taking advantage of the 'above the line' presentation, and is recognised in the year for which the research and development relates.

   4.3    Research and development expenditure 

In all instances across the Group, research expenditure is expensed through the income statement. For development expenditure, items will be expensed where the recognition criteria for internally generated intangible assets is not met.

The main criteria used to assess this, as required under IAS 38 - Intangible Assets, are:

   -       Demonstrating technical feasibility of completing the intangible asset; 
   -       Intention to complete the asset; 
   -       Ability to use or sell the asset in order to generate future economic benefit; 
   -       Availability of adequate technical or other resources to complete development; and 
   -       Ability to measure reliably the expenditure attributable to the asset. 

It was determined that the Group continued to meet the above criteria in respect of specific developments to its TrialTracker platform and data analytics service offering. As a result, associated development costs are capitalised in the year in relation to TrialTracker and an intangible asset is recognised as set out in note 15 .

   4.4    Share-based payments 

Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions.

Any changes that impact the original estimates, for example the effect of employees who have left the Group in the year and have forfeited their options, is recognised in the Consolidated Statement of Comprehensive Income such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 23 of the consolidated financial statements.

   4.5    Employee benefits 

All employee benefit costs are recognised in the Consolidated Statement of Comprehensive Income as they are incurred. These principally relate to holiday pay and contributions to the Group defined contribution plan.

The assets of the Group scheme are held separately from those of the Group in independently administered funds. The Group does not offer any other post-retirement benefits.

   4.6    Leased assets 

A lease is defined as a contract that gives the Group the right to use an asset for a period of time in exchange for consideration. The Group identifies from the contract the total length and cost of the lease contract, and determines whether it meets the definition of a right-of-use asset. Recognition of a right-of-use asset is met if it is longer than 12 months and of a high value. For those leases that do not meet these criteria, the rental charge payable under these leases are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the lease term.

The initial recognition and subsequent measurement of right-of-use asset leases are:

Initial recognition

At the commencement date, the Group measures the lease liability at the present value of future lease payments, discounted using the Group's incremental borrowing rate. The Group also recognises a right-of-use asset which is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs and an estimate of any costs to reinstate the asset to its original condition.

Subsequent measurement

The lease liability is reduced for payments made and increased for interest, and is remeasured for any modifications made to the lease. The right-of-use asset is depreciated on a straight-line basis over the expected lease term. The asset is also assessed for impairment when such indicators exist.

On the statement of financial position, right-of-use assets are included in property, plant and equipment and lease liabilities within trade and other payables.

   4.7    Property, plant and equipment 

Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, less provisions for impairment. The initial recognition and subsequent measurement of property, plant and equipment are:

Initial recognition

Property, plant and equipment is initially recognised at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating. In most circumstances, the cost will be its purchase cost, together with the cost of delivery.

Subsequent measurement

An asset will only be depreciated once it is ready for use. Depreciation is charged so as to write off the cost of property, plant and equipment, less its estimated residual value, over the expected useful economic lives of the assets.

Depreciation is charged on a straight-line basis as follows:

 
Office buildings        over expected lease term 
Leasehold improvements  shorter of 5 years or the 
                         lease term 
Fixtures and fittings   3 years 
Equipment               3 years 
 

The disposal or retirement of an asset is determined by comparing the sales proceeds with the carrying amount. Any gains or losses are recognised within the Consolidated Statement of Comprehensive Income.

   4.8    Intangible assets 

Acquired intangibles

Intangible assets that are acquired through business combinations are recognised as an intangible asset if it is separable from the acquired business or arises from contractual or legal rights. These assets will only be recognised if they are also expected to generate future economic benefits and its fair value can be reliably measured.

Initial recognition

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition.

Subsequent measurement

Following capitalisation, the intangible assets are carried at cost less any accumulated amortisation, and where appropriate, less provisions for impairment.

Intangible assets are amortised using the straight-line method over their estimated useful economic life as follows:

 
Intangibles acquired through business  5 years 
 combinations 
Other acquired intangible assets 
                                       3 years 
        *    Computer software 
                                       5 years 
        *    Data acquisition 
 

Amortisation is charged to the Consolidated Statement of Comprehensive Income and is included within cost of sales for those items directly related to project activities, or otherwise within general and administrative expenses.

Internally generated intangible assets

Intangible assets that are capitalised internally are deemed to have met the recognition criteria set out in IAS 38. These items relate to research and development costs and are considered in note 4.3 .

Initial recognition

Internally generated intangible assets are initially recognised at cost once the recognition criteria of IAS 38 are met.

Subsequent measurement

Any assets that are not yet ready for use will be capitalised as assets under construction and will not be amortised. Once the asset is ready for use, amortisation will begin. The amortisation rates adopted are based on the expected useful economic life of the projects to which they relate. The assets useful economic life is as follows:

 
Internally generated technology   3 - 5 
                                  years 
 
   4.9    Impairment of non-current assets 

Each category of non-current assets is reviewed for impairment both annually and when there is an indication that an asset may be impaired, being when events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognised in the Consolidated Statement of Comprehensive Income for the amount by which the asset's carrying value exceeds its recoverable amount.

The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. Non-financial assets, other than goodwill, which have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

4.10 Investments in Group undertakings

Investments in Group undertakings are initially recognised at cost and subsequently measured at cost less any impairment provision. Investments are subject to an annual impairment review, with any impairment charge being recognised through the Consolidated Statement of Comprehensive Income. Additions to investments are amounts relating to share options for the services performed by employees of the subsidiaries of the Company and are classified as capital contributions within note 16 .

4.11 Trade and other receivables

Trade and other receivables are initially recognised at fair value and subsequently stated at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or significant delinquency in payments (exceeding credit terms) are considered indicators that the trade receivable should be impaired.

The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the Consolidated Statement of Comprehensive Income within general and administrative expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against general and administrative expenses in the Consolidated Statement of Comprehensive Income.

4.12 Taxation

Current tax

Current tax represents amounts recoverable within the United Kingdom and is provided at amounts expected to be recovered using the tax rates and laws that have been enacted at the Statement of Financial Position date.

Research and development credits

The benefit associated with UK-based research and development is recognised under the UK's Research and Development Expenditure Credit scheme. Details of the recognition are set out in note 4.3 .

Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements in accordance with IAS 12 - Income taxes. Deferred tax liabilities are recognised for all taxable temporary differences. A deferred tax asset is recognised only to the extent that it is probable that sufficient taxable profit will be available in future years to utilise the temporary difference. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither the accounting, nor taxable profit or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the Statement of Financial Position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets and liabilities are offset only when there is a legally enforceable right to set off current tax assets against current tax liabilities, they relate to income taxes levied by the same taxation authority and the Group intends to settle these on a net basis.

4.13 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand with original maturities at inception of 3 months or less.

4.14 Foreign currency translation

Transactions denominated in foreign currencies are translated into Great British Pounds at actual rates of exchange prevailing at the date of transaction. Monetary assets and liabilities expressed in foreign currencies are translated into Great British Pounds at rates of exchange prevailing at the end of the financial year. All foreign currency exchange differences are taken to the Consolidated Statement of Comprehensive Income in the year in which they arise.

Non-monetary items are not retranslated at year end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

4.15 Trade and other payables

Trade and other payables are non-interest-bearing and are initially recognised at fair value and subsequently stated at amortised cost.

4.16 Provisions, contingent assets and contingent liabilities

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required from the Group and amounts can be estimated reliably. The timing of such outflows may still be uncertain. Such provisions are measured at the estimated expenditure required to settle the present obligation based on the most reliable estimate available at the reporting date, discounted to the present value where material.

Any reimbursement that the Group is virtually certain to collect from a third party in relation to the related provision will be recognised as a separate asset.

Liabilities are not recognised where the outflow of economic resources is not probable, but are instead disclosed as contingent liabilities.

4.17 Equity instruments

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

4.18 Financial instruments

Financial assets and financial liabilities are recognised on the Consolidated Statement of Financial Position when the Group or the Company becomes a party to the contractual provisions of the instrument. Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Further information relating to financial instruments and the policies adopted by the Group to manage risk is found in note 24 .

5. Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the consolidated financial statements, the Directors make a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

Significant management judgements

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the consolidated financial statements.

Revenue recognition

The Group recognises revenue in accordance with amounts charged to clients under service contracts. All contracts include an agreed, detailed work order which defines the deliverables. The service contracts are typically multi-year and may be amended through a change order process, which may include changes to data volumes (increased or decreased), different methods of data analysis or changes to the timing of providing the deliverables.

Revenue is recognised upon achievement of deliverables set out in the service contract. The recognition is expected to approximate to the timing of the physical performance of the contracts. The Group records the performance of the contractual obligations to determine that the deliverables and actual work performed is in accordance with the contract and agreed change orders. The scope of the project and contract terms are reviewed to determine whether the Group is acting as principal or agent in respect of the project, which depends on facts and circumstances and requires judgement.

Client contracts include an agreed work order so the transaction price for a contract is allocated against distinct performance obligations based on their relative stand-alone selling prices. Management determines the fair value of individual components based on actual amounts charged by the Group on a stand-alone basis. The transaction price for a contract excludes any amounts collected on behalf of third parties.

Capitalisation of internally developed software

Distinguishing the research and development phases of a new software product and determining whether the requirements for the capitalisation of development costs are met requires judgement. Management will assess whether a project meets the recognition criteria as set out in IAS 38 based on an individual project basis. Where the criteria are not met, the research and development expenditure will be expensed in the Consolidated Statement of Comprehensive Income. Where the recognition criteria are met, the items will be capitalised as an intangible asset.

During the year ended 30 September 2020, total research and development expenses totalled GBP1,553,000 (2019: GBP1,147,000). Of this amount, GBP244,000 (2019: GBP161,000) was capitalised as an intangible asset. The balance of expenditure being GBP1,309,000 (2019: GBP986,000) is recognised in the Consolidated Statement of Comprehensive Income as an expense.

Recovery of deferred tax assets

Deferred tax assets have not been recognised for deductible temporary differences and tax losses. The Directors consider that there is not sufficient certainty that future taxable profits will be available to utilise those temporary differences and tax losses. Further information on the Group's deferred tax asset can be found in note 21 of the consolidated financial statements.

Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Changes to these estimations may result in substantially different results for the year.

Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. Details of the estimations used in determining the fair value of the options in issue are detailed in note 23 .

Useful lives of depreciable assets

The useful lives of depreciable assets are determined by management at the date of purchase based on the expected useful lives of the assets. These are subsequently monitored and reviewed annually and where there is objective evidence of changes in the useful economic lives, these estimates are adjusted. Any changes to these estimates may result in significantly different results for the period.

Provisions

The amounts included in both long- and short-term provisions are based on estimates provided by professionals relevant to the field the provision relates. These were reviewed by management and are considered to be a reasonable estimate of the expected cost of fulfilling these provisions.

   6.       Revenue 

An analysis of the Group's revenue by type is as follows:

 
                          2020     2019 
                        GBP000   GBP000 
-----------------      -------  ------- 
 Service revenue         9,532    7,561 
---------------------  -------  ------- 
 

For the year ended 30 September 2020, revenue includes GBP227,000 (2019: GBP1,271,000) held in contract liabilities within trade and other payables at the beginning of the period.

   7.       Segmental information 

The Board considers there to be only one core operating segment for the Group's activities. This is based on the Group's development, commercial and operational delivery teams operating across the entirety of the Group, which is wholly based in the United Kingdom. The projects undertaken by the Group are managed by project managers, who receive inputs for each project by other team members. Performance information is reported as a single business unit to the leadership team, who review the Group's management information.

The information gathered for each project is subsequently reported to the Group's Chief Executive Officer, who is considered to be the chief operating decision-maker. This information is used for resource allocation and assessment of performance. Therefore, the entirety of the Group's revenue and assets can be attributed wholly to this operating segment with reference to the Consolidated Statement of Comprehensive Income and Consolidated Statement of Financial Position.

During the year ended 30 September 2020, the Group had 1 client (2019: 2 clients) that exceeded 10% of total revenue. In 2020 the individual percentage revenue associated with this client was 65% (GBP6,232,000). In 2019 the individual percentage revenue associated with this client was 39% (GBP2,976,000) and 14% (GBP1,086,000) related to the other client which exceeded 10% of total revenue.

Geographical information

The Group's revenue can be categorised by type of revenue and by country, based on the contracting client location of the contracting client entity.

 
                         2020     2019 
                       GBP000   GBP000 
----------------      -------  ------- 
 United States          1,990    3,388 
 United Kingdom         6,374    2,764 
 Europe                 1,168    1,404 
 Rest of World              -        5 
--------------------  -------  ------- 
 Revenue                9,532    7,561 
--------------------  -------  ------- 
 

As the Group is domiciled in the United Kingdom, the entirety of the revenue originates from this location.

   8.       Other income 

Items of other income principally relate to government grants received, originating solely in the United Kingdom. Grants are recognised as income over the period required to match them with the related costs, for which they are intended to compensate, on a systematic basis.

The Group also recognises Research and Development Expenditure Credit ('RDEC') as other income.

 
                   2020     2019 
                 GBP000   GBP000 
--------------  -------  ------- 
 Grant income       444      433 
 RDEC               162      155 
--------------  -------  ------- 
 Other income       606      588 
--------------  -------  ------- 
 
   9.       Auditor's remuneration 
 
                                       2020     2019 
                                     GBP000   GBP000 
----------------------------------  -------  ------- 
 
 Audit services 
   - Group and Parent Company            33       31 
   - subsidiary companies                22       20 
 
 Total audit fees                        55       51 
 
 Audit-related assurance services         6        6 
 Tax compliance services                  -        9 
 Tax advisory services                    -        1 
 
 Total auditor's remuneration            61       67 
----------------------------------  -------  ------- 
 
   10.    Employees and Directors 

The average monthly number of persons (including Executive and Non-Executive Directors) employed by the Group was:

 
                                           2020     2019 
                                         Number   Number 
--------------------------------------  -------  ------- 
 Administration                              15       17 
 Operations, research and development        67       51 
--------------------------------------  -------  ------- 
 Average total persons employed              82       68 
--------------------------------------  -------  ------- 
 

The aggregate remuneration of employees in the Group was:

 
                                   2020     2019 
                                 GBP000   GBP000 
------------------------------  -------  ------- 
 Wages and salaries               5,480    4,630 
 Social security costs              845      535 
 Other pension costs                203      177 
 Share-based payments charge        184      113 
------------------------------  -------  ------- 
 Total remuneration for staff     6,712    5,455 
------------------------------  -------  ------- 
 Staff costs capitalised          (244)    (161) 
------------------------------  -------  ------- 
 Net staff costs                  6,468    5,294 
------------------------------  -------  ------- 
 

The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group in independently administered funds. The amounts outstanding at 30 September 2020 in respect of pension costs were GBP31,000 (2019: GBP27,000).

The remuneration of the Group's Directors is set out in the Directors' Remuneration Report in the full annual report, as well as in note 25 under related party transactions.

The Company did not directly employ any staff and therefore there is no cost recognised in respect of staff costs.

   11.    Operating profit 

An analysis of the Group's operating profit has been arrived at after charging:

 
                                                            2020     2019 
                                                          GBP000   GBP000 
-------------------------------------------------------  -------  ------- 
 Research and development expenses                         1,309      986 
 Sales and marketing expenses                              1,579    1,154 
 Operating lease charges: land, buildings and printers        21      144 
 Depreciation of tangible assets                             356       72 
 Loss on disposal of tangible and intangible assets            3        - 
 Amortisation of intangible assets                            26       40 
 Foreign exchange (gain) / loss                             (17)       27 
 Administrative expenses                                   2,819    2,743 
 Total operating expenses                                  6,096    5,166 
-------------------------------------------------------  -------  ------- 
 

There is a further amortisation charge of GBP56,000 (2019: GBPnil) recognised in cost of sales for those items directly related to project activities. The total amortisation charge for the year is GBP82,000 (2019: GBP40,000).

   12.    Taxation 

The tax charge for each period can be reconciled to the result per the Consolidated Statement of Comprehensive Income as follows:

 
                                                                  2020       2019 
 
                                                                GBP000     GBP000 
------------------------------------------------------------  --------  --------- 
 Profit on ordinary activities before taxation                     858        366 
 
 Profit before tax at the effective rate of corporation 
  tax 
  in the United Kingdom of 19% (2019: 19%)                         163         70 
 
 Effects of: 
 Expenses not deductible for tax purposes                           16        (2) 
 Temporary differences                                           (131)       (85) 
 Research and development uplifts net of losses surrendered 
  for tax credits                                                (145)       (28) 
 Prior period adjustment                                             3       (21) 
 Tax credit for the period                                        (94)       (66) 
------------------------------------------------------------  --------  --------- 
 
 

The tax credit for each period can be reconciled as follows:

 
                                                           2020       2019 
 
                                                         GBP000     GBP000 
-----------------------------------------------------  --------  --------- 
 Small or medium enterprise research and development 
  credit                                                  (127)       (74) 
 Deduction for corporation tax on RDEC                       30         29 
 Prior period adjustment                                      3       (21) 
 Tax credit for the period                                 (94)       (66) 
-----------------------------------------------------  --------  --------- 
 
 

The Group has elected to take advantage of the RDEC, introduced in the Finance Act 2013 whereby a company may surrender corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a corporation tax refund.

The following is a reconciliation between the tax charge and the tax receivable within the Consolidated Statement of Financial Position:

 
                                                2020     2019 
                                              GBP000   GBP000 
-------------------------------------------  -------  ------- 
 Current tax receivable at start of period       450      229 
 Current period credit                           256      221 
 Corporation tax repayment                     (447)        - 
 Current tax receivable at end of period         259      450 
-------------------------------------------  -------  ------- 
 

The tax credit for each period can be reconciled to the current period credit recognised in tax receivable within the Consolidated Statement of Financial Position in each period as follows:

 
                                              2020     2019 
                                            GBP000   GBP000 
-----------------------------------------  -------  ------- 
 Tax credit for the year                        94       66 
 Deferred tax movement on amortisation           -        - 
 RDEC gross of corporation tax deduction       162      155 
-----------------------------------------  -------  ------- 
 Current period credit                         256      221 
-----------------------------------------  -------  ------- 
 
   13.    Earnings per share 

The calculation of basic and diluted earnings per share ('EPS') of the Group is based on the following data:

 
                                                              2020         2019 
 
 
 Earnings 
 Earnings for the purposes of basic and diluted EPS, 
  being net profit attributable to the owners of the 
  Company (GBP000)                                             952          432 
 
 Number of shares 
 Weighted average number of shares for the purposes 
  of basic EPS                                          47,036,398   46,786,375 
 
 Effect of potentially dilutive ordinary shares: 
 
      *    Weighted average number of share options        513,521        9,182 
 
 Weighted average number of shares for the purposes 
  of diluted EPS                                        47,549,919   46,795,557 
 
 

Basic earnings per share is calculated by dividing earnings attributable to the owners of the Company by the weighted average number of shares in issue during the year. The diluted EPS is calculated by dividing earnings attributable to the owners of the Company by the weighted average number of shares in issue taking into account the share options outstanding during the year.

The basic and diluted earnings per share for the Group and Company is:

 
                                2020    2019 
 
 Basic earnings per share      2.02p   0.92p 
 Diluted earnings per share    2.00p   0.92p 
 
 
   14.    Property, plant and equipment 

Group

 
                               Office     Leasehold    Fixtures 
                                                            and 
                             building   improvement    fittings   Equipment    Total 
 
 Cost                          GBP000        GBP000      GBP000      GBP000   GBP000 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 At 1 October 2018                  -            62           7         140      209 
 Additions                          -           102           5         204      311 
 Disposals                          -          (62)         (7)        (61)    (130) 
 At 30 September 2019               -           102           5         283      390 
 Adjustment on transition 
  to IFRS 16                      462             -           -           -      462 
 Additions                          -            44           -         549      593 
 Disposals                          -             -           -         (1)      (1) 
 At 30 September 2020             462           146           5         831    1,444 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 
 Accumulated depreciation 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 At 1 October 2018                  -            53           7          72      132 
 Charge for the period              -            11           2          59       72 
 Disposals                          -          (62)         (7)        (61)    (130) 
 At 30 September 2019               -             2           2          70       74 
 Charge for the period            191            45           2         118      356 
 Disposals                          -             -           -           -        - 
 At 30 September 2020             191            47           4         188      430 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 
 Net book value 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 At 30 September 2019               -           100           3         213      316 
 At 30 September 2020             271            99           1         643    1,014 
--------------------------  ---------  ------------  ----------  ----------  ------- 
 

The only right-of-use asset is held within the office building category. At 30 September 2020, the carrying amount of the right-of-use asset was GBP271,000 (2019: GBPnil).

Company

At 30 September 2020 and 30 September 2019, the Company had no property, plant and equipment.

   15.    Intangible assets 

Group

 
                                        Intangibles 
                                   acquired through   Other acquired              Internally 
                              business combinations      intangibles    developed technology     Total 
                                             GBP000           GBP000                  GBP000    GBP000 
 Cost 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 1 October 2018                            1,804               46                       -     1,850 
 Additions                                        -              139                     161       300 
 Disposals                                  (1,804)              (3)                       -   (1,807) 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 30 September 2019                             -              182                     161       343 
 Additions                                        -               75                     513       588 
 Impairment                                       -                -                     (4)       (4) 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 30 September 2020                             -              257                     670       927 
 
 Accumulated amortisation 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 1 October 2018                            1,804               14                       -     1,818 
 Amortisation                                     -               23                      17        40 
 Disposals                                  (1,804)              (3)                       -   (1,807) 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 30 September 2019                             -               34                      17        51 
 Amortisation                                     -               31                      51        82 
 Impairment                                       -                -                     (2)       (2) 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 30 September 2020                             -               65                      66       131 
 
 Net book value 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 At 30 September 2019                             -              148                     144       292 
 At 30 September 2020                             -              192                     604       796 
--------------------------  -----------------------  ---------------  ----------------------  -------- 
 

Amortisation is charged to the Consolidated Statement of Comprehensive Income and is included within cost of sales for those items directly related to project activities, or otherwise within general and administrative expenses.

Internally developed technology

The Group has capitalised research and development costs during the year in relation to the development of its proprietary TrialTracker software. Development includes TrialTracker platform upgrades as well as additional algorithm development. The costs capitalised include time and expenses in relation to staff costs. In recognising these assets, the Group has applied the recognition criteria of IAS 38 relating to internally generated intangible assets, where costs in relation to the development phase must be capitalised under certain circumstances. More information in relation to this is included in the accounting policies of the Group in notes 4 and 5 .

Company

At 30 September 2020 and 30 September 2019, the Company had no intangible assets.

   16.    Investments 

The consolidated financial statements of the Group as at 30 September 2020 and at 30 September 2019 include:

 
                      Class of    Country of 
 Name of subsidiary    share       incorporation   Principal activities 
-------------------  ----------  ---------------  ----------------------------------- 
 
  Directly held: 
 IXICO Technologies   Ordinary    United Kingdom   Data collection and analysis 
  Limited                                           of neurological diseases 
 IXITech Limited      Ordinary    United Kingdom   Dormant - dissolved on 26 November 
                                                    2019 
 
 Indirectly held: 
 IXICO US LLC         Members'    United States    Dormant 
                       interest 
 Optimal Medicine     Ordinary    United Kingdom   Dormant - dissolved on 26 November 
  Limited                                           2019 
 IXICO Technologies   Ordinary    United States    Sales and marketing 
  Inc. 
 
 

The Company and Group has no investments other than the holdings in the above subsidiaries that are all 100% owned. The carrying amounts of the investments in subsidiaries for the Company are:

 
                                                           Company 
                                                  2020         2019 
                                                GBP000       GBP000 
 Investments in subsidiary undertakings 
 At beginning of the period                      5,516        5,434 
 Capital contribution                              107           82 
 Total investments at end of the period          5,623        5,516 
----------------------------------------  ------------  ----------- 
 

The capital contribution represents the charge in the year for share-based awards issued by the Company to employees of IXICO Technologies Limited and IXICO Technologies Inc.

All investments in subsidiaries, other than IXICO Technologies Limited and IXICO Technologies Inc., are not expected to be recoverable, have been impaired in previous periods and have carrying values of GBPnil (2019: GBPnil).

   17.    Trade and other receivables 
 
                                                            Group                     Company 
                                                  2020        2019          2020          2019 
                                                GBP000      GBP000        GBP000        GBP000 
------------------------------------------  ----------  ----------  ------------  ------------ 
 Trade receivables                               1,395       1,933             -             - 
 Less provision for bad and doubtful                 -           -             -             - 
  debts 
------------------------------------------  ----------  ----------  ------------  ------------ 
 Net carrying amount of trade receivables        1,395       1,933             -             - 
 
 
 Other taxation and social security                137          27            19             5 
 Prepayments and accrued income                    550         419            30            34 
 Amounts due from subsidiary undertakings            -           -         4,206         4,671 
------------------------------------------  ----------  ----------  ------------  ------------ 
 Trade and other receivables                     2,082       2,379         4,255         4,710 
------------------------------------------  ----------  ----------  ------------  ------------ 
 

All amounts are classified as short-term and are expected to be received within one year. The average credit period granted to clients ranges from 30 to 90 days (2019: 30 to 90 days).

A provision for bad and doubtful debts is made when there is uncertainty over the ability to collect the amounts outstanding from clients. This is determined based on specific circumstances relating to each individual client. The Directors consider that there are no expected credit losses (2019: no expected credit losses) due to the calibre of customers the Group has and so the carrying amount of trade and other receivables approximates their fair value.

Within the Company, there are no expected credit losses (2019: no expected credit losses) from subsidiary companies due to the level of cash available in the subsidiaries which would allow the repayment of these receivables immediately.

As at the year-end, the ageing of trade receivables which are past due but not impaired is as follows:

 
                                          Group                 Company 
                                 2020       2019        2020        2019 
                               GBP000     GBP000      GBP000      GBP000 
-------------------------  ----------  ---------  ----------  ---------- 
 Amounts not past due           1,372      1,812           -           - 
 Past due: 
 Less than 30 days                 23         91           -           - 
 31 - 60 days                       -         30           -           - 
 61 - 90 days                       -          -           -           - 
 More than 90 days                  -          -           -           - 
-------------------------  ----------  ---------  ----------  ---------- 
 Total trade receivables        1,395      1,933           -           - 
-------------------------  ----------  ---------  ----------  ---------- 
 

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 24 .

   18.    Trade and other payables 
 
                                                     Group                 Company 
                                            2020       2019        2020        2019 
                                          GBP000     GBP000      GBP000      GBP000 
 Current liabilities 
 Trade payables                              176        597          13          59 
 Other taxation and social security          171        196           -           - 
 Contract liabilities                        761        414           -           - 
 Accrued expenses                          1,294      1,569          60          53 
 Other payables                                5          6           -           - 
                                      ----------  ---------  ----------  ---------- 
                                           2,407      2,782          73         112 
 Non-current liabilities 
 Accrued expenses                            167          -           -           - 
 
 Total trade and other payables            2,574      2,782          73         112 
------------------------------------  ----------  ---------  ----------  ---------- 
 

Trade payables and accrued expenses principally comprise amounts outstanding for trade purchases and ongoing costs. No interest is charged on the trade payables. The Group's policy is to ensure that payables are paid within the pre-agreed credit terms and to avoid incurring penalties and/or interest on late payments.

The fair value of trade and other payables approximates their current book values.

   19.    Provisions 

The provision balance consists of dilapidations and other provisions. The movements and carrying amounts in the provision account are as follows:

 
 
                                                        Total 
                                                       GBP000 
-----------------------------------        ------------------ 
 Carrying amount 1 October 2019                             - 
 Additional provisions                                    190 
 Carrying amount 30 September 2020                        190 
-----------------------------------------  ------------------ 
 Current                                                  100 
 Non-current                                               90 
-----------------------------------------  ------------------ 
 

The dilapidations provision relates to the office building and is the estimated cost of returning the property in its original condition at the end of the lease.

The remaining provision relates to an ongoing legal matter and reflects the expected costs associated with bringing this to a conclusion.

   20.    Leases 

All lease liabilities are presented in the statement of financial position as follows:

 
                                      Group 
                           2020         2019 
                         GBP000       GBP000 
------------       ------------  ----------- 
 Current                    168            - 
 Non-current                 45            - 
------------       ------------  ----------- 
                            213            - 
------------       ------------  ----------- 
 

The Group uses leases throughout the business for office space and IT equipment. With the exception of short-term leases and leases of low value, each lease is reflected on the balance sheet as a right-of-use asset in property, plant and equipment and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can only be used by the Group. For leases over office buildings, the Group must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. The cost of this is capitalised.

The Group has identified one lease relating to the office building that meets the definition of a right-of-use asset. There is no option to purchase and payments are not linked to an index. The remaining lease term is 17 months, has the ability to be extended at the end of this term and can be terminated with six months' notice.

Right-of-use asset and lease liability

Additional information on the right-of-use asset is as follows:

 
                                                            Carrying 
                     Asset   Dilapidations   Depreciation     amount 
                    GBP000          GBP000         GBP000     GBP000 
-----------------  -------  --------------  -------------  --------- 
 Office building       372              90          (191)        271 
-----------------  -------  --------------  -------------  --------- 
 

The undiscounted maturity analysis of lease liabilities at 30 September 2020 is as follows:

 
 
                     Within 1 
                         year   1 - 2 years   Total 
-----------------   ---------  ------------  ------ 
 Office building          168            45     213 
------------------  ---------  ------------  ------ 
 

Lease payments not recognised as a liability

The Group has elected to not recognise a lease liability for short-term leases, being 12 months or less, or for leases of low value. Payments for these are expensed on a straight-line basis. The expense relating to payments not included in the measurement of the lease liability is as follows:

 
                                               Group 
                                    2020         2019 
                                  GBP000       GBP000 
---------------------       ------------  ----------- 
 Leases of low value                   1            1 
--------------------------  ------------  ----------- 
                                       1            1 
  ------------------------  ------------  ----------- 
 

At 30 September 2020, the Group's commitment to short term and low-value leases was GBPnil (2019: GBP1,000).

   21.    Deferred tax 

Deferred tax asset (unrecognised)

 
                                                        Group                      Company 
                                              2020        2019           2020          2019 
                                            GBP000      GBP000         GBP000        GBP000 
--------------------------------------  ----------  ----------  -------------  ------------ 
 Tax effect of temporary differences: 
 Depreciation in excess of tax 
  allowances                                   292         102            (1)           (1) 
 Accumulated losses                       (12,657)    (11,268)        (1,966)       (1,699) 
 Deductible temporary differences            (140)        (49)           (14)           (5) 
--------------------------------------  ----------  ----------  -------------  ------------ 
 Deferred tax asset (unrecognised)        (12,505)    (11,215)        (1,981)       (1,705) 
--------------------------------------  ----------  ----------  -------------  ------------ 
 

The unrecognised deferred tax asset is based on material temporary differences that have originated but not reversed at the Consolidated Statement of Financial Position date from transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future.

The unrecognised deferred tax asset is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which temporary differences will reverse. Based on tax rates and laws enacted or substantively enacted at the latest balance sheet date, the rate when the above temporary differences are expected to reverse is currently 19% (2019: 17%).

   22.    Issued capital and reserves 

Ordinary shares and share premium

The Company has 1 class of ordinary shares. The share capital issued has a nominal value of GBP0.01 and each share carries the right to one vote at shareholders' meetings and all shares are eligible to receive dividends. Share premium is recognised when the amount paid for a share is in excess of the nominal value.

The Group and Company's opening and closing share capital and share premium reserves are:

 
                                            Group and Company 
                                        Ordinary     Share     Share 
                                          shares   capital   premium 
                                          Number    GBP000    GBP000 
-----------------------------------  -----------  --------  -------- 
 Authorised, issued and fully paid 
 At 30 September 2019                 46,902,294       469    84,436 
 Share options exercised                 188,998         2        63 
 At 30 September 2020                 47,091,292       471    84,499 
-----------------------------------  -----------  --------  -------- 
 

Exercise of share options

During the period, the following share options were exercised:

 
                     Key management        Other             Exercise 
                          personnel    employees     Total      price    Value 
 
 Date of exercise            Shares       Shares    Shares      Pence   GBP000 
------------------  ---------------  -----------  --------  ---------  ------- 
 15 January 2020             45,176       15,058    60,234       30.5       19 
 15 January 2020            113,706            -   113,706       34.0       39 
 15 January 2020                  -        7,529     7,529       36.5        3 
 15 January 2020                  -        7,529     7,529       49.0        4 
------------------  ---------------  -----------  --------  ---------  ------- 
 Total                      158,882       30,116   188,998          -       65 
------------------  ---------------  -----------  --------  ---------  ------- 
 

This resulted in an increase in share capital of GBP1,890 and an increase in share premium of GBP61,579.

Other reserves

Accumulated losses

This reserve relates to the cumulative results made by the Group and Company in the current and prior periods.

Merger relief reserve

In accordance with Section 612 of the Companies Act 2006 'Merger Relief', the Company issuing shares as consideration for a business combination, accounted at fair value, is obliged, once the necessary conditions are satisfied, to record the share premium to the merger relief reserve.

Reverse acquisition reserve

Reverse accounting under IFRS 3 'Business Combinations' requires that the difference between the equity of the legal parent and the issued equity instruments of the legal subsidiary, pre-combination is recognised as a separate component of equity.

Capital redemption reserve

This reserve holds shares that were repurchased and cancelled by the Company.

Foreign exchange translation reserve

This reserve represents the impact of retranslation of overseas subsidiaries on consolidation.

   23.    Share-based payments 

Certain Directors and employees of the Group hold options to subscribe for shares in the Company under share option schemes. There are 2 distinct structures to the share options in operation in the Group (2019: 2). Both structures relate to a single scheme outlined in the EMI Share Option Plan 2014.

The scheme is open, by invitation, to both Executive Directors and employees. Participants are granted share options in the Company which contain vesting conditions. These are subject to the achievement of individual employee and Group performance criteria as determined by the Board. The vesting period varies by award and the conditions approved by the Board. Options are usually forfeited if the employee leaves the Group before the options vest.

Total share options outstanding have a range of exercise prices from GBP0.01 to GBP0.70 per option and the weighted average contractual life is 3.6 years (2019: 4.6 years). The total charge for each period relating to employee share-based payment plans for continuing operations is disclosed in note 10 of the consolidated financial statements.

Details of the share options under the scheme outstanding during the period are as follows:

 
                                         2020                             2019 
-------------------------  -------------------------------  ------------------------------- 
                                 Number   Weighted average        Number   Weighted average 
                                            exercise price                   exercise price 
 Outstanding at start of 
  the period                  3,690,572            GBP0.18     5,279,745            GBP0.18 
 Granted                      1,990,000            GBP0.17             -                  - 
 Exercised                    (188,998)            GBP0.34     (125,294)            GBP0.38 
 Lapsed                     (1,053,062)            GBP0.17   (1,463,879)            GBP0.17 
 Outstanding at end of 
  the period                  4,438,512            GBP0.17     3,690,572            GBP0.18 
 Exercisable at end of 
  the period                  1,118,581            GBP0.36     1,068,110            GBP0.36 
-------------------------  ------------  -----------------  ------------  ----------------- 
 

During the year to 30 September 2020, there were two issues of share options awarded (2019: no options were awarded). Details of these awards are provided below.

5 December 2019

On 5 December 2019, the Company issued a total of 1,540,000 options to the two executive directors and two senior management personnel with an exercise price of GBP0.01. These options are subject to both revenue and share price performance over a 3-year period, with the share price performance measured against the volume-weighted average price of the Company's ordinary shares in the 20 days immediately prior to the third anniversary of the date of the grant. The options eligible to vest are then split, with 50% eligible to vest on the third anniversary of the date of the grant and 50% eligible to vest on the fourth anniversary of the date of the grant. These options must also achieve a compound annual growth rate of 10% on annual revenues over the three financial years to 30 September 2022. The performance conditions of this option award are measured against a share price of GBP0.32 and are as follows:

- 0% of the LTIP will vest if the share price increases by less than a compound annual growth rate of 12.5%;

- 25% of the LTIP will vest if the share price increases on a compound annual growth rate of 12.5%;

- 25% - 100% of the LTIP will vest on a straight-line basis if the share price increases up by up to a compound annual growth rate of 25.0%.

6 July 2020

Share options were granted on 6 July 2020 to employees of the Group. In this grant there were two tranches issued.

The first tranche totalling 300,000 options was issued to three senior management personnel with an exercise price of GBP0.70. These options are subject to both revenue and share price performance over a 3-year period, with the share price performance measured against the volume-weighted average price of the Company's ordinary shares in the 20 days immediately prior to the third anniversary of the date of the grant. The options eligible to vest are then split, with 50% eligible to vest on the third anniversary of the date of the grant and 50% eligible to vest on the fourth anniversary of the date of the grant. These options must also achieve a compound annual growth rate of 10% on annual revenues over the three financial years to 30 September 2023. The performance conditions of this option award are measured against a share price of GBP0.70 and are as follows:

- 0% of the LTIP will vest if the share price increases by less than a compound annual growth rate of 12.5%;

- 25% of the LTIP will vest if the share price increases on a compound annual growth rate of 12.5%;

- 25% - 100% of the LTIP will vest on a straight-line basis if the share price increases up by up to a compound annual growth rate of 25.0%.

The second tranche totalling 150,000 options was issued to 6 management personnel in the Group with an exercise price of GBP0.70 and was linked to profitability and service, with a performance period of 3 years and vesting on achievement of the performance criteria by the end of this period.

The model used to value the grants was the Monte Carlo method followed by 'Hull White' trinomial lattice and the inputs used were as follows:

 
                                    5 December 2019   6 July 2020 
 Weighted average share price               GBP0.70       GBP0.70 
 Weighted average exercise price            GBP0.01       GBP0.70 
 Expected volatility                          66.7%         64.4% 
 Expected life                              5 years      10 years 
 Expected dividend yield                         0%            0% 
 Risk-free interest rate                      0.55%        -0.05% 
---------------------------------  ----------------  ------------ 
 
 

4 June 2018 - modification

On 4 June 2018, the Company issued options with an exercise price of GBP0.01. The original share options granted are subject to share price performance, measured against the 3-month volume-weighted average price of the Company's ordinary shares. The measurement date will be made in the 3 months prior to the third anniversary from the date of the grant. The performance conditions of this award are as follows:

   -       0% of the LTIP will vest if the share price increases by less than 50%; 

- 25% of the LTIP will vest if the share price increases by 50% from the date of issue of the grant;

- 25% - 100% of the LTIP will vest on a straight-line basis if the share price increases by up to 100% from the date of issue of the grant.

On 5 December 2019, the share options granted to those still employed at the Group were modified. This modification removed a minimum floor price of GBP0.50 and aligned the vesting and holding periods to that of the 5 December 2019 award. A revised valuation model was used to determine the incremental fair value of the modified share options. The model used to value the grants was the Monte Carlo method followed by 'Hull White' trinomial lattice and the inputs used were as follows:

 
                                    Original    Modified 
 
 Weighted average share price        GBP0.35     GBP0.70 
 Weighted average exercise price     GBP0.01     GBP0.01 
 Expected volatility                   46.7%       66.9% 
 Expected life                       6 years   4.5 years 
 Expected dividend yield                  0%          0% 
 Risk-free interest rate               1.05%       0.62% 
---------------------------------  ---------  ---------- 
 
   24.    Financial risk management 

In common with all other areas of the business, the Group is exposed to risks that arise from the use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.

The main risks arising from the Group's financial instruments are liquidity, interest rate, foreign currency and credit risk. The Group's financial instruments comprise cash and various items such as trade receivables and trade payables, which arise directly from its operations.

Categories of financial instruments

 
                                                       Group                    Company 
                                            2020         2019          2020         2019 
                                            GBP000     GBP000        GBP000       GBP000 
---------------------------------------  ---------  ---------  ------------  ----------- 
 Financial assets held at amortised 
  cost 
 Trade and other receivables excluding 
  prepayments                                1,960      2,082         4,225        4,671 
 Cash and cash equivalents                   7,945      7,264         1,705        2,187 
---------------------------------------  ---------  ---------  ------------  ----------- 
                                             9,905      9,346         5,930        6,858 
---------------------------------------  ---------  ---------  ------------  ----------- 
 
 Financial liabilities held at 
  amortised cost 
 Trade and other payables excluding 
  statutory liabilities                      2,216      2,197            73          112 
---------------------------------------  ---------  ---------  ------------  ----------- 
                                             2,216      2,197            73          112 
---------------------------------------  ---------  ---------  ------------  ----------- 
 

Fair value of financial assets and liabilities

There is no material difference between the fair value and the carrying values of the financial instruments because of the short maturity period of these financial instruments or their intrinsic size and risk.

Liquidity risk management

Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due through having insufficient resources. The Group monitors its levels of working capital to ensure that it can meet its liabilities as they fall due. Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate framework for the management of the Group's short-, medium- and long-term funding and liquidity requirements.

The principal current asset of the business is cash and cash equivalents and is therefore the principal financial instrument employed by the Group to meet its liquidity requirements. The Board ensures that the business maintains surplus cash reserves to minimise any liquidity risk.

The financial liabilities of the Group and Company are all mostly due within 3 months (2019: 3 months) of the Consolidated Statement of Financial Position date. The Group does not have any borrowings or payables on demand which would increase the risk of the Group not holding sufficient reserves for repayment. Those liabilities older than 3 months are all denominated in Great British Pounds and are not expected to materially affect the business' liquidity.

Market risk

Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Group operates an interest rate policy designed to minimise interest costs and reduce volatility in reported earnings.

The Group holds all cash and cash equivalents with institutions with a recognised high credit rating. Interest rates on current accounts are floating. Changes in interest rates may increase or decrease the Group's finance income.

The Group does not have any committed interest-bearing borrowing facilities and consequently there is no material exposure to interest rate risk in respect of financial liabilities.

Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of a foreign currency exposure will fluctuate because of changes in foreign exchange rates.

The Group's exposure to the risk of changes in foreign exchange rates relates to the Group's overseas operating activities, primarily denominated in US Dollars, Euros and Swiss Francs. There is also an investment by the Company in a foreign subsidiary. The Group's exposure to foreign currency changes for all other currencies is not material.

During the year, the Group has not made use of financial instruments to minimise any foreign exchange gains or losses, and fluctuations in foreign exchange movements are reflected in the results from operating activities. The Group seeks to minimise the exposure to foreign currency risk by matching local currency income with local currency costs where possible. The Group will use financial instruments to minimise foreign exchange fluctuations where it is appropriate to do so.

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities as at 30 September are as follows:

 
                                          Group                    Company 
                                 2020       2019          2020         2019 
 US Dollar exposure           USD'000    USD'000       USD'000      USD'000 
--------------------------  ---------  ---------  ------------  ----------- 
 Balance at end of period 
 Monetary assets                  469        944             -            - 
 Monetary liabilities           (170)       (89)             -            - 
--------------------------  ---------  ---------  ------------  ----------- 
 Total exposure                   299        855             -            - 
--------------------------  ---------  ---------  ------------  ----------- 
 
 
                                          Group                   Company 
                                 2020       2019         2020         2019 
 Euro exposure                EUR'000    EUR'000      EUR'000      EUR'000 
--------------------------  ---------  ---------  -----------  ----------- 
 Balance at end of period 
 Monetary assets                  304        284            -            - 
 Monetary liabilities            (32)      (112)            -            - 
--------------------------  ---------  ---------  -----------  ----------- 
 Total exposure                   272        172            -            - 
--------------------------  ---------  ---------  -----------  ----------- 
 
 
                                          Group                   Company 
                                 2020       2019         2020         2019 
 Swiss Franc exposure         CHF'000    CHF'000      CHF'000      CHF'000 
--------------------------  ---------  ---------  -----------  ----------- 
 Balance at end of period 
 Monetary assets                   10         99            -            - 
 Monetary liabilities            (10)      (123)            -            - 
--------------------------  ---------  ---------  -----------  ----------- 
 Total exposure                     -       (24)            -            - 
--------------------------  ---------  ---------  -----------  ----------- 
 

Foreign currency sensitivity analysis

As at 30 September 2020, the sensitivity analysis assumes a +/-10% change of the USD/GBP, EUR/GBP and CHF/GBP exchange rates, which represents management's assessment of a reasonably possible change in foreign exchange rates (2019: 10%). The sensitivity analysis was applied on the fair value of financial assets and liabilities.

 
                            2020                         2019 
                10% weaker(1)   10% stronger   10% weaker   10% stronger 
                       GBP000         GBP000       GBP000         GBP000 
-------------  --------------  -------------  -----------  ------------- 
 US Dollar               (23)             23         (70)             70 
 Euro                    (25)             25         (15)             15 
 Swiss Franc                -              -            2            (2) 
-------------  --------------  -------------  -----------  ------------- 
                         (48)             48         (83)             83 
-------------  --------------  -------------  -----------  ------------- 
 

(1) 10% weaker relates to the Great British Pound strengthening against the currency and therefore the Group would be in a weaker monetary position.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group's financial assets are cash and cash equivalents and trade and other receivables. The carrying value of these assets represents the Group's maximum exposure to credit risk in relation to financial assets.

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the Consolidated Statement of Financial Position are net of allowances for any expected credit losses, estimated by the Group's management based on prior experience and their assessment of the current economic environment, and any specific criteria identified in respect of individual trade receivables. An allowance for expected credit losses is made where there is an identified loss event, which, based on previous experience, is evidence of a reduction in the recoverability of future cash flows. There are no outstanding expected credit losses identified at 30 September 2020 (2019: nil).

Prior to entering into an agreement to provide services, the Group makes appropriate enquiries of the counterparty and independent third parties to determine creditworthiness. The Group has not identified any significant credit risk exposure to any single counterparty or Group of counterparties as at the period end.

The Group and Company continually reviews client credit limits based on market conditions and historical experience. Any provision for impairment, as well as the ageing analysis of overdue trade receivables, is set out in note 17 .

The Group and Company's policy is to minimise the risks associated with cash and cash equivalents by placing these deposits with institutions with a recognised high credit rating.

Capital risk management

The Group considers capital to be shareholders' equity as shown in the Consolidated Statement of Financial Position, as the Group is primarily funded by equity finance and is not yet in a position to pay a dividend. The Group had no borrowings at 30 September 2020 (2019: GBPnil).

The objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and for other stakeholders. In order to maintain or adjust the capital structure the Group may return capital to shareholders or issue new shares.

   25.    Related party transactions 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Remuneration and transactions of Directors and key management personnel

Key management remuneration:

 
                                   2020     2019 
                                 GBP000   GBP000 
------------------------------  -------  ------- 
 Short-term employee benefits     1,905    1,604 
 Post-employment benefits            27       29 
 Other long-term benefits           104        - 
 Termination benefits                74       70 
 Share-based payments               170       76 
------------------------------  -------  ------- 
 Total remuneration               2,280    1,779 
------------------------------  -------  ------- 
 

Key management includes Executive Directors, Non-Executive Directors and senior management who have the responsibility for managing, directly or indirectly, the activities of the Group.

The aggregate Directors' remuneration, including employers' National Insurance and share-based payments' expense, was GBP1,256,000 (2019: GBP1,043,000) and aggregate pension of GBP12,000 (2019: GBP8,000). Further detail of Directors' remuneration is disclosed in the Directors' Remuneration Report in the full annual report.

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December 02, 2020 02:00 ET (07:00 GMT)