TIDMIKA
RNS Number : 8445F
Ilika plc
13 July 2023
Ilika plc
("Ilika", the "Group". or the "Company")
Full Year Results
Ilika (AIM: IKA), a pioneer in solid-state battery technology,
announces its results for the year ended 30 April 2023 (the
"Period").
During the Period, Ilika continued to develop and commercialise
its thin-film Stereax(R) miniature solid-state batteries for
powering implantable medical devices and industrial wireless
sensors (IIoT) in hostile environments, as well as progressing the
development of its large-format Goliath cells for electric vehicles
(EV) and cordless appliances.
Operational highlights:
-- Despatched first customer samples of Stereax M50s from UK production facility
-- Entered into memorandum of understanding with Cirtec Medical
LLC in which Ilika will develop and license Stereax technology to
Cirtec for manufacturing and commercialisation
-- Awarded GBP2.8m of funding from the Faraday Battery Challenge
to lead an GBP8.2m programme to develop high-silicon anode Goliath
batteries, supported by BMW and WAE
-- Continued technical progress with the Goliath development
programme, including increased cycle count, reduced operating
temperature and increased energy density
-- Awarded and completed a six-month Goliath economic
feasibility study (BUS100), funded by the Automotive Transformation
Fund (ATF), with UK-Battery Industrialisation Centre (UK-BIC) to
create a 100 MWh SSB facility at UK-BIC
-- Awarded and completed nine-month study of Goliath scale-up
equipment trials, supported with grant funding from the ATF
-- Appointed Jason Stewart as CFO in January 2023
-- Increased patent portfolio to 67 granted patents, with eight
new grants in the reporting period. Four additional international
filings submitted
Financial highlights:
-- Turnover GBP0.7m (2022: GBP0.5m) with other income of GBP0.1m
(2022: GBP0m) giving a total income of GBP0.8m
-- EBITDA loss adjusted for share-based payments for the year of
GBP7.0m (2022: EBITDA loss of GBP6.4m)
-- Loss per share 4.61p (2022: 4.65p loss)
-- Cash, cash equivalents and bank deposits of GBP15.9m (2022: GBP23.4m)
Post-period end highlights:
-- Despatched first revenue generating customer samples of
Stereax M50s and M300s from UK production facility
Outlook
Following shipment of the initial samples of Stereax M50s and
M300s to customers including Blink Energy, CubeWorks and Lura
Health, the focus of the Stereax team is on completion of the
Cirtec contract and execution of the associated tech transfer of
Stereax technology. The terms of the intended partnership is
currently being finalised. Once the contract is in place, Ilika
will begin transfer of the equipment from its facility in the UK to
enable the process to be established quickly on a like-for-like
basis at Cirtec's facility in Lowell, MA. The process will be set
up using the procedures developed by Ilika in the UK with the
expected shipment of batteries from Cirtec in calendar year ('CY')
2024. Ilika intends to work together with Cirtec and their
customers to develop next generation Stereax batteries to address
an expanded portfolio of market sectors.
The Goliath programme will continue to deliver improved cell
performance with increasing capacity, cycle life and charge rates
combined with elevated safety. Ilika expects to deliver data
showing lithium-ion energy density equivalence by end-2023 and to
share prototype cells with partners in H1 CY2024. In parallel with
improved cell performance, Ilika will continue to invest in
equipment to increase its capacity to produce cells. Over the
coming 12 months Ilika plans to invest c.GBP1.9m in capital
equipment, from the funds it raised in 2021 for this purpose.
Commenting on the results Ilika's Chairman, Keith Jackson, said:
"Regarding Stereax, we have built on the process qualification
foundations laid in 2022 by delivering the first batches of Stereax
batteries to customers in April 2023. This is a significant
milestone for the team, which demonstrates our focus on product
commercialisation. Our business strategy has been exemplified by
entering into a memorandum of understanding with our US-based
manufacturing partner, Cirtec Medical. This will allow Ilika to
focus on its core expertise in technology development and
licensing, while supporting the manufacturing and commercialisation
activities at Cirtec. Having now revised expectations for the
timelines required for Stereax commercialisation, we are in a
strong position to deliver on our plans going forward. There is a
tremendous amount of innovation taking place in the medical device
sector, focussed on improving treatments for chronic diseases and
Stereax is strongly positioned to add significant value to this
effort."
"We are delighted to have been awarded a significant grant to
support our collaborations and the planned development work for our
Goliath programme. Stakeholders can be reassured that our programme
was selected against a backdrop of strong competition for funding,
with our technical progress made over the preceding year and
support from well-recognised industrial partners key to securing
our selection. In parallel with the technology development, we
continue to plan and invest in industry-ready equipment to
demonstrate the robustness of our process for commercial scale-up.
This is an exciting time for the Goliath programme as we push
towards the next phase of partner evaluation in 2024, and our
ultimate goal of large-scale deployment through licensing."
Analyst Briefing
The management team will be hosting an in-person analyst
briefing today, at 9.30am. Analysts who wish to attend should
contact Lianne Applegarth at Walbrook PR on +44(0)20 7933 8780 or
email ilika@walbrookpr.com to register.
Investor Presentation
An investor presentation will be held this afternoon at 4.30pm
and will be hosted through the digital platform, Investor Meet
Company. Investors can sign up to Investor Meet Company for free
and add to meet Ilika plc via the following link:
https://www.investormeetcompany.com/ilika-plc/register-investor or
for more information please contact Walbrook PR at
ilika@walbrookpr.com .
For more information contact:
Ilika plc www.ilika.com
Graeme Purdy, Chief Executive Via Walbrook PR
Liberum Capital Limited (Nomad Tel: 020 3100 2000
and Joint Broker)
Andrew Godber,
William Hall, Nikhil Varghese
Joh. Berenberg, Gossler & Co. KG Tel: 020 3207 8700
(Joint Broker)
Matthew Armitt, Mark Whitmore, Detlir
Elezi,
Mara Grasso
Walbrook PR Ltd Tel: 020 7933 8780 / Ilika@walbrookpr.com
Lianne Applegarth Mob: 07584 391 303
Nick Rome Mob: 07748 325 236
Tom Cooper Mob: 07971 221 972
About Ilika plc
Ilika specialises in the development of solid-state batteries.
Its Stereax(R) product line is designed for miniature medical
devices and specialist internet of Things (IoT) applications.
Stereax(R) enables disruptive product designers looking for an
intrinsically safe, long life (1000s recharges), low leakage (nA)
and miniature power source in a rectangular form factor similar to
ICs. For more information about Ilika, please visit:
https://www.ilika.com .
ILIKA plc
STRATEGIC REPORT
The Directors present their Strategic Report for the year ended
30(th) April 2023.
Principal Activities
Ilika has continued to pursue its strategy of developing and
commercialising its cutting-edge solid-state batteries. The
Company's mission is to rapidly develop leading-edge IP,
manufacture and license solid-state batteries for markets that
cannot be addressed with conventional batteries due to their
safety, charge rates, energy density and life limits. We will
achieve this using ceramic-based lithium-ion technology that is
inherently safe in manufacture and usage, higher thermal tolerance
and easier to recycle which differentiates our products from
existing batteries.
Business Strategy
The Group's revenue model involves three phases:
a) commercially-funded and grant-funded development of small
quantities of batteries for customer evaluation on Company-operated
pilot lines;
b) scale-up to mid-scale manufacturing facilities to demonstrate
product and process robustness, while also supporting initial
commercialisation; and
c) commercial collaborations, including licensing the
technology, for large volume production.
Ilika has scaled-up its Stereax technology to a mid-scale
manufacturing facility. Initial deliveries of batteries were made
in H1 CY 2023. Ilika has entered into a memorandum of understanding
('MoU') for Cirtec Medical LLC to manufacture Stereax under
license. Ilika's Goliath programme is currently in the first
commercial phase, where product development is being supported by
grant-funded programmes and commercial collaborations.
To support Ilika's commitment to ESG, we have initiated an ESG
Committee with board-level leadership. Taking a risk-managed
approach, all aspects of our business are incorporating
environmental sustainability, social responsibility and appropriate
corporate governance. ESG performance is reported at all levels
within the organisation and monitored at board level.
Introduction to Solid-State Batteries
Ilika has been working with solid-state battery technology since
2008 and has developed a type of lithium-ion battery, which,
instead of using liquid or polymer electrolyte, uses a ceramic ion
conductor. Ilika's solid-state batteries have a number of benefits
over traditional lithium-ion batteries, including the
following:
-- Non-flammable, which eliminates the need for containment packaging.
-- Faster charging.
-- Increased energy density, reducing their size to up to half
the volume and weight for a given electrical charge.
-- Longer storage without loss of charge.
Ilika has developed a roadmap and family of battery products,
ranging from miniature solid-state devices designed for powering
wireless sensor applications (Industrial IOT) and medical devices
to large format cells for consumer appliances and automotive
power.
Miniature Stereax batteries
Ilika's miniature Stereax cells are differentiated from other
solid-state technology through their selection of materials and an
efficient, low temperature evaporation process that is capable of
higher manufacturing rates than other existing solid-state routes.
This results in the following benefits relative to previous
solid-state battery designs:
-- Lower cost of manufacture through avoiding use of expensive sputtering targets
-- Long cycle life through use of a silicon anode
-- Less encapsulation required
-- High temperature resilience
The unique benefits of Stereax batteries have been optimised for
medical implants and industrial applications. Miniature Stereax
batteries can enable medical devices in a way that is currently not
possible with conventional lithium-ion batteries. Their compact,
high-energy density and high power characteristics make them useful
for a range of medical implant applications covering blood pressure
monitoring to neuro-stimulation.
Stereax Manufacturing Scale-up and Commercialisation
Following substantial completion of Stereax process
qualification in CY 2022, Ilika demonstrated it was able to run the
complete manufacturing process from beginning to end and an
understanding was gained of process stability and reproducibility.
Product qualification was initiated and initial revenue generating
samples of M50s and M300s were issued to customers.
In January 2023, Ilika announced it had broadened its
relationship with Cirtec Medical ('Cirtec'), an industry-leading
strategic outsourcing partner of complex medical devices including
minimally invasive and active implantable devices, by signing a
memorandum of understanding ('MOU') which outlines the transfer of
Stereax mm-scale battery manufacturing to Cirtec's facility in
Lowell, Massachusetts, U.S.
The intent of the MOU is that Ilika will focus on advanced
technology development and IP licensing in support of Cirtec's
manufacturing and commercialisation activities. This partnership
will reinforce Cirtec's ongoing activities in system level
miniaturisation for the medical device industry. Benefits of this
partnership, to Ilika, include:
-- Further validation of Stereax's capabilities
-- Manufacturing partnership delivering economy of scale and ability to rapidly ramp production
-- Expanded business development team bringing additional commercial momentum
Since signing the MOU, Ilika and Cirtec have been finalising the
detailed terms of the contract. Once the contract is signed, Ilika
will begin shipping its Stereax manufacturing equipment to Cirtec's
facility in Lowell, Massachusetts US, to enable rapid commencement
of operations. Once the process is established at the Cirtec
facility, full product qualification will be carried out, involving
producing batches of products for highly accelerated life testing
(HALT) and reliability testing. HALT is designed to understand the
failure modes of the product in case opportunities can be
identified to increase product robustness. Reliability testing
involves creating statistically relevant data sets to underpin the
product specification sheets.
As demand for Stereax ramps over the coming years, Cirtec
intends to increase Stereax production capacity.
Large Format Goliath Batteries
At Ilika's headquarters in Romsey, UK, Ilika is operating a
pre-pilot line to develop low-cost processes suitable for
manufacturing solid-state batteries several orders of magnitude
larger than miniature Stereax batteries.
Over the course of the 2022/23 financial year, Ilika has made
continued technical progress with the Goliath development
programme, including achieving increased cycle count, reduced
operating temperature and increased energy density.
In January 2023, Ilika was awarded GBP2.8m of grant funding from
the Faraday Battery Challenge to lead a 24-month GBP8.2m programme
(code-named HISTORY) to develop high-silicon anode Goliath
batteries to enable automotive level performance. BMW Group ('BMW')
and Williams Advanced Engineering ('WAE') joined the programme's
steering committee. In the project, llika is partnering with
Nexeon, one of the UK's leading manufacturers of silicon battery
materials, and experts from four of the UK's top academic
Universities and the Centre for Process Innovation to deliver an
automotive industry-defined SSB by programme end. Manufacturing
consultants HSSMI will be working with the other partners to
deliver an SSB Life Cycle Analysis (LCA).
Project HISTORY follows on from Ilika's previous successful
Faraday Battery Challenge programmes which supported the
development of the Goliath SSB baseline cell and the construction
of Ilika's pre-pilot line. Since those initial developments, Ilika
has been working with industry specialists on scale-up activities
in line with its industrialisation programme and expects to deliver
prototype automotive A-sample SSB's from its scaled pilot
facility.
Goliath Manufacturing Scale-up
The Company's pilot line in Romsey is capable of producing 1kWh
per week. Ilika has started implementing its plans to scale up its
current site to an automated facility to support A-sample
production. Ilika estimates it will require a capacity of 30 kWh
per week by 2025 for this purpose. The first piece of automated
equipment, a belt furnace, has been successfully commissioned.
Ilika has been assessing other equipment vendors of
production-intent equipment. In this regard, the Automotive
Transformation Fund (ATF) awarded Ilika funding to cover a
nine-month study of Goliath scale-up equipment trials, which Ilika
has now completed.
In order to assess the possibility of further scale-up to 2
MWh/week with the UK-Battery Industrialisation Centre (UK-BIC),
Ilika was awarded a six-month economic feasibility study (BUS100),
also funded by the ATF.
War in Ukraine
The war in Ukraine has created inflationary pressures across the
supply chain, but there is no specific consumable or product from
the region upon which Ilika is particularly reliant. The impact on
global energy pricing and specifically the UK energy market did
have the potential to impact the Stereax FAB which the Board
mitigated through early interaction with Cirtec and the outsourcing
activity.
Patent Position
Building Ilika's intellectual property portfolio in solid-state
batteries has continued to be a focus this year. Ilika believes its
patents ring-fence and protect critical IP to avoid competitors
working around a single patent. Ilika now maintains a portfolio of
67 granted patents, as well as trade secrets in solid-state
batteries.
Quality Management System
Ilika has maintained its certification for ISO 9001:2015, which
is the world's most widely recognised Quality Management Software
and helps organisations to meet the expectations and needs of their
customers. The certification promotes the development of continual
improvement, customer satisfaction, traceability and international
best practices.
Environmental Management System
The Company has also maintained its ISO 14001:2015
certification, which is part of a family of standards developed by
the International Organisation for Standardisation. It specifies
the requirements for an environmental management system that an
organisation can use to enhance its environmental performance. The
certification confirms that environmental impact is being
continuously monitored and improved.
Environmental & Social Governance (ESG)
The Board takes a proactive approach to ESG matters looking to
adopt the best practice and recommendations from the Quoted
Companies Alliance (QCA) Corporate Governance Code. The Group is
committed to achieving a real and sustainable positive impact on
the broader community by adopting environmentally responsible
policies so it can demonstrate a responsible and balanced approach
to corporate governance.
Key performance indicators ('KPIs')
The Board monitors a small portfolio of KPIs, which define the
progress being made by the Group. Technical KPIs benchmark battery
development milestones and patent applications. Commercial KPIs
link the technical development programmes to the sales pipeline and
engagement of commercialisation partners. Operational KPIs ensure
that overheads and cash resources are tightly controlled.
The most important financial KPIs are the cash position,
turnover and profitability of the Group, which remain under
constant focus and which are considered in the financial
review.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take
into consideration the interests of stakeholders and other matters
in their decision making. The Directors continue to have regard to
the interests of the Group's employees and other stakeholders, the
impact of its activities on the community, the environment and the
Group's reputation for good business conduct, when making
decisions. In this context, acting in good faith and fairly, the
Directors consider what is most likely to promote the success of
the Group for its members in the long term. The Board regularly
reviews the Group's principal stakeholders and how it engages with
them. This is achieved through information provided by management
and also by direct engagement with stakeholders themselves.
Why engagement is Engagement process Strategic decisions
important in the year
Investors
------------------------------ ------------------------------
To communicate and AGM, analyst presentations, Reduce cash burn to
secure support for institutional investor avoid a fundraise
our long-term strategic presentations. Use in 2023.
objectives effectively of Investor Meet Company
and to promote long-term and Directors' Talk
holdings. platforms to extend
reach to retail investors.
Trading on OTCQX best
market to extend coverage
to US retail investors.
------------------------------ ------------------------------
Employees
------------------------------ ------------------------------
To deliver our long-term Transparent cascading The Board undertook
strategic objectives. Key Performance Indicators a business review
To promote our culture, that link directly and restructuring
purpose and values to the company objectives. activity aligned to
and support their Twice yearly performance the Cirtec MoU.
well-being whilst evaluations with objective
maintaining low turnover setting and reviews. An interim pay review
and high productivity Formal policies and for those staff below
rates procedures. UK median wage reflecting
Quarterly, all-company, the inflationary environment
update meetings. in the UK.
------------------------------ ------------------------------
Community and environment
------------------------------ ------------------------------
To ensure activities Promotion of the employee-led Maintained ISO accreditations
are socially and environmentally "Green Champions", (9001 and 14001).
responsible and meet a cross-company working Continued use of electricity
the highest standards. group to ensure green solely from renewable
initiatives are raised sources.
and followed through. Implemented an electric
vehicle salary sacrifice
scheme.
Undertook carbon offset
program to minimise
carbon footprint.
------------------------------ ------------------------------
Business relationships Engagement process Strategic decisions
in the year
To enable balanced Attendance at conferences MOU with Cirtec Medical
decisions which incorporate and customer and supplier for Stereax manufacturing.
viewpoints of customers, meetings.
suppliers and regulators
and ensure Company's
integrity, brand and
reputation are upheld.
--------------------------- ----------------------------
FINANCIAL REVIEW
The Financial Review should be read in conjunction with the
consolidated financial statements of the Company and Ilika
Technologies Limited (together the 'Group') and the notes below.
The consolidated financial statements are presented under
international accounting standards in conformity with the
requirements of the Companies Act 2006. The financial statements of
the Company continue to be prepared in accordance with
International Financial Reporting Standards in conformity with the
requirements of the Companies Act 2006 and are set out on below
Statement of Comprehensive Income
Turnover
Turnover, all from continuing activities, for the year ended
30(th) April 2023 was GBP0.7m (2022: GBP0.5m). This includes
GBP0.7m of grant income recognised from four projects that the
Company has in progress with Innovate UK (2022: GBP0.4m from seven
programmes). Non-grant turnover in the year was GBP0.0m (2022:
GBP0.0m).
Other Operating Income
The Company has benefitted from Research & Development
Expenditure Credit (RDEC) of GBP0.1m (2022: GBP0m).
Administrative expenses and losses for the period
Administrative costs for the year increased from GBP8.0m in 2022
to GBP9.0m in 2023. While direct R&D expenditure has reduced to
GBP4.1m (2022: GBP4.8m). The inflationary environment in the UK
over the last 12 months has contributed to the increase in cost
leading to the acceleration of Stereax licencing through the Cirtec
MoU. Staff costs increased from GBP4.7m in 2022 to GBP5.2m in 2023
associated with the increase in the average number of staff
employed from 64 to 72 which reflects the increase in operational
activities of the Stereax FAB and scale up of Goliath
development.
Development costs GBP1.0m of were capitalised in the year
compared to GBP0.8m in 2022. The share-based payment charge
increased slightly from GBP430k in 2022 to GBP442k in 2023, due to
an increased number of employees qualifying for the Company's share
option scheme.
The underlying level of loss that is measured by Earnings Before
Interest, Tax, Depreciation and Amortisation and Share-based
payments (adjusted EBITDA) shows an increase in loss from GBP6.4m
in 2022 to GBP7.0m in 2023.
Statement of financial position and cash flows
At 30(th) April 2023, current assets amounted to GBP19.1m (2022:
GBP26m), including cash, cash equivalents and bank deposits of
GBP15.9m (2022: GBP23.4m).
The principal elements of the GBP7.5m decrease in net funds
were:
-- Operating cash outflow of GBP7.0m (2022: GBP6.4m)
-- Capital expenditure on intangible development costs, plant,
property and equipment of GBP1.4m (2022: GBP4.8m) which mostly
relates to the capitalisation of Stereax R&D expenditure
-- Increased recovery of R&D tax claims of GBP1.4m (2022: GBP0.3m)
PRINCIPAL RISKS AND UNCERTAINTIES
Commercial risk
The Group is subject to competition from competitors who may
develop more advanced and less expensive alternative technology
platforms, both for existing products and for those products
currently under development.
The Group seeks to reduce this risk by continually assessing
competitive technologies and competitors. The Group seeks to
commercialise its batteries through multiple channels to reduce
overreliance on individual partners and, in agreements with
partners, it ensures that there are commercialisation milestones
which must be met for the partner to retain the rights to
commercialise the intellectual property.
Financial risk
The Group is reliant on a small number of significant customers,
partners and grant funding bodies. Termination of these agreements
or grant polices could have a material adverse effect on the
Group's results or operations or financial condition. The Group
expects to incur further operating losses as progress on
development programmes continue.
The Group seeks to reduce this risk by broadening the number of
customers and partners and thereby reduce reliance on individual
significant companies and by leveraging its IP and resources over
multiple projects. The Group applies for Research and Development
tax credits to help mitigate its investment in these
activities.
Intellectual property risk
The Group faces the risk that intellectual property rights
necessary to exploit research and development efforts may not be
adequately secured or defended. The Group's intellectual property
may also become obsolete before the products and services can be
fully commercialised.
The Group reduces this risk by contracting specialist patent
agents and attorneys with extensive global experience of patenting
and licensing.
Dependence on senior management and key staff
Certain members of staff are considered vital to the successful
development of the business. Failure to continue to attract and
retain such highly skilled individuals could adversely affect
operational results.
The Group seeks to reduce this risk by offering appropriate
incentives to staff through competitive salary packages and
participation in long-term share option schemes and a good working
environment.
War in Ukraine risk
The ongoing war in Ukraine has created inflationary pressures
across the supply chain, but there is no specific consumable or
product from the region upon which Ilika is particularly reliant.
Current inflation forecasts have been factored into the forward
looking financial forecasts. The Board continue to review spend at
all levels of the business to identify efficiencies or cost savings
which can be deployed to mitigate the inflationary environment. The
Cirtec MOU will also lead, at the conclusion of the contract and
commencement of technology transfer, to a reduction of cost to the
Company as the responsibility for manufacturing is transferred to
Cirtec.
By order of the Board
Keith Jackson Graeme Purdy
Chairman CEO
12(th) July 2023
ILIKA plc
DIRECTORS' REPORT
Directors
The Directors who served on the board of Ilika during the year
and to the date of this report were as follows:
Executive
Mr G. Purdy (CEO)
Mr S Boydell (FD and Company Secretary) (Resigned 15 July
2022)
Mr J Stewart (CFO) (Joined 3 January 2023)
Non-Executive
Prof. K Jackson (Chairman)
Mr. J Millard (Senior Independent Director)
Dr. M. Biddulph
Please note: Mr S Boydell resigned as Company Secretary as of
13(th) July 2023 and Mrs M Petitt is current Company Secretary.
Research and development costs
In accordance with the policy outlined in note 1, the Group
incurred research and development expenditure of GBP4,131,407 in
the year (2022: GBP4,786,225). In addition, amounts totalling
GBP1,027,512 (2022: GBP807,331) were capitalised in the year.
Commentary on the major activities is given in the Strategic
Report.
Financial instruments
The use of financial instruments and financial risk management
policies is covered in the Strategic Report and also in note 15 of
the financial statements.
Future developments
Information on the future developments of the business are
included in the Strategic Report.
Directors indemnities
The Company has made no qualifying third part indemnity
provisions during the year and no further provisions have been made
at the date of this report.
Political Donations
The Company has made no political donations during the
period.
Dividends
The Directors do not recommend the payment of a dividend.
Directors' interests in ordinary shares
The directors, who held office at 30(th) April 2023, had the
following interests in the ordinary shares of the Company:
Number of shares
30th April 2022 30th April 2023
G Purdy 782,927 782,927
K Jackson 102,142 102,142
M Biddulph 16,071 16,071
J Millard - -
J Stewart - -
S Boydell resigned as director with effect from 15(th) July
2022. The table below sets out the interests in ordinary shares of
the Company held as at 15(th) July 2022 and 1(st) May 2022.
1st May 2022 15(th) July 2022
S Boydell 113,948 113,948
During the year, no Directors exercised options nor sold
shares.
Substantial shareholdings
On 30 June 2023 the Company had been notified of the following
holdings of more than 3% or more of the issued share capital of the
Company.
Shareholder No. of ordinary % shareholding
shares
GPIM 18,590,225 11.70
Charles Schwab, New York
(ND) 11,260,387 7.09
Schroder Investment Management 11,008,797 6.93
Janus Henderson Investors 8,885,213 5.59
Hargreaves Lansdown, stockbrokers
(EO) 8,804,362 5.54
Post balance sheet events
There are no significant post balance sheet events from the
30(th) April 2023 to the signing of this report.
Auditors
All the current directors have taken all the steps that they
ought to have taken to make themselves aware of any information
needed by the Company's Auditors for the purposes of their audit
and to establish that the Auditors are aware of that information.
The Directors are not aware of any relevant audit information of
which the Auditors are unaware.
A resolution to re-appoint BDO LLP will be proposed at the next
Annual General Meeting.
By order of the board
Mandy Petitt
Company Secretary
ILIKA plc
DIRECTORS' REMUNERATION REPORT
Remuneration Committee
The Group's remuneration policy is the responsibility of the
Remuneration Committee (the 'Committee'). The terms of reference of
the Committee are outlined in the Corporate Governance Statement
below. The Committee members are Keith Jackson (Chairman), Jeremy
Millard and Monika Biddulph, all of whom are independent
non-executive directors. The Chief Executive Officer and certain
executives may be invited to attend Committee meetings to assist
with its deliberations, but no executive is present when their own
remuneration is being discussed.
Remuneration policy
(i) Executive remuneration
The Committee has a duty to establish a remuneration policy
which will enable it to attract and retain individuals of the
highest calibre to run the Group. Its policy is to ensure that the
executive remuneration packages of executive directors and the fee
of the Chairman are appropriate given performance, scale of
responsibility, experience, and consideration of the remuneration
packages for similar executive positions in companies it considers
to be comparable. Packages are structured to motivate executives to
achieve the highest level of performance in line with the best
interests of shareholders. A significant proportion of the total
remuneration package, in the form of bonus and share options, is
performance driven and has been constructed following consultation
with major shareholders. The Committee engages external market
leading remuneration consultants to benchmark the current
remuneration policy to ensure that the shareholders interests are
reflected in a balance package offered to Board members.
Components of remuneration
Component Purpose and Operation Performance
link to strategy metrics
Base salary To attract and Reflecting individual's Take into account
retain talent. role, experience and performance. Group and individual
Base salaries are reviewed performance,
annually in January. external benchmark
information and
internal relativities.
------------------------ ----------------------------------- ------------------------
Benefits To offer market Contribution to the executive n/a
and Pension competitive package. director's individual money
purchase scheme (at between
8% and 10% of base salary)
and critical illness cover.
------------------------ ----------------------------------- ------------------------
Short--Term Rewards the achievement Maximum bonus of base salary: Delivery of exceptional
Incentive of short--term 100% CEO and 50% CFO. 50% performance against
Plan - annual financial and of the bonus is payable a series of financial,
performance strategic project in cash and 50% is deferred commercial and
related bonus milestones. into shares (using nominal technology objectives.
cost options) for one year,
subject to continued employment.
------------------------ ----------------------------------- ------------------------
Long--Term Incentivise, Ilika plc Long Term Incentive Awards vest to
Incentive retain and reward Plan 2018 (the "LTIP"), the extent that
Plan - restricted the executive was adopted by shareholders challenging share
share unit directors for at the 2018 AGM price targets
awards successfully Single awards of share have been met.
taking the Company options with an exercise
through the next price of the nominal value
stage of its of the shares were made
growth. which will vest after three
years.
------------------------ ----------------------------------- ------------------------
Shareholding To increase shareholder 100% of the net of tax n/a
guidelines alignment. share awards which vest
must be retained until
the following guidelines
are met:
CEO 300% of salary
CSO 250% of salary
CFO 150% of salary
------------------------ ----------------------------------- ------------------------
(ii) Chairman and non-executive Director remuneration
The Chairman, Keith Jackson receives a fixed fee of GBP69,424
per annum. Jeremy Millard and Monika Biddulph receive a fixed fee
of GBP35,233 per annum. The fixed fee covers preparation for and
attendance at meetings of the full Board and committees thereof.
The Chairman and the executive directors are responsible for
setting the level of non-executive remuneration. The non-executive
directors are also reimbursed for all reasonable expenses incurred
in attending meetings.
All remuneration policies will be reviewed regularly using
independent remuneration consultants to maintain adherence with
best market practice as appropriate.
Directors' remuneration
The aggregate remuneration received by directors who served
during the year ended 30(th) April 2023 and 30(th) April 2022 was
as follows:
Total
Basic Benefits Short term
salary in kind Bonus benefits Pension Total
GBP GBP GBP GBP GBP GBP
Year to 30th April
2023
G Purdy 211,238 1,497 106,549 319,284 22,056 341,340
S Boydell* (to July
22) 33,576 204 - 33,780 2,686 36,466
J Stewart (from Jan
23) 51,600 7 13,773 65,380 2,146 67,526
K Jackson 69,424 - - 69,424 - 69,424
J Millard 35,233 - - 35,233 - 35,233
M Biddulph 35,233 - - 35,233 - 35,233
------ ------ ------ ------ ------ ------
436,304 1,708 120,322 558,334 26,888 585,222
------ ------ ------ ------ ------ ------
Year to 30th April
2022
G Purdy 210,459 720 53,667 264,846 21,046 285,892
S Boydell 139,298 476 20,546 160,320 11,143 171,463
B Hayden (to end
Sept 21) 57,150 231 - 57,381 - 57,381
K Jackson 67,389 - - 67,389 - 67,389
J Millard 34,200 - - 34,200 - 34,200
M Biddulph 34,200 - - 34,200 - 34,200
------ ------ ------ ------ ------ ------
542,696 1,427 74,213 618,336 32,189 650,525
------ ------ ------ ------ ------ ------
*S Boydell resigned as Finance Director and Company Secretary
leaving the company in 15 July 2022.
Benefits in kind include critical illness cover.
Share options
The share options of the directors are set out below:
2022 2023 Exercise Performance
Unapproved Number Number Price Expiry date Conditions
G Purdy 75,810 75,810 1p August 2027 n/a
G Purdy 1,127,777 1,127,777 1p January 2029 See note 1
G Purdy 207,229 207,229 1p August 2029 n/a
G Purdy 606,014 606,014 1p March 2030 See note 2
G Purdy 65,812 65,812 1p September 2030 n/a
G Purdy 92,536 92,536 1p February 2031 See note 3
2022 2023 Exercise Performance
Approved Number Number Price Expiry date Conditions
J Stewart - 300,000 52p August 2033 See note 4
S Boydell resigned as director with effect from 15(th) July
2022, with all outstanding unexercised options, vested or unvested,
lapsing at that date. The table below sets out the share options
that he held up until 15 July 2022 along with the 30(th) April 2022
comparative.
2022 15/07/22 Exercise Performance
Unapproved Number Number Price Expiry date Conditions
S Boydell 196,619 196,619 1p March 2030 See note 2
S Boydell 42,873 42,873 1p February 2031 See note 3
Awards with performance conditions will vest on the achievement
of the share price targets, assessed over a three year performance
period:
1) (a) Less than 27p - no vesting
(b) 27p - 25% of the shares subject to award will vest
(c) 36p - 75% of the shares subject to award will vest
(d) 54p - 100% of the shares subject to award will vest
2) (a) Less than 51p - no vesting
(b) 51p - 25% of the shares subject to award will vest
(c) 68p - 75% of the shares subject to award will vest
(d) 102p - 100% of the shares subject to award will vest
3) (a) Less than 336p - no vesting
(b) 336p - 25% of the shares subject to award will vest
(c) 448p - 75% of the shares subject to award will vest
(d) 672p - 100% of the shares subject to award will vest
4) (a) Less than 52p - no vesting
(b) 56p - 25% of the shares subject to award will vest
(c) 65p - 75% of the shares subject to award will vest
(d) 69p - 100% of the shares subject to award will vest
Awards will vest between points (b) and (c) and between (c) and
(d) on a straight-line basis.
Share based payment charge attributable to directors in the year
was GBP256,036 (2022: GBP314,204).
Keith Jackson
Chairman of the Remuneration Committee
Statement of Directors' responsibilities in respect of the
Annual Report and the Financial Statements
The Directors are responsible for preparing the annual report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements
in accordance with UK adopted international accounting standards.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgements and accounting estimates that are reasonable
and prudent;
-- state whether they have been prepared in accordance with UK
adopted international accounting standards subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Group's website in accordance with
legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Group's website is the responsibility of the Directors. The
Directors' responsibility also extends to the ongoing integrity of
the financial statements contained therein.
Going concern
The directors have prepared and reviewed financial forecasts.
After due consideration of these forecasts and current cash
resources, the directors consider that the Company and the Group
have adequate financial resources to continue in operational
existence for the foreseeable future (being a period of at least
twelve months from the date of this report), and for this reason
the financial statements have been prepared on a going concern
basis.
By order of the Board
Graeme Purdy
Chief Executive
12(th) July 2023
ILIKA plc
CORPORATE GOVERNANCE STATEMENT
We confirm that our governance structures and practices are in
agreement with the provisions of the Quoted Companies Alliance
(QCA) Corporate Governance Code (2018) for small and mid-size
quoted companies. Our statement of compliance with the 10
principles of the QCA Corporate Governance Code is set out below
and on our website:
https://www.ilika.com/investors/corporate-governance.
Principle Disclosure
========================================== =======================================
Establish a strategy and business Business strategy outlined above.
model which promotes long-term
value for shareholders.
========================================== =======================================
Seek to understand and meet See the "Meeting the needs and
shareholder needs and expectations. objectives of shareholders"
section in Corporate Governance
Statement.
========================================== =======================================
Take into account wider stakeholder See the "Shareholder engagement"
and social responsibilities section in Corporate Governance
and their implications for long Statement.
term success.
========================================== =======================================
Embed effective risk management, See risk management and internal
considering both opportunities control section in Corporate
and threats, throughout the Governance Statement.
organisation.
========================================== =======================================
Maintain the board as a well-functioning, See the "Board of directors"
balanced team led by the chair. section in Corporate Governance
Statement.
========================================== =======================================
Ensure that between them the See the "Board experience" section
directors have the necessary in Corporate Governance Statement.
up-to-date experience, skills
and capabilities.
========================================== =======================================
Evaluate all elements of board See the "Performance evaluation"
performance based on clear and section below in Corporate Governance
relevant objectives, seeking Statement.
continuous improvement.
========================================== =======================================
Promote a corporate culture See the "Promoting ethical values
that is based on sound ethical and behaviours" section in Corporate
values and behaviours. Governance Statement.
========================================== =======================================
Maintain governance structures See the "Board Committees" section
and processes that are fit for in Corporate Governance Statement.
purpose and support good decision
making by the board.
========================================== =======================================
Communicate how the company See the "Shareholder engagement"
is governed by maintaining a section in Corporate Governance
dialogue with shareholders and Statement.
other relevant stakeholders.
========================================== =======================================
Shareholder engagement
The Board recognises the importance of communicating with its
shareholders and maintains dialogue with institutional shareholders
and analysts, presentations are made when financial results are
announced. The Group retains the services of a professional
financial public relations company, who assist with ensuring the
accurate and timely communication of relevant corporate, financial
and other regulatory news. The Annual General Meeting is the
principal forum for dialogue with private shareholders who are
given the opportunity to raise questions at the meeting, and to
meet directors and senior managers of the business who make
themselves available after each meeting. The Company aims to send
out the notice of the Annual General meeting at least 21 working
days before the meeting and publish the results of resolutions
(which are usually voted on by a show of hands) in a Regulatory
News Statement after the relevant meeting. Shareholders also have
access to the Company's website and interactive Investor Meet
Company web-based presentations.
Meeting the needs and objectives of shareholders
The Board appreciates that the diverse shareholder base of the
Group may have differing objectives for their investment in the
business, and therefore the importance of ensuring that
non-executive directors ("NED") have an up to date understanding of
these perspectives is well recognised. Directors will therefore
routinely engage with both institutional and private investors and
will seek out opinions on unusual or potentially controversial
matters before adopting policy changes or tabling shareholder
resolutions. The Board will always review written feedback reports
from investors following financial results "roadshows" and will
always consider information received from institutional voter
advisory firms.
Promoting Ethical Values and Behaviours
The Board has primary responsibility for ensuring that the Group
operates according to the highest ethical standards. The Directors
believe that the main determinant of whether a business behaves
ethically and with integrity is the quality of its people. The
Directors have responsibility for ensuring that individuals
employed by the Group demonstrate the highest levels of integrity.
In addition, the Group has a formal Share Dealing Code.
Board of directors
The Board of directors (the 'Board') consists of a Non-Executive
Chairman, two Executive Directors and two Non-Executive
Directors.
The responsibilities of the Non-Executive Chairman and the Chief
Executive Officer are clearly divided. The Chairman is responsible
for overseeing the formulation of the overall strategy of the
company, the running of the board, ensuring that no individual or
group dominates the Board's decision making and ensuring that the
non-executive directors are properly briefed on matters. Prior to
each Board meeting, directors are sent an agenda and Board papers
for each agenda item to be discussed. Additional information is
provided when requested by the Board or individual directors.
The Chief Executive Officer has the responsibility for
implementing the strategy of the Board and managing the day to day
business activities of the Group through his chairmanship of the
executive committee.
The Non-Executive Directors bring relevant experience from
different backgrounds and receive a fixed fee for their services
and reimbursement of reasonable expenses incurred in attending
meetings.
The Senior Non-Executive Director is responsible for providing a
sounding board to the Chair and to act as an intermediary for other
directors and stakeholders outside of the normal channels of
communication.
The Board retains full and effective control of the Group. This
includes responsibility for determining the Group's strategy and
for approving budgets and business plans to fulfil this strategy.
The full Board ordinarily meets bi-monthly.
The Company Secretary is responsible to the Board for ensuring
that Board procedures are followed and that the applicable rules
and regulations are complied with. All directors have access to the
advice and services of the Company Secretary, and independent
professional advice, if required, at the Company's expense. Removal
of the Company Secretary would be a matter for the Board.
Performance evaluation
The Board has a process for evaluation of its own performance,
based on clear and relevant objectives to ensure continuous
improvement. The board undertakes this through a reflective review
process completed at the conclusion of each Board meeting to ensure
timely capture of any feedback and to allow for rapid
implementation of improvements in addition to a comprehensive
annual reflective review assessing the performance and
understanding of the Board in relation to key goals and stakeholder
needs. All members of the Board engaged freely and openly with the
reviews and demonstrated the expected level of commitment and held
the appropriate level of skills, experience and expertise to guide
the business ad represent all stakeholder interests.
Board experience
Keith Jackson - Non-Executive Chairman
Keith has had a wide ranging and successful career in companies
varying from start-ups to multinationals. He founded and grew an
automotive control systems company whose engine control systems are
used on millions of vehicles worldwide. Following the sale of the
company to a major OEM, he joined Rolls Royce Engines PLC where he
worked as Chief Technology Officer (CTO) in the electrical power
and control systems group and later became the CTO at Meggitt
PLC.
Keith is now the Non-Executive Chairman Libertine FPE and a
Professor at Sheffield University's Automated Control and Systems
Engineering department. He also advises a number of companies on
their technologies and strategy. Keith is a Fellow of the Society
of Automotive Engineers, a previous Rolls Royce Engineering Fellow
and Royal Aeronautical Society Fellow. He is a Computer Science
graduate from University College London.
Graeme Purdy - Chief Executive Officer
Graeme was appointed to head up Ilika in May 2004, just before
completion of the company's seed round of funding. He led the
company through two successful rounds of venture funding before
floating the company on AIM in 2010.
Prior to joining Ilika, Graeme was Chief Operating Officer of a
high-technology company in the Netherlands and before that worked
internationally in a variety of technical and commercial roles for
Shell. Graeme holds a Master's degree in Chemical Engineering from
Cambridge and an MBA from INSEAD business school in France. Graeme
is a Chartered Engineer and a Sainsbury Management Fellow.
Jason Stewart - Chief Financial Officer
Jason is a CIMA qualified accountant, senior Finance Director
and Executive joining Ilika in January 2023 bringing significant
commercial experience in the manufacturing sector. Most recently,
Jason spent twelve years at Sunseeker International in various
senior roles including Interim CFO where he successfully managed
the company through the COVID-19 crisis, managing costs and
re-establishing production subsequent to the lockdown.
Prior to joining Sunseeker International Jason undertook roles
across the broad spectrum of finance including B&Q Ltd and
Kerry Foods Ltd where he completed his professional training. He
brings with him a wealth of knowledge across financial functions,
with particular expertise in project appraisals, performance
management and business development.
Monika Biddulph - Non-Executive Director
Monika has a wide range of experience in both the commercial and
technical aspects of an international technology business. Until
2018, Monika was a member of the Senior Leadership Team IP Product
Groups at Arm Holdings plc, responsible for driving the execution
of the product roadmaps across all lines of business and central
engineering, and previously holding various General Manager and
licensing roles in the business. Currently Monika is also a
Non-Executive Director on the board of D4t4 Solutions Plc and AFC
Energy Plc. She was previously NED at Linaro Limited, an open
source software organisation. Monika holds a PhD in Physics from
the ETH Zurich.
Jeremy Millard - Senior Non-Executive Director
After an early career in engineering, Jeremy trained as a
chartered accountant in the late 1990s. Jeremy has over 20 years'
investment banking experience and currently provides corporate
finance advice to clients in the science and deep technology
sectors via Iridium Corporate Finance Limited which he founded,
prior to which he held senior roles in a number of corporate
finance houses including heading up the technology practice at
Rothschild in London. Jeremy is currently a Non-Executive Director
and Chairman of the audit committee of UK listed company Omega
Diagnostics Group plc (AIM: ODX), a Non-Executive Director of
private companies Blackbullion Ltd (EdTech) and CFPro Ltd
(specialist accounting services).
Board Committees
As appropriate, the Board has delegated certain responsibilities
to Board Committees. These committees are made up of Non Executive
Directors to ensure that they remain independent from the day to
day operations of the Company. The responsibilities of the
individual committees are as follows:
i) Audit Committee
The Audit Committee currently comprises Jeremy Millard (Chair),
Professor Keith Jackson and Dr. Monika Biddulph.
The Committee monitors the integrity of the Group's financial
statements and the effectiveness of the audit process. The
Committee reviews accounting policies and material accounting
judgements. The Committee also reviews, and reports on, reports
from the Group's auditors relating to the Group's accounting
controls. It makes recommendations to the Board on the appointment
of auditors and the audit fee. It has unrestricted access to the
Group's auditors. The Committee keeps under review the nature and
extent of non-audit services provided by the external auditors in
order to ensure that objectivity and independence are
maintained.
ii) Remuneration Committee
The Remuneration Committee comprised Professor Keith Jackson
(Chairman), Jeremy Millard and Dr. Monika Biddulph.
The committee is responsible for making recommendations to the
Board on remuneration policy for Executive Directors and the terms
of their service contracts, with the aim of ensuring that their
remuneration, including any share options and other awards, is
based on their own performance and that of the Group generally.
iii) Nomination Committee
T he Nomination Committee comprised Professor Keith Jackson
(Chairman), Jeremy Millard and Dr. Monika Biddulph.
It is responsible for providing a formal, rigorous and
transparent procedure for the appointment of new directors to the
board and reviewing the performance of the board each year.
Attendance at Board meetings and committees
The Directors are expected to attend all Board committees of
which they are a member and NED's are expected to dedicate a
minimum of twelve days per annum to the Company. During the year
the Directors attended the following Board and committees meetings
during the year:
Attendance Board Audit Nomination Remuneration
Mr S. Boydell 1/1 - - -
Mr J Stewart 2/2 - - -
Mr G. Purdy 7/7 - - -
Prof K Jackson 7/7 2/2 1/1 3/3
Jeremy Millard 7/7 2/2 1/1 3/3
Dr. Monika Biddulph 7/7 2/2 1/1 3/3
Risk management and internal control
The Board is responsible for the systems of internal control and
for reviewing their effectiveness. The internal controls are
designed to manage rather than eliminate risk and provide
reasonable but not absolute assurance against material misstatement
or loss. The Audit Committee reviews the effectiveness of these
systems primarily by discussion with the external auditor and by
considering the risks potentially affecting the Group.
The Board continues to improve the control of risk within the
business through the appointment of established experts who can
bring relevant industry and subject matter experience to develop
better control environments. This has been accomplished with the
recruitment of a Sustainability, Quality and Business Compliance
Director, a Supply Chain Director with multiple years of advanced
and complex supply chains within the automotive industry, a
Financial Controller to provide additional financial review and an
Operations Director once again bringing a lifetime of experience
from the automotive area. These individuals bring developed control
and risk management skills to provide hands on experience to
developing the Company and as an additional route for the NED
members of the Board to seek independent verification of the
improvements being made.
The Group maintains both a strategic and business risk register
as dynamic documents and as a route to track the developing risks
to the Group. These risk registers are used to manage and mitigate
emerging and established risks and escalate these to the
appropriate level within the business to support a timely
response.
The Board has assessed the risk management activity of the Board
and Group to be appropriate for the business during its current
phase of R&D and scale up development activity.
The Group does not consider it necessary to have an internal
audit function due to the small size of the administration
function. Instead there is a detailed Director review and
authorisation of transactions. The annual audit by the Group
auditor, which tests a sample of transactions, did not highlight
any significant system improvements in order to reduce risk.
The Group maintains appropriate insurance cover in respect of
actions taken against the Executive Directors because of their
roles, as well as against material loss or claims of the Group. The
insured values and type of cover are comprehensively reviewed on a
periodic basis.
By order of the Board
Keith Jackson
Chairman
12(th) July 2023
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has primary responsibility for ensuring that
the financial performance of the Group is properly measured and
reported on. It is responsible for providing oversight of the
Company's financial reporting process, the audit process, the
system of internal controls including business continuity,
information technology, the identification and management of
significant risks and the Companies compliance with laws and
regulations. Its terms of reference and its current membership are
outlined in the Corporate Governance Statement.
The Committee is chaired by an independent director with
significant experience in finance and financial markets. The
experience and background of the individuals who make up the Audit
Committee is detailed in the summary of Board experience above.
The attendance of the individual members of the Audit Committee
is detailed in the summary of Board attendance as detailed
above
Committee independence
The Audit Committee maintains its independence from the Group by
being composed exclusively of Non Executive Directors thus ensuring
the Committee's ability to effectively challenge the operations of
the business. The Board is satisfied that in doing so that the
committee is inline with best practice and that all members are
independent.
Matters covered by the Committee
The Committee, which is required to meet at least twice a year,
met twice during the year ended 30 April 2023, with all members
present. The Committee undertakes review of the principle risk
matters and is responsible for making recommendations to the Board
in relation to appropriate mitigations and control measures. The
Committee reviews the risk matrix and verifies and challenges the
processes for identifying new and emerging risks and the
appropriateness of the risk severity rating.
The Committee considers the role of the independent auditors,
their tenure and their report in relation to the Audit of Ilika Plc
and Ilika Technologies Ltd.
-- The Committee reviews the performance of the external auditor
and considers their performance in relation to the requirements of
internal and external stakeholders.
-- It considers the appropriateness of the auditor in respect of objectivity and independence
-- The Committee reviews the duration on the audit and time to
rotation of audit partner. BDO LLP were appointed as auditors of
Ilika Plc and its subsidiary companies in 2011 and the audit
partner is due for rotation in 2025.
-- The Committee gives appropriate consideration to the
reappointment of the external auditor or the needs to tender audit
services.
Matters covered during the year ended 30 April 2023:
-- July 2022: Audit completion meeting for the 2022 year-end audit,
o Review the financial forecast to support the Group's ability
to account on a going concern basis,
o Review of the auditor's report on the audit, including
materiality levels and any significant matters or specific
recommendations from the auditor.
o Review of the annual report and financial statements to ensure
they represents a fair and balance portrayal of the Group's
performance.
-- January 2023: Half year report completion meeting. Approval
of the release of the Half Year report.
Auditor independence
The auditors supply only audit and assurance related services
and do not provide and non-audit consultation services. Any
assurance services provided are provided on an exceptional basis
and reviewed by the Audit & Risk Committee prior to engagement
to ensure adherence to their independence. This policy safeguards
auditor objectivity and independence.
The external auditor may not undertake any work that may
compromise its independence or is otherwise prohibited by any law
or regulation.
Payments made to the auditor are detailed in Note 3 to the
financial statements and can be found below.
Internal audit function
The Group does not have an internal audit function, but the
Committee considers that this is appropriate, given the size and
relative lack of complexity of the Group. The Committee keeps this
matter under review annually.
Jeremy Millard
Chair of the Audit Committee
Independent auditor's report to the members of Ilika plc
Opinion on the financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 30
April 2023 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
-- the Parent Company financial statements have been properly
prepared in accordance with UK adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Ilika plc (the
'Parent Company') and its subsidiaries (the 'Group') for the year
ended 30 April 2023 which comprise the Consolidated statement of
comprehensive income, the Consolidated balance sheet, the
Consolidated cash flow statement, the Consolidated statement of
changes in equity, the Company balance sheet, the Company cash flow
statement, the Company statement of changes in equity and notes to
the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK adopted
international accounting standards and, as regards the Parent
Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those
standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's
Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Group and the Parent
Company's ability to continue to adopt the going concern basis of
accounting included:
-- Reviewing Directors' assessment of going concern through
analysis of the Group's cash flow forecast through to July 2024
including assessing and challenging the assumptions underlying the
forecasts by reference to historic performance and our knowledge of
future developments.
-- Sensitising the forecasts further to ascertain the levels of
revenue decline and cost increase that would cause a cash shortage
at any point in Directors' post balance sheet assessment period. We
also compared the level of expenditure included in the forecasts
and compared this to previous periods.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and the Parent Company's ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Overview
100% (2022: 100%) of Group loss before
Coverage tax
100% (2022: 100%) of Group revenue
100% (2022: 100%) of Group total assets
2023 2022
Capitalisation
of development
expenditure
Key audit matters
--------------------------------------------------------------------------
Group financial statements as a whole
Materiality
GBP446K (2022: GBP412K) based on 5%
(2022: 5%) of loss before tax.
--------------------------------------------------------------------------
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group's system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there
was evidence of bias by the Directors that may have represented a
risk of material misstatement.
At 30 April 2023 the group had two components whose transactions
and balances are included in the consolidated accounting records.
Both components, being Ilika plc and its subsidiary Ilika
Technologies Limited, were considered to be significant components
and were subject to a full scope audit.
All work was carried out by the group audit team.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
Key audit matter How the scope of our audit
addressed the key audit matter
Capitalisation The group has capitalised We considered the conditions
of development development expenditure under which development costs
expenditure in relation to their can be capitalised under the
Stereax battery technology. accounting standards and checked
Please refer This is the third full that these conditions have been
to note 7 period in which the met in respect of the Stereax
and accounting associated expenditure battery technology.
policies has been capitalised
and key sources having been deemed to We discussed with management
of estimation meet the criteria in the Group's processes for identifying
and uncertainty the accounting standards the relevant development costs.
in note 1. in the previous year. We reviewed the nature of the
costs capitalised to check they
There are a number of were in line with our understanding
judgements involved of the work carried out in the
in accounting for development year.
expenditure, including
whether the activities We agreed a sample of capitalised
are appropriate for costs to underlying supporting
capitalisation in accordance documentation to confirm the
with the criteria of existence and accuracy of the
the applicable accounting costs. This included obtaining
standard, the allocation time records to corroborate
of the relevant costs the allocation of employee time
to the Stereax battery spent on the Stereax battery
project, and the recoverability technology and inspecting employee
of the asset generated. contracts to check that their
stated job roles support their
Due to the level of involvement in development activities.
judgement, there was Employee costs were also agreed
also considered to be to the underlying payroll records.
an inherent risk of
management bias therefore We assessed the ability of the
this was considered asset to generate future economic
to be an area of focus benefits for the business, which
for our audit. must at least exceed the carrying
value of the intangible asset.
We have corroborated management's
assessment to external market
information and expectations.
Key observations:
Based on the audit work performed
we consider that development
costs have been capitalised
appropriately and in accordance
with the Group's accounting
policy
--------------------------------- ----------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
Group financial statements Parent company financial
statements
2023 2022 2023 2022
GBP GBP GBP GBP
-------------- ------------- ------------------- -------------------------
Materiality 446K 412K 223K 227K
-------------- ------------- ------------------- -------------------------
Basis for 5% of loss 5% of loss 50% of 55% of Group materiality
determining before tax before tax Group materiality
materiality
-------------- ------------- ------------------- -------------------------
Rationale We considered 5% of loss Calculated as a percentage
for the benchmark before tax to be a key of Group materiality due
applied performance benchmark to aggregated consideration
for the Group and the of significant component
users of the financial materiality levels.
statements in assessing
financial performance.
----------------------------- ----------------------------------------------
Performance
materiality 335k 308k 167k 170k
-------------- ------------- ------------------- -------------------------
Basis for 75% of materiality.
determining
performance
materiality
-----------------------------------------------------------------------------
Rationale Based on our risk assessment, together with our
for the percentage assessment of the Group's control environment and
applied for previous low level of misstatements
performance
materiality
-----------------------------------------------------------------------------
Component materiality
For the purposes of our Group audit opinion, we set materiality
for each significant component of the Group, apart from the Parent
Company whose materiality is set out above, based on a percentage
of 92% (2022: 95% ) of Group materiality dependent on the size and
our assessment of the risk of material misstatement of that
component. Component materiality in respect of Ilika Technologies
Limited was GBP410k (2022: GBP390k). We further applied performance
materiality levels of 75% (2022: 75%) of the component materiality
to our testing to ensure that the risk of errors exceeding
component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of GBP13k (2022: GBP8k).
We also agreed to report differences below this threshold that, in
our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report and accounts other than the financial statements and our
auditor's report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read
the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and
matters as described below.
Strategic In our opinion, based on the work undertaken in the
report and course of the audit:
Directors' * the information given in the Strategic report and the
report Directors' report for the financial year for which
the financial statements are prepared is consistent
with the financial statements; and
* the Strategic report and the Directors' report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of
the Group and Parent Company and its environment obtained
in the course of the audit, we have not identified
material misstatements in the strategic report or
the Directors' report.
Matters We have nothing to report in respect of the following
on which matters in relation to which the Companies Act 2006
we are required requires us to report to you if, in our opinion:
to report
by exception * adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit
have not been received from branches not visited by
us; or
* the Parent Company financial statements are not in
agreement with the accounting records and returns; or
* certain disclosures of Directors' remuneration
specified by law are not made; or
* we have not received all the information and
explanations we require for our audit.
------------------------------------------------------------------------
Responsibilities of Directors
As explained more fully in Statement of Directors'
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group's and the Parent Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Non-compliance with laws and regulations
Based on:
-- Our understanding of the Group and the industry in which it operates;
-- Discussion with management and those charged with governance and the Audit Committee;
-- Obtaining and understanding of the Group's policies and
procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be the
applicable accounting framework, UK tax legislation and the AIM
Listing Rules etc.
The Group is also subject to laws and regulations where the
consequence of non-compliance could have a material effect on the
amount or disclosures in the financial statements, for example
through the imposition of fines or litigations. We identified such
laws and regulations to be the health and safety legislation.
Our procedures in respect of the above included:
-- Review of minutes of meetings of those charged with
governance for any instances of non-compliance with laws and
regulations;
-- Review of correspondence with regulatory and tax authorities
for any instances of non-compliance with laws and regulations;
-- Review of financial statement disclosures and agreeing to supporting documentation;
-- Involvement of tax specialists in the audit;
-- Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to
material misstatement, including fraud. Our risk assessment
procedures included:
-- Enquiry with management and those charged with governance
including the Audit Committee regarding any known or suspected
instances of fraud;
-- Obtaining an understanding of the Group's policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to
fraud.
-- Review of minutes of meetings of those charged with
governance for any known or suspected instances of fraud;
-- Discussion amongst the engagement team as to how and where
fraud might occur in the financial statements;
-- Assessing journal entries as part of our planned approach,
with a particular focus on journal entries to key financial areas
such as intangible assets and journals raised after the year end;
and
-- Considering significant management judgements, particularly
in relation to the capitalisation of intangible assets.
Based on our risk assessment, we considered the areas most
susceptible to fraud to be capitalisation of development costs and
management override.
Our procedures in respect of the above included:
-- Testing of the capitalisation of development costs (as detailed in the KAM above);
-- Testing of all material journals raised post year by agreeing
to supporting documentation, and considering if they had any impact
on the year to April 2023;
-- Assessing significant estimates made by management for bias
by reference to external valuation reports in respect of the
dilapidation provisions.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members who were
all deemed to have appropriate competence and capabilities and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the Parent Company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the
Parent Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Stephen Le Bas (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Southampton, UK BDO LLP is a limited liability partnership
registered in England and Wales (with registered number
OC305127).
Ilika plc
Consolidated statement of comprehensive income
Year ended 30(th)
April
Notes 2023 2022
GBP GBP
Turnover 2 702,018 496,103
Revenue 33,848 30,878
UK grants 668,170 465,225
---------------------------------------- ----- ----------- -----------
Cost of sales (404,038) (218,794)
------- -------
Gross profit 297,980 277,309
Other Operating income 2 78,956 -
Total Administrative expenses
---------------------------------------- ----- ----------- -----------
Administrative expenses (8,932,647) (7,966,807)
Share based payment charge (441,796) (429,686)
---------------------------------------- ----- ----------- -----------
(9,374,443) (8,396,493)
------- -------
Operating loss 3 (8,997,507) (8,119,184)
Income from short term deposits 105,696 5,590
Interest payable (36,599) (31,299)
------- -------
Loss before tax (8,928,410) (8,144,893)
Taxation 5 1,632,455 1,016,331
------- -------
Loss for period / total comprehensive
expense (7,295,955) (7,128,562)
------- -------
Loss per share from continuing
operations 6
Basic (4.61)p (4.65)p
Diluted (4.61)p (4.65)p
The notes below form part of these financial statements.
Ilika plc
Consolidated balance sheet
Company number 07187804
As at 30(th) April
Notes 2023 2022
GBP GBP
ASSETS
Non-current assets
Intangible assets 7 2,943,462 1,958,153
Property, plant and equipment 8 4,263,579 5,072,280
Right to use assets 9 630,999 891,254
------- -------
Total non-current assets 7,838,040 7,921,687
------- -------
Current assets
Trade and other receivables 10 1,938,555 1,594,326
Current tax receivable 5 1,261,082 1,016,822
Other financial assets - bank
deposits 11 772,675 772,675
Cash and cash equivalents 12 15,100,956 22,626,280
------- -------
Total current assets 19,073,268 26,010,103
------- -------
Total assets 26,911,308 33,931,790
------- -------
Issued capital and reserves attributable
to owners of parent
Issued share capital 16 1,590,628 1,582,342
Share premium 64,936,563 64,754,910
Capital restructuring reserve 6,486,077 6,486,077
Accumulated losses (48,241,057) (41,386,898)
------- -------
Total equity 24,772,211 31,436,431
------- -------
LIABILITIES
Current liabilities
Trade and other payables 13 1,271,083 1,407,398
Lease liabilities 9 260,836 223,644
------- -------
Total current liabilities 1,531,919 1,631,042
------- -------
Non-current liabilities
Lease liabilities 9 357,643 623,952
Provisions 14 249,535 240,365
------- -------
Total non-current liabilities 607,178 864,317
------- -------
Total liabilities 2,139,097 2,495,359
------- -------
Total equity and liabilities 26,911,308 33,931,790
------- -------
The notes below form part of these financial statements.
These financial statements were approved and authorised for
issue by the Board of Directors on 12(th) July 2023.
Mr. K Jackson
Chairman
Ilika plc
Consolidated cash flow statement
Year ended 30(th)
April
2023 2022
GBP GBP
Cash flows from operating activities
Loss before taxation (8,928,410) (8,144,893)
Adjustments for:
Amortisation 42,203 47,512
Depreciation 1,552,752 1,253,038
Equity settled share-based payments 441,796 429,686
(Profit) on disposal of plant property
and equipment (750) (2,000)
Net financial (income) / expense (69,097) 25,709
------- -------
Operating cash flow before changes
in working capital, interest and
taxes (6,961,506) (6,390,948)
Decrease / (increase) in trade and other
receivables (454,046) 279,221
Increase in trade and other payables (136,314) 34,188
Increase/ (decrease) in provisions 9,170 100,000
------- -------
Cash utilised by operations (7,542,696) (5,977,539)
Tax received 1,388,195 329,509
------- -------
Net cash flow used in operating
activities (6,154,501) (5,648,030)
Cash flows from investing activities
Interest received 105,696 5,590
Purchase of intangible assets (1,027,512) (942,606)
Purchase of property, plant and equipment (373,980) (3,491,671)
Sale of property, plant and equipment 750 2000
Increase in other financial assets - (3,595)
------- -------
Net cash used in investing activities (1,295,046) (4,430,282)
Cash flows from financing activities
Proceeds from issuance of ordinary
share capital 189,939 24,833,468
Cost of share issue - (885,414)
Lease payments - capital (229,118) (209,371)
Lease payments - interest (36,598) (31,299)
------- -------
Net cash (used in) / from financing
activities (75,777) 23,707,384
------- -------
Net (decrease) / increase in cash
and cash equivalents (7,525,324) 13,629,072
Cash and cash equivalents at the
start of the period 22,626,280 8,997,208
------- -------
Cash and cash equivalents at the
end of the period 15,100,956 22,626,280
------- -------
The notes below form part of these financial statements.
Ilika plc
Consolidated statement of changes in equity
Total
Share attributable
capital Share Capital to equity
premium restructuring Accumulated holders of
account reserve losses parent
GBP GBP GBP GBP GBP
As at 30th April 2021 1,396,265 40,992,933 6,486,077 (34,688,022) 14,187,253
Share-based payment - - - 429,686 429,686
Issue of shares 186,077 24,647,391 - - 24,833,468
Cost of share issue - (885,414) - - (885,414)
Loss and total comprehensive
expense - - - (7,128,562) (7,128,562)
------ ------- -------- -------- --------
As at 30th April 2022 1,582,342 64,754,910 6,486,077 (41,386,898) 31,436,431
Share-based payment - - - 441,796 441,796
Issue of shares 8,286 181,653 - - 189,939
Cost of share issue - - - - -
Loss and total comprehensive
expense - - - (7,295,955) (7,295,955)
------ ------- -------- -------- --------
As at 30th April 2023 1,590,628 64,936,563 6,486,077 (48,241,057) 24,772,211
------ ------- -------- -------- --------
Share capital
The share capital represents the nominal value of the equity
shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value
is credited to the share premium reserve.
Capital restructuring reserve
The capital restructuring reserve arises on the accounting for
the share for share exchange. It represents the difference between
the value of the issued equity instruments of Ilika Technologies
Ltd immediately before the share for share exchange and the equity
instruments of Ilika plc along with the shares issued to effect the
share for share exchange.
Accumulated losses
The accumulated losses reserve records the accumulated profits
and losses of the Group since inception of the business.
The notes below form part of these financial statements.
Ilika plc
Notes to the consolidated financial statements
1 Accounting policies
Basis of preparation
These financial statements have been prepared in accordance with
UK adopted international accounting standards. The principal
accounting policies adopted in the preparation of the consolidated
financial statements are set out below. The policies have been
consistently applied to all of the years presented.
The individual financial statements of Ilika plc are shown in
the notes below.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
made up to the reporting date. The Company controls an investee if
all three of the following elements are present: power over the
investee, exposure to variable returns over the investee, and the
ability of the investee to use its power to affect the variable
returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of
control. All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Going concern
The financial statements have been prepared on a going concern
basis which assumes that the Company will have sufficient funds
available to enable it to continue to trade for the foreseeable
future. In making their assessment that this assumption is correct
the Directors have undertaken an in-depth review of the business,
its current prospects, and cash resources as set out below.
The directors have prepared and reviewed financial forecasts.
The Group meets its day to day working capital requirements through
existing cash resources and bank deposits, which, at 30th April
2023, amounted to GBP15,873,631 (2022:GBP23,398,955). After due
consideration of these forecasts and current cash resources and
bank deposits, the directors consider that the Company and the
Group have adequate financial resources to continue in operational
existence for the foreseeable future (being a period of at least
twelve months from the date of this report), and for this reason
the financial statements have been prepared on a going concern
basis.
After taking account of all the above factors the Directors
believe that as the market becomes more aware of the Company's
prospects and the scale of the opportunities that the Company's
technologies create the Company will continue to be able to raise
any funds required to enable it to continue to trade and grow
towards self-sufficiency.
Changes in accounting policies
(a) New standards, amendments to standards or
interpretations
No new standards, interpretations and amendments adopted in the
year have had a material impact on the Group.
(b) New standards, amendments to standards or interpretations
not yet applied
There are no new standards, interpretations or amendments not
yet applied which the directors anticipate will have a material
impact on the Group.
Turnover
Turnover comprises the amount of consideration to which the
entity expects to be entitled for the sales of products or
services, net of value added tax and is recognised as follows:
Sales of goods
Sales of Stereax batteries are recognised upon despatch to the
customer at which point they have an obligation to pay in full and
as such, control is considered to transfer at that point. Invoices
are raised at the point purchase orders are made and subsequently
upon delivery.
Government grants
Grants that compensate the Group for expenses incurred are
recognised in the income statement on a systematic basis in the
same periods in which the expenses are recognised. Submissions are
made for pre-arranged time periods with timing differences
recognised within accrued or deferred income.
Financial income
Income from short term deposits is recognised in the income
statement as it accrues, using the effective interest method.
Pension and other post-retirement benefits
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due.
Share-based payment transactions
The Group issues equity-settled share options to all employees.
Equity-settled share options are measured at fair value at the date
of grant. The fair value determined at the grant date of the
equity-settled share options is expensed on a straight-line basis
over the vesting period. At each period end, the directors
re-assess the impact of non-market conditions and adjust the
estimated share-based payment appropriately.
The fair value of options granted by the Group is measured by
use of the Black-Scholes pricing model taking into account the
following inputs: the exercise price of the option; the life of the
option; the market price on the date of grant of the option; the
expected volatility of the share price; the dividends expected on
the shares; and the risk free interest rate for the life of the
option. Where required market-based vesting and other conditions
are also considered in determining the fair value of new options
granted in the year. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural
considerations.
Foreign currency
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are translated at the foreign exchange rate
ruling at that date. Foreign exchange differences arising on
translation are recognised in profit or loss.
Research and development expenditure
Research expenditure is recognised as an expense when it is
incurred.
Development expenditure is recognised as an expense except that
costs incurred on development projects are capitalised as
intangible assets to the extent that such expenditure is expected
to generate future economic benefits. Development expenditure is
capitalised if, and only if, an entity within the Group can
demonstrate all of the following:
i. its ability to measure reliably the expenditure attributable
to the asset under development;
ii. the product or process is technically and commercially feasible;
iii. its future economic benefits are probable;
iv. its ability to use or sell the developed asset;
v. the availability of adequate technical, financial and other
resources to complete the asset under development; and
vi. its intention is to use or sell the developed asset.
During the year, GBP1,027,512 (2022: GBP807,331) of development
expenditure has been capitalised in line with IAS 38 as a result of
the conditions being met in respect of the Stereax battery project
and the sales made in the year. This capitalisation had commenced
in April 2020.
Taxation
Companies within the group may be entitled to claim special tax
allowances under the SME scheme in relation to qualifying research
and development expenditure (eg R&D tax credits). The group
accounts for such allowances as tax credits, which means that they
are recognised when it is probable that the benefit will flow to
the group and that benefit can be reliably measured. R&D tax
credits reduce current tax expense and, to the extent the amounts
due in respect of them are not settled by the balance sheet date,
reduce current tax payable. Where companies are loss-making the
company claims tax credits on their surrenderable losses, with an
appropriate receivable recognised. A deferred tax asset is
recognised for unclaimed tax credits that are carried forward as
deferred tax assets.
Tax credits claimed under the RDEC scheme are accounted for
under IAS 20 as government grants in line with the accounting
policy noted above.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The amount of
deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the reporting date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to the statement of comprehensive income
on a straight-line basis over the estimated useful lives of each
part of an item of property, plant and equipment less their
estimated residual value. The estimated useful lives are as
follows:
Leasehold improvements lease term
Plant, machinery and equipment 2 - 5 years
Fixtures & fittings 3 - 5 years
Impairment
The carrying amounts of the Group's assets are reviewed at each
reporting date to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable
amount is estimated at the present value of the future expected
cashflows associated with the impaired asset.
An impairment loss is recognised whenever the carrying amount of
an asset exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for leases of low value assets and
leases with a duration of twelve months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the Group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease
liability also includes: amounts expected to be payable under any
residual value guarantee; the exercise price of any purchase option
granted in favour of the group if it is reasonably certain to
exercise that option; and any penalties payable for terminating the
lease, if the term of the lease has been estimated on the basis of
termination option being exercised.
Right-of-use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for: lease payments made at or before commencement of the
lease, initial direct costs incurred, and the amount of any
provision recognised where the Group is contractually required to
dismantle, remove or restore the leased asset.
Subsequent to initial measurement, lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
Intangible assets
Computer software
Acquired computer software licenses are capitalised on the basis
of the costs incurred to acquire and bring to use the specific
software. These costs are amortised to administrative expenses
using the straight line method over their estimated useful lives
(1-5 years).
Intellectual property
Acquired intellectual property is included at cost and is
amortised to administrative expenses on a straight-line basis over
its useful economic life of 15 years.
Development expenditure
Development expenditure is capitalised at cost and is amortised
to administrative expenses on a straight-line basis over its useful
economic life of 10 years.
1 Accounting policies (continued)
Financial instruments
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument. The Group's financial
assets are all carried at amortised cost. Impairment provisions for
trade receivables are recognised based on the simplified approach
within IFRS 9 using a provision matrix in the determination of the
lifetime expected credit losses. The Group's financial liabilities
are all classified as 'other' liabilities which are carried at
amortised cost. Cash and cash equivalents comprise cash balances
and call deposits. Deposits of over 3 months' maturity, judged at
inception, are classified as Other Financial Assets.
Cash comprises cash on hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject
to an insignificant risk of changes in value.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial
liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial
liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recognised
at the proceeds received, net of direct issue costs.
Provisions
Provisions are made where an event has taken place that gives
the Group a legal or constructive obligation that probably requires
settlement by a transfer of economic benefit, and a reliable
estimate can be made of the amount of the obligation.
Provisions are either charged as an expense to income statement
or capitalised within property, plant and equipment in the year
that the Group becomes aware of the obligation, and are measured at
the best estimate at the balance sheet date of the expenditure
required to settle the obligation, taking into account relevant
risks and uncertainties.
When payments are made, they are charged to the provision
carried in the balance sheet.
Key sources of estimation and uncertainty
The preparation of the Group's financial statements requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, revenues and expenses
at the date of the Group's financial statements. The Group's
estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below:
Capitalisation of development costs
During the year, costs have been capitalised in respect of the
Stereax battery technology. The directors have determined that the
conditions to capitalise this associated expenditure have been met.
Had these costs been considered research rather than development
expenditure then the intangible assets would be GBP1,027,512
lower.
Recoverability of development costs
The directors have considered the recoverability of the
capitalised costs by reference to third party market analysis and
the MOU and contract discussions with Cirtec and determined that
the amounts are recoverable.
Ilika plc
Notes to the consolidated financial statements
2 Segment reporting
The Group operates in one area of activity, namely the
production, design and development of solid-state batteries. For
management purposes, the Group is analysed by the geographical
location of its customer base and business development directors
have been appointed to cover the group's three territories of
focus, Asia, North America and Europe (with the UK further split
out below).
Year ended 30(th) April
Turnover 2023 2022
GBP GBP
Analysis by geographical market:
By destination
Asia 20,451 -
Europe - 2,720
North America 553 28,158
UK 681,014 465,225
-------- --------
702,018 496,103
------- -------
An analysis of turnover by type, demonstrating the changing
focus of management from sales of services to sales of goods, is as
follows:
Year ended 30(th) April
Turnover 2023 2022
GBP GBP
Goods and services 33,848 30,878
UK Grants 668,170 465,225
-------- --------
702,018 496,103
------- -------
Customers might individually account for more than 10% of the
total turnover of the Group. The turnover from these companies are
indicated below:
Year ended 30(th) April
Turnover 2023 2022
GBP GBP
UK Grants 668,170 465,225
Customers less than 10% 33,848 30,878
-------- --------
702,018 496,103
------- -------
The Company benefitted from the UK Government Research &
Development Expenditure Credit (RDEC) during the year:
Year ended 30(th) April
Other Operating Income 2023 2022
GBP GBP
RDEC 78,956 -
-------- --------
78,956 -
------- -------
3 Operating loss
Year ended 30(th) April
2023 2022
This is arrived at after charging: GBP GBP
Research and development expenditure
in the year 4,131,407 4,786,225
Depreciation of property, plant and
equipment 1,292,497 1,024,624
Depreciation of right-of-use assets 260,255 228,414
Amortisation of intangible assets 42,203 47,512
Auditors remuneration:
Fees payable to the Group's auditor
for the audit of the Group's accounts 43,477 34,700
Fees payable to the Group's auditor
for other services:
* The Audit of the Group's subsidiaries 9,773 7,800
* Audit assurance services 4,000 -
Foreign exchange differences 10,436 23,510
Share-based payment 441,796 429,686
------- -------
4 Employees
The average number of employees during the year, including
executive directors, was:
Year ended 30(th) April
2023 2022
Number Number
Administration 6 5
Materials synthesis 66 59
------ ------
72 64
------ ------
Staff costs for all employees, including executive directors,
consist of:
Year ended 30(th) April
2023 2022
GBP GBP
Wages and salaries 4,043,784 3,604,099
Social security costs 473,316 426,358
Share-based payment expense 441,796 429,686
Pension costs 280,021 223,669
------- -------
5,238,917 4,683,812
-------- --------
Included in the above are amounts totaling GBP935,669 (2022:
GBP790,331) which have been capitalised.
The total remuneration of the Directors of the
Group was as follows:
Year ended 30(th) April
2023 2022
GBP GBP
Wages and salaries 558,334 622,829
Pension costs 26,888 32,190
------- -------
Directors' emoluments 585,222 655,019
Social security costs 72,727 101,834
Share-based payment expense 256,036 314,204
------- -------
Key management personnel 913,985 1,071,057
------- -------
The Directors represent key management personnel and further
details, are given in the Directors' Remuneration Report. The
highest paid director received remuneration of GBP341,340 (2022:
GBP285,892) including pension contributions of GBP22,056 (2022:
GBP21,046).
5 Taxation
(a) Tax on loss from ordinary activities
There is no taxation charge due to the losses incurred by the
Group during the year. The taxation credit represents R&D tax
credit claims as follows:
Year ended 30(th) April
2023 2022
GBP GBP
R&D tax credits 1,261,082 1,016,822
Adjustments to prior period 371,373 (491)
---- ----
1,632,455 1,016,331
------ ------
(b) Factors affecting current tax credit
The tax assessed on the loss on ordinary activities for the
period is different to the standard rate of corporation tax in the
UK of 19% up to April 2023 and 19% from April 2023 under the Small
ring fenced profits rate (2022: 19%). The differences are
reconciled below:
2023 2022
GBP GBP
Loss on ordinary activities before tax (8,928,410) (8,144,893)
------ ------
Loss on ordinary activities before tax
multiplied by the standard rate of corporation
tax in the UK of 19% (2022: 19%) (1,696,398) (1,547,530)
Effects of:
Expenses not deductible for corporation
tax 90,718 82,435
R&D relief (468,029) (175,267)
Origination of unrecognised tax losses 812,627 623,540
Adjustments to prior period (371,373) 491
------ ------
Total tax credit for the year (1,632,455) (1,016,331)
------ ------
5 Taxation (continued)
Unrecognised deferred taxation
There are tax losses available for carry forward against future
trading profits of approximately GBP40m (2022: GBP37.5m). A
deferred tax asset in respect of these losses, net of fixed asset
timing differences of approximately GBP9.1m (2022: GBP9.4m) has not
been recognised in the accounts, as the full utilisation of these
losses in the foreseeable future is uncertain.
6 Losses per share
Losses per ordinary share have been calculated using the
weighted average number of shares in issue during the relevant
financial periods. The weighted average number of equity shares in
issue and the losses, being loss after tax, are as follows:
Year ended 30(th) April
2023 2022
No. No.
Weighted average number of equity shares 158,395,116 153,175,933
-------- --------
GBP GBP
Losses after tax (7,295,955) (7,128,562)
------- -------
Pence Pence
Loss per share (4.61) (4.65)
------ ------
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for the purpose of calculating
the diluted losses per ordinary share are identical to those used
for basic losses per share. This is because the exercise of share
options would have the effect of reducing the loss per ordinary
share and is therefore not dilutive. At 30(th) April 2023, there
were 6,978,331 options outstanding (2022: 6,673,840) as detailed in
notes 16 and 20.
7 Intangible assets
Development Software Intellectual
expenditure licences property Total
GBP GBP GBP GBP
Cost
As at 30th April
2021 985,652 134,575 75,000 1,195,227
Additions 807,331 135,275 - 942,606
------ ------ ------ ------
As at 30th April
2022 1,792,983 269,850 75,000 2,137,833
Additions 1,027,512 - - 1,027,512
------ ------ ------ ------
As at 30th April
2023 2,820,495 269,850 75,000 3,165,345
Amortisation
As at 30(th) April
2021 - 57,168 75,000 132,168
Provided for the year - 47,512 - 47,512
------ ------ ------ ------
As at 30th April
2022 - 104,680 75,000 179,680
Provided for the year - 42,203 - 42,203
------ ------ ------ ------
As at 30th April
2023 - 146,883 75,000 221,883
Net book value
As at 30(th) April
2022 1,792,983 165,170 - 1,958,153
------- ------ ------- ------
As at 30(th) April
2023 2,820,495 122,967 - 2,943,462
------- ------ ------- ------
The amortisation charge of GBP42,203 (2022: GBP47,512) is
included within administrative expenses.
Development expenditure has not yet been amortised awaiting full
commercialisation and completion of proposed technology transfer of
the Stereax business to Cirtec under licence.
8 Property, plant and equipment
Plant,
Leasehold machinery Fixtures
improvements and equipment and fittings Total
GBP GBP GBP GBP
Cost
As at 30(th)
April 2021 78,108 5,606,249 50,311 5,734,668
Additions 314,251 3,424,813 52,657 3,791,721
Disposals - (492,921) - (492,921)
------ ------- ------ -------
As at 30th April
2022 392,359 8,538,141 102,968 9,033,468
Additions 1,400 478,450 3,946 483,796
Disposals - (119,716) - (119,716)
------ ------- ------ -------
As at 30th April
2023 393,759 8,896,875 106,914 9,397,548
------ ------- ------ -------
Depreciation
As at 30(th)
April 2021 19,920 3,376,592 32,973 3,429,485
Provided for the
year 60,944 952,588 11,092 1,024,624
Disposals - (492,921) - (492,921)
------ ------- ------ -------
As at 30th April
2022 80,864 3,836,259 44,065 3,961,188
Provided for the
year 78,728 1,190,945 22,824 1,292,497
Disposals - (119,716) - (119,716)
------ ------- ------ -------
As at 30th April
2023 159,592 4,907,488 66,889 5,133,969
------ ------- ------ -------
Net book value
As at 30(th)
April 2022 311,495 4,701,882 58,903 5,072,280
------ ------- ------ -------
As at 30(th)
April 2023 234,167 3,989,387 40,025 4,263,579
------ ------- ------ -------
At the year end, deposits totaling GBP223,751 (2022: GBP109,816)
were paid in respect of property, plant and equipment and are held
in prepayments. These will be transferred once the items have been
received. Additionally, the company has capital commitments
totaling GBP314,531 (2022: GBP163,523) as disclosed in note 18.
9 Leases
The Group has leases for its premises in Romsey and Chandler's
Ford and for an item of equipment. These leases are accounted for
by recognising a right-of-use asset and a lease liability.
The lease liabilities have been measured at the present value of
the contractual payments due to the lessor over the lease terms
using an incremental borrowing rate of 4%, which is the group's
estimate of the discount rate applicable to a property and an
equipment lease. The lease terms have been determined to be 5
years, as this is the non-cancellable period before the Group has
the option of a break. There is no reasonable certainty that the
leases will continue beyond this point.
The right-of-use assets have been initially measured at the
amount of the lease liabilities. Subsequent to initial measurement
the lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for any
lease payments made. Right-of-use assets are depreciated on a
straight-line basis over the remaining term of the lease.
Plant and
Right-of-use assets Land and buildings equipment Total
GBP GBP GBP
Cost
As at 1(st) May 2021 1,046,553 - 1,046,553
Additions - 229,247 229,247
------ ------ ------
As at 30(th) April 2022 1,046,553 229,247 1,275,800
Additions - - -
------ ------ ------
As at 30(th) April 2023 1,046,553 229,247 1,275,800
------ ------ ------
Depreciation
As at 1(st) May 2021 156,132 - 156,132
Provided for the year 209,310 19,104 228,414
------ ------ ------
As at 30(th) April 2022 365,442 19,104 384,546
Provided for the year 209,311 50,944 260,255
------ ------ ------
As at 30(th) April 2023 574,753 70,048 644,801
------ ------ ------
Net book value
As at 30(th) April 2022 681,111 210,143 891,254
------ ------ ------
As at 30(th) April 2023 471,800 159,199 630,999
------ ------ ------
Lease liabilities
2023 2022
GBP GBP
As at 1(st) May 847,596 827,720
Additions - 229,247
Cashflows:
Lease payments (265,715) (240,670)
Interest expense 36,598 31,299
------ ------
As at 30(th) April 618,479 847,596
------ ------
Maturity analysis of lease payments:
As at 30(th) April
2023 2022
GBP GBP
0-3 months 82,881 73,316
3-12 months 166,933 179,513
------ ------
Due in less than one year 249,814 252,829
1-2 years 205,000 262,569
2-5 years 191,250 396,250
------ ------
Lease payments 646,064 911,648
------ ------
10 Trade and other receivables
As at 30(th) April
2023 2022
GBP GBP
Trade receivables 19,310 4,568
Prepayments 970,198 800,957
Other receivables 481,552 464,880
Accrued income 467,495 323,921
------ ------
1,938,555 1,594,326
------ ------
The ageing of trade receivables is as follows:
As at 30(th) April
2023 2022
GBP GBP
0-29 days 19,310 4,568
------ ------
The accrued income of GBP467,495 (2022: GBP323,921) relates to
performance obligations satisfied but not invoiced, all of which is
due to be settled within the next twelve months. The increase in
accrued income is due to the level of grants underway at the
current year end compared to the previous year.
11 Other financial assets - bank deposits
As at 30(th) April
2023 2022
GBP GBP
Short term deposits with more than three
months' maturity 772,675 772,675
-------- --------
12 Cash and cash equivalents
As at 30(th) April
2023 2022
GBP GBP
Current bank accounts 739,522 618,230
Short term deposits with less than three
months' maturity 14,361,434 22,008,050
-------- --------
15,100,956 22,626,280
-------- --------
13 Trade and other payables
As at 30(th) April
2023 2022
GBP GBP
Trade payables 294,143 687,948
Other payables 39,027 38,643
Other taxes and social security costs 92,639 112,516
Accruals and deferred income 845,274 568,291
-------- --------
1,271,083 1,407,398
-------- --------
The ageing of financial liabilities is as follows:
As at 30(th) April
2023 2022
GBP GBP
0-29 days 680,278 597,388
30-59 days 85,549 138,082
60-89 days 383,180 323,556
90+ days 29,437 235,856
-------- --------
1,178,444 1,294,882
-------- --------
Within Accruals and deferred income is deferred income of
GBP10,000 (2022: GBP10,000) that represent unfulfilled performance
obligations on grants and product sales to be satisfied in the next
twelve months.
14 Provisions
Leasehold
Dilapidations
GBP
As at 1(st) May 2022 240,365
Provided 9,170
------
As at 30(th) April 2023 249,535
--------
Leasehold dilapidations relate to the estimated cost of
returning two leasehold properties to their original state at the
end of the lease in accordance with the lease terms. The provision
in the year is in respect of work that would need to be carried out
to reinstate an existing leased premise.
15 Financial instruments
The risks associated with financial instruments are set out
below.
Foreign currency risk
The Group buys goods and services in currencies other than
sterling. The Group's non sterling liabilities and cash flows can
be affected by movements in exchange rates. Given the low value of
non-sterling transactions the Group considers there to be a low
exposure to foreign currency risk. The Group has denominated some
of it sales transactions in non-sterling currencies. The foreign
exchange loss recognised in the accounts in the year to 30(th)
April 2023 was GBP10,436 (2022: GBP23,510).
Credit risk
The Group's credit risk is attributable to its trade receivables
and banking deposits. The Group places its deposits with reputable
financial institutions to minimise credit risk. The maximum
exposure to credit risk for each period is the amount disclosed
above as cash and cash equivalents, banking deposits and
receivables. For the periods above there were no trade receivables
which were past due or impaired. Risk is further mitigated through
the use of credit limits, but also through the nature of the
customers, who, for the most part, are large multinationals.
Liquidity risk
The Group's policy is to maintain adequate cash resources to
meet liabilities as they fall due. All Group payable balances fall
due for payment within one year. Cash balances are placed on
deposit for varying periods with reputable banking institutions to
ensure there is limited risk of capital loss. The Group does not
maintain an overdraft facility.
Interest rate risk
The main risk arising from the Group's financial instruments is
interest rate risk. The Group placed deposits surplus to short-term
working capital requirements with a variety of reputable UK-based
banks. These balances are placed at floating rates of interest and
deposits have maturities of one to twelve months. The Group's cash
and short-term deposits are set out in note 11. Floating-rate
financial assets comprise cash on deposit and cash at bank.
Short-term deposits are placed with banks and are categorised as
floating-rate financial assets. Contracts in place at 30(th) April
2023 had a weighted average period to maturity of 7 days (2022: 18
days) and a weighted average annualised rate of interest of 2.73%.
(2022: 0.07%)
Interest rate risk sensitivity analysis
It is estimated that a change in base rate to zero would have
increased the Group's loss before taxation for the year to 30(th)
April 2023 by approximately GBP105,696 (2022: GBP6,000).
It is estimated that an increase in base rate by 1 percent would
decrease the Group's loss before taxation for the year to 30(th)
April 2023 by approximately GBP158,699 (2022: GBP228,000).
There is no difference between the book and fair value of
financial assets and liabilities.
Capital management
The primary aim of the Group's capital management is to
safeguard the Group's ability to continue as a going concern, to
support its businesses and maximise shareholder value. The Group
monitors its capital structure and makes adjustments as and when it
is deemed necessary and appropriate to do so using such methods as
the issuing of new shares. At present all funding is raised by
equity.
16 Share capital
As at 30(th) April
2023 2022
GBP GBP
Authorised
158,474,367 (2022: 157,645,867) Ordinary
Shares of GBP0.01 each 1,584,744 1,576,459
1,781,400 Convertible Preference Shares
of GBP0.01 each 17,814 17,814
------ ------
Allotted, called up and fully paid
158,474,367 (2022: 157,645,867) Ordinary
Shares of GBP0.01 each 1,584,744 1,576,459
588,400 Convertible Preference Shares
of GBP0.01 each 5,884 5,884
------ ------
1,590,628 1,582,343
------ ------
Share Rights
The ordinary share and preference shares rank pari passu in all
respects other than:
-- The losses which the Group may determine to distribute in
respect of any financial period shall be distributed only among the
holders of the Ordinary Shares. The Preference Shares shall not
entitle the holders of them to any share in such distributions.
-- On a return of capital or assets on a liquidation, reduction
of capital or otherwise the surplus assets of the Group remaining
after payment of its obligations shall be applied:
o First, in paying to the holders of the Preference Shares the
amount paid thereon, being the amount equal to the par value of the
preference shares excluding any premium; and
o Secondly, the balance of such surplus assets shall belong to
and be distributed amongst the holders of the Ordinary Shares.
The Preference Shareholders have the right, at any time, to
convert the preference shares held to the same number of Ordinary
Shares. There are no further redemption rights.
During the year, a total of 828,500 options over Ordinary Shares
of GBP0.01 each were exercised for a total consideration of
GBP189,939.
Share options
Employee related share options are disclosed in note 20.
17 Pensions
The Group operates a defined contribution group personal pension
scheme. The pension cost charge for the period represents
contributions payable by the Group to the scheme and amounted to
GBP280,021 (2022: GBP223,669). Included within other creditors is
GBP37,429 (2022: GBP36,006) relating to outstanding pension
contributions.
18 Capital commitments
At 30(th) April, the group had capital commitments as
follows:
2023 2022
GBP GBP
Contracted for but not provided in these
financial statements 314,531 163,523
------ ------
19 Related party transactions
The directors consider that no one party controls the Group.
Details of key management personnel and their compensation are
given in note 4 and in the Directors' Remuneration Report.
Included within these statements, as shown in note 10 and note
26, are amounts totalling GBP127,403 (2022: GBP0) relating to
employee share option exercises which were owed as at April 30
2023
20 Share-based payments expense and share options
Share-based payment expense
The Group has incentivised and motivated staff through the grant
of share options under the Enterprise Management Incentive (EMI)
scheme and through unapproved share options.
At 30(th) April 2023, the following fully vested options, whose
fair values have been fully charged to the consolidated statement
of total comprehensive income, were outstanding:
Approved share options:
Period of Exercise
Date of grant Number of shares option Price per share
08/02/18 78,375 10 years GBP0.21
24/01/19 629,483 10 years GBP0.182
19/03/20 730,000 10 years GBP0.255
Unapproved share options:
Period of Exercise
Date of grant Number of shares option Price per share
15/08/2017 84,021 10 years GBP0.01
24/01/2019 1,840,171 10 years GBP0.01
29/08/2019 268,125 10 years GBP0.01
Black Scholes valuation
Weighted Average Exercise Number
Price
2023 2022 2023 2022
Outstanding: GBP GBP
At start of the
period 0.1840 0.1894 6,673,840 7,369,729
Granted in the period 0.3844 0.0100 1,579,140 327,497
Exercised in the
period 0.2293 0.1050 (828,500) (933,886)
Lapsed in the period 0.2270 0.9093 (446,149) (89,500)
----- ----- -------- --------
At the end of the
period 0.2213 0.1840 6,978,331 6,673,840
----- ----- -------- --------
The exercise price of options outstanding at the end of the
period ranged between GBP0.01 and GBP2.24 and their weighted
average contractual life was 7.1 years (2022: 7.5 years). These
share options are exercisable and must be exercised within 10 years
from the date of grant.
20 Share-based payments expense and share options (continued)
Ilika plc Executive Share Option Scheme 2010
At 30(th) April 2023 the following share options were
outstanding in respect of the Ilika plc Executive Share Option
Scheme 2010:
Period of Exercise
Date of grant Number of shares option Price per share
08/02/18 78,375 10 years GBP0.21
24/01/19 390,500 10 years GBP0.182
09/07/19 238,983 10 years GBP0.295
19/03/20 730,000 10 years GBP0.255
10/02/21 239,500 10 years GBP2.240
26/01/23 1,153,786 10 years GBP0.52
All of the options have been valued using the Black-Scholes
methodology, with an expected volatility rate of between 37.7% and
100%, the interest rate being the bank of interest base rate at the
time of grant and an expected period to maturity of 3 years.
Members of staff in the Group have options in respect of
ordinary shares in Ilika plc, which are conditional upon the
achievement of a series of financial and commercial milestones.
85,200 options lapsed in the year and 828,500 options were
exercised.
Ilika plc unapproved share options
At 30(th) April 2023 the following share options were
outstanding in respect of Ilika plc unapproved share options:
Period of Exercise
Date of grant Number of shares option Price per share
15/08/17 84,021 10 years GBP0.01
24/01/19 1,840,171 10 years GBP0.01
29/08/19 268,125 10 years GBP0.01
26/03/20 988,821 10 years GBP0.01
26/03/20 60,000 10 years GBP0.255
22/09/20 81,575 10 years GBP0.01
10/02/21 137,303 10 years GBP0.01
22/09/21 42,105 10 years GBP0.01
07/02/22 197,985 10 years GBP0.01
26/01/23 419,754 10 years GBP0.01
360,949 options lapsed in the year.
There are 4,824,676 options which were capable of being
exercised as at 30(th) April 2023.
2023 2022
GBP GBP
Share-based payment expense
Black Scholes calculation 441,796 429,686
------ ------
21 Company details
Ilika plc is a public limited company registered in England and
Wales with company number 07187804 and whose registered office is
Unit 10a, The Quadrangle, Premier Way, Romsey, England, SO51
9DL.
Company Balance sheet of Ilika plc
Company number 07187804
As at 30(th) April
2023 2022
Notes GBP GBP
ASSETS
Non-current assets
Investments in subsidiary undertaking 24 66,429,684 66,429,684
Amount due from subsidiary undertaking 25 218,525 195,658
------- -------
66,648,209 66,625,342
Current assets
Trade and other receivables 26 169,621 41,666
------- -------
Total assets 66,817,830 66,667,008
------- -------
Equity
Issued share capital 16 1,590,628 1,582,342
Share premium 64,915,773 64,734,120
Retained earnings 301,474 335,116
------- -------
66,807,875 66,651,578
LIABILITIES
Current liabilities
Trade and other payables 27 9,955 15,430
------- -------
Total liabilities 9,955 15,430
------- -------
Total equity and liabilities 66,817,830 66,667,008
------- -------
No profit and loss account is presented for the Company as
permitted by Section 408 of the Companies Act 2006. The Company's
loss for the year was GBP475,438 (2022: loss of GBP390,600).
The notes on above form part of these financial statements.
These financial statements were approved and authorised for
issue by the Board of Directors on 12(th) July 2023.
Mr. K Jackson
Chairman
Year ended 30(th) April
2023 2022
GBP GBP
Cash flows from operating activities
Loss before tax (475,438) (390,600)
Adjustments for:
Equity settled share-based payments 441,796 429,686
------ ------
Operating cash flow before changes
in working capital, interest and taxes (33,642) 39,086
(Increase) in trade and other receivables (127,955) (18,275)
(Decrease) in trade and other payables (5,475) (396)
------ ------
Cash generated (used in)/from operations (167,072) 20,415
Cash flows from investing activities
(Increase) in amounts due from subsidiary
undertaking (22,867) (768,468)
Investment in subsidiary company - (23,200,000)
------ ------
Net cash used in investing activities (22,867) (23,968,468)
Cash flows from financing activities
Proceeds from issuance of ordinary
share capital 189,939 24,833,468
Costs of share issue - (885,415)
------ ------
Net cash from financing activities 189,939 23,948,053
------ ------
Net increase in cash and cash equivalents - -
Cash and cash equivalents at the start - -
of the year
------ ------
Cash and cash equivalents at the end - -
of the year
------ ------
Ilika plc
Company cashflow statement
The Notes form part of these financial statements.
Ilika plc
Company statement of changes in equity
Total
Share Share attributable
capital premium Retained to
account Earnings equity holders
GBP GBP GBP GBP
As at 30th April 2021 1,396,265 40,972,144 296,030 42,664,439
Issue of shares 186,077 24,647,391 - 24,833,468
Cost of issue - (885,415) - (885,415)
Share-based payment - - 429,686 429,686
Loss and total comprehensive
expense - - (390,600) (390,600)
------ -------- ------ ---------
As at 30th April 2022 1,582,342 64,734,120 335,116 66,651,578
Issue of shares 8,286 181,653 - 189,939
Cost of issue - - - -
Share-based payment - - 441,796 441,796
Loss and total comprehensive
expense - - (475,438) (475,438)
------ -------- ------ ---------
As at 30th April 2023 1,590,628 64,915,773 301,474 66,807,875
------ --------- ------ ---------
Share capital
The share capital represents the nominal value of the equity
shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value
is credited to the share premium reserve.
Retained earnings
The retained earnings reserve records the accumulated profits
and losses of the Company since inception of the business.
The notes form part of these financial statements.
22 Accounting polices
Basis of preparation
These financial statements have been prepared in accordance with
UK adopted international accounting standards in conformity with
the requirements of the Companies Act 2006.
Taxation, share based payments and financial instruments
For the relevant accounting policies please see note 1.
Investments in subsidiary undertakings
Investments in subsidiary undertakings where the Company has
control are stated at cost less any provision for impairment.
Key sources of estimation and uncertainty
The company holds a significant investment in its subsidiary,
Ilika Technologies Ltd, of GBP66.4m (2022: GBP66.4m). In assessing
the carrying value of this asset for impairment, the directors have
exercised judgement in estimating its recoverable amount. The
determination of the valuation for this asset is based on the
discounted estimated future cash flows generated from out-licensing
transactions. The valuation is derived from a financial model that
evaluates a range of potential outcomes from what are considered
the key variables, including the probability of licensing
agreements being signed, the expected licensing terms that will be
negotiated and the anticipated revenues generated as a result.
Given the level of headroom indicated by the impairment review, the
discount rate assumption is not considered to be sufficiently
sensitive to change to impact the conclusion of the review.
23 Directors' remuneration
The only employees of the Company are the directors. In respect
of directors' remuneration, the disclosures required by Schedule 5
to the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 are included in the detailed disclosures
in the audited section of the Directors' Remuneration Report, which
are ascribed as forming part of these financial statements.
24 Investment in subsidiary undertaking
Investments in Group undertakings are stated at cost.
Ilika plc has a wholly owned subsidiary, Ilika Technologies Ltd.
Ilika Technologies Ltd (Incorporated in the UK) made a loss for the
year of GBP6,820,517 (2022: GBP6,737,962) and had net assets as at
30th April 2023 of GBP24,394,019 (2022: GBP31,214,536).
2023 2022
Shares in Group undertakings (at cost) GBP GBP
At 1st May 66,429,684 43,229,684
Additions - 23,200,000
------ ------
At 30(th) April 66,429,684 66,429,684
------ ------
24 Investment in subsidiary undertaking (continued)
The registered address of Ilika Technologies Ltd is unit 10a,
The Quadrangle, Premier Way, Abbey Industrial Park, Romsey, SO51
9DL. The company registration number is 05048795.
25 Amount due from subsidiary undertaking
2023 2022
GBP GBP
Ilika Technologies Ltd 218,525 195,658
------ ------
26 Trade and other receivables
2023 2022
GBP GBP
Other receivables 127,403 4,369
Prepayments 42,218 37,297
------ ------
169,621 41,666
------ ------
27 Trade and other payables
2023 2022
GBP GBP
Trade payables 1,284 3,852
Accruals 8,671 11,578
------ ------
9,955 15,430
28 Related party transactions
During the year, the Company recharged costs totalling
GBP229,734 (2022: GBP243,606) to its subsidiary, Ilika Technologies
Ltd. Amounts owed by Ilika Technologies Ltd are disclosed in note
25 (2022: owed by Ilika Technologies Ltd in note 25).
Included within these statements, as shown in note 10 and note
26, are amounts totalling GBP127,403 (2022: GBP0) relating to
employee share option exercises which were owed as at April 30
2023.
Details of key management personnel and their compensation are
given in note 4 and in the Directors' Remuneration Report
The directors consider that no one party controls the
Company.
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END
FR NKBBPPBKDFOD
(END) Dow Jones Newswires
July 13, 2023 02:00 ET (06:00 GMT)
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