ANGLE plc
Annual Report & Accounts 2009 ANGLE plc Annual Report & Accounts 2009
About us
ANGLE plc
Founded in 1994, ANGLE is an international
venture management company focusing on
the commercialisation of technology and
the development of technology-based
industry. ANGLE creates, develops and
advises technology businesses on its own
behalf and for its clients.
Management services
ANGLE has a long term Management
services business. Contracts are typically
three years or longer in duration and
assist our clients in achieving successful
commercialisation activities, such as running
incubators and research parks, innovation
and product development initiatives and
working on IP commercialisation. The
Management services business is active in
Europe, the US and the Middle East. As well
as revenue, profit and cash generation, the
Management services business provides
commercialisation opportunities for ANGLE’s
own investment business and a strong
management team which can be
leveraged in other parts of the business.
Investment Portfolio
ANGLE is an investor in high growth
companies in the medical and technology
sectors in both the UK and the US. We take
operational responsibility for the companies
as subsidiaries during their development
phase and maintain a substantial
shareholding and close involvement during
their growth phase. ANGLE has significant
holdings in portfolio companies developing
proven technologies targeting substantial
commercial markets.
Our strategy
ANGLE’s strategy is to grow its cash generative Management services
business using this as a platform for future expansion. ANGLE is focusing on
the development of its existing portfolio companies to deliver exceptional
cash realisation events. Page 01
Investment Portfolio
• Investment portfolio substantially cash
independent of ANGLE.
• Corporate deal for Novocellus (IVF embryo
viability) with Origio (formerly MediCult).
• Parsortix world break-through by isolating
foetal cells in maternal blood.
Contents
Highlights 01
Management services 02
Investment Portfolio 03
A helping hand 04
True-to-life 06
Chairman’s Statement 08
Chief Executive’s Statement 10
Financial Review 14
Board of Directors 16
Directors’ Report 18
Corporate Governance Report 20
Remuneration Report 23
Independent Auditor’s Report 25
Consolidated Income Statement 26
Consolidated Balance Sheet 27
Consolidated Cash Flow
Statement 28
Consolidated Statement of Changes
in Equity 29
Notes to the Consolidated Financial
Statements 30
Company Balance Sheet 51
Notes to the Company Financial
Statements 52
Notice of Annual General Meeting 55
Form of Proxy 59
Directors and Advisors 61
Operational Highlights
Group
• Group cash generative prior to
discretionary expenditure on investment
portfolio.
Management services
• Revenues increased by 28% to £4.9 million
(2008: £3.8 million).
• Profit before tax from Management
services increased by 41% to £1.6 million
(2008: £1.1 million).
• Successful completion in March 2009 of
five year contract to develop the highly
successful Qatar Science & Technology
Park.
• Continued progress in winning significant
cash generative management contracts.
• Significant business development in the
Middle East with strong growth prospects
developing. Page 02 ANGLE plc Annual Report & Accounts 2009
Management services
ANGLE offers a fully managed service for the delivery of technology
commercialisation programmes on behalf of clients in the private
and public sectors. Examples of major contracts are set out below.
London Development Agency - Knowledge Connect
Knowledge Connect is a pan-London innovation support Programme to assist small
and medium sized enterprises (SMEs) undertake collaborative projects with the wider
knowledgebase. It is funded by the London Development Agency (LDA) and the
European Regional Development Fund (ERDF).
This flagship Programme, a core part of the LDA’s Solutions for Business portfolio,
will engage with over 2,800 businesses and involve ANGLE working intensively with
around 500 businesses across London. The Programme has been established to raise
the performance and aspirations of London’s businesses by providing effective
support for research and development, knowledge transfer and innovation across
the Capital.
The Knowledge Connect Programme aims to increase the level of business research
and development in London by creating new collaborations between business and
the world-class London knowledgebase, with a focus on enterprises that have not
previously worked with specialists from this sector.
Worth £5.4 million, the three year initiative involves ANGLE providing a combination
of one to one mentoring, specialist identification and search and business support to
enable SMEs to address business growth opportunities.
The initiative is being delivered by ANGLE and its partner Winning Moves.
Qatar Science & Technology Park
On 31 March 2009, ANGLE successfully completed its five year contract to implement
and manage the Qatar Science & Technology Park (QSTP).
During the year, ANGLE continued to implement and operate the “capacity building
programmes” that ANGLE developed for Qatar Foundation. The programmes include
the management of a seed investment fund, an entrepreneurship programme and
a mentoring programme.
Strong progress was made during the year. The tenant base has now been expanded
to twenty one major corporations including EADS, ExxonMobil, GE, Microsoft, Shell and
Total and QSTP has attracted more than $250 million in private funding for the
research and development activities that are in progress on site.
The formal inauguration of QSTP took place on 16 March 2009 in the presence
of the Emir of Qatar, His Highness Sheikh Hamad Bin Khalifa Al Thani and Her Highness
Sheikha Mozah Bint Nasser Al-Missned, Chair Person of Qatar Foundation.
ANGLE are proud to have been responsible for the successful management of this
$600 million project over the last five years.
Carbon Trust ANGLE Incubator
ANGLE has delivered incubation support services on behalf of the Carbon Trust since
2004 and was awarded a further contract starting in August 2009 for a minimum of two
years and up to four years.
The objective of the programme is to help qualifying developers of low carbon
technologies build their businesses. Support includes help with business and financial
plan development, market investigations, mentoring the team, product development
advice, IP guidance, preparation for investor rounds or licence negotiations and
raising investment capital.
ANGLE has provided support to over thirty cleantech companies in renewable and
alternative energy, industrial process efficiency, materials, and built infrastructure
sectors. These include high growth SMEs, private start-ups, and University spin-outs
which, with ANGLE’s support, have gone on to raise over £42 million of private
investment funding (during or within 12 months of incubation) plus one IPO. ANGLE has
developed significant knowledge of low-carbon technologies and routes to
commercialisation.
New Energy Finance identified the Carbon Trust ANGLE incubator in its October 2007
Global Clean Energy Incubators Report as one of the top performing cleantech
incubators worldwide. The portfolio spans medical and life sciences through to IT and software with the base intellectual property sourced from world class
research establishments such as Dstl (UK Defence Science & Technology Laboratory), the Universities of Bristol, Cambridge, and York and
the Rowett Institute (Europe’s leading nutrition research institute) and in the US from the Universities of Southern California and New York.
The average age of the portfolio companies is five years old and they have been developed to the stage where the portfolio as a
whole is substantially cash-independent of ANGLE, thereby presenting ANGLE shareholders with the potential for substantial upside
returns without a corresponding downside risk of further investment.
Over the last two years, ANGLE has deployed a deliberate strategy to focus its efforts and resources on the winners within the portfolio
recognising that, with early stage technology investment, successful returns are likely to be concentrated in a relatively small number of
investments, which may be big winners.
At 30 April 2009, ANGLE had holdings in mature portfolio companies of 8% in Provexis plc (a listed nutraceuticals company) and the
potential for a final payment in relation to the sale of Acolyte Biomedica (an MRSA diagnostics company).
ANGLE also has principal holdings, which it currently considers have the potential to provide exceptional returns to ANGLE shareholders.
Novocellus (In vitro fertilisation - 82% holding)
Novocellus has developed a patent protected system, EmbryoSure, for selecting embryos likely to lead to a successful pregnancy.
This is expected to lead to a 25% increase in the clinical pregnancy rate for IVF as well as a reduction in health risks for the mother
and baby.
During the year Novocellus secured a corporate deal with Origio a/s (formerly MediCult a/s) to fund and manage the final trials process
and take responsibility for the product going forward. Origio supplies around one in five of the global market for IVF culture medium and
is ideally placed to ensure that EmbryoSure is widely adopted giving Novocellus access to the largest IVF customer base in the world.
Worldwide there are over 1 million cycles of IVF annually. A single cycle of IVF costs between £4,000 and £8,000 in a UK private clinic.
Origio believes that EmbryoSure will be widely adopted and will justify a premium price.
With successful trials and product launch, Novocellus will receive up to £4.5 million in milestone payments and a 25% royalty on net
sales of EmbryoSure products for the life of the patents. Novocellus offers the potential for a very substantial upside to ANGLE without a
corresponding investment risk.
Geomerics (Enhanced computer games middleware - 47% holding)
Geomerics has successfully developed and launched its ‘Enlighten’ product, dramatically improving the lighting of computer games.
During the year, Geomerics secured sales from key reference customers including Electronic Arts (DICE), CCP and Zombie. The sales
prospect list is strong.The computer games market has proven resilient in current economic conditions and is forecast to grow to a
$46.5 billion market by 2010.
Underlying Geomerics’ products is a unique patent protected technology platform, which has a range of potential applications.
As a result the company has attracted considerable corporate interest from companies such as Intel, nVidia, AMD and Autodesk.
Parsortix (Prenatal diagnostics- 76% holding)
Parsortix has developed the first ever non-invasive testing platform for the unborn baby. Pregnant women have a very small number
of their baby’s cells circulating in their blood; at most one foetal cell for 500 million maternal cells. Parsortix has developed a separation
device, which can isolate intact foetal cells in maternal blood (as opposed to merely DNA fragments) when only 1.5ml of maternal
blood is flowed through the device.
At present, testing for early definitive diagnosis for chromosomal abnormalities associated with Down’s,Turner, and Klinefelter syndromes,
as well as other disorders due to genetic abnormalities such as spina bifida is limited to high risk category patients where an invasive
procedure such as amniocentesis or chorionic villi sampling can be justified.
In the US market alone there are currently 375,000 such invasive tests undertaken per annum leaving the remaining 2.2 million pregnancies
with no advance warning of potential problems. If the invasive test can be replaced with a simple and comparatively inexpensive
maternal blood test, it is considered that the procedure will be widely adopted with the potential for 2.6 million tests per annum in the
US alone.The current cost of the amniocentesis procedure in the US is around $1,200.The Parsortix technique is expected to substantially
reduce this cost.
Parsortix is currently exploring the potential for a partnership with a major corporate and has actively engaged with a number of
multi-national companies with that in mind. The ideal corporate partner will have substantial financial resources and own diagnostic
technologies which can be bundled with Parsortix’s cell capture technology to provide a complete solution for pre-natal diagnostics.
Having proven its separation technology, Parsortix has extensively protected the intellectual property for a range of cell separation
applications in addition to foetal cells including stem cells, metastatic cancer cells and bacteria.
Investment Portfolio
ANGLE has founded and developed a portfolio of companies in which it retains substantial equity stakes.
These companies were selected for their strong IP platform addressing a large international market providing
the potential for exceptional investment returns for ANGLE shareholders.
ANGLE plc Annual Report & Accounts 2009 Page 03 Page 04 ANGLE plc Annual Report & Accounts 2009
A helping hand
ANGLE has developed world-leading technologies to care for the
unborn baby. ANGLE’s ante-natal healthcare companies offer the
potential for non-invasive health care for the unborn baby for the first
time and increased success for IVF pregnancies. ANGLE plc Annual Report & Accounts 2009 Page 05 Page 06 ANGLE plc Annual Report & Accounts 2009
True-to-life
ANGLE has developed world-leading technologies to improve the CGI
for computer games and films, dramatically improving lighting effects
in digital imagery, making them more lifelike and allowing the capture
of facial images and surface textures to enhance realism. Battlefield Bad Company 2
ANGLE plc Annual Report & Accounts 2009 Page 07 Chairman’s Statement
Page 08 ANGLE plc Annual Report & Accounts 2009
Introduction
ANGLE has continued to make progress during a difficult economic
period.
Cash remains well managed; the growth rate in the ongoing
Management services business, excluding the now completed Qatar
contract, is high; an extensive Middle East prospect list has been
developed; and much has been done to protect the potential of the
portfolio companies.
Equally, cash remains tight; large management services contracts take
time to win; funding and exit opportunities have reduced for portfolio
companies, revenue development within those companies has slowed
and valuations have consequently been reduced.
ANGLE is successfully reshaping its Management services business and
has done much to protect its portfolio against clearly adverse market
conditions and increased risks. The outlook is challenging but the
potential for success remains. Strong profitability in the
Management services business.
Results
I am pleased to report strong profitability in the Management services
business for the year ended 30 April 2009 with sharply increased revenues
and profits. Profit before tax from Management services increased by
41% to £1.6 million (2008: £1.1 million) after all costs.
This profit was offset by the costs of operating, managing and developing
the portfolio, which reduced by 44% to £0.9 million (2008: £1.6 million) and
by planned expenditure on the controlled investments, which was down
52% at £1.1 million (2008: £2.3 million).
The fair value of the investment portfolio was written down by £2.9 million
during the year (2008: write up £3.9 million) to reflect concerns as to how
the recession will affect the prospects for these businesses.
After these provisions, the loss before tax was £3.4 million (2008: profit
£1.1 million).
Overheads have been substantially reduced across the business and
during the year operating profits substantially exceeded operating costs
prior to discretionary expenditure on controlled investments.
Management services
ANGLE’s Management services business is cash generative and has
continued to grow profitably with revenues up 28% at £4.9 million (2008:
£3.8 million). The business has thus far proved resilient in current economic
conditions as a result of its specialist areas of activity and the long term
contracts under which it operates.
Portfolio companies
ANGLE has continued to tighten its focus on its existing portfolio of
investments, with increasing emphasis on its leading investments. ANGLE
continues to retain large equity stakes in a small number of portfolio
companies with high growth potential and, because of its high level of
ownership is able to control and manage these investments to maximise
the eventual return to ANGLE shareholders. ANGLE has holdings ranging
from 47% to 82% in its leading investments.
ANGLE’s controlled investments are consolidated so that their fair value is
not included in the investment portfolio fair value on the balance sheet
and their operating costs are expensed in the results.
During the year, Novocellus, ANGLE’s 82%-owned IVF embryo viability
subsidiary completed a corporate deal with Origio a/s (formerly known
as MediCult a/s). This deal has the potential to deliver substantial returns
to ANGLE from milestone payments and royalties for many years.
The adverse market conditions have resulted in a severe lack of funding
for venture capital investment on reasonable terms. ANGLE has therefore
focused its portfolio companies on revenue generation, cost
containment and corporate deals.
Cashflow
Cash was carefully managed during the year and at £0.3 million at
30 April 2009 is in line with management expectations, slightly reduced
from the position at 31 October 2008. The reduction in cash since
1 May 2008 was as a result of discretionary investment expenditure on
our controlled investments.
The profit before tax generated during the year by the Management
services business of £1.6 million (2008: £1.1 million) substantially exceeded
the Ventures and all other cash operating costs of the business for the
year of £0.8 million (2008: £1.4 million) leaving the surplus available for
discretionary expenditure on controlled investments.
With a modest level of new sales and continuing strong management of
overheads, the cash generated by the Management services business is
expected to more than cover the costs of managing the portfolio thus
allowing ANGLE to take the time necessary to maximise the value of its
investments.
Outlook
ANGLE is seeking to grow its specialist Management services business
further and has strengthened its business development activities in
the Middle East with that in mind. It will also retain and manage its
investments in the portfolio of substantially cash independent companies
which ANGLE has founded and developed. The medium term business
plan envisages growing trading profits from Management services
enhanced by returns from dividend, milestone payments, royalties and
capital returns from its investments.
ANGLE’s venture management and technology commercialisation skills
are marketable and of increasing relevance as global economies focus
on regeneration, innovation and value added components to their
industries. ANGLE’s technology skills in IT and software, medical and life
sciences, clean tech and renewable energies are directly relevant to
major growth markets of the future.
The substantial efforts involved during the year to deliver strong
profitability in the Management services business and encouraging
progress in the portfolio companies reflect the hard work of ANGLE’s
staff and the Board thanks them sincerely for their continuing efforts.
Garth Selvey
Chairman
23 July 2009
ANGLE plc Annual Report & Accounts 2009 Page 09 Chief Executive’s
Statement
Page 10 ANGLE plc Annual Report & Accounts 2009
Introduction
The year ended 30 April 2009 has been a year of continued execution
of our established strategy to build the cash generative Management
services business as a strong platform for the future. Costs have been
reduced, revenues increased and portfolio companies have been
progressed against key milestones.
Management services
ANGLE’s specialist Management services business has continued to
grow year-on-year. Revenues increased 28% during the year to £4.9
million (2008: £3.8 million) and net profit before tax for this business was
41% higher at £1.6 million (2008: £1.1 million). These results reflect the
Company’s success in generating new and additional business to
replace revenues from the Qatar contract, which was completed in
March 2009.
Successful completion of ANGLE’s five year contract to develop the
Qatar Science & Technology Park (QSTP) was a highlight of the year.
The QSTP project was the largest of its kind in the world in recent times,
with the first phase development costing in excess of US$600 million.
Under ANGLE’s management, QSTP has developed a world class physical
infrastructure and environment for technology development and R&D
and has attracted some of the world’s leading companies including
Chevron, Cisco, ConocoPhillips, EADS, ExxonMobil, GE, Hydro, Microsoft,
Shell, Tata and Total as well as leading early stage technology
companies. The portfolio is now substantially
cash independent of ANGLE.
Excluding the QSTP contract, during the year the revenues of the
Management services business grew 60% to £3.2 million. ANGLE has
secured new long term contracts including:
• London Development Agency’s Knowledge Connect Programme
expanded to £5.4 million over three years;
• Carbon trust contract renewal worth up to £1.4 million over three years,
agreed after the year end;
• London Manufacturing Advisory Services contract worth an estimated
£0.7 million over three years, agreed after the year end.
ANGLE’s Management services business is focused on long term
management contracts, typically of three years or more in duration,
and this gives good visibility on future revenues.
Technology based economic development is critical to the future of
many economies. In the current economic conditions, Governments are
seeking to expand their activities in ANGLE’s core areas of activity
including incubation, innovation, support for SMEs (small and medium
sized enterprises) and developing the knowledge-based economy.
The sold order book for the next three years is solid at £4.8 million at
30 June 2009 (30 April 2008: £5.1 million) and there are major efforts
under way to build new business notably in the Middle East.
Portfolio value
ANGLE’s portfolio of investments comprises both non-controlled
investments and controlled investments.
The non-controlled investments are held on the balance sheet at a fair
value of £4.4 million (30 April 2008: £7.3 million). The Board has taken a
robust view of fair values reflecting very difficult economic conditions
and in particular the need to mark to market, an extremely difficult fund
raising and exit environment and uncertainties as to how businesses will
be able to develop in the present climate.
Non-controlled investments
Provexis (functional food and beverages), in which ANGLE holds an 8%
stake valued at £0.5m at the year end and which is quoted on AIM,
completed a £2.5 million equity placing during the year. Since the year
end, the value of Provexis has risen following its announcement of
successful European Health Claim Adoption for the Company's Fruitflow
®
anti-thrombotic technology by the European Food Safety Authority
(“EFSA”).
Acolyte Biomedica (medical diagnostics / MRSA detection): the
deferred consideration due in respect of the sale of the investment in
Acolyte is subject to dispute between the former Acolyte shareholders
and the purchaser. Legal advice has been received that the former
Acolyte shareholders have a strong case although the matter will take
some time to resolve. ANGLE has adopted a strategy to ensure it will not
be exposed to significant legal costs in this matter.
Geomerics (computer games middleware), in which ANGLE holds 47%,
has completed its product development and is building a pipeline of
customers for its Enlighten product. The strength of the product offering
has been demonstrated through sales to Electronic Arts (DICE), CCP and
Zombie and there is now corporate interest from Intel, nVidia, AMD and
Autodesk amongst others.
NeuroTargets (neuropathic pain), in which ANGLE has a 25% stake,
has licensed its intellectual property in relation to neuropathic pain
therapeutic molecules to the University of Bristol, who have used that
background IP to successfully raise further funds to advance the galanin
programme.
ANGLE plc Annual Report & Accounts 2009 Page 11 Major efforts under way to build new business,
notably in the Middle East.
Chief Executive’s
Statement
Continued
Page 12 ANGLE plc Annual Report & Accounts 2009
Controlled investments
Controlled investments are consolidated as subsidiaries and are not
shown at fair value on the balance sheet. Their value is excluded from
the fair value of £4.4 million discussed above. During the year, a further
£1.1 million was invested in these companies and expensed.
Novocellus (ANGLE’s 82% subsidiary in medical diagnostics IVF embryo
viability) completed a deal during the year with Origio a/s (formerly
known as MediCult a/s) (OSE: ORO), a leader in Assisted Reproductive
Technologies to acquire the patented, non-invasive embryo selection
technology (EmbryoSure™) that Novocellus has developed. Origio’s
leading market position in global IVF gives access to the largest IVF
customer base in the world for sale of the EmbryoSure product.
The success based milestone and royalty arrangements provide
ANGLE with the potential for exceptional returns on its investment.
Origio will fund and manage a 400 patient trial in a number of leading
UK clinics to statistically validate the extent to which the use of
EmbryoSure will increase the chances of successful pregnancy
compared to current visual techniques used to select the most viable
embryo. Building on the work already undertaken by Novocellus, this trial
is expected to take around twelve months to complete with the product
being commercially launched by the end of 2010.
On successful completion of the trial demonstrating a significant uplift
in clinical pregnancy rates, Origio will make milestone payments to
Novocellus. In addition to milestone payments, Origio will make royalty
payments to Novocellus on net sales of EmbryoSure products in countries
in which patent protection exists, which as at the date of the agreement
are Europe, USA, Japan, Canada, China, India and Australia.
In 2009, it is estimated that there will be over 1,000,000 cycles of IVF
carried out globally, a figure that is growing at more than 4% a year.
A single cycle of IVF costs between £4,000 and £8,000 in a UK private
clinic according to the Human Fertilisation and Embryology Authority.
Assuming the trial substantiates the increased pregnancy rates offered
by EmbryoSure, Origio believes that EmbryoSure will be widely adopted
and, by virtue of the increased success rates it offers, will justify a premium
price. Parsortix (ANGLE’s 78% subsidiary in medical diagnostics / foetal cell
capture) achieved a world break-through during the year by isolating
foetal cells in maternal blood. Pregnant women have a very small
number of their baby’s cells circulating in their blood. There are thought
to be at most one foetal cell in 500 million maternal cells. Parsortix has
developed a patent protected micro fluidic device which, when 1.5 ml
of the mother’s blood is flowed through the device, can uniquely
capture intact foetal cells for analysis. A number of multinationals have
already expressed interest in Parsortix and ANGLE is exploring the
potential for a corporate deal.
Early definitive diagnosis for chromosomal abnormalities associated with
Down’s, Turner and Klinefelter syndromes, as well as other disorders due
to genetic abnormalities such as spina bifida, can help physicians better
care for both the mother and the foetus during pregnancy. It also gives
families earlier information with respect to the health of the unborn child
and is increasingly important as the mother’s average age increases.
At present, diagnosis is only possible through invasive procedures such as
amniocentesis and chorionic villus sampling (CVS). These carry a risk to
both the baby and the mother and as a result are limited only to high risk
pregnancies. Parsortix’s new device allows completely non-invasive
testing of the unborn baby removing the risk and allowing diagnosis to
be extended as a matter of course to all babies not just those known to
be at high risk. The physical separation process used is simple and cost-
effective. It requires no pre-treatment of the sample and no reagents.
Commercially, Parsortix’s unique patented separation technique will
reduce overall medical costs. In the high risk category, there are currently
375,000 tests per annum in the US market alone. With a non-invasive test,
the market is likely to expand to cover lower risk patients with a
theoretical maximum in the US market alone of 2.6 million tests per
annum. Parsortix has the potential to secure a dominant position in this
separation market. The current cost of the amniocentesis procedure in
the US is around $1,200.
ANGLE has secured strong corporate interest in Parsortix and is currently
exploring corporate deals to bring this technology to market.
Aguru Images completed its first commercial contract successfully
during the year with deployment of its technology in Paramount’s
“GI Joe”, but has since been severely frustrated in its sales process by
the year-long actors’ dispute and the threat of a Hollywood strike.
Considerable progress was made towards a corporate deal and towards
securing investment capital but in both cases the delay in securing sales
made it impossible to complete these transactions. As a result of the
exceptionally adverse trading conditions, the company now faces
serious difficulties. This is very disappointing given the strength of the
company’s technology offering. The investment is held at nil value on
ANGLE’s balance sheet.
Outlook
The Management services business is well established and growing
strongly. Growth prospects in the Middle East are promising and the
Company is in discussions with a number of major new clients.
Lack of liquidity in the wider market has placed considerable stress on
the Group but this is being managed proactively through the reduction
in costs, building of revenues and securing corporate deals for the
portfolio companies.
Cash balances are expected to remain tight for a period before
growing with continued success in the Management services business.
In the future ANGLE may benefit from a range of cashflows including
profits from the Management services business, capital gains from the
sale of investments, dividends from trading investments, and returns from
milestone payments from corporate partners and ongoing royalty
payments.
Andrew Newland
Chief Executive
23 July 2009
ANGLE plc Annual Report & Accounts 2009 Page 13 Financial Review
Page 14 ANGLE plc Annual Report & Accounts 2009
Financial Highlights
• Revenues increased by 31% to £5.1 million (2008: £3.9 million)
• Profit before tax from Management services increased by 41% to £1.6 million
(2008: £1.1 million)
• Operating costs to manage and develop the portfolio reduced by 44% to £0.9
million (2008: £1.6 million)
• Planned expenditure on controlled investments reduced to £1.1 million (2008: £2.3 million)
• Fair value of investment portfolio on the balance sheet reduced to £4.4 million
to reflect adverse market conditions (30 April 2008: £7.3 million)
• Resultant loss before tax £3.4 million (2008: profit £1.1 million)
• Cash balance at 30 April 2009 in line with expectation at £0.3 million (31 October
2008: £0.4 million; 30 April 2008: £1.0 million)
• Investment portfolio substantially cash independent of ANGLE
• Group cash generative prior to discretionary expenditure on investment portfolio Introduction
The Management services business has continued to develop strongly
and this business has delivered profits that more than cover other
operating costs prior to discretionary spend on investments.
The overall loss for the year reflects both the impact of the adverse
market conditions on the fair value of non-controlled investments and
the requirement for expenditure on controlled investments to be
expensed in the income statement.
Cash balances have remained materially unchanged from the half-year,
but remain tight and are being carefully managed.
Revenue (Note 2)
Revenue for the year increased by 31% to £5.1 million (2008: £3.9 million).
Management services revenues account for the majority of this and
have grown by 28% year-on-year to £4.9 million (2008: £3.8 million). The
long term nature of the contracts, typically three years, provides the
Group with a high degree of visibility of revenues, profits and cash. The
Management services sold order book, including the Carbon Trust and
London Manufacturing Advisory Services contracts confirmed after the
year end, amounted to £4.8 million (2008: £5.1 million). The Qatar Science
& Technology Park five year contract completed successfully in March
2009 and results for 2010 will be affected accordingly with a reduction in
both revenues and costs. The Group is actively developing new business
opportunities to replace this and has a number of good pipeline
opportunities already identified, especially in the Middle East.
The Group continues to supply services to the portfolio companies but
to the extent that these are controlled investments, applicable sales are
removed from revenue on consolidation. Remaining revenues relate to
sales made by controlled investments.
Change in Fair Value (Note 10)
The Board took a robust view of the valuations of non-controlled
investments in the current adverse economic conditions resulting in
an overall unrealised fair value loss for the year of £2.9 million
(2008: gain £3.9 million).
Operating costs (Note 3)
Staff costs are the Group’s most significant individual cost item accounting
for some 56% of costs (2008: 61%). However, reflecting the tight focus on
staff costs and a change in status of some controlled investments, costs
were reduced by 26% to £2.9 million (2008: £3.9 million), excluding share
based payments. Other operating costs have also reduced by 8%.
Operating costs to manage and develop the portfolio reduced by 44%
to £0.9 million (2008: £1.6 million) as the Group focused on its existing
portfolio and cut costs.
Under IFRS, results for controlled investments are consolidated into the
Group accounts and none of their value is shown on the Balance Sheet.
Planned expenditure on controlled investments reduced by 52% to £1.1
million (2008: £2.3 million) reflecting the progress and maturing nature of
the portfolio, including some investments becoming non-controlled, and
their decreased requirement for support from ANGLE.
The Group remains committed to maintaining as low and flexible a cost
base as possible and costs are expected to fall significantly further.
Tax (Note 8)
The tax charge for the year of £0.2 million has arisen as a result of a
corporate tax charge on profits offset by R&D tax credits. The charge for
the year includes a prior year adjustment of £0.1 million where certain
losses could not be relieved as anticipated.
ANGLE plc Annual Report & Accounts 2009 Page 15
Results
The Management services business has generated a profit before tax
of £1.6 million (2008: £1.1 million).
The Group has generated an operating profit before change in fair value
(non-cash) and controlled investments of £0.6 million (2008: loss £0.6
million). After these items, the Group has made a loss after tax of £3.6
million (2008: profit £1.2 million) resulting in a basic and fully diluted loss
per share of 13.42p (2008: profit 4.52p).
Investment portfolio (Note 10)
The year ended 30 April 2009 has seen significant progress in the investment
portfolio overall, although there have also been some setbacks.
Controlled investments are consolidated into the results of the Group
and are described in Operating costs above.
The fair value of the portfolio, comprising non-controlled investments and
a final payment in relation to a trade sale, has reduced to £4.4 million
(2008: £7.3 million) reflecting the fact that the Board has taken a robust
view on valuations in the current adverse market conditions. Non-
controlled investments are held on the Balance Sheet at a fair value of
£2.9 million (2008: £5.4 million). A fair value of £1.5 million is held on
ANGLE’s Balance Sheet under “Other receivables” (2008: £1.9 million) in
relation to a potential £4.7 million final payment from the sale of Acolyte
Biomedica, although currently this is under dispute.
Non-current and current liabilities (Notes 16 and 17)
Non-current liabilities have increased to £0.3 million (2008: £0.1 million)
and comprise convertible loan arrangements for controlled investments.
Current liabilities, excluding tax, have reduced significantly from £1.8
million to £1.1 million principally as a result of a significant reduction in
accruals and deferred income.
Cash
The Group ended the year with a cash balance of £0.3 million (2008: £1.0
million), which was in line with management expectations and materially
unchanged from the half year (£0.4 million). This reflects the fact that
ANGLE was cash generative at the operating level, before discretionary
expenditure on controlled investments.
There were minimal cash realisations from the investment portfolio in the
year (2008: £0.5 million) although there have been some £0.2 million of
realisations since the year end.
The maturing portfolio has become substantially cash independent from
ANGLE as a result of closing corporate deals, securing third party funding
and generating sales. There is only expected to be a limited level of
further investment required. The tightening credit market may produce
pressures on future funding and portfolio companies are focusing on
sales generation and corporate deals, where appropriate, to ensure they
remain in as strong a position as possible.
Cash balances are expected to remain tight but to build as new sales
are secured. The Group is carefully executing its business plan so that
business activities are in line with the available cash resources and cash
will continue to be carefully managed. With a modest level of new sales
and continuing strong management of overheads, the cash generated
by the Management services business will more than cover the ongoing
operating costs of the business thus allowing ANGLE to take the time
necessary to maximise the value of its investments. The Directors are
satisfied that the Group has adequate resources to continue in business
for the foreseeable future as detailed in Note 1.4.
Ian Griffiths
Finance Director
23 July 2009
Group cash generative prior to discretionary
spend on investment portfolio. The potential for success
ANGLE is successfully reshaping its Management services
business and has done much to protect its portfolio against
clearly adverse market conditions and increased risks.
The outlook is challenging but the potential for success remains.
Page 16 ANGLE plc Annual Report & Accounts 2009 ANGLE PLC
Board of Directors
Garth R Selvey
Chairman
Garth Selvey has a BSc in Physics and
Electronics Engineering from the University
of Manchester and has spent thirty six
years in the computer industry with
technical, product, sales and marketing
roles. He became Managing Director of TIS
Applications Ltd in 1984 and a main board
director of TIS Ltd prior to its acquisition
by Misys in 1989. He organised the
management buyout of the social housing
division of Misys and became Group Chief
Executive of Comino Group plc when it
floated on AIM in 1997. Comino moved to
a full listing in 1999 where he remained until
its successful public sale to Civica plc in
February 2006. Garth joined ANGLE as a
non-executive Director in September 2006.
Andrew D W Newland
Chief Executive
Andrew Newland founded ANGLE in 1994
and has an MA in Engineering Science from
the University of Cambridge, and is a
qualified Chartered Accountant. After
working with the engineering
conglomerate, TI plc, he worked for KPMG
from 1982 to1994; from 1985 to 1987 he was
based in the US as a manager providing
corporate finance and business advice to
high technology firms in the area around
Route 128, Boston, Massachusetts. From 1987
to 1994 he worked for KPMG in the UK with
responsibility for establishing KPMG’s UK and
European High Technology Practices and
High Technology Consulting Group. Andrew
has founded and led eleven technology
companies in partnership with world class
research organisations, both in the UK and
the US.
Ian F Griffiths
Finance Director
Ian Griffiths has a BSc in Mathematics
with Management Applications from
Brunel University and is a qualified
Chartered Accountant. For seven years he
worked for KPMG, initially in accountancy
(1986 to 1990), then in management
consulting (1990 to 1993) within KPMG's High
Technology Practice and High Technology
Consulting Group where he specialised in
financial modelling, business planning,
corporate finance, market development
and strategy work. After a career break,
Ian joined ANGLE in 1995. As well as leading
the finance function at ANGLE, he has been
closely involved with the development
and delivery of the UK, US and Middle East
Management services businesses and in
developing new Ventures and supporting
Progeny® Companies.
David W Quysner CBE
Non-executive Director
David Quysner has an MA from the
University of Cambridge. He began his
career at ICFC (now known as 3i) in 1969.
In 1982, he joined Abingworth, a venture
capital fund management company, and
became its Managing Director in 1994 and
its Chairman in 2001. David was Chairman
of the British Venture Capital Association in
1996 / 97. He is currently the Chairman of
RCM Technology Trust plc and Capital for
Enterprise Limited and a Director of
Foresight VCT2 plc, Medical Research
Council Technology and Private Equity
Investor plc. David joined ANGLE in 2004.
From left to right
Standing
David Quysner
Ian Griffiths
Seated
Garth Selvey
Andrew Newland
Page 17 Directors’ Report
For the year ended 30 April 2009
Page 18 ANGLE plc Annual Report & Accounts 2009
The Directors present their Annual Report and Financial Statements for the year ended 30 April 2009 for ANGLE plc (the “Company”) and its subsidiaries
(the “Group”).ANGLE plc is a public listed company, incorporated and domiciled in England and quoted on the Alternative Investment Market (AIM).
The Annual Report includes two voluntarily prepared statements; the Corporate Governance Report and the Remuneration Report.
The Directors who held office as at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no relevant audit
information of which the Company’s auditors are unaware, and each Director has taken all the steps that they ought to have taken as a Director to
make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
Principal activities
The principal activity of the Company is that of a holding company. ANGLE Group is an international ventures and management services business
focusing on the commercialisation of technology and the development of technology-based industry. ANGLE creates, develops and advises
technology businesses on its own behalf and for its clients.
Review of the business and future developments
The Chairman’s Statement, Chief Executive’s Statement, Financial Review and Management services and Investment Portfolio review (on pages 2 to
15) report on the Group’s performance during the past financial year and its prospects.
The information that fulfils the requirements of the Business Review can be found in the Chief Executive’s Statement and Financial Review on pages
10 to 15. These are incorporated into this report by reference.
Results and dividends
The Consolidated Income Statement for the year is set out on page 26.
The Group made a loss for the year of £3,595,489 (2008: profit £1,209,916), which has been transferred to reserves.
The Directors do not recommend the payment of a dividend for the year (2008: £nil). The Board periodically reviews the Company’s dividend policy
in the context of its financial condition and in the light of any realisations on disposal of equity stakes.
Research and development
Expenditure on research and development incurred by controlled investments that have been consolidated into the Group results as subsidiaries
under the acquisition method of accounting amounted to £60,115 in the year (2008: £357,392). All other investments have continued to undertake
substantial research and development activities during the year.
Property, Plant and Equipment
The changes in property, plant and equipment during the year are explained in Note 11 to the Financial Statements.
Directors and their interests
The following Directors have held office since 1 May 2008:
I F Griffiths
A D W Newland
D W Quysner
G R Selvey
The Directors’ interests, including beneficial interests, in the ordinary shares and share options of the Company are shown in the Remuneration Report
on pages 23 to 24.
Significant shareholdings
In addition to the Directors’ interests shown on pages 23 to 24, the following shareholders had interests in 3% or more of the Company’s ordinary share
capital at 9 July 2009:
Holding
Name Number of shares %
RAB Capital plc 3,341,707 12.32
Fidelity Investment Managers 2,429,400 8.95
AXA Framlington Investment Management 1,429,325 5.27
Aidan Waine Esq 1,303,207 4.80
Metage Capital Limited 976,424 3.60
Trinity Hall 900,000 3.32
Aerion Fund Management 833,357 3.07 Risk management
Details of the Group’s financial risk management objectives and policies are disclosed in Note 13 to these Financial Statements, along with further
information on the Group’s use of financial instruments.
Supplier payment policy
It is Group policy to communicate clearly and agree the terms of payment at the start of business with suppliers and to pay in accordance with the
agreed terms of the contract and other legal obligations. Where no contract terms are specified, then assuming suppliers have met their obligations,
the policy is to pay within 30 days of receipt of a correct invoice. The Group had 55 days’ purchases outstanding for payment at 30 April 2009
(2008: 44 days), based on the average daily amount invoiced by suppliers during the year. The Company had no trade creditors at 30 April 2009
(2008: £nil).
Charitable and political donations
The Group made no charitable donations during the year (2008: £nil). The Group made no political donations during the year (2008: £nil).
Directors’ responsibilities
The Directors are responsible for preparing the Directors’ Report and the Financial Statements in accordance with applicable law and regulations.
UK Company law requires the Directors to prepare Group and Company Financial Statements for each financial year. Under that law the Directors
are required to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the
European Union (“EU”) and have elected to prepare the Company financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law).
The Group Financial Statements are required by law and IFRS adopted by the EU to present fairly the financial position and performance of the
Group; the Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial
statements giving a true and fair view are references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state
of affairs of the company.
In preparing each of the group and company financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
make judgements and estimates that are reasonable and prudent;
•
for the group financial statements, state whether they have been prepared in accordance with IFRS adopted by the EU; and
•
prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial
Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Group’s website. Corporate and financial information published on the
website is accessible over the internet in many countries. The Group’s website is based on meeting the legal requirements for the UK and not to meet
the different legal requirements relating to the preparation and dissemination of financial information in other countries.
Going concern
The Directors have reviewed the projections for the forthcoming 12 month period from the date of signing of these Financial Statements and based
on the level of existing cash, projected income and expenditure and other sources of funding, the Directors are satisfied that the Company and
Group have adequate resources to continue in business for the foreseeable future. Accordingly the going concern basis has been used in preparing
the Financial Statements. Note 1.4 provides additional information.
Auditors
The auditor Baker Tilly UK Audit LLP , Chartered Accountants, has indicated its willingness to continue in office.
Annual General Meeting
The Annual General Meeting of the Company will be held at 2:00 pm on 10 September 2009 at ANGLE’s offices, 3 Frederick Sanger Road, The Surrey
Research Park, Guildford, GU2 7YD. The notice of meeting is enclosed within this report on pages 55 to 58.
By order of the Board
A D W Newland
23 July 2009
ANGLE plc Annual Report & Accounts 2009 Page 19 Corporate Governance Report
Page 20 ANGLE plc Annual Report & Accounts 2009
Compliance with the Combined Code
The Company’s shares were admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange on 17 March 2004.
AIM listed companies are not required to comply with the disclosures of the Combined Code (2006) of Corporate Governance. However, the Board
supports the principles contained in the Combined Code and is committed to maintaining high standards of Corporate Governance. In respect of
the year ended 30 April 2009 the Board has sought to comply with the provisions of the Combined Code in so far as it considers them to be
appropriate to a company of this size, nature and structure, and has explained any areas of non-compliance with those provisions.
Below is a brief description of the Board, its role and its committees followed by details of the Group’s systems of internal control.
Board of Directors
The Board of Directors has overall responsibility for the proper management of the Group. Its aim is to provide leadership and control in order to
ensure the growth and development of a successful business, while representing the interests of the Company’s shareholders.
The Board currently comprises the Chairman, one Non-executive and two Executive Directors and is responsible to shareholders for the governance
of ANGLE plc and for the effective operation and management of the Group. Different Directors hold the roles of Chairman and Chief Executive
and there is a clear division of responsibilities between them. The Chairman is responsible for overseeing the running of the Board, ensuring that no
individual or group dominates the Board’s decision making and ensuring that the Non-executive Director is properly briefed on matters. The Chief
Executive has responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group through his
management of the Executive Directors and senior managers. Individual Directors possess a wide variety of skills and experience and biographical
details of the Directors are set out on page 17.
The Non-executive Director is considered by the Board to be independent of management and free of any relationship which could materially
interfere with the exercise of his independent judgement. The Board considers that the Non-executive Director is of sufficient calibre to bring the
strength of independence to the Board. The Board has not nominated a Senior Independent Director, as recommended in the Combined Code,
as there is currently only one Non-executive director and in any case it believes issues can be raised through the normal channels of the Chairman,
Chief Executive and Finance Director and where necessary the Non-executive Director can be approached directly.
Management supply the Board with appropriate and timely information. All Directors are able to take training and / or independent professional
advice in the furtherance of their duties if necessary. All Directors also have access, at the Company’s expense, to experienced legal advice through
the Company’s legal advisors and other independent professional advisors as required.
The Board has at least eight meetings per year with additional special meetings as required. As well as regularly reviewing trading performance and
significant risks, the Board has a schedule of matters specifically reserved to it for decision, including the review and approval of:
•
Group policy and long term plans and strategy for the profitable development of the business;
•
interim and annual Financial Statements;
•
major investments and divestments;
•
other significant financing matters such as acquisitions and capital item purchases;
•
annual budgets and amendments; and
•
senior executive remuneration and appointments.
In addition certain other responsibilities have been delegated to the Committees of the Board, each of which has clearly defined terms of reference
(available from the Company Secretary).
Board effectiveness and evaluation
The Company supports the concept of an effective Board leading and controlling the Company. The Board therefore undertakes a periodic
evaluation of its performance, its Directors and its Committees, the most recent of which was undertaken in June 2009. The review, led by the
Chairman, involves each Board member providing feedback and comments on the others with specific actions identified to improve certain areas.
Service contracts and letters of appointment
The two Executive Directors Andrew Newland and Ian Griffiths have service contracts with the Company dated 9 March 2004 and effective from
17 March 2004. The contracts are not set for a specific term, but include a rolling 12-month notice period by the Company or the individual.
The Chairman Garth Selvey has a letter of appointment dated and effective from 7 September 2006. The Non-executive Director David Quysner
has a letter of appointment dated 9 March 2004 and effective from 17 March 2004. These letters are issued in place of service contracts.
These appointments are not set for a specific term and are terminable at will without notice by either party. Election
Under the Company’s Articles of Association, newly appointed Directors are required to resign and seek re-election at the first Annual General
Meeting following their appointment, and all Directors are required to seek re-election at intervals of no more than three years. All Directors were re-
elected by the shareholders at the Annual General Meeting held on 20 September 2007. Accordingly no Directors are seeking re-election this year.
Committees of the Board
The Board maintains Nominations, Audit and Remuneration Committees. All committees operate with written terms of reference. Their minutes are
circulated for review and consideration by the full Board of Directors, supplemented by oral reports on matters of particular significance from the
Committee Chairmen at Board Meetings.
The revised Combined Code recommends there are two Non-executive Directors on the Audit and Remuneration committees. In September 2007
the Non-executive Director Garth Selvey was appointed as Chairman and has remained on the Audit and Remuneration Committees as the Board
believed it was inappropriate to only have one Member on the Audit and Remuneration Committees. Although this is non-compliant with the
Combined Code, as the Chairman is not considered independent under the provisions of the Code, the Board believed it offered an appropriate
solution in both avoiding only having one Member of the Committees and in reflecting the requirements of the Company.
The following committees assist the full Board in the exercise of its responsibilities by dealing with specific aspects of the Group’s affairs:
Audit Committee
The members of the Committee are the Non-executive Director David Quysner (Chairman of the Audit Committee) and Chairman Garth Selvey,
and it meets at least three times a year to review the interim and annual accounts before they are submitted to the Board. The external auditors,
Finance Director and Chief Executive may attend by invitation. Provision is made to meet with the auditors at least once a year without any
Executive Director present.
The Committee has adopted formal terms of reference and considers financial reporting, corporate governance and internal controls. Its review of
financial reporting includes discussion of major accounting issues, policies and compliance with generally accepted accounting standards, review
of key management judgements and estimates, review of our risk assessment and risk management activities and going concern assumptions.
It also reviews the scope and results of the external audit and the independence and objectivity of the auditors and makes recommendations
to the Board on issues surrounding their remuneration, appointment, resignation or removal. The Audit Committee is also responsible for monitoring
the provision of non-audit services provided by the Group’s auditors and assesses the likely impact on the auditor’s independence and objectivity
before awarding them any material contract for additional services.
Remuneration Committee
The members of the Committee are the Chairman Garth Selvey (Chairman of the Remuneration Committee) and the Non-executive Director
David Quysner, and it meets at least twice a year. None of them has any personal financial interest in the matters to be decided (other than as
shareholders), potential conflicts of interest arising from cross-directorships nor any day-to-day involvement in running the business. The Chief
Executive and Finance Director may attend by invitation but are not present when matters affecting their own remuneration arrangements are
considered.
The Committee has adopted formal terms of reference and the Committee reviews and sets the remuneration and terms and conditions of
employment of the Executive Directors and senior management. It also agrees a policy for the salaries of all staff and has been responsible for the
development of the Company’s remuneration scheme. The decisions of the Committee are formally ratified by the Board.
Details of Directors’ remuneration and service contracts together with Directors’ interests are shown in the Remuneration Report on pages 23 to 24.
Nominations Committee
The members of the Committee are the Chairman Garth Selvey (Chairman of the Nominations Committee) and the Non-executive Director
David Quysner, and it meets as required. The Chief Executive and Finance Director may attend by invitation.
The Committee has adopted formal terms of reference and is responsible for reviewing the structure, size and composition of the Board and for
recommending to the Board suitable candidates for both executive and non-executive Board appointments.
Directors’ attendance
Directors’ attendance at Board and Committee meetings during the year ended 30 April 2009 is set out below.
Garth David Andrew Ian
Selvey Quysner Newland Griffiths
Board 10/10 10/10 10/10 10/10
Audit 3/3 3/3 N/A N/A
Remuneration 3/3 3/3 N/A N/A
Nominations 0/0 0/0 N/A N/A
Scoring represents individual Directors’ attendance for those meetings when they were members of the Board or Committee.
ANGLE plc Annual Report & Accounts 2009 Page 21 Corporate Governance Report
Continued
Page 22 ANGLE plc Annual Report & Accounts 2009
Internal controls
Internal control systems are designed to meet the particular needs of the Group and the risks to which it is exposed, and by their nature can only
provide reasonable but not absolute assurance against material misstatement or loss. The system of internal control is designed to manage the risk
of failure to achieve business objectives, rather than to eliminate it.
An internal audit function is not considered necessary or practical due to the size of the Group and the close day to day control exercised by the
Executive Directors and senior management. The Board will continue to monitor the requirement to have an internal audit function.
The key procedures that the Directors have established with a view to providing an effective system of internal control are as follows:
Management structure
The Board has overall responsibility for the Group and focuses on the overall Group strategy and the interests of shareholders. There is a schedule
of matters specifically reserved for decision by the Board. The Board has an organisational structure with clearly-defined responsibilities and lines
of accountability and each Executive Director has been given responsibility for specific aspects of the Group’s affairs.
Quality and integrity of personnel
The integrity and competence of personnel are ensured through high recruitment standards and subsequent training courses. High quality personnel
are seen as an essential part of the control environment.
Identification of business risks
The Board is responsible for identifying the major business risks faced by the Group and for determining the appropriate course of action to manage
those risks. The Audit Committee also considers and determines relevant action in respect of any control issues raised by the auditors.
Budgets and reporting
Each year the Board approves the annual budget which includes an assessment of key risk areas. Performance is monitored and relevant action
taken throughout the year through regular reporting to the Board of variances from the budget and preparation of updated forecasts for the year
together with information on the key risk areas. Underpinning these budgets is a system of internal financial control, based on authorisation
procedures and tiers of authority.
Investment and divestment appraisal
All material investment and divestment decisions require appraisal, review and Board approval.
The Board reviews the effectiveness of the Group’s systems of internal controls and has a process for the continuous identification, evaluation and
management of the significant risks the Group faces. Assessment considers the external environment, the industry in which the Group operates,
the internal environment and non-financial risks such as operational and legal risks. The risks identified are ranked based on significance and
likelihood of occurrence. The Board reviews the controls in place to mitigate those risks and improvements are made where required. A number of
improvements have been made in the year and others have been identified and are being progressed. Day-to-day responsibility for effective
internal control and risk monitoring rests with senior management.
Shareholder relations
The Company seeks to maintain and enhance good relations with its shareholders and analysts. The Company’s and Group’s Interim and Annual
Reports are supplemented by regular published updates to investors on commercial progress. All investors have access to up-to-date information
on the Group via its website, www.ANGLEplc.com, which also provides contact details for investor relations queries, details on the Company’s share
price, share price graphs and share trading activity. The Company also distributes Group announcements electronically. Shareholders and other
interested parties wishing to receive announcements via email are invited to sign up to the “Email alerts” facility on the Company’s website.
The Directors seek to build on a mutual understanding of objectives between the Company and its shareholders, especially considering the specialist
and medium term nature of the business. Institutional shareholders, private client brokers and analysts are in contact with the Directors through a
regular programme of briefing presentations and meetings to discuss issues and give feedback, primarily following the announcement of the interim
and preliminary results, but throughout the year as required. The Board also receives formal feedback through the Company’s stockbroker.
All shareholders are invited to make use of the Company’s Annual General Meeting (AGM) to raise any questions regarding the strategy,
management and operations of the Group. The Chairmen of the Nominations, Audit and Remuneration Committees are available to answer any
questions from shareholders at the AGM. Remuneration Report
ANGLE plc Annual Report & Accounts 2009 Page 23
The Company is not required by either the AIM Listing Rules or the Companies Act to produce a remuneration report, but has done so because of its
commitment to maintaining high standards of Corporate Governance. The Company’s remuneration policy is the responsibility of the Remuneration
Committee.
Remuneration policy
The Company’s policy on remuneration is to attract, retain and incentivise the Directors and staff in a manner consistent with the goals of good
corporate governance. In setting the Company’s remuneration policy, the Remuneration Committee considers a number of factors including the
basic salary, incentives and benefits available to Executive Directors, senior managers and staff of comparable companies. Consistent with this policy
the Company’s remuneration packages awarded to Executive Directors and senior management are intended to be competitive, comprise a
significant proportion of performance related remuneration and align employees with shareholders’ interests.
Basic salary and benefits
Salary levels are reviewed annually. The Committee believes that basic pay should be competitive in the relevant employment market and reflect
individual responsibilities and performance. Medical health insurance and life cover benefits are also provided to employees and in addition US
employees have dental insurance and a defined contribution pension scheme.
Deferred Annual Bonus Plan
The aim of the Deferred Annual Bonus Plan is to incentivise employees to achieve stretching annual performance targets and to align short term
performance with long term shareholder interests by encouraging employees to defer bonuses into ANGLE plc shares.
Bonus targets under the plan are linked to Group and/or Business Unit profitability, operational performance and individual performance.
The Remuneration Committee establishes the targets which must be achieved by Directors in order to receive a payment and these are reviewed
as required.
Directors and other senior management are required to compulsorily defer 50% of any earned bonus into ANGLE plc shares for a further three years
subject to continued employment over the period. Additionally individuals have the opportunity to voluntarily defer any of their remaining bonuses
into shares, and receive one free matching share for each voluntarily deferred share at the end of the three year period.
When in operation, all employees in the Group (excluding controlled investments) are eligible to participate to some extent in the plan though the
bonus potential and performance targets reflect the seniority and responsibility of the individual.
Venture Incentive Plan
Executive Directors, regional chief executives and venture team staff are eligible to participate in the Venture Incentive Plan. The aim of the plan is to
provide a long term incentive linked to the realised cash gains from the Ventures business and is therefore closely aligned with the interests of
shareholders.
The level of cash bonus received by participants is a function of the cash profits realised from the Ventures business and the number of participation
points earned. The cash profits are determined after recovering all ventures costs and achieving a hurdle rate.
Share options
The Company does not normally intend to grant share options to employees participating in the Deferred Annual Bonus and Venture Incentive Plan.
However, the Remuneration Committee has discretion to grant share options in special circumstances.
Discretionary incentives
The Group may operate with discretionary incentives either in addition to or instead of the incentives described above in any particular year,
dependent on the needs of the business.
None of the awards under the Deferred Annual Bonus Plan,Venture Incentive Plan, Share Option arrangements or discretionary incentives are
pensionable.
Non-executive Directors receive a fixed fee for their services and the reimbursement of reasonable expenses incurred in attending meetings.
The remuneration of the Non-executive Directors is determined by the Board as a whole within the overall limits stipulated in the Articles of
Association. Non-executive Directors are not eligible to participate in any of the Company’s incentive schemes.
Directors’ interests – shares
The Directors’ interests, including beneficial interests, in the ordinary shares of the Company were as stated below:
Ordinary shares of 10p each 30 April 2009 1 May 2008
I F Griffiths 529,546 529,546
A D W Newland 6,854,686 6,854,686
D W Quysner 20,000 20,000
G R Selvey 20,000 20,000 Directors’ emoluments
The aggregate remuneration received by Directors who served during the year was as follows:
Year ended 30 April 2009 2009 2009 2009 2009 2008
Salary/Fees
(1)
Benefits
(3)
Bonus Pension Total Total
(5)
£’000 £’000 £’000 £’000 £’000 £’000
Chairman
G R Selvey 21 ––– 21 25
Executive
I F Griffiths
(4)
103 1–– 104 112
A D W Newland
(2)(4)
9 3– 152 164 196
Non-executive
D W Quysner 21 ––– 21 25
Total 154 4– 152 310 358
(1) The Directors have all voluntarily waived part of their emoluments with effect from December 2008
(2) A D W Newland sacrificed salary during the year. The Company elected to make contributions to a personal pension.
(3) Benefits include amounts in respect of private medical insurance and permanent health insurance.
(4) No bonuses or share awards were made to Executive Directors in 2009 or 2008.
(5) The 2008 figure excludes £15,000 of emoluments for H Fullerton who retired on 30 September 2007.
Directors’ interests – share options
The Directors’ interests in the ordinary share options of the Company were as stated below:
At At Earliest
Date of 1 May 30 April Exercise exercise Expiry
Name grant 2008 Granted Lapsed Cancelled Exercised 2009 price (£) date date
I F Griffiths 27/09/2002 60,000 60,000 1.00 27/09/2005 26/09/2009
18/07/2003 60,000 60,000 1.00 18/07/2006 17/07/2010
17/03/2004 40,000 40,000 1.44 17/03/2007 16/03/2011
29/07/2005 47,619 47,619 1.26 29/07/2008 28/07/2012
27/04/2006 100,000 100,000 0.835 27/04/2009 26/04/2013
21/03/2007 100,000 100,000 0.640 21/03/2010 20/03/2014
407,619 ––– – 407,619
A D W Newland 17/03/2004 40,000 40,000 1.44 17/03/2007 16/03/2011
29/07/2005 47,619 47,619 1.26 29/07/2008 28/07/2012
30/03/2006 601,056 601,056 0.79 30/03/2009 29/03/2013
688,675 ––– – 688,675
No Directors options were granted, cancelled, lapsed or exercised during the year.
Note 20 provides additional information on share options.
Shareholder return
The market price of the Company’s shares on 30 April 2009 was 9.5p and the range of market price during the period from 1 May 2008 until
30 April 2009 was between 7p (low) and 39p (high).
By order of the Board
Garth Selvey
Remuneration Committee Chairman
23 July 2009
Page 24 ANGLE plc Annual Report & Accounts 2009
Remuneration Report
Continued Independent Auditor’s Report
To the shareholders of ANGLE plc
ANGLE plc Annual Report & Accounts 2009 Page 25
We have audited the Group and parent company Financial Statements (“the Financial Statements”) on pages 26 to 53. The financial reporting
framework that has been applied in the preparation of the Group Financial Statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent
company Financial Statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting
Practice).
This report is made solely to the company’s members, as a body, in accordance with sections 495 and 496 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As more fully explained in the Directors’ Responsibilities Statement on page 19, the Directors are responsible for the preparation of the Financial
Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Financial Statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
(APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/UKNP
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 2009 and of the
Group’s loss for the year then ended;
•
the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
•
the parent company’s Financial Statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
•
the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the Financial Statements are prepared is consistent with
the Financial Statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept, 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.
Colin Roberts (Senior Statutory Auditor)
For and on behalf of Baker Tilly UK Audit LLP
Statutory Auditor
Chartered Accountants
The Clock House
140 London Road
Guildford
Surrey
GU1 1UW
23 July 2009 2009 2008
Note £ £
Revenue 2 5,064,381 3,873,477
Change in fair value 10 (2,931,460) 3,911,031
Operating costs 3
Management services (3,364,063) (2,732,866)
Ventures (880,052) (1,579,409)
Controlled investments (1,082,145) (2,254,897)
Share based payments 20 (185,599) (258,751)
Restructuring charges – 130,359
(5,511,859) (6,695,564)
Operating profit / (loss) (3,378,938) 1,088,944
Finance income 13,940 49,524
Finance costs (286) (17,751)
Net finance income 7 13,654 31,773
Profit / (loss) before tax (3,365,284) 1,120,717
Tax 8 (230,205) 89,199
Profit / (loss) for the year (3,595,489) 1,209,916
Earnings / (loss) per share 9
Basic and Diluted (pence per share) (13.42) 4.52
All attributable to equity shareholders of the parent
All activity arose from continuing operations
Page 26 ANGLE plc Annual Report & Accounts 2009
Consolidated Income Statement
For the year ended 30 April 2009 Consolidated Balance Sheet
As at 30 April 2009
ANGLE plc Annual Report & Accounts 2009 Page 27
2009 2008
Note £ £
ASSETS
Non-current assets
Non-controlled investments 10 2,395,000 4,373,504
Other receivables 10,14 1,520,239 1,902,724
Property, plant and equipment 11 47,846 71,723
Intangible assets 12 163,853 191,529
Total non-current assets 4,126,938 6,539,480
Current assets
Non-controlled investments 10 499,165 1,042,331
Trade and other receivables 15 504,425 628,025
Cash and cash equivalents 319,819 970,197
Total current assets 1,323,409 2,640,553
Total assets 5,450,347 9,180,033
EQUITY AND LIABILITIES
Equity
Issued capital 19 2,713,293 2,713,293
Share premium account 13,701,935 13,701,935
Share based payments reserve 1,523,488 1,522,429
Other reserve 2,553,356 2,553,356
Translation reserve (320,881) (297,311)
Retained earnings (16,008,032) (12,617,357)
ESOT shares 21 (342,115) (355,453)
Total equity attributable to equity shareholders of parent 3,821,044 7,220,892
Liabilities
Non-current liabilities
Controlled investments – convertible loans 16 321,011 125,976
Total non-current liabilities 321,011 125,976
Current liabilities
Trade and other payables 17 1,065,274 1,828,605
Taxation 8 243,018 –
Obligations under finance leases 18 – 4,560
Total current liabilities 1,308,292 1,833,165
Total liabilities 1,629,303 1,959,141
Total equity and liabilities 5,450,347 9,180,033
The Financial Statements were approved by the Board and authorised for issue on 23 July 2009 and signed on its behalf by:
G R Selvey A D W Newland
Director Director 2009 2008
£ £
Operating activities
Profit / (loss) before tax (3,365,284) 1,120,717
Adjustments for:
Depreciation of property, plant and equipment 39,563 49,518
(Profit) / loss on disposal of fixed assets 1,116 183
Amortisation and impairment of intangible assets 16,323 92,574
Exchange differences 21,799 (6,551)
Net finance (income) / cost (13,654) (31,773)
Change in fair value 2,931,460 (3,911,031)
Share based payments 185,599 258,751
Changes in working capital:
(Increase) / decrease in trade and other receivables 106,942 132,696
Increase / (decrease) in trade and other payables (757,987) (84,891)
Operating cashflows:
Research and development tax credits received 44,960 118,882
Net cash from / (used in) operating activities (789,163) (2,260,925)
Investing activities
Purchase of property, plant and equipment (11,909) (19,528)
Disposal of property, plant and equipment 20 1,485
Purchase of intangible assets (2,214) (28,722)
Provision of convertible loans (13,250) (47,000)
Proceeds from sale of investments 20,249 538,692
Deemed disposal of subsidiaries – (20,260)
Interest paid (1,063) (2,717)
Interest received 15,759 49,458
Net cash from / (used in) investing activities 7,592 471,408
Financing activities
Capital elements of finance lease contracts (4,560) (18,242)
Proceeds from issue of convertible loans 135,753 226,788
Net cash from / (used in) financing activities 131,193 208,546
Net increase / (decrease) in cash and cash equivalents (650,378) (1,580,971)
Cash and cash equivalents at start of year 970,197 2,551,168
Cash and cash equivalents at end of year 319,819 970,197
Page 28 ANGLE plc Annual Report & Accounts 2009
Consolidated Cash Flow Statement
For the year ended 30 April 2009 Consolidated Statement of Changes in Equity
For the year ended 30 April 2009
ANGLE plc Annual Report & Accounts 2009 Page 29
Share based
Issued Share payments Other Translation Retained ESOT Total
capital premium reserve reserve reserve earnings shares equity
£ £££ ££££
At 1 May 2007 2,713,293 13,701,935 1,713,289 2,553,356 (193,813) (14,420,638) (370,000) 5,697,422
For the year to 30 April 2008
Consolidated profit / (loss) (103,498) 1,209,916 1,106,418
Share based payments 288,485 288,485
Released on forfeiture / lapse (145,391) 145,391 –
Utilised on share schemes 14,547 14,547
Deemed disposal of subsidiaries (333,954) 333,954 –
Partial disposal of subsidiaries 114,020 114,020
At 30 April 2008 2,713,293 13,701,935 1,522,429 2,553,356 (297,311) (12,617,357) (355,453) 7,220,892
For the year to 30 April 2009
Consolidated profit / (loss) (23,570) (3,595,489) (3,619,059)
Share based payments 185,599 185,599
Released on forfeiture / lapse (184,540) 184,540 –
Utilised on share schemes 13,338 13,338
Partial disposal of subsidiaries 20,274 20,274
At 30 April 2009 2,713,293 13,701,935 1,523,488 2,553,356 (320,881) (16,008,032) (342,115) 3,821,044
All attributable to equity shareholders of the parent.
Share premium
Represents amounts subscribed for share capital in excess of nominal value, net of directly attributable issue costs.
Share based payments reserve
The share based payments reserve account is used for the corresponding entry to the share based payments charged through a) the Income
Statement for staff incentive arrangements in the Group b) the Income Statement for staff incentive arrangements in the controlled investments and
c) the Balance Sheet for acquired intangible assets in the controlled investments comprising intellectual property (IP). These components are
separately identified in the table below.
Transfers are made from this reserve to retained earnings as the related share options are exercised, lapse or expire or as a controlled investment
becomes non-controlled (a deemed disposal).
Other reserve
The other reserve is a “merger” reserve arising from the acquisition of the former holding company.
Translation reserve
The translation reserve account comprises cumulative exchange differences arising on consolidation from the translation of the Financial Statements
of international operations. Under IFRS this is separated from retained earnings.
ESOT shares
These relate to shares held by the ANGLE Employee Share Ownership Trust (ESOT) and used to assist in meeting the obligations under employee
remuneration schemes.
Share based payments reserve
Controlled Controlled
Group investments investments
employees employees IP Total
££££
At 1 May 2007 1,260,154 73,463 379,672 1,713,289
Acquired intellectual property –– 28,347 28,347
Deemed disposal of subsidiaries – (70,739) (263,215) (333,954)
Charge for the year 213,759 44,992 – 258,751
Released on forfeiture / lapse (145,391) –– (145,391)
Exchange movements – 397 990 1,387
At 30 April 2008 1,328,522 48,113 145,794 1,522,429
Charge for the year 168,004 17,595 – 185,599
Released on forfeiture / lapse (184,540) –– (184,540)
At 30 April 2009 1,311,986 65,708 145,794 1,523,488 1 Accounting policies
1.1 Basis of preparation
The Annual Report and Accounts have been prepared on the basis of the recognition and measurement requirements of International Financial
Reporting Standards (IFRS) in issue that have been endorsed by the EU for the year ended 30 April 2009.They have also been prepared in accordance
with those parts of the Companies Act 2006 that apply to companies reporting under IFRS.
Standards and Interpretations not applied
At the date of authorisation of these Financial Statements, the following Standards and Interpretations (International Financial Reporting
Interpretation Committee – IFRIC), which have not been applied in these Financial Statements, were in issue but not yet effective:
•
IFRS 3 (Rev) Business Combinations (Revised)
•
IFRS 8 Operating segments
•
IFRIC 13 Customer Loyalty Programmes
•
IFRIC 15 Agreements for the Construction of Real Estate
•
IFRIC 16 Hedges of a Net Investment in a foreign operation
•
IFRIC 17 Distribution of non-cash assets to owners
•
IFRIC 18 Transfers of assets from customers
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the Financial
Statements of the Group when the relevant Standards and Interpretations come into effect.
IFRS has only been applied to the Consolidated Financial Statements. The Company has elected to keep and prepare its parent company Financial
Statements in accordance with UK GAAP . The Financial Statements and accounting policies of the Company are presented on pages 51 to 53.
1.2 Accounting convention
These Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets at fair
value, as required by IAS 39. The basis of consolidation is set out below.
1.3 Presentation of Financial Statements
The financial information, in the form of the primary statements contained in this report, is presented in accordance with International Accounting
Standard (IAS) 1,“Presentation of Financial Statements”. IAS 1 provides no definitive guidance as to the format of the Income Statement, but states
that key items should be disclosed. It also encourages additional line items to be added and the re-ordering of items presented on the face of the
Income Statement when appropriate for a proper understanding of the entity’s financial performance. ANGLE has reviewed the items disclosed
separately on the face of the Income Statement and the components of financial performance considered by management to be significant, or for
which separate disclosure would assist, both in a better understanding of financial performance and in making projections of future results. This has
been done taking into account the materiality, nature and function of components of income and expense.
1.4 Going concern
The Financial Statements have been prepared on a going concern basis which assumes that the Group will be able to continue its operations for
the foreseeable future.
The Group's business activities, together with the factors likely to affect its future development, performance and financial position are set out in the
Chairman’s and Chief Executive’s Statements on pages 8 to 13. In addition Note 13 to the Financial Statements includes details of the Group’s
exposure to liquidity risk.
In order to improve the Group’s working capital position the Directors have implemented a number of initiatives which have reduced costs and
improved cash flows. Business development efforts have built a strong sales pipeline and the Directors are confident of winning new contracts as a
result. With a modest level of new sales and continuing strong management of overheads, the cash generated by the Management services
business will more than cover the ongoing operating costs of the business. The Group’s forecasts and projections show that in the event that the
modest level of new sales does not materialise as expected, there may be a need for short term funding. In mitigation of this potential risk, the
Directors have applied for bank funding. Funds are also available if required from further disposals of current assets and from committed shareholder
support.
The Directors have reviewed the projections for the forthcoming 12 month period from the date of signing of these Financial Statements and based
on the level of existing cash, projected income and expenditure and other sources of funding, the Directors are satisfied that the Company and
Group have adequate resources to continue in business for the foreseeable future. Accordingly the going concern basis has been used in preparing
the Financial Statements.
1.5 Basis of consolidation
Subsidiaries
Subsidiary undertakings are consolidated on the basis of the purchase method of accounting. Under this method of accounting the results of
subsidiaries sold or acquired are included in the Income Statement up to, or from the date control passes. Intra-group transactions and balances are
eliminated fully on consolidation and the consolidated accounts reflect external transactions only.
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a
shareholding of more than half of the voting rights. The existence and effect of potential voting rights are considered when assessing whether the
Group controls an entity. Subsidiaries’ accounting policies are amended where necessary to ensure consistency with the policies adopted by the
Group.
Page 30 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
For the year ended 30 April 2009 ANGLE plc Annual Report & Accounts 2009 Page 31
1.5 Basis of consolidation continued
Deemed disposals
Where the Group ceases to control an entity by means other than disposal of equity, such as the entity issuing shares to third parties, the entity
ceases to be a subsidiary and is no longer consolidated. Any gain or loss arising on the “deemed disposal” is recognised in the Income Statement.
Associates
Associates are entities over which the Group has significant influence, but does not control, generally accompanied by a shareholding of between
20% to 50% of the equity or voting rights. The Group has elected to treat such investments in associates as accounted for in accordance with IAS 39
Financial Instruments: Recognition and Measurement, and upon initial recognition these investments are designated as at fair value through the
Income Statement.
Other investments
Other investments are generally investments where the Group owns less than 20% of the equity or voting rights.
In accordance with IAS 39, upon initial recognition such investments are designated as at fair value through the Income Statement.
1.6 Investments
The Directors consider that a substantial measure of the performance of the Group is assessed through changes in fair value arising from the
investment activity of the Group. Consequently the Group classifies all its investments that are not controlled investments as being designated on
initial recognition as financial assets at fair value through the Income Statement.
Treatment of gains and losses arising on fair value
Investments that are not controlled investments are shown on the Balance Sheet at their fair value and any associated changes in fair value are
included in the Income Statement in the period they arise.
Valuation policy
In determining fair value, investments have been valued by the Directors in compliance with the principles of the International Private Equity and
Venture Capital Guidelines (edition October 2006), as recommended by the British Venture Capital Association (BVCA). The key policies are detailed
below.
Listed investments - the fair values of quoted investments are based on bid prices at the Balance Sheet date.
Unlisted investments - the valuation methodology used most commonly by the Group is the ”price of recent investment”, reflecting the early stage
nature of the investments. The following considerations are used when calculating the fair value using the “price of recent investment” guidelines:
•
Where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value; and
•
Where there has been any recent investment by third parties, the price of that investment will provide a basis of the valuation.
Where a fair value cannot be estimated reliably the investment is reported at the carrying value at the previous reporting date unless there is
evidence that the investment has since been impaired.
Earn-outs are a deferred payment conditional on the future performance of the acquired asset and are shown on the Balance Sheet at fair value.
The Directors consider a number of valuation methodologies including a “balance of probabilities” and discounted cash flow in order to determine
a fair value. The earn-out is revalued based on any new information received relating to progress against plans, levels of sales and any other relevant
factors.
Convertible loan notes
As well as direct investment into Progeny
®
companies the Group uses other financial instruments such as convertible loans.
Under IAS 28 Investments in Associates, financial instruments that are presently exercisable are taken into account in determining control and
significant influence and this may affect the basis of consolidation.
Under IAS 39 convertible loan notes are financial assets and are defined as compound financial instruments consisting of a liability component and
an equity component. At the date of issue there is a requirement to split the instrument between its debt and equity components.
The debt component is classified under investments as “Loans and receivables” and subsequently carried in the Balance Sheet at cost less any
impairment.
The equity component is classified under investments and subsequently carried in the Balance Sheet at fair value. The right to convert the loan into
equity represents an embedded derivative (the option) and as such needs to be re-measured to fair value at each reporting date with any changes
in fair value of this right taken through the Income Statement.
Convertible loans issued in a different functional currency to the issuing entity are treated the same, however, there may also be an associated
financial instrument (see policy 1.15 below) to manage the risks associated with foreign currency fluctuations. 1 Accounting policies continued
1.7 Revenue
Revenue represents amounts receivable for goods and services net of value added tax.
Management services revenues are recognised in proportion to the stage of completion of each project. The stage of completion takes into
account the milestones achieved in relation to the project deliverables.
1.8 Employee benefits
Share based payments
Share based incentive arrangements which allow Group employees to acquire shares of the Company may be provided to staff. The fair value of
options granted is recognised as a cost of employment with a corresponding increase in equity. In accordance with IFRS 2, Share options granted
after 7 November 2002 which had not vested by 1 May 2005 are valued at the date of grant using an appropriate option pricing model and are
charged to operating costs over the vesting period of the award. The annual charge is modified to take account of options granted to employees
who leave the Group during the performance or vesting period and forfeit their rights to the share options and in the case of non-market related
performance conditions, where it becomes unlikely they will vest. The fair value of options granted to professional advisors as part consideration for
services in connection with fund raising is recognised as an expense against share premium account with a corresponding increase in equity. Such
options vest and are expensed on successful completion of the services.
Bonus plan
The Group has a Deferred Annual Bonus Plan for its employees and Executive Directors.
Venture Incentive Plan
The Group has a Venture Incentive Plan for its employees and Executive Directors involved in the Ventures area of the business. The Group recognises
a liability and an expense for bonuses that are accruing through the creation of value in the Group’s portfolio of equity investments but that have
not yet been realised in cash.
Discretionary incentives
The Group may operate with discretionary incentives either in addition to or instead of the incentives described above in any particular year,
dependent on the needs of the business.
Pension obligations
Pension costs are charged against profits as they fall due and represent the amount of contributions payable to a defined contribution scheme in
the US or to employee personal pension schemes on an individual basis. The Group has no further payment obligations once the contributions have
been paid.
A liability for short term compensated absences, such as holiday, is recognised for the amount the Group may be required to pay as a result of the
unused entitlement that has accumulated at the Balance Sheet date.
1.9 Income taxes
Full provision is made for deferred tax on all differences resulting from the carrying value of an asset or liability and its tax base. Deferred tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the Balance Sheet date and are expected to apply
when the related deferred tax liability is settled or deferred tax asset realised.
Deferred tax liabilities are recognised on any increase in the fair value of investments to the extent that substantial shareholdings relief may be
unavailable. Deferred tax assets are only recognised to the extent to which they are expected to be recovered in the near future. IAS 12 Income
Taxes requires the separate disclosure of deferred tax assets and liabilities on the Group’s Balance Sheet.
1.10 Property, plant and equipment
All property, plant and equipment is stated at historical cost less accumulated depreciation and subject to impairment review. Cost includes
expenditure that is attributable to the acquisition of the items. Depreciation is provided at rates calculated to write off the cost less estimated
residual value of each asset over its expected useful economic life. Assets held under finance leases are depreciated over their expected useful
economic life on the same basis as owned assets, or where shorter, the lease term. Assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable.
The following rates are used:
Computer equipment 33.33% Straight line
Fixtures, fittings and equipment 33.33% Straight line
Laboratory equipment 20% Straight line
Page 32 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 33
1.11 Intangible assets
Computer software
Under IAS 38 – Intangible Assets, acquired computer software should be capitalised as an intangible asset unless it is an integral part of the related
hardware (such as the operating system) where it remains as an item of property, plant and equipment.
Internally developed computer software will be capitalised in accordance with the research and development accounting policy. If the software is
developed for in-house use the capitalised amount is reclassified from research and development to computer software.
Amortisation is calculated using the straight line method to allocate the cost of the software over its estimated useful economic life.
Research and development
Research expenditure is written off as incurred.
Development expenditure is also written off, except where the Directors are satisfied that a new or significantly improved product or process results
and other relevant IAS 38 criteria are met as to the technical, commercial and financial viability of individual projects that would allow such costs to
be capitalised. In such cases, the identifiable expenditure is capitalised and amortised over the period during which benefits are expected.
Intellectual Property (IP)
IP (comprising patents, know-how, copyright and licences) is acquired by the Group as a result of either a business combination (and initially
recognised at fair value in accordance with IFRS 3 – “Business Combinations”) or a purchase at cost. The Group’s view is that these assets have
a finite useful life and to that extent they should be amortised over their respective unexpired periods with provision made for impairment when
required. Assets in development are not amortised until the Group is generating an economic return from the underlying asset. Amortisation is
calculated using the straight line method to allocate the cost of IP over its estimated useful economic lives, which is estimated at five years for
physical sciences IP and ten years for biosciences IP , but may be determined at different periods depending on the remaining patent life or specific
terms of licences or agreements.
Impairment
Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of the asset’s fair value less costs to sell and the value in use.
1.12 Leases
Assets obtained under hire purchase contracts and finance leases, and any other leases that entail taking substantially all the risks and rewards of
ownership of an asset, are capitalised on the Balance Sheet and depreciated over the shorter of the lease term and their useful economic lives.
Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the
rental payment is charged to the Income Statement so as to produce a constant periodic rate of charge on the net obligation outstanding in each
period.
1.13 Employee Share Ownership Trust
The Group has an Employee Share Ownership Trust (ESOT) to assist with the obligations under share option and other employee remuneration
schemes. The ESOT is consolidated as if it were a subsidiary. Shares in the Group held by the ESOT are stated at cost and presented in the Balance
Sheet as a deduction from equity under the heading of “ESOT Shares”. Finance and administration costs relating to the ESOT are charged to
operating costs.
1.14 Foreign currency
The Consolidated Financial Statements are presented in pounds sterling, which is the Company’s functional and presentation currency. The Group
determines the functional currency of each entity and items included in the Financial Statements of each entity are measured using that functional
currency. The functional currencies of the Group’s operations are sterling and US dollars.
Transactions denominated in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date.
Non-monetary assets and liabilities denominated in foreign currencies and held at cost use the exchange rate at the date of the initial transactions.
Non-monetary assets and liabilities denominated in foreign currencies and held at fair value use the exchange rate at the date that the fair value
was determined.
Profits and losses on both the individual transactions during the period and monetary assets and liabilities are dealt with in the Income Statement.
On consolidation, the Income Statements of the foreign subsidiaries are translated at the average exchange rates for the period and the Balance
Sheets at the exchange rates at the Balance Sheet date. The exchange differences arising as a result of translating Income Statements at average
rates and restating opening net assets at closing rates are taken to the translation reserve. On disposal of a foreign operation, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is recognised in the Income Statement.
The Group has elected to apply the exemption in IFRS 1 ”First time adoption of International Financial Reporting Standards” which allows the
cumulative translation differences for all foreign operations to be deemed to be zero at the date of transition to IFRS. The Group has similarly elected
that the profit or loss on any subsequent disposal of any foreign operation shall exclude translation differences that arose before the date of
transition. 1 Accounting policies continued
1.15 Financial instruments
Financial assets and liabilities are recognised in the Group’s Balance Sheet when the Group becomes a party to the contractual provisions of the
instrument.
Derivative financial instruments
The Group will use derivative financial instruments as appropriate to manage the risks associated with foreign currency fluctuations from its activities
and changes in interest rates on borrowings. This is achieved by the use of foreign currency contracts, currency swaps and interest rate swaps.
All derivative financial instruments are held at fair value. The Group does not use derivative financial instruments for speculative purposes.
Derivative financial instruments are recognised initially at fair value on the contract date and subsequently re-measured to fair value at each
reporting date. The fair value of forward exchange contracts is calculated by reference to current forward exchange contracts for contracts with
similar maturity profiles. The fair value of currency swaps and interest rate swaps is determined with reference to future cash flows and current interest
and exchange rates. All changes in the fair value of derivative financial instruments are taken through the Income Statement.
Derivatives embedded in other financial instruments or other non-financial host contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of the host contract and the host contract is not carried at fair value with unrealised gains or losses
reported in the Income Statement.
Cash and cash equivalents
Cash and short term deposits in the Balance Sheet comprise cash at bank and in hand and short term deposits with an original maturity of three
months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash and short term deposits as defined previously and other
short term highly liquid investments that are readily convertible into cash and are subject to an insignificant risk of changes in value, net of
outstanding short-term borrowings.
Deposits
Deposits in the Balance Sheet comprise longer term deposits with an original maturity of greater than three months.
Bank loans, loan notes and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowings. After
initial recognition, these are subsequently measured at amortised cost using the effective interest method, which is the rate that exactly discounts the
estimated future cash flows through the expected life of the liabilities. Amortised cost is calculated by taking into account any issue costs and any
discount or premium on settlement.
Other assets
Assets, other than those specifically accounted for under a separate policy, are stated at their cost less impairment losses. They are reviewed at each
Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is
estimated based on expected discounted future cash flows. Any change in the level of impairment is recognised directly in the Income Statement.
An impairment loss is reversed at subsequent Balance Sheet dates to the extent that the asset’s carrying amount does not exceed its carrying value
had no impairment loss been recognised.
Other liabilities
Liabilities, other than those specifically accounted for under a separate policy, are stated based on the amounts which are considered to be
payable in respect of goods or services received up to the Balance Sheet date.
1.16 Provisions
Provisions are recognised when the Group has a present obligation of uncertain timing or amount as a result of past events, and it is probable that
the Group will be required to settle that obligation and a reliable estimate of the obligation can be made. The provisions are measured at the
Directors’ best estimate of the amount to settle the obligation at the Balance Sheet date, and are discounted back to present value if the effect is
material. Changes in provisions are recognised in the Income Statement for the period.
1.17 Segmental reporting
A business segment is a group of assets and operations engaged in providing services that are subject to risks and returns that are different from
those of other business segments. A geographical segment is engaged in providing services within a particular economic environment that is subject
to different risks and returns from other segments in other economic environments.
1.18 Restructuring charges
Restructuring charges are accrued against operating income in the period in which management has committed to a plan and in which the liability
has been incurred and the amount can be reasonably estimated.
Page 34 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 35
1.19 Critical accounting estimates and judgements
The preparation of Financial Statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the
date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and
assumptions are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to
the valuation of unlisted investments held at fair value and the valuation of earn-outs (see valuation policy in Note 1.6) and to the valuation of Other
receivables.
2 Revenue and segmental analysis
The Group operates in one principal area of activity – technology wealth creation through the commercialisation of intellectual property and the
development of technology industry.
The primary business segments are:
•
Management services – provision of Management services to clients including research organisations, corporate and governmental organisations
on a fee-for-service basis. This business segment provides a platform for the Ventures activities.
•
Ventures – activities to establish, develop and create value in technology companies. The Group uses a proprietary Progeny
®
process to develop
these companies, which are referred to as Progeny
®
companies. ANGLE’s unique business model involves ANGLE founding new companies which
it controls during the critical early stages of development, before securing third party funding.
Under IFRS, the accounting for Progeny
®
companies divides into controlled investments and non-controlled investments:
– Controlled investments – Progeny
®
companies where the Group has control, typically as a result of owning in excess of 50% of the equity.
These are consolidated and the Group’s investment costs are expensed in the Income Statement.
– Non-controlled investments – Progeny
®
companies where the Group does not have control. These investments are held on the Balance Sheet at
fair value, with changes in fair value passing through the Income Statement.
The nature of these operations is significantly different. The primary format and segmentation by class of business has been provided on the face of
the Consolidated Income Statement.
The secondary format would be by geographical format. Segmental revenue by geographical revenue is shown below. Over 95% of segment assets
by geographical location are based in the UK.
The revenue of the Group for the year has been primarily derived from its Management services activities. Some £0.2 million (2008: £0.3 million) of the
revenues relate to reimbursable operating expenditure incurred on management contracts.
In addition the Group provides management services to investments in the form of non-executive director services, management, accounting and
administration support for which it receives fees.
The geographical analysis of revenue, as defined by the country or area in which the client is based, is as follows:
2009 2008
£ £
Management services
United Kingdom 2,605,648 1,769,444
North America 543,654 240,615
Middle East 1,772,498 1,824,484
4,921,800 3,834,543
Ventures
United Kingdom 52,688 26,727
Controlled investments
North America 89,893 12,207
Total revenue 5,064,381 3,873,477 3 Operating costs
2009 2008
£ £
Staff costs – employees (Note 5) 3,082,859 4,182,410
Depreciation
– owned assets 28,618 38,573
– leased assets 10,945 10,945
Impairment of intangible fixed assets 6,773 88,204
Amortisation of intangible assets 9,550 4,370
Auditor’s remuneration 75,808 69,900
Bad debts – (25,538)
Research and development 60,115 357,392
Other operating costs 2,237,191 2,099,667
5,511,859 6,825,923
Restructuring charges – (130,359)
5,511,859 6,695,564
2009 2008
£ £
Auditor’s remuneration
Audit services – statutory audit of parent and consolidated accounts 18,500 18,500
Audit services – statutory audit of subsidiaries 25,250 23,000
Review of interim results 3,000 8,000
Tax compliance services 11,851 11,550
Tax advisory services 17,207 8,850
Total auditor’s remuneration 75,808 69,900
4 Directors’ emoluments
2009 2008
£ £
Emoluments for qualifying services including retirement benefits of £152,009 (2008: £187,775) 309,472 372,515
Emoluments disclosed above include the following amounts paid to the highest paid Director including retirement benefits of £152,009 (2008: £187,775):
Emoluments for qualifying services 164,170 195,707
Disclosures relating to individual Directors’ emoluments are given in the Remuneration Report on page 24.
Page 36 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 37
5 Employment
Employment costs
The aggregate employment costs of staff (including Directors) for the year was:
2009 2008
£ £
Wages and salaries 2,540,205 3,397,196
Social security costs 178,666 298,595
Other pension costs (Note 6) 178,389 227,868
2,897,260 3,923,659
Employee share based payment charge (Note 20) 185,599 258,751
3,082,859 4,182,410
Number of employees
The average number of employees (including Directors) during the year was:
2009 2008
Number Number
Executives 30 27
Administration 13 13
Controlled investments 9 15
52 55
6 Pension costs
The Group operates a defined contribution pension scheme for employees in the US. The assets of the scheme are held separately from those of the
Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted
to £26,380 (2008: £40,093). Contributions totalling £5,687 (2008: £5,832) were payable to the fund at the year end and are included in trade and other
payables. The Group made UK pension costs payments of £152,009 (2008: £187,775) directly to personal pension plan schemes. Contributions to
personal pension plan schemes of £8,169 (2008: £8,169) were payable at year end and are included in trade and other payables.
7 Net finance income
2009 2008
£ £
Finance income 13,940 49,524
Finance costs
Bank and other interest (777) 15,199
Lease finance charges 1,063 2,552
286 17,751
Net finance income 13,654 31,773
The 2009 interest costs are negative as a result of the release of a provision for interest charges. 8 Tax
The Group is eligible for, and takes advantage of, the substantial shareholdings relief UK corporation tax exemption. This results in the gain from any
disposals of UK investments where the Group has an equity stake greater than 10%, and subject to certain other tests, being free of corporation tax.
Tax is therefore based on the net of profits in the Management services business as relieved by losses incurred in the establishment and development
of new ventures. Loss relief may not absorb the tax in relation to all of the profits and where this occurs tax is provided on the basis of the estimated
effective tax rate for the full year.
Controlled investments undertake research and development activities. In the UK these activities qualify for tax relief resulting in tax credits.
2009 2008
£ £
Current tax:
Corporation tax 230,205 (89,199)
Deferred tax:
Origination and reversal of timing differences – –
Tax on profit / (loss) on ordinary activities 230,205 (89,199)
The estimated value of the deferred tax asset not recognised, measured at a standard rate of 28% (2008: 28%) is £4,480,000 (2008: £3,930,000).
2009 2008
£ £
Corporation tax
Profit / (loss) on ordinary activities before tax (3,365,284) 1,120,717
Tax on profit / (loss) on ordinary activities at 28% (942,280) 313,801
Factors affecting charge:
Capital allowances for period in excess of depreciation (417) 3,029
Disallowable expenses 21,791 960
Other tax adjustments (85,754) (63,870)
Change in fair value of investments 813,160 (914,217)
Share based payments 50,009 67,496
Capital transactions – 58,593
Unutilised losses carried forward 268,034 445,009
Prior year adjustment 105,662 –
Tax charge / (credit) for year 230,205 (89,199)
9 Earnings / (loss) per share
The basic and fully diluted earnings / (loss) per share is calculated on an after tax loss of £3.60 million (2008: profit £1.21 million). Share options are non-
dilutive for 2009 because of the loss. Share options are regarded as dilutive if the exercise price was below the average fair value. Share options are
non-dilutive for 2008 because the exercise price was above the average fair value. Note 20 provides information on outstanding options.
2009 2008
£ £
Profit / (loss) for the financial year (3,595,489) 1,209,916
Number Number
of shares of shares
Weighted average number of ordinary shares 27,132,931 27,132,931
Weighted average number of ESOT shares (333,489) (387,446)
Weighted average number of ordinary shares – basic 26,799,442 26,745,485
Effect of potential dilutive share options – –
Adjusted weighted average number of ordinary shares – diluted 26,799,442 26,745,485
Earnings / (loss) per share – basic (p) (13.42) 4.52
Earnings / (loss) per share – diluted (p) (13.42) 4.52
Page 38 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 39
10 Non-controlled investments and Other receivables
The Group’s investment portfolio comprises investments in Progeny
®
companies. Progeny
®
companies are businesses established by ANGLE to
commercialise intellectual property using ANGLE’s proprietary Progeny
®
process.
Where the Group has control of a Progeny
®
company (typically owning more than 50% of the equity), these are defined as controlled investments
and are consolidated as subsidiaries. At the point control no longer exists, a deemed profit arises and the non-controlled investment is held at fair
value on the Consolidated Balance Sheet. In the year to 30 April 2009 costs before taxation relating to controlled investments of £1.1 million were
charged to the Income Statement (2008: £2.3 million).
Where the Group does not control a Progeny
®
company (typically owning less than 50% of the equity), these are defined as non-controlled
investments and held on the Balance Sheet at fair value, as set out in the table below:
Total
Non-current Current Non-
assets assets controlled
Unquoted Quoted Investments
£££
At 1 May 2007 – 1,812,197 1,812,197
Investments 89,461 – 89,461
Disposals – (538,692) (538,692)
Fair value gain on deemed disposals 4,373,504 – 4,373,504
Change in fair value (89,461) (231,174) (320,635)
At 30 April 2008 4,373,504 1,042,331 5,415,835
Disposals – (20,249) (20,249)
Change in fair value (1,978,504)* (522,917) (2,501,421)
At 30 April 2009 2,395,000 499,165 2,894,165
Investments are made directly and in the form of loans. The loans are normally convertible into equity and are non-interest bearing.
* The Board has considered a number of factors in determining whether there is evidence that the fair value of an investment has been impaired
since its last valuation. These factors have included 1) the positives and negatives in the progress of the investment 2) the current and forecast
financial situation of the investment and its ability to make timely sales 3) the original funding environment and the current funding environment, in
particular as it relates to new venture capital financing and associated terms, including the pressures on prices and 4) the performance of various
small cap and tech indices including AIM, Techmark and NASDAQ in the relevant period.
Other receivables
ANGLE’s Progeny
®
company Acolyte Biomedica was sold in February 2007. ANGLE’s share of the proceeds was an initial £0.9 million in cash and an
earn-out of up to £4.7 million receivable early in 2010. A fair value of £1.5 million (2008: £1.9 million) of this potential £4.7 million final payment is held
on ANGLE’s Balance Sheet under the “Other receivables” category.
During the year a dispute has arisen between the former Acolyte shareholders and the purchaser. The Company has received legal advice that
there is a strong case and that it is highly probable that an action will succeed. The matter is currently being pursued by the major shareholder with
the other shareholders reserving their rights; therefore ANGLE has limited exposure to any litigation costs at this stage.
Based on the currently available information and legal advice, the Directors believe that there will eventually be a significant return from this
investment, although indications are that this may take longer to resolve than previously anticipated. In view of the dispute, it is difficult to form a
reliable estimate of the fair value of this investment. In present circumstances, the Directors believe that it is appropriate to hold the asset at its last fair
value, but to discount this further for the time value of money recognising it may take longer to resolve the matter. The Directors note that the value
may be revised in the future as further information becomes available.
Change in fair value through Income Statement
2009 2008
£ £
Year ended 30 April
Deemed loss from net assets no longer consolidated – (141,838)
Fair value gain on deemed disposal of subsidiaries – 4,373,504
Change in fair value of investments (2,501,421) (320,635)
Change in fair value of Other receivables (402,724) –
Change in fair value of intangible assets (27,315) –
Change in fair value (2,931,460) 3,911,031 10 Non-controlled investments and Other receivables continued
Group investments at the end of the year comprise the following:
Effective Effective
holding holding
before after
minority minority
Class of interests interests
Principal activity share held %%
Non-current asset investments
Geomerics Limited
(1)
Computational graphics Ordinary 47.31
NeuroTargets Limited
(1)
New drug targets Ordinary 25.08 24.27
Synature Limited
(1)
Internet personalisation Ordinary 37.81
Current asset investments
Provexis plc
(1)
Nutraceutical products Ordinary 7.61 7.54
(1) The effective Group holdings shown are before the effects of any dilutive share options or convertible loans or additional ANGLE holdings from convertible loans within
the individual investments.
The aggregate amount of capital and reserves and the results of these investments for the last relevant financial year were as follows:
Date of
financial Net Profit / (loss)
statements assets for the year
Geomerics Limited 30/04/2008 1,183,670 (1,133,504)
NeuroTargets Limited 30/04/2008 (335,244) (81,780)
Synature Limited 30/04/2008 (663,865) (346,710)
Recent Financial Statements are not always publicly available and management information is deemed commercially sensitive. Net assets and
profit / (loss) figures are therefore based on publicly available information – results statements or the most recently filed Accounts with Companies
House.
Subsidiaries
The following subsidiaries have been consolidated into the Group Financial Statements using the acquisition method of accounting:
Controlled investments Class of Holding
Company Name Principal activity share held %
Aguru Images Inc
(1)
Rapid image surface capture Common & Preferred 75.26
Novocellus Limited
(1)
IVF diagnostics Ordinary 81.89
Parsortix Inc
(1)
Cell separation Common & Preferred 78.00
All “Limited” companies Incorporated in Great Britain. All “Inc” companies incorporated in the US.
(1) The effective Group holdings shown are before the effects of any dilutive share options or convertible loans or additional ANGLE holdings from convertible loans within
the individual investments.
Page 40 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 41
10 Non-controlled investments and Other receivables continued
Country of
Operating companies registration or Class of Holding
Principal Subsidiaries incorporation share held %
ANGLE Partnerships Limited* Great Britain Ordinary 100.00
ANGLE Technology Licensing Limited Great Britain Ordinary 100.00
ANGLE Technology Limited* Great Britain Ordinary 100.00
ANGLE Technology Ventures Limited Great Britain Ordinary 100.00
ANGLE Ventures Limited* Great Britain Ordinary 100.00
Progeny bioVentures Limited Great Britain Ordinary 96.50
ANGLE Technology LLC US Membership Units 100.00
ANGLE Technology Ventures LLC US Membership Units 100.00
* subsidiary held directly
The principal activity of these businesses for the last relevant financial year was as follows:
Principal Subsidiaries Principal activity
ANGLE Partnerships Limited Dormant
ANGLE Technology Licensing Limited Dormant
ANGLE Technology Limited Principal UK company – Management services
ANGLE Technology Ventures Limited Establishment and growth of technology companies
ANGLE Ventures Limited Establishment and growth of technology companies
Progeny bioVentures Limited Establishment and growth of biotech companies
ANGLE Technology LLC US subsidiary covering all of Group’s business
ANGLE Technology Ventures LLC US subsidiary for technology ventures 11 Property, plant and equipment
Fixtures,
Computer Laboratory fittings &
equipment equipment equipment Total
£ £££
Cost
At 1 May 2007 179,672 89,332 63,375 332,379
Additions 8,134 – 11,394 19,528
Disposals (7,212) –– (7,212)
Deemed disposals (34,004) – (2,594) (36,598)
Exchange movements (140) – (54) (194)
At 30 April 2008 146,450 89,332 72,121 307,903
Additions 10,351 – 1,558 11,909
Disposals (8,712) – (10,223) (18,935)
Exchange movements 12,305 – 6,019 18,324
At 30 April 2009 160,394 89,332 69,475 319,201
Depreciation
At 1 May 2007 129,672 30,648 49,196 209,516
Charge for the year 23,548 17,867 8,103 49,518
Disposals (5,544) –– (5,544)
Deemed disposals (15,826) – (1,429) (17,255)
Exchange movements (49) – (6) (55)
At 30 April 2008 131,801 48,515 55,864 236,180
Charge for the year 13,063 17,866 8,634 39,563
Disposals (8,301) – (9,498) (17,799)
Exchange movements 10,697 – 2,714 13,411
At 30 April 2009 147,260 66,381 57,714 271,355
Net book value
At 30 April 2009 13,134 22,951 11,761 47,846
At 30 April 2008 14,649 40,817 16,257 71,723
Included above are assets held under finance leases as follows:
Fixtures,
Computer Laboratory fittings &
equipment equipment equipment Total
££££
Net book value
At 30 April 2009 – 16,420 – 16,420
At 30 April 2008 – 27,365 – 27,365
Depreciation charge for the year
At 30 April 2009 – 10,945 – 10,945
At 30 April 2008 – 10,945 – 10,945
Page 42 ANGLE plc Annual Report & Accounts 2009
Notes to the Consolidated Financial Statements
Continued ANGLE plc Annual Report & Accounts 2009 Page 43
12 Intangible assets
Intellectual Computer
property software Licences Total
££££
Cost or deemed cost
At 1 May 2007 379,672 17,547 – 397,219
Additions 28,347 1,751 39,575 69,673
Deemed disposals (171,538) (1,238) – (172,776)
Exchange movement (2,483) 2 (18) (2,499)
At 30 April 2008 233,998 18,062 39,557 291,617
Additions – 2,214 – 2,214
Deemed disposals –– (12,659) (12,659)
Exchange movements 17,755 1,645 9,258 28,658
At 30 April 2009 251,753 21,921 36,156 309,830
Amortisation and impairment
At 1 May 2007 – 8,060 – 8,060
Deemed disposals – (546) – (546)
Charge for the year – 4,037 333 4,370
Impairment 88,204 –– 88,204
At 30 April 2008 88,204 11,551 333 100,088
Charge for the year 6,773 4,812 4,738 16,323
Impairment –– 27,315 27,315
Exchange movements 887 629 735 2,251
At 30 April 2009 95,864 16,992 33,121 145,977
Net book value
At 30 April 2009 155,889 4,929 3,035 163,853
At 30 April 2008 145,794 6,511 39,224 191,529
Intellectual property (IP) was added as a result of acquisitions made by controlled investments in share for share exchanges under the terms
of IP Option Exercise Agreements of £nil (2008: £28,347), and the issue of new shares in exchange for the assignment or exclusive rights to the IP
of £nil (2008: £nil). Notes to the Consolidated Financial Statements
Continued
Page 44 ANGLE plc Annual Report & Accounts 2009
13 Other financial assets and financial liabilities
The Group’s financial instruments comprise cash, treasury deposits, overdraft, finance leases and various items such as trade receivables and trade
payables which arise directly from its operations.
In addition the Group holds an investment portfolio comprising loans and equity investments (listed and unlisted) in technology based companies
and an associated “Other receivable”(Note 10).
It is the Group’s policy that no trading in financial derivatives shall be undertaken.
The main risks arising from the Group’s financial instruments are adverse interest rate movements, adverse currency rate movements, liquidity risk and
investment risk.
Financial assets
Financial assets of the Group comprise cash at bank and in hand as well as treasury deposits and loan notes. Other financial assets on which no
interest is earned comprise non-current and current asset investments and details are provided in Note 10. It is the Group’s policy to place surplus
cash resources on deposit at both floating and fixed term deposit rates of interest with the objective of maintaining a balance between accessibility
of funds and competitive rates of return. Fixed term deposits are for varying periods ranging from one to six months, to the extent that cash flow can
be reasonably predicted.
Financial liabilities
Financial liabilities of the Group in the normal course of business comprise overdraft facilities and finance leases (see Note 18 for profile), but not
borrowings. It is the Group’s policy to use various financial instruments with floating and fixed rates of interest with the objective of maintaining a
balance between continuity of funding, matching the liability with the use of the asset, and finding flexible funding options for a reasonable charge.
The Group currently does not utilise overdraft facilities. The Group believes that it has a good long-standing banking relationship and that these
facilities can be reinstated if required. Finance leases and hire purchase agreements are held under fixed rate contracts. The Group has no long term
borrowings or undrawn committed borrowing facilities. Therefore the Group is not exposed to any interest rate risk on its financial liabilities.
Interest rate profile
The Group’s financial assets and financial liabilities have the following interest rate profile:
Fixed Floating Interest 2009 Fixed Floating Interest 2008
rate
(1)
rate
(2)
free Total rate
(1)
rate
(2)
free Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Financial assets:
Investments (non-current) –– 2,395 2,395 –– 4,374 4,374
Investments (current) –– 499 499 –– 1,042 1,042
Property, plant and equipment –– 48 48 –– 72 72
Intangible assets –– 164 164 –– 191 191
Other receivables (non-current) –– 1,520 1,520 –– 1,903 1,903
Trade and other receivables (current) –– 504 504 –– 628 628
Cash and cash equivalents – 278 42 320 – 640 330 970
Total financial assets – 278 5,172 5,450 – 640 8,540 9,180
Financial liabilities:
Trade and other payables –– 1,065 1,065 –– 1,828 1,828
Taxation – 107 136 243 ––– –
Loans and borrowings 101 – 220 321 76 – 50 126
Obligations under finance leases (current) ––– – 5–– 5
Total financial liabilities 101 107 1,421 1,629 81 – 1,878 1,959
(1) Fixed rate liabilities attracted interest of 8.0% during the year (2008: 8.0% to 14.0%).
(2) Floating rate cash deposits in Sterling earn interest at 0.5% below the Bank of England Base rate (2008: 0.5%). The weighted average interest rate on Sterling cash
deposit for this period was 4.5% (2008: 4.5%). The weighted average interest rate on US dollar cash deposit for this period was 0.3% (2008: 2.2%).
With the exception of non-current investments, other receivables (non-current) and loans and borrowings, all amounts have maturity dates of less
than 12 months.
Foreign currency risk
The Group has overseas subsidiaries, the revenues and expenses of which are denominated in Sterling and US dollars. As a result, the Group’s Sterling
Income Statement and Balance Sheet may be affected by movements in the US dollar : Sterling exchange rate.
The majority of the Group’s operating revenues and expenses are in Sterling and US dollars. Sales are priced in Sterling or US dollars for preference
although the Group has a limited amount of revenues and expenses denominated in other currencies. A natural hedge exists through the matching
of anticipated foreign currency operating expenses with foreign currency revenues. Any excess exposure over and above this natural hedge will be
managed for all significant foreign currencies using forward currency contracts or currency swaps. In exceptional circumstances the Board may
approve of contracts in excess of twelve months. 13 Other financial assets and financial liabilities continued
Sensitivity analysis
The impact of a 5% variation in the US dollar rates on the profit / (loss) for the year is as follows:
2009 2008
£ £
Profit / (loss) – 5% strengthening (44,206) (107,727)
Profit / (loss) – 5% weakening 39,996 97,468
Hedging
Other than the natural hedge, the Group did not hedge its financial transactions in 2009 or 2008.
Currency profile
The Group’s financial assets and financial liabilities have the following currency profile:
2009 2008
Sterling US dollar Total Sterling US dollar Total
£’000 £’000 £’000 £’000 £’000 £’000
Financial assets:
Investments (non-current) 2,395 – 2,395 4,374 – 4,374
Investments (current) 499 – 499 1,042 – 1,042
Property, plant and equipment 34 14 48 53 19 72
Intangible assets 96 68 164 97 94 191
Other receivables (non-current) 1,520 – 1,520 1,903 – 1,903
Trade and other receivables (current) 328 176 504 454 174 628
Cash and cash equivalents 290 30 320 887 83 970
Total financial assets 5,162 288 5,450 8,810 370 9,180
Financial liabilities:
Trade and other payables 694 371 1,065 1,490 338 1,828
Taxation 243 – 243 –––
Loans and borrowings – 321 321 – 126 126
Obligations under finance leases (current) –– – 5– 5
Total financial liabilities 937 692 1,629 1,495 464 1,959
Liquidity risk
The principal risk to which the Group is exposed is liquidity risk. The nature of the Group’s activities means it finances its operations through retained
earnings, including equity disposals, and the issue of new shares to investors. The principal cash requirements are in relation to developing new
ventures, funding investments and meeting working capital requirements. The Group seeks to manage liquidity through planning, forecasting, careful
cash management and managing the investment risk.
Early stage companies typically experience significant negative cash flows, which ANGLE covers initially until sufficient progress is made to attract
further funding. Investments may be unable to obtain financing due to lack of operational progress or market conditions and the Group may feel it
necessary to provide additional investment and / or management time to support these companies further. Adverse market conditions may also
delay liquidity events, thereby requiring additional investment, and ANGLE may also find it difficult to raise additional capital under these conditions.
Investment risk
Equity investments are held to achieve capital growth in their value with the intention of subsequent disposal at a profit. The main risks arising from
these equity investments are technological risk and market price risk. The Group seeks to manage investment risk by using investment appraisal
processes and monitoring procedures with regular reports made to the Board on the status of investments. The Group’s Progeny
®
model is built on
robust risk management processes combined with experienced management.
Fair values of financial assets and liabilities
Other than as disclosed, the Directors believe that the fair value and the book value of financial assets and financial liabilities is not materially
different. Trade payables and receivables have a remaining life of less than one year so their value on the Balance Sheet is considered to be a fair
approximation of fair value. The valuation policy for investments and other receivables (non-current) is detailed in Note 1.6.
ANGLE plc Annual Report & Accounts 2009 Page 45 Notes to the Consolidated Financial Statements
Continued
Page 46 ANGLE plc Annual Report & Accounts 2009
14 Other receivables
2009 2008
£ £
Non-current assets:
Other receivables 1,520,239 1,902,724
Other receivables relates primarily to the fair value ascribed to the eventual return expected from the sale of Acolyte Biomedica (Note 10) and a
small loan to a non-controlled investment.
15 Trade and other receivables
2009 2008
£ £
Current assets:
Trade receivables 269,719 347,474
Taxation 12,809 44,960
Other receivables 15,104 1,609
Prepayments and accrued income 206,793 233,982
504,425 628,025
The standard credit period allowed for trade debtors is 30 days, although this may be extended such that invoices become payable after
completion of a key milestone.
Age profile of trade receivables
2009 2008
£ £
Not past due 156,019 297,000
0 – 30 days past due 103,451 50,474
30 – 90 days past due 10,249 –
Greater than 90 days past due – –
Total 269,719 347,474
The Directors consider the carrying amount of trade and other receivables to approximate their fair value and consequently no bad debt provisions
have been made. All receivables are unsecured and interest free, unless past due where interest may be charged.
16 Controlled investments – convertible loans
2009 2008
£ £
Unsecured convertible loans (interest free) 101,372 50,390
Unsecured convertible loan (interest bearing) 101,372 75,586
Secured convertible down payment 118,267 –
321,011 125,976
The interest free unsecured convertible loans are convertible into equity, or repayable in the event of certain circumstances or to be repaid
gradually based on 2 percent of annual revenues or 1% of new equity financing, above a $500,000 cap. The maximum repayment is based on
a multiple of three times the original investment.
The interest bearing unsecured convertible loan note is convertible into equity or repayable in the event of certain circumstances.
The secured convertible down payment is convertible at will into an interest bearing loan note or equity investment or is repayable. Security is
provided through a fixed charge over certain of the company’s assets. 17 Trade and other payables
2009 2008
£ £
Current liabilities:
Trade payables 416,015 304,877
Other taxes and social security costs 99,291 93,148
Other payables 13,856 –
Accruals and deferred income 536,112 1,430,580
1,065,274 1,828,605
As a result of ANGLE’s establishment and operation of Progeny
©
companies, complex VAT issues arise requiring agreement of a special partial
exemption method. Included within accruals and deferred income is a provision for an estimated liability for VAT and further professional advice
relating thereto. There remains some uncertainty as to the quantum and timing of the actual liability.
18 Obligations under finance leases
2009 2008
£ £
Non-current liabilities:
Obligations under finance leases – –
Current liabilities:
Obligations under finance leases – 4,560
Net obligations under finance leases – 4,560
The Group was committed to making the following payments under finance leases:
2009 2008
£ £
Net obligations under finance leases
Repayable within one year – 5,199
Repayable between one and five years – –
– 5,199
Finance charges and interest allocated to future accounting periods – (639)
– 4,560
Obligations under finance leases are secured on the assets to which they relate. The fair value of the lease obligations approximates their carrying
amount.
19 Share capital
The share capital of the Company is shown below:
2009 2008
£ £
Authorised
50,000,000 (2008: 50,000,000) Ordinary shares of 10p each 5,000,000 5,000,000
Allotted, called up and fully paid
27,132,931 (2008: 27,132,931) Ordinary shares of 10p each 2,713,293 2,713,293
The Company has one class of ordinary shares which carry no right to fixed income.
There were no changes to share capital in 2009 or 2008.
ANGLE plc Annual Report & Accounts 2009 Page 47 Notes to the Consolidated Financial Statements
Continued
Page 48 ANGLE plc Annual Report & Accounts 2009
20 Share based payments
The key disclosures that enable the user of the Financial Statements to understand the nature and extent of share based payment charges through
the Income Statement relate to ANGLE plc and not to the controlled investments.
Company – Share Option Schemes
The Company operates Approved and Unapproved Share Option Schemes as a means of encouraging ownership and aligning interests of staff
and external shareholders. Prior to 2007, share options were a key part of the remuneration package and were granted at the discretion of the
Remuneration Committee taking into account the need to motivate, retain and recruit high calibre executives. In 2007 the Company introduced a
new remuneration scheme involving deferred shares and options are expected to only be used in exceptional circumstances going forward.
Options are not exercisable until three years after the date of grant and cease to be exercisable after seven years from the date of grant.
Options are forfeited if the employee leaves the Group unless the conditions under which they leave are such that they are considered to be a
“good leaver”; in this case their options remain exercisable for a limited period of time. Share option agreements in place require the employee to
reimburse the Company for the cost of employer’s National Insurance Contributions, and other equivalent taxes, and accordingly the Company
does not accrue for such taxes that would otherwise be due on share option gains.
The movement in the number of employee share options is set out below:
2009 2009 2008 2008
Number Weighted Number Weighted
of share average of share average
options exercise options exercise
# price (p) # price (p)
Outstanding at 1 May 3,628,987 103.6 4,533,434 119.8
During the year
Granted –– ––
Exercised –– ––
Lapsed (428,131) 127.9 (511,200) 192.2
Forfeited –– (393,247) 119.7
Outstanding at 30 April 3,200,856 100.4 3,628,987 103.6
Capable of being exercised at 30 April 2,840,856 104.8 1,777,214 119.2
Options are issued at market price, with the exception of tranche 10 (see table below) which were issued at the placing price. The options
outstanding at 30 April 2009 had a weighted average remaining contractual life of two years and ten months (2008: three years and nine months).
The Company uses the “Black-Scholes” model to determine the fair-value of the Company’s share options. The Group has elected to apply the
share-based payment exemption under IFRS 1. The Company has not applied IFRS 2 to those options granted before 7 November 2002.
Assumptions
The following assumptions are used in the model to determine the fair value of share options at the respective date of grant:
Ordinary Share price Life of
Date of Exercise shares under at date of Expected Risk free options Expected
Tranche grant price (£) option grant (£) volatility interest rate (years) dividends
Employee options
1 18 July 2003 1.000 708,000 1.000 30.41% 4.11% 6 Nil
2 14 January 2004 1.000 174,687 1.000 31.37% 4.56% 6 Nil
3 17 March 2004 1.440 850,000 1.440 31.35% 4.56% 6 Nil
4 19 July 2004 1.280 109,375 1.280 30.78% 5.01% 6 Nil
5 01 October 2004 1.215 77,778 1.215 30.03% 4.80% 6 Nil
6 08 October 2004 1.215 41,152 1.215 29.99% 4.72% 6 Nil
7 24 January 2005 1.385 30,000 1.385 29.39% 4.49% 6 Nil
8 01 Febuary 2005 1.425 35,088 1.425 29.37% 4.48% 6 Nil
9 29 July 2005 1.260 537,338 1.260 29.24% 4.24% 6 Nil
10 30 March 2006 0.790 601,056 0.840 30.00% 4.39% 5 Nil
11 27 April 2006 0.835 550,000 0.835 30.00% 4.63% 5 Nil
12 19 September 2006 0.855 80,000 0.855 35.00% 4.75% 5 Nil
13 21 March 2007 0.640 330,000 0.640 35.00% 5.01% 5 Nil
Advisor options (part-consideration for services)
1 17 March 2004 1.440 312,500 1.440 31.33% 4.52% 5 Nil
Expected volatility is derived from observation of the volatility of quoted shares in similar sectors to the Company.
The expected life used in the model is based on management’s best estimate taking into account the effects of non-transferability, exercise
restrictions and behavioural conditions. 20 Share based payments continued
On 30 April 2009, 312,500 options with an exercise price of £1.44 (representing 5% of the value of the Placing Shares at the Placing Price) over
ordinary shares of 10p each in the Company were outstanding to KBC Peel Hunt (2008: 312,500 at £1.44). The options were issued as part
consideration for its services in connection with the flotation and placing in March 2004, vested immediately and cease to be exercisable on
10 March 2011.
Company – Deferred Annual Bonus Scheme
Bonuses under the Deferred Annual Bonus (DAB) scheme are paid partly in cash and partly in deferred shares. The cash element is accrued in the
year it relates to and is included in wages and salaries. The deferred shares, comprising Mandatory and Matching shares, are deferred for three years
at which point they vest. Awards are forfeited if the employee leaves the Group before the awards vest, unless the conditions under which they leave
are such that they are considered to be a “good leaver”; in which case their award vests, but may be pro-rated.
The movement in the number of DAB scheme shares is set out below:
2009 2009 2008 2008
Number Weighted Number Weighted
of DAB average of DAB average
shares award shares award
# price (p) # price (p)
Interests under DAB Scheme at 1 May 203,993 28.0 ––
During the year
Awarded 224,403 22.5 213,195 28.0
Forfeited –– (9,202) 28.0
Interests under DAB Scheme at 30 April 428,396 25.1 203,993 28.0
Capable of being exercised at 30 April – –
Awards are made at market price. The awards outstanding at 30 April 2009 had a weighted average remaining contractual life of one year and ten
months. (2008: two years and three months).
The share based payment charge for the Company Share Option Schemes and DAB scheme was £168,004 (2008: £213,759).
Controlled investments
Controlled investments individually operate Unapproved, or equivalent, share option schemes and restricted share schemes as a means of attracting
start-up management, encouraging ownership and aligning interests of staff with shareholders. Share options are a key part of the remuneration
package and are granted at the discretion of the individual controlled entity boards taking into account the need to recruit, motivate and retain
high calibre executives.
Controlled investments unapproved share option schemes typically have a management option pool of 15% of the issued share capital. Options are
typically 1) granted at market value 2) have vesting and / or performance conditions and 3) lapse after a period of 10 years from the date of grant.
There are no legal or constructive obligations to repurchase or settle options in cash.
Market prices do not exist for such early stage controlled investments and, in the absence of market prices, fair value is estimated using a valuation
technique to value the instrument on the measurement date in an arm’s length transaction between knowledgeable, willing parties.
The share based payment charge for controlled investments was £17,595 (2008: £44,992).
21 ESOT shares
2009 2008
£ £
Opening cost 355,453 370,000
Disposals (13,338) (14,547)
Closing cost 342,115 355,453
Employee Share Ownership Trust (ESOT) shares are ANGLE plc shares held by the ANGLE Employee Trust. At 30 April 2009 the Trust held
300,264 shares (2008: 359,548 shares). The market value of these shares at 30 April 2009 was £28,525 (2008: £131,235).
22 Contingent liabilities
One of the controlled investments has entered into a deferred compensation agreement with a number of management and staff amounting
to some $440,000. These amounts may be repaid or converted into equity in the controlled investment. Repayments are contingent on making
sufficient sales and are to be repaid as cash balances allow or on securing third party funding. Amounts deferred bear interest at a rate of
8% per annum compounded.
The Group had no other contingent liabilities as at 30 April 2009 (2008: £nil).
ANGLE plc Annual Report & Accounts 2009 Page 49 Notes to the Consolidated Financial Statements
Continued
Page 50 ANGLE plc Annual Report & Accounts 2009
23 Guarantees and other financial commitments
The Group leases office accommodation on leases of generally less than one year with monthly rental payments and short notice periods. The Group
also has a number of retainers with professional advisors which can be terminated on short notice periods.
One of the controlled investments has entered into field of use licence agreements in relation to certain patents and know-how as a result of which
it has made a commitment to pay annual royalties at rates of 1) 3.33% of relevant net revenues with a minimum level of royalties due currently at
$55,000 rising to $75,000 by 2012 to one party and 2) 10% or relevant net revenues with a minimum level of royalties due currently at $25,000 and rising
to $100,000 by 2013 to another party. In the event that the minimum royalties are not paid, or in the event of certain other circumstances, then the
licence agreements may be terminated by the licensor and all rights revert.
The Group has no contractual commitments to provide financial support to its investments.
24 Related party transactions
The Group provided executive management and support services to, and incurred expenditure on behalf of, portfolio companies as follows:
2009 2008
£ £
Geomerics Limited 39,781 18,180
NeuroTargets Limited 2,139 3,763
Synature Limited 10,768 4,785
At the Balance Sheet date amounts were due from investments as follows:
2009 2008
£ £
Geomerics Limited 19,892 –
NeuroTargets Limited 20,239 15,098
Synature Limited 2,750 30,465
At the Balance Sheet date amounts were due to investments as follows:
2009 2008
£ £
Geomerics Limited – 28,085
Directors’ interests – related party interests and transactions
Apart from the interests disclosed in the Remuneration Report on pages 23 to 24, none of the Directors had any interest at any time during the year
ended 30 April 2009 in the share capital of the Company or its subsidiaries.
At the balance sheet date £42,635 of salary was due to Ian Griffiths; he also holds an interest in an investment as a result of purchasing 938 shares in
NeuroTargets Ltd for £15,008 representing 1.1% of the issued share capital at 30 April 2009 (2008: 938 shares representing 1.1%).
No Director had a material interest in a contract, other than a service contract, with the Company or its subsidiaries, or investments during the year. 2009 2008
Notes £ £
Fixed assets
Investments in subsidiary undertakings C2 2,524,754 2,356,750
Current assets
Debtors – due after one year C3 10,354,928 15,532,391
Net assets 12,879,682 17,889,141
Capital and reserves
Called up share capital C4 2,713,293 2,713,293
Share premium account C4 13,701,935 13,701,935
Share based payment reserve C4 1,311,986 1,473,913
Profit and loss reserve C4 (4,847,532) –
Shareholders’ funds – equity interests 12,879,682 17,889,141
The Financial Statements on pages 51 to 53 were approved by the Board and authorised for issue on 23 July 2009 and signed on its behalf by:
G R Selvey A D W Newland
Director Director
Company Balance Sheet
As at 30 April 2009
ANGLE plc Annual Report & Accounts 2009 Page 51 C1 Accounting policies
C1.1 Accounting convention and compliance with accounting standards
The Financial Statements have been prepared under the historical cost convention, in accordance with the Companies Act 2006 and applicable
United Kingdom accounting standards. A summary of the more important accounting policies which have been applied consistently throughout the
year are set out below.
As permitted by Section 408 of the Companies Act 2006, the holding Company’s Profit and Loss Account has not been included in these Financial
Statements. The loss for the financial year was £5,177,463 (2008: £nil) which resulted from a provision made against the carrying value of loans due
from Group undertakings (see Note C3).
As permitted by FRS 1 Cash Flow Statements, no Cash Flow Statement for the Company has been included on the grounds that the Group includes
the Company in its own published Consolidated Financial Statements.
The Company has taken advantage of the exemption in FRS 25 – Financial Instruments: Disclosure and Presentation, not to prepare a financial
instruments note as the information is available in the published Financial Statements of the Group.
C1.2 Fixed Asset Investments
Fixed asset investments are held at cost less any provision for impairment in value and are held for long term investment purposes.
C1.3 Loans to subsidiary undertakings
Intercompany loans are provided to operating subsidiaries and are held at cost less any provision to reduce carrying value to its currently estimated
recoverable amount.
C1.4 Share based payments
The Share option and Deferred Annual Bonus schemes allow Group employees to acquire shares of the Company, subject to certain criteria.
In accordance with FRS 20 Share-based payments, the fair value of options granted and deferred shares awarded is recognised as an expense
of employment and the cost is borne by the appropriate subsidiary receiving the benefit of the employees’ services. The fair value is treated as a
capital contribution and added to the cost of the Company’s investments in its subsidiary undertakings and a corresponding credit is made to
reserves. The accounting treatment required by FRS 20 is consistent with that applied under IFRS 2 in the Group’s consolidated financial statements.
C2 Investments
2009 2008
Shares in subsidiaries £ £
At 1 May 2,356,750 2,142,991
Additions 168,004 213,759
At 30 April 2,524,754 2,356,750
Additions represent share based payment transactions.
Details of the Company’s subsidiary undertakings at 30 April 2009 are shown in Note 10 to the Consolidated Financial Statements along with other interests
held indirectly through subsidiary undertakings.
C3 Debtors falling due after more than one year
2009 2008
£ £
Amounts owed by Group undertakings
At 1 May 15,532,391 15,532,391
Less provision (5,177,463) –
At 30 April 10,354,928 15,532,391
ANGLE plc provides a centralised treasury function to trading subsidiaries. The amounts due from Group undertakings are interest free, unsecured
and have no fixed date of repayment.
The provision reflects the Directors’ view of the potential impact of current adverse economic conditions on the long term value of the amounts
owed by subsidiary undertakings.
Notes to the Company Financial Statements
For the year ended 30 April 2009
Page 52 ANGLE plc Annual Report & Accounts 2009 ANGLE plc Annual Report & Accounts 2009 Page 53
C4 Share capital and reserves
Share based Profit
Share Share payment and loss
capital premium reserve reserve
£ £££
At 1 May 2007 2,713,293 13,701,935 1,260,154 –
Share based payments 213,759
At 30 April 2008 2,713,293 13,701,935 1,473,913 –
Retained loss for the year (5,177,463)
Share based payments 168,004
Released on forfeiture / lapse (329,931) 329,931
At 30 April 2009 2,713,293 13,701,935 1,311,986 (4,847,532)
Details of the Company’s authorised share capital and changes in its issued share capital and share premium account can be found in the
Consolidated Statement of Changes in Equity on page 29 and Note 19 to the Consolidated Financial Statements on page 47.
Details of the Company’s share options, DAB Scheme Shares and warrants can be found in Note 20 to the Consolidated Financial Statements on
pages 48 to 49.
On 30 April 2009 the following employee options over ordinary shares of 10p each in the Company were outstanding:
2009 2008
Option Number of Number of
Year of grant (each year ended 30 April) Exercise period price options options
2002 31/10/2004 – 21/01/2009 £2.50 – 16,000
2003 27/09/2005 – 26/09/2009 £1.00 257,000 259,000
2004 18/07/2006 – 14/01/2011 £1.00 621,687 721,687
2004 17/03/2007 – 16/03/2011 £1.44 550,000 630,000
2005 19/07/2007 – 01/02/2012 £1.215-£1.425 – 150,527
2006 29/07/2008 – 28/07/2012 £1.26 361,113 440,717
2006 30/03/2009 – 26/04/2013 £0.79-£0.835 1,051,056 1,051,056
2007 19/09/2009 – 18/09/2013 £0.86 30,000 30,000
2007 21/03/2010 – 20/03/2014 £0.64 330,000 330,000
3,200,856 3,628,987
On 30 April 2009, 312,500 options with an exercise price of £1.44 (representing 5% of the value of the Placing Shares at the Placing Price) over
ordinary shares of 10p each in the Company were outstanding to KBC Peel Hunt (2008: 312,500 at £1.44). The options were issued as part
consideration for its services in connection with the flotation and placing in March 2004, vested immediately and cease to be exercisable on 10
March 2011.
C5 Administrative expenses
Administrative expenses, including auditor’s remuneration, are borne by other Group companies.
C6 Directors’ emoluments and employee information
The only employees of the Company are the executive Directors; the remuneration of the Directors is borne by Group subsidiary undertakings.
Full details of their remuneration can be found in the Directors’ Remuneration Report on pages 23 to 24.
C7 Related party transactions
The Company has relied on the exemptions given in FRS 8 not to disclose transactions between itself and its subsidiaries that have been eliminated
on consolidation. Notes
Page 54 ANGLE plc Annual Report & Accounts 2009 ANGLE plc Annual Report & Accounts 2009 Page 55
Notice of Annual General meeting
ANGLE plc
Directors: Registered Office
G R Selvey (Chairman) 3 Frederick Sanger Road
A D W Newland (Chief Executive) The Surrey Research Park
I F Griffiths (Finance Director) Guildford GU2 7YD
D W Quysner CBE (Non-Executive Director)
Dear Shareholder
Annual General Meeting
You will find included with this document a Notice convening the Annual General Meeting of the Company for 2.00 pm on Thursday 10 September
2009 at which the following resolutions will be proposed:
1. Resolution 1 to receive and adopt the annual report and accounts of the Company for the financial year ended 30 April 2009;
2. Resolution 2 to re-appoint the auditors of the Company, Baker Tilly, and authorise the Directors to determine their level of remuneration;
3. Resolution 3 to grant the Directors authority to allot unissued shares in the capital of the Company up to an aggregate nominal amount of
£1,298,606;
Note: whilst the Directors have no present intention of allotting further shares (other than with respect to remuneration schemes and the issue of
shares upon the exercise of share options), the Directors wish to renew their authorisations with respect to the allotment of new shares.
4. Resolution 4 to disapply statutory pre-emption rights;
Note: whilst the Directors have no present intention of allotting further shares for cash, the Directors wish to renew their authorisations for the
disapplication of the statutory pre-emption rights in respect of the allotment of new shares pursuant to rights issues or otherwise for cash, as
detailed in the Notice of Annual General Meeting, to enable the Directors to take advantage of opportunities as they arise without the need for
further shareholder approval.
5. Resolution 5 to grant the Directors authority to purchase issued shares in the capital of the Company up to an aggregate nominal amount of
£271,329;
Note: whilst the Directors have no present intention of purchasing the Company’s shares, the Directors are seeking authorisation as they wish to
have the flexibility to do so if this was generally in the best interests of the shareholders and unless (except in the case of purchases intended to
satisfy obligations under share schemes) the expected effect of the purchase would be to increase earnings per share of the remaining shares.
The authorities requested in items 3, 4 and 5 will expire at the 2010 Annual General Meeting or, if earlier, 15 months following the date the resolutions
are passed.
Action To Be Taken
A Form of Proxy for use at the Annual General Meeting is enclosed. If you are a holder of shares in the Company you are advised to complete and
return the form in accordance with the instructions printed on it so as to arrive at the Company's registrars, Capita Registrars (Proxies), 34 Beckenham
Road, Beckenham, Kent BR3 4TU as soon as possible, but in any event no later than 48 hours before the time fixed for the meeting. The return of the
Form of Proxy does not preclude you from attending and voting at the Annual General Meeting if you so wish. Shares held in uncertificated form (i.e.
in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual.
Recommendation
Your Directors consider the resolutions to be proposed at the Annual General Meeting to be in the best interests of the Company and its
shareholders. Accordingly, the Directors unanimously recommend shareholders to vote in favour of all the resolutions to be proposed at the Annual
General Meeting.
Yours faithfully
Garth Selvey
Chairman Notice of Annual General meeting
Continued
Page 56 ANGLE plc Annual Report & Accounts 2009
(Company number 4985171)
Notice is hereby given that the sixth Annual General Meeting of ANGLE plc (“the Company”) will be held at 2:00 pm on Thursday 10 September 2009
at 3 Frederick Sanger Road, the Surrey Research Park, Guildford GU2 7YD for the purpose of considering and, if thought fit, passing the following
resolutions of which the resolutions numbered 1 through 3 will be proposed as ordinary resolutions and resolutions numbered 4 and 5 will be
proposed as special resolutions:
Ordinary Business
1. TO receive the accounts of the Company for the year ended 30 April 2009, and the reports of the directors and auditors thereon.
2. TO re-appoint Baker Tilly as auditors of the Company to hold office from the conclusion of this meeting until the conclusion of the next general
meeting of the Company at which accounts are laid and to authorise the Directors to determine their remuneration.
3. THAT, for the purposes of section 80 of the Companies Act 1985 (“the Act”), the Directors be and they are hereby generally and unconditionally
authorised to exercise all the powers of the Company to allot relevant securities (within the meaning of section 80 of the Act) up to an aggregate
nominal amount of £1,298,606 PROVIDED that this authority shall expire (unless previously renewed, varied or revoked by the Company in general
meeting) at the earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15 months from the date of the
passing of this resolution EXCEPT that the Company may, before such expiry, make an offer or agreement which would or might require relevant
securities to be allotted after such expiry and the Directors may allot relevant securities in pursuance of any such offer or agreement as if the
authority conferred hereby had not expired, this authority to replace any existing like authority which is hereby revoked with immediate effect.
Special Business
4. THAT, subject to and conditional upon the passing of resolution 3, the Directors be and they are hereby empowered, in substitution for all existing
authorities, pursuant to section 95 of the Act to allot equity securities (within the meaning of section 94 of the Act) for cash pursuant to the
authority conferred by resolution 3 above as if sub-section (1) of section 89 of the Act did not apply to any such allotment, provided that this
power shall be limited to:
(a) the allotment of equity securities in connection with an offer of equity securities open for acceptance for a period fixed by the Directors to
holders of equity securities on the register of members of the Company on a date fixed by the Directors in proportion (as nearly as may be)
to their respective holdings of such securities or in accordance with the rights attached thereto but SUBJECT to such exclusions, variations or
other arrangements as the directors may deem necessary or expedient to deal with:
i. fractional entitlements;
ii. directions from any holders of shares to deal in some other manner with their respective entitlements;
iii. legal or practical problems arising in any overseas territory;
iv. the requirements of any regulatory body or stock exchange; or
v. otherwise howsoever;
(b) the allotment of equity securities (otherwise than pursuant to sub-paragraph (a) above) up to an aggregate nominal amount of £813,987;
and the power hereby conferred shall expire (unless previously renewed, varied or revoked by the Company in general meeting) 15 months
after the date of passing of this resolution or at the conclusion of the next annual general meeting of the Company (whichever first occurs)
EXCEPT that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted
after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had
not expired. ANGLE plc Annual Report & Accounts 2009 Page 57
5. THAT, the Company be and is hereby generally and unconditionally authorised to make market purchases (within the meaning of section 163(3)
of the Companies Act 1985) of ordinary shares of 10p each in the capital of the Company provided that:
(a) the maximum number of ordinary shares that may be purchased is 2,713,293 (representing 10% of the Company’s issued share capital);
(b) the minimum price (exclusive of expenses) which may be paid for each ordinary share is 10p;
(c) the maximum price (exclusive of expenses) which may be paid for each ordinary share is an amount equal to 105% of the average of the
middle market quotations of an ordinary share of the Company taken from the London Stock Exchange Daily Official List for the five business
days immediately preceding the day on which the ordinary share is contracted to be purchased;
and the power hereby conferred shall expire (unless previously renewed, varied or revoked by the Company in general meeting) 15 months after
the date of passing of this resolution or at the conclusion of the next annual general meeting of the Company (whichever first occurs) EXCEPT
that the Company may, before such expiry, enter into one or more contracts to purchase ordinary shares under which such purchases may be
completed or executed wholly or partly after the expiry of this authority and may make a purchase of ordinary shares in pursuance of any such
contract or contracts.
Registered Office By order of the Board
3 Frederick Sanger Road Ian F Griffiths
The Surrey Research Park Company Secretary
Guildford GU2 7YD
Dated 13 August 2009
Notes:
1. A member of the Company entitled to attend and vote at the Annual General Meeting may appoint one or more proxies to attend, speak and
vote instead of him. A proxy need not be a member of the Company. The form of proxy for use by members is enclosed. To appoint more than
one proxy, the Proxy Form should be photocopied and completed for each proxy holder. The proxy holder’s name should be written on the Proxy
Form together with the number of shares in relation to which the proxy is authorised to act. The box on the Proxy Form must also be ticked to
indicate that the proxy instruction is one of multiple instructions being given.
2. To be valid, an appointment of proxy must be returned to the Company’s Registrars at least 48 hours before the time of the meeting or any
adjourned meeting by one of the following methods:
• the form of proxy in hard copy duly executed, together with the power of attorney or other authority (if any) under which it is signed (or a
notarially certified copy of such power or authority) must be deposited at the Company's registrars, Capita Registrars, 34 Beckenham Road,
Beckenham, Kent BR3 4TU; or
• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out in
Note 4 of this document.
Completion and return of the form of proxy will not preclude a member from attending and voting in person.
3. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that, to be entitled to attend and vote at
the meeting (and for the purpose of determining the number of votes they may cast), members must be entered on the Company's register of
members at 6.00pm on 8 September 2009. Changes to entries on the relevant register of securities after that time shall be disregarded in
determining the rights of any person to attend or vote at the meeting.
4. To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST message must be received
by the issuer’s agent RA10 by at least 48 hours before the time of the meeting or any adjourned meeting. For this purpose, the time of receipt will
be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent
is able to retrieve the message. After this time any change of instructions to a proxy appointed through CREST should be communicated to the
proxy by other means. CREST Personal Members or other CREST sponsored members, and those CREST Members who have appointed voting
service provider(s) should contact their CREST sponsor or voting service provider(s) for assistance with appointing proxies via CREST. For further
information on CREST procedures, limitations and system timings please refer to the CREST Manual. We may treat as invalid a proxy appointment
sent by Crest in the circumstances set out in Regulations 35(5) (a) of the Uncertificated Securities Regulations 2001. In any case your proxy form
must be received by the Company’s registrars no later than at least 48 hours before the time of the meeting or any adjourned meeting. Page 58 ANGLE plc Annual Report & Accounts 2009
General Information for shareholders in respect of the
Annual General meeting
Time of the meeting
The doors will open at 1:50 pm and the AGM will start promptly at 2:00 pm on 10 September 2009.
The venue
The meeting will be held at 3 Frederick Sanger Road, The Surrey Research Park, Guildford, Surrey, GU2 7YD.
Directions
Directions to the venue can be found at www.surrey-research-park.com/directions.html or from any website mapping service such as
www.multimap.com or www.streetmap.co.uk.
Shareholders’ enquiries
Shareholders’ enquiries will be dealt with by a member of staff.
Questions at the meeting
The Chairman will take questions from shareholders during the meeting relating to the various items of business and resolutions contained in the
formal notice of meeting included herewith. If you wish to ask a question, please make your way to the question registration area, where there will be
somebody to assist you.
Travel details
There is easy access from the A3. Follow the signs to the Royal Surrey Hospital and The Surrey Research Park.
The nearest railway station is Guildford and the venue is located approximately five minutes taxi ride away from the railway station. Alternatively,
there is a 10 minute bus ride. The bus stop at The Surrey Research Park is approximately 2 minutes walking distance away from the venue.
Refreshments
Coffee, tea and biscuits will be available before the meeting.
Toilet facilities
These will be available at the venue.
Mobile phones
Please ensure mobile phones are switched off for the duration of the meeting.
Smoking
Smoking will not be permitted anywhere in the venue or during the meeting.
Disabled Persons
Arrangements have been made for disabled shareholders. Please follow the signs to the separate areas for disabled car parking. If you have a
companion to assist you, they will be admitted to the meeting. Guide dogs are also permitted. There are lift facilities available. Relating to the Annual General Meeting (“the Meeting”) of ANGLE plc (“the Company”) to be held at 2:00pm on Thursday 10 September 2009 at
3 Frederick Sanger Road, The Surrey Research Park, Guildford GU2 7YD.
I/We (insert name)
of (address)
being (a) holder(s) of (number) ordinary shares of 10p each in the Company hereby appoint the Chairman of the meeting or
(see note 6)
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at 2:00pm on Thursday 10 September
2009 and at any adjournment thereof.
My/Our proxy is to vote on the resolutions as follows:
ORDINARY RESOLUTIONS For Against Withheld
1. To receive the audited financial statements of the Company for the year ended 30 April 2009
and to receive the directors’ report and the auditor's report thereon.
2. To re-appoint Baker Tilly as auditors of the Company and to authorise the directors
to fix the remuneration of the auditors.
3. To authorise the directors to exercise all the powers of the Company to allot
relevant securities (within the meaning of section 80 of Companies Act 1985) up to an
aggregate nominal amount of £1,298,606.
SPECIAL RESOLUTIONS
4. To disapply statutory pre-emption rights.
5. To authorise the Company to purchase its own shares.
In the absence of instructions, the proxy is authorised to vote (or abstain from voting) at his or her discretion on the specified resolutions. The proxy is
also authorised to vote (or abstain from voting) on any other business which may properly come before the meeting.
Date Signature
Please mark this box if you are appointing more than one proxy (Note 5 )
NOTES
1. Please indicate how you wish your proxy to vote on the resolution by inserting “X” in the appropriate space.
2. The “Withheld” option is to enable you to abstain on any particular resolution. Such a vote is not a vote in law and will not be counted in the votes
'for' or 'against' a resolution.
3. In the case of a corporation, the proxy must be under its common seal (if any) or the hand of its duly authorised agent or officer. In the case of
an individual, the proxy must be signed by the appointor or his agent, duly authorised in writing.
4. This proxy, together with any authority (or a notarially certified copy of such authority) under which it is signed, should reach the Company's
registrars, Capita Registrars, 34 Beckenham Road, Beckenham, Kent BR3 4TU no less than 48 hours before the time for the holding of the Meeting
or adjourned Meeting.
5. You may appoint one or more proxies of your choice to attend, vote and speak at the meeting and any adjournment thereof, provided each
proxy is appointed to exercise rights in respect of different shares. To appoint more than one proxy (an) additional proxy form(s) may be obtained
by contacting the registrars or you may photocopy this page indicating on each copy the number of shares in respect of which the proxy is
appointed. All forms must be signed and should be returned to Capita Registrars in the same envelope.
6. If you wish to appoint a proxy other than the Chairman of the meeting, delete the words “the Chairman of the meeting or” and insert the name
and address of your proxy in the space provided. Please initial the amendment. If you wish your proxy to make comments on your behalf you will
need to appoint someone other than the Chairman and give them relevant instructions directly. A proxy, who need not be a member of the
Company, must attend the meeting in person to represent you.
7. In the case of joint holders, the signature of only one of the joint holders is required but, if more than one joint holder votes at the meeting,
the vote of the first named on the register of members will be accepted to the exclusion of the other joint holders.
8. Shares held in uncertificated form (i.e. in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures
set out in the CREST manual.
Form of proxy
 CAPITA REGISTRARS (PROXIES)
PO BOX 25
THE REGISTRY
34 BECKENHAM ROAD
BECKENHAM
KENT BR3 4BR
First fold
Third fold
and tuck in flap opposite
Second fold
BUSINESS REPLY SERVICE
Licence No. MB122
1 1 ANGLE plc Annual Report & Accounts 2009 Page 61
Directors Garth R Selvey, Chairman
ANR
Andrew D W Newland, Chief Executive
Ian F Griffiths, Finance Director 
David W Quysner CBE, Non-executive Director
ANR
A
– Audit Committee
N
– Nomination Committee
R
– Remuneration Committee
Secretary Ian F Griffiths
Company number 4985171
Registered office & 3 Frederick Sanger Road
Business address The Surrey Research Park
Guildford
Surrey GU2 7YD
+44 (0)1483 685830
www.ANGLEplc.com
Auditors Baker Tilly UK Audit LLP
The Clock House
140 London Road
Guildford
Surrey GU1 1UW
Nominated Advisor Collins Stewart Limited
and Broker 88 Wood Street
London EC2V 7QR
Registrars CRG Capita
34 Beckenham Road
Beckenham
Kent BR3 4TU
Bankers National Westminster Bank Bank of America
PO Box 1 300 East Main Street
2nd floor, G3 Charlottesville
2 Cathedral Hill Virginia VA 22902
Guildford
Surrey GU1 3ZR
Solicitors Pinsent Masons LLP Holland & Knight
CityPoint 1600 Tysons Boulevard
One Ropemaker Street Suite 700, Mclean
London EC2Y 9AH Virginia VA 22102-4867
Directors and Advisors
Design and production
www.ckdcorp.co.uk
Telephone 020 7566 0190
Photography
Ben Rice
Dominique Labrosse
Print
www.spinoffset.co.uk
Printed on revive 50:50.this paper comes 
from sustainable forests and is fully 
recyclable and biodegradeable. Made 
from 50% recovered waste and 50% virgin 
fibre. The manufacturers of the paper and 
the printer are accredited with ISO 14001
environmental management system. ANGLE plc
3 Frederick Sanger Road
The Surrey Research Park
Guildford, Surrey GU2 7YD
T +44 (0)1483 685830
F +44 (0)1483 685836
E enquiries@angleplc.com
www.ANGLEplc.com
ANGLE plc Annual Report & Accounts 2009