Phytopharm plc
Annual Report and Accounts 2012
for a healthier future
Phytopharm Who we are
Developing novel treatments targeting 
diseases with high levels of unmet need.
Phytopharm (LSE:PYM) is a development-stage 
pharmaceutical company. Our lead series of 
compounds has the potential to be a new class 
of therapy for neurodegenerative diseases.
Our lead programme is in clinical trials for Parkinson’s disease, 
a $3 billion market with a significant unmet need.
Our CONFIDENT-PD clinical 
study is expected to generate 
clinical data in February 2013, 
which, if positive, will allow us to 
maximise shareholder value by 
seeking late-stage development 
and/or commercial partners 
as appropriate.
We operate with a low 
headcount and minimal 
infrastructure. This lean 
operational structure 
confers substantial cost 
and technical benefits.
We have cash resources to 
fund the Group’s ongoing 
activities until at least the 
end of Q1 2014.
Read more about our strategy on page 2
Read more about our product development 
on pages 6 to 10 Annual Report and Accounts 2012 Phytopharm plc
Business highlights
Business Overview
01
Operational
 Recruitment into CONFIDENT-PD Phase II clinical trial of 
Cogane™ in untreated patients with early-stage Parkinson’s 
disease was completed in April 2012 and the last patient 
completed the trial in early December 2012. Results from 
the trial remain on track to be available in February 2013.
 Cogane™ demonstrated efficacy in the “gold standard” 
preclinical model of amyotrophic lateral sclerosis (“ALS”), 
the most common form of motor neurone disease. Positive 
data have now been obtained in four models of ALS, providing 
a strong rationale for Cogane™ as a potential treatment for 
this devastating condition.
 Preparation for a Phase I clinical trial to evaluate Cogane™ solid 
dose oral formulations for up to 28 days has been initiated.
 A study of Myogane™ in a preclinical model of glaucoma 
was inconclusive due to an unexpectedly low neuronal cell 
loss in the control group which prevented evaluation of a 
neuroprotective effect of Myogane™.
Corporate
 Dr Ian Tulloch was appointed as a non-executive Board 
director in February 2012. As planned, Mr Sandy Morrison 
stepped down from the Board following the Company’s 
Annual General Meeting in March 2012.
Financial
 Loss after tax of £7.77 million in line with expectations reflects 
ongoing focus on the development of our pharmaceutical 
programmes (2011: £7.66 million).
 Cash and money market investments of £8.89 million 
(2011: £17.57 million). Based on our current expectations 
Phytopharm is financed until at least the end of Q1 2014.
Contents
Business Overview
IFC Who we are
01 Business highlights
02 Strategy
Business Review
04 Chairman’s review
05 Chief Executive’s review
06 Business review
11 Financial review
Corporate Governance
14  Principal risks and uncertainties
16 Board of Directors
17 Directors’ report
22 Remuneration report
28 Corporate governance report
36  Statement of 
Directors’ responsibilities
Financial Statements
37 Independent auditors’ report
39  Consolidated statement 
of comprehensive income
40  Consolidated and Company 
balance sheets
41  Consolidated statement 
of changes in equity
42  Company statement  
of changes in equity
43  Consolidated and Company 
cash flow statements
44 Notes to the financial statements
Shareholder information can be found 
on pages 63, 64 and IBC.
visit us online at 
www.phytopharm.com Annual Report and Accounts 2012 Phytopharm plc
02
Clinicians
Medical leaders
Charitable organisations
Manufacturing
Laboratory work
Company strategy
Management
Clinical work
Business Overview
Drug candidate
Strategy
Targeting diseases with high levels 
of unmet need.
Our commercially focused development programmes have the potential to produce 
significant treatment advances in our target areas of neurodegeneration and inflammatory 
disease. Our products are single chemical entities with novel mechanisms of action protected 
by strong patent families. Our pipeline has been sourced from our own research activities 
and from licensing activities, particularly from leading research institutions in China with 
which the Company has long-standing relationships.
Phytopharm is a development-stage pharmaceutical company developing 
novel treatments targeting diseases with high levels of unmet need.
Our business model
Phytopharm operates as a virtual company 
ensuring the majority of our financial resources 
are focused on our pharmaceutical pipeline. 
We utilise a network of external scientific and 
clinical experts to help guide our development 
programmes with our experienced pharmaceutical 
managers overseeing operations.
In-house
Out-sourced
Collaborations
Read more about our business in the 
Chief Executive’s Review on page 5 Annual Report and Accounts 2012 Phytopharm plc
03
Business Overview
Cogane
TM
 and Myogane
TM
 are orally bioavailable neurotrophic 
factor modulators that readily cross the blood-brain barrier. 
Neurotrophic factors are naturally occurring proteins in the 
brain that have been shown to be effective in re-growing 
damaged nerves.
What we’re working on
Many neurodegenerative diseases, including 
Parkinson’s disease, ALS, glaucoma and Alzheimer’s 
disease, occur as a result of neurodegenerative 
processes that exhibit many similarities suggesting 
that these diseases are related on a sub-cellular level. 
Because of the similarities in neurodegeneration 
across this range of diseases, there is hope that 
therapeutic advances, such as Phytopharm’s lead 
pharmaceutical programmes Cogane™ and 
Myogane™, could be beneficial in more than 
one of these diseases.
Dopaminergic neurones 
Retinal ganglion cells 
Spinal motor neurones
2
2
3
3
1
1 Annual Report and Accounts 2012 Phytopharm plc Business Review
04
“ Phytopharm is very much on track to deliver on the 
objective outlined as part of the November 2009 
equity financing.”
Chairman’s review
Mr Alistair Taylor Non-executive Chairman
During the year the Group once again made 
good progress against its stated objectives. 
I am pleased to be able to report that Phytopharm 
is very much on track to deliver on the objectives 
outlined as part of the November 2009 equity 
financing: principally, to finance the development 
of lead product, Cogane™, through Phase I and II
clinical studies in Parkinson’s disease; and to 
retain a one year cash runway at the conclusion 
of these studies. Having completed patient 
recruitment into the CONFIDENT-PD clinical trial 
in early-stage Parkinson’s disease patients earlier 
this year, we are looking forward to receiving the 
results from the trial in February 2013. Once 
received, the Board will work with the Group’s 
management team to determine the best way 
forward to maximise value for shareholders.
The past year saw some changes to our 
Board. After giving over five years of valuable 
service to the Group Sandy Morrison stepped 
down as a non-executive director in March 
this year. The Board would like to acknowledge 
the valuable contribution Sandy made to the 
Group, particularly in stepping in as interim 
Chief Executive Officer during a period of 
transition in 2009/2010. Sandy has been 
succeeded on the Board by Dr Ian Tulloch. 
Ian has recently retired from his position 
as Global Head of Marketing, Neuroscience 
and Ophthalmology at Novartis and his 
experience will be of great value as we 
develop the commercial strategy for our 
pharmaceutical pipeline.
The coming year will be of great importance 
to Phytopharm and we will continue to keep 
you apprised of our progress and plans. Until 
then I would like to thank the management 
team and staff for the excellent job they have 
performed in the past year and shareholders 
for their continued support.
Mr A Taylor
Non-executive Chairman Annual Report and Accounts 2012 Phytopharm plc
05
Business Review
Chief Executive’s review
“ Over the last year the Group has continued to focus on 
the development of its pharmaceutical programmes whilst 
maintaining tight financial control. Operationally, good 
progress has been made in the development of our lead 
programme Cogane™.”
Mr Tim Sharpington Chief Executive Officer
Over the last year the Group has continued to 
focus on the development of its pharmaceutical 
programmes whilst maintaining tight financial 
control. Operationally, good progress has 
been made in the development of our lead 
programme Cogane™ in Parkinson’s disease 
and amyotrophic lateral sclerosis (“ALS”) 
and on the development of our preclinical 
anti-inflammatory project, P61, though our 
development of Myogane™ in glaucoma did 
suffer a setback with an inconclusive study.
Phytopharm continues to operate a cost-effective, 
virtual model, with just 13 staff, enabling us to 
focus our expenditure on our research and 
development programmes. Our experienced 
staff are complemented by a network of 
leading scientists and clinicians who provide 
guidance on the design and implementation 
of our projects.
Cogane™ and Myogane™ are first-in-class 
development stage medicines with the 
potential to be important new treatments for 
a wide range of neurodegenerative diseases. 
These diseases, including Parkinson’s disease, 
ALS and glaucoma, are characterised by ongoing 
neuronal degeneration with devastating 
consequences for those affected. There is a 
large medical and commercial unmet need 
for new treatments which can slow or halt 
the progression of these diseases. 
Cogane™ and Myogane™ have been shown to be 
both neuroprotective (protecting neurones from 
degeneration) and neurorestorative (restoring 
functionality to damaged and dormant neurones) 
in a wide range of industry-standard preclinical 
models conducted in independent laboratories 
around the world. The next crucial step is to 
determine whether this preclinical promise 
translates into real clinical benefit to patients and it 
is this question which our ongoing clinical trial in 
Parkinson’s disease has been designed to answer.
Leading movement disorder centres in North 
America and Europe have treated more than 
400 patients with either Cogane™ or placebo 
for 28 weeks and are assessing signs of efficacy, 
safety and tolerability. Patients will have 
completed the study in December 2012 and 
we will receive data in February 2013. The results 
of this study represent a major milestone for 
Phytopharm and are eagerly awaited.
Whilst conducting the study we have also been 
planning for next steps. If successful, Cogane™ 
will need to undergo Phase III registration 
studies in Parkinson’s disease before receiving 
marketing authorisation. Detailed plans for 
these next studies have been put in place. 
In addition, the Group has had very positive 
responses in initial discussions with larger 
pharmaceutical companies who represent 
potential licensing partners for Cogane™. 
The best way forward for Cogane™ in 
Parkinson’s disease will be determined 
once data are received.
Cogane™ has also demonstrated good 
potential in ALS, the most common form 
of motor neurone disease. ALS is a rapidly 
progressing, devastating condition with very 
limited treatment options. During the past 
year the preclinical programme for ALS has 
been completed. Positive data has been 
generated in four preclinical models of ALS, 
providing strong support for progressing into 
clinical trials. The latest of these studies, the 
results of which were announced earlier this 
year, was supported by a grant from the 
Motor Neurone Disease Association and we 
are grateful for their support. Cogane™ has 
been granted orphan drug designation in both 
the US and Europe which offers the potential 
for an expedited development programme 
and additional value from the programme.
As we approach key development milestones 
in the coming year, which will have a significant 
impact on the Group’s prospects, plans are being 
put in place to respond to results in a way which 
maximises value for our shareholders. Finally, 
I would like to thank our Board members and 
staff for their contribution during the year and 
our shareholders for their continued support.
Mr T Sharpington
Chief Executive Officer Annual Report and Accounts 2012 Phytopharm plc Business Review
06
Business review
“ Our lead series of compounds, the sapogenins (including 
Cogane™ and Myogane™), has the potential to be a new 
class of therapy for neurodegenerative diseases.”
Strategy
Phytopharm plc (“Phytopharm”) is a 
development-stage pharmaceutical Group 
developing novel treatments targeting 
diseases with high levels of unmet need. 
Our lead series of compounds, the sapogenins 
(including Cogane™ and Myogane™), has 
the potential to be a new class of therapy 
for neurodegenerative diseases including 
Parkinson’s disease, amyotrophic lateral 
sclerosis (“ALS”) and glaucoma.
Phytopharm operates as a virtual Group ensuring 
the majority of our financial resources are focused 
on our pharmaceutical pipeline. We utilise a 
network of external scientific and clinical experts 
to help guide our development programmes 
with our experienced pharmaceutical managers 
overseeing operations.
Our commercially focused development 
programmes have the potential to produce 
significant treatment advances in our target 
areas of neurodegeneration and inflammatory 
disease. Our products are single-chemical entities 
with novel mechanisms of action protected by 
strong patent families. Our pipeline has been 
sourced from our own research activities and 
from licensing activities, particularly from leading 
research institutions in China with which the 
Group has long-standing relationships.
Our objective is to develop products aimed 
at major markets with high unmet medical 
need to key value inflection points before 
seeking late-stage development and/or 
commercial partners as appropriate.
Overview
We continue to progress our strategy of 
focusing on our pharmaceutical programmes, 
specifically on the development of Cogane™ 
for Parkinson’s disease, and results from the 
CONFIDENT-PD clinical trial are expected 
in February 2013.
Programme 2012 Key highlights
Cogane™ Parkinson’s disease CONFIDENT-PD: April 2012 
– completion of recruitment
CONFIDENT-PD: Early December 2012 – last patient  
completed the trial
Preparation for a Phase I bioavailability clinical trial of new solid dose oral formulations initiated
ALS Positive data from preclinical evaluation supporting the role of Cogane™ in ALS
Myogane™ Glaucoma Inconclusive results in a preclinical model which prevented evaluation of a neuroprotective action 
P61 Inflammatory diseases Characterisation of lead compound ongoing Annual Report and Accounts 2012 Phytopharm plc Business Review
07
Parkinson’s disease
Parkinson’s disease is a movement disorder 
characterised by muscle rigidity, tremor and a 
slowing of physical movement (bradykinesia) and, 
in extreme cases, a loss of physical movement 
(akinesia). The primary symptoms are the result 
of altered signalling in an area of the brain, the 
striatum, responsible for the control of movement. 
This is caused by degeneration of dopaminergic 
neurones that project from the substantia nigra 
to the striatum, leading to insufficient formation 
and action of dopamine. Parkinson’s disease is 
therefore termed a neurodegenerative disease. 
The disease is slow in onset and the appearance 
of symptoms reflects the gradual loss of 
dopaminergic neurones.
Motor neurone disease/ALS 
ALS, also known as Lou Gehrig’s disease, is 
the most prevalent form of motor neurone 
disease which generally occurs in people between 
40 and 60 years of age. It is characterised by 
progressive loss of both lower (spinal cord and 
brain stem) and upper (cerebral cortex) motor 
neurones, which leads to severe muscle weakness 
and wasting, followed by paralysis and death, 
generally caused by respiratory failure with 
only 50% of patients surviving 18 months from 
diagnosis and only 20% surviving beyond five 
years from diagnosis
(7)
. There is an urgent need 
for the development of new approaches to 
treat this devastating condition.
(7) ALS-TDI 2012.
Indication Opportunity
Parkinson’s disease Second most common neurodegenerative disease
(1)
Estimated to affect more than 4 million people globally
(1)
Estimated to affect 8.3 to 9.3 million people by 2030
(2)
 across the world’s most populous countries
(a)
$3.0 billion market in 2011
(1)
Motor neurone disease/ALS Estimated to affect more than 400,000 people globally
(4)
Approximately 120,00 new cases diagnosed annually
(5)
Designated orphan disease
Estimated market $211 million in 2012
(6)
. Potential market size forecast of $2 billion
(4)
 for effective treatment
Glaucoma Currently the second leading cause of blindness worldwide
(6)
Estimated to affect 70 million people globally
(6)
Estimated market $3 billion in 2010
(6)
(Sources: (1) Business Insights 2010; (2) European Parkinson’s Disease Association 2012; (3) ASD Reports 2012; (4) ALS-TDI 2012; (5) International Alliances of ALS/MND Associations 2012; 
(6) Global Data 2011.)
(a) Bangladesh, Brazil, China, France, Germany, India, Indonesia, Italy, Japan, Nigeria, Russia, Spain, UK and USA.
Pharmaceutical programmes
Neurodegeneration
Neurodegeneration is the umbrella term for the progressive death or loss of structure and function 
of neurones. Many neurodegenerative diseases, e.g. Parkinson’s disease, ALS, glaucoma and Alzheimer’s 
disease, occur as a result of neurodegenerative processes that exhibit many similarities suggesting that 
these diseases are related on a sub-cellular level. Because of the similarities in neurodegeneration across 
this range of diseases, there is hope that therapeutic advances, such as Phytopharm’s lead pharmaceutical 
programmes Cogane™ and Myogane™, could be beneficial in more than one of these diseases.
Glaucoma
Current pharmacological treatments for 
glaucoma are predominantly focused on 
reducing the elevated intra ocular pressure 
(“IOP”) in the eye, which is often associated 
with glaucoma. However, a significant number 
of patients with glaucoma do not exhibit raised 
IOP and, in addition, a significant number of 
patients whose IOP is successfully reduced 
still experience ongoing neurodegeneration 
resulting in deterioration of sight. It is therefore 
believed that there is a major unmet need 
and a commercial opportunity for products 
which could successfully treat the underlying 
neurodegenerative process in glaucoma. Annual Report and Accounts 2012 Phytopharm plc Business Review
08
Cogane™ Myogane™
Orally bioavailable neurotrophic factor modulators that readily cross the blood-brain barrier
Demonstrated neuroprotective effects in a range of preclinical models
Induce and modulate the production of neurotrophic factors
Completed long-term toxicology studies
Formulated as once daily, orally administered therapies with good bioavailability and safety profiles
Currently being evaluated in a Phase II trial of untreated patients with 
early-stage Parkinson’s disease (CONFIDENT-PD)
Evaluated in a preclinical model of glaucoma. Data from this study will 
be further evaluated
Evaluated for safety and tolerability in patients with Alzheimer’s disease
Positive results in preclinical models of ALS which provides strong 
support for the utility of Cogane™ in the treatment of this condition
Mode of action
Cogane™ and Myogane™ are therapies 
which are administered orally. Once absorbed 
by the body they readily cross the blood-brain 
barrier and concentrate in the central nervous 
system (“CNS”). Once delivered to the brain 
and CNS it is hypothesised that they exert 
their beneficial actions by modulating the 
production of neurotrophic factors. Glial 
cell-derived neurotrophic factor (“GDNF”) and 
brain derived neurotrophic factor (“BDNF”) are 
naturally occurring proteins in the brain that 
have been shown to be effective in re-growing 
damaged nerves. As neurotrophic factors are 
proteins, they cannot themselves be given 
orally (in tablet or liquid form) because they 
are degraded in the stomach and intestine and 
also do not readily cross the blood-brain barrier.
Direct infusion of GDNF into the area of the 
brain involved in Parkinson’s disease has shown 
evidence of being clinically effective in restoring 
the control of movement but requires highly 
complex and difficult surgical procedures.
Cogane™ therefore has the potential to 
overcome many of the difficulties associated 
with GDNF administration, whilst retaining its 
therapeutic promise. In preclinical models, 
Cogane™ modulated the release of GDNF 
and BDNF in the brain and increased neurite 
outgrowth. When administered orally in several 
different preclinical models of Parkinson’s 
disease, Cogane™ modulated neurotrophic 
factor production and reversed the loss of 
dopaminergic neurones in the substantia 
nigra, the area of the brain most affected 
in Parkinson’s disease. 
The sapogenins
Cogane™ and Myogane™ 
are structurally related, 
small molecule, chemical 
entities and members 
of the sapogenin class 
of compounds.
Business review (continued)
“ Recruitment into the CONFIDENT-PD clinical trial 
completed in April 2012 and the last patient completed 
the trial in early December 2012. It is anticipated that 
data from the trial will be available in February 2013.” Annual Report and Accounts 2012 Phytopharm plc Business Review
09
Cogane™ in Parkinson’s disease  
– progress to date
The preclinical neuroprotective profile of 
Cogane™ suggests that it will have benefit 
on both motor and non-motor symptoms 
of Parkinson’s disease. In addition its effect 
on restoring damaged neurones to a 
functioning state implies that it might result 
in a delay in the progression of disease in 
recently diagnosed patients.
Cogane™ is currently being evaluated in a 
multi-national Phase II, randomised, double 
blind, placebo controlled, dose ranging trial 
(CONFIDENT-PD). The trial is comparing the 
safety, tolerability and efficacy of three doses 
of Cogane™ and placebo when administered 
for 28 weeks to untreated patients with 
early-stage Parkinson’s disease. The trial will 
assess the efficacy of Cogane™ in the treatment 
of both motor and non-motor symptoms of 
Parkinson’s disease. Recruitment into the trial 
completed in April 2012 and the last patient 
completed the trial in December 2012. It is 
anticipated that data from the trial will be 
available in February 2013.
Data from preclinical models also indicates 
that in addition to its effectiveness as a 
monotherapy, Cogane™ administered in 
conjunction with L-DOPA, a commonly 
used symptomatic treatment of Parkinson’s 
disease, shows additional benefit over L-DOPA 
alone. Other data suggests that Cogane™ 
co-administration reduces the side effects 
associated with L-DOPA. If these effects of 
improved efficacy and reduced side effects 
of L-DOPA by co-administration of Cogane™ 
are also observed in patients, this will have 
significant benefit in the management of 
patients with more severe, later stage disease.
Cogane™ is administered in a liquid 
formulation in the current CONFIDENT-PD 
clinical trial. In parallel to this trial the 
Group has been developing solid dose oral 
formulations which it believes will be a more 
commercially attractive proposition to take 
forward into Phase III registration trials and 
onto the market. Preparation for a Phase I 
bioavailability clinical trial has been initiated 
to assess the bioavailability of these solid dose 
oral formulations of Cogane™ in healthy volunteers 
for a period of up to 28 days. The results of the 
trial are expected in early 2013.
Cogane™ in motor neurone 
disease/ALS – progress to date
A study of Cogane™ in the genetic “gold 
standard” preclinical model of ALS was 
completed during the period. The model 
has a mutation in the SOD1 gene (SOD1
G93A
); 
mutation of the SOD1 gene is a known cause 
of ALS in humans. In this study, Cogane™ was 
administered orally for 50 days, commencing 
after ALS-type symptoms had manifested. 
This is therefore considered to be a model 
of severe, late-stage ALS. The main findings 
from the study are:
 administration of Cogane™ resulted in a 
30–50% improvement in muscle strength 
in one muscle type compared to both the 
untreated control group and a group treated 
with riluzole (the only currently approved 
treatment of ALS);
 treatment with Cogane™ also resulted in 
an increase in the number of motor units 
(a measure of functional motor neurones) 
compared with both the untreated and 
riluzole treated groups;
 treatment effects were less clear in a second 
muscle type which was more severely damaged 
in the model, though the group treated with 
Cogane™ again showed an improvement in 
strength compared to the riluzole treated 
group; and
 histopathology data shows that administration 
of Cogane™ reduced the loss of spinal cord 
motor neurones by 39% compared with the 
number damaged in the untreated group 
(a statistically significant difference; p=0.008). 
Treatment with riluzole resulted in a 29% 
but not statistically significant reduction. 
Additionally, microscopic examination 
showed that Cogane™ protected muscle 
composition, supporting the results on 
muscle strength.
This study was performed by Professor 
Linda Greensmith’s group at University College 
London with the financial support of the Motor 
Neurone Disease Association, a UK-based 
charitable organisation which provided a 
grant to cover the costs of the study.
These results support those reported previously 
by Phytopharm in which Cogane™ showed 
benefit in an environmental (toxin-induced) 
model of ALS, in a progressive motor neuropathy 
model and in a nerve crush model.  Annual Report and Accounts 2012 Phytopharm plc Business Review
10
Cogane™ in motor neurone 
disease/ALS – progress to date 
(continued)
Collectively the results from these four 
different models of motor neurone damage 
provide strong support for the utility of 
Cogane™ in the treatment of this condition.
As Cogane™ is already in clinical trials for 
Parkinson’s disease, rapid progression into 
efficacy indicating trials would be possible, 
subject to funding. 
Cogane™ has been granted Orphan Drug 
status by both the European Commission 
and by the US Food and Drug Administration 
for development in ALS and this will allow 
significant access to the regulatory authorities 
for advice and expedited clinical progression 
as well as providing financial advantages.
Myogane™ in glaucoma 
 – progress to date
Myogane™ has demonstrated neuroprotective 
effects in a range of preclinical models of 
neurodegenerative diseases. Specifically, 
Myogane™ has been shown to modulate 
the production of neurotrophic factors in a 
number of cell types and to have beneficial 
neuroprotective and neurorestorative effects 
on retinal ganglion cells, the cells which 
degenerate in glaucoma. 
The Group has completed a study with 
Myogane™ in an animal model of glaucoma 
that was inconclusive. The study did not yield 
a valid result because of an unexpectedly 
low level of neuronal cell death in the control 
group which prevented evaluation of the 
neuroprotective effect of Myogane™.
The study was designed to evaluate the 
neuroprotective effects of treatment with 
Myogane™ in an established model of glaucoma. 
In this model intraocular pressure is elevated in 
order to induce neuronal cell loss in the retina. 
The endpoint was a comparative measurement 
of neuronal cell loss. However, the extent of 
induced neuronal cell loss was much less than 
anticipated (from literature precedent) in the 
control group. While there were some indications 
of a neuroprotective effect following Myogane™ 
treatment, it was not possible to draw 
definitive conclusions because of the limited 
neurodegeneration in the control group. 
Pharmacokinetic evaluation indicated that 
levels of Myogane™ in the plasma were broadly 
in line with that expected from previous studies 
and that Myogane™ was present in the retina. 
This study was performed with the financial 
support of the UK Technology Strategy Board. 
Further tests will be conducted in glaucoma 
when resources permit.
P61 programme – progress to date
The P61 programme was established to 
investigate the known pharmacological 
properties of curcumin and gingerol. P61 
is a series of novel new chemical entities 
(“NCEs”) which exhibit anti-inflammatory, 
anti-remodelling, anti-spasmodic and TRPV1 
modulating activities. This range of activity 
within single molecules could provide attractive 
therapeutic options for a number of inflammatory 
diseases. A lead compound has been identified 
and is being characterised to better understand 
its pharmaceutical potential.
Legacy products 
Hoodia
The Council for Scientific and Industrial Research, 
South Africa, is continuing its evaluation of 
Hoodia gordonii as an appetite suppressant.
Phytopica®
During the year we signed a global licence 
agreement for Phytopica®, a natural product 
for canine skin health, with a Chinese company, 
Hebei Meiwei Chinese Medicinal Herbs Co. 
Limited (“Hebei Meiwei”). We have retained 
a commercial interest in the project and will 
receive a proportion of any future commercial 
milestones and royalties from the project 
following a period of further development 
by Hebei Meiwei.
Business review (continued) Annual Report and Accounts 2012 Phytopharm plc Business Review
11
Financial review
“ We operate with a low headcount and minimal 
infrastructure. This lean operational structure 
confers substantial cost and technical benefits.”
The financial performance for the year 
ended 30 September 2012 reflects the 
Group’s ongoing pharmaceutical development 
activities, particularly the progress of our 
pharmaceutical development programmes 
in neurodegenerative diseases.
During the year we have continued to progress 
our pharmaceutical programmes as planned 
whilst maintaining our lean operating structure. 
Alongside the development work on Cogane™ in 
Parkinson’s disease and ALS, we have continued 
discussions with potential partners. We have 
also benefited from changes in the research 
and development corporation tax credit system 
which were confirmed during the year. Based on 
our current expectations, we have sufficient cash 
resources until at least the end of Q1 2014.
Income statement
Revenue
Revenue from continuing operations for the 
year of £0.02 million (2011: £0.07 million) was 
principally generated from activities on the 
Group’s legacy programmes.
Other income of £0.08 million (2011: £nil) has 
been received in respect of a grant towards 
the preclinical development programme for 
Myogane™ in glaucoma.
Research and development expenses
Our research and development expenses are 
inline with our expectations at £8.29 million, 
an increase from £7.46 million in 2011. The 
increase in our research and development 
expenses over the last two financial years 
reflects the investment in our development 
programmes, in particular the ongoing 
CONFIDENT-PD clinical study.
Administrative expenses
Our virtual business model allows us to operate 
with a low cost base which is reflected in our 
administrative expenses of £1.10 million 
(2011: £1.15 million).
Finance income
Finance income decreased to £0.21 million 
for the year (2011: £0.38 million) and represents 
interest received and receivable from our cash 
balances. The reduction reflects the utilisation 
of cash resources on our research and 
development programmes.
Taxation
During the year a number of changes to the 
research and development corporation tax credit 
system were confirmed. These changes included 
the removal of the cap on the level of refund 
payable at the level of PAYE and NIC paid in each 
year. This change has resulted in a substantial 
increase in the corporation tax refund for the 
year to £1.32 million (2011: £0.51 million). 
This refund is expected to be received in 2013.
Cash resources to fund 
the Group’s ongoing 
activities until at least 
the end of Q1 2014. Annual Report and Accounts 2012 Phytopharm plc Business Review
12
Cash flow
We continue to utilise our cash to fund the 
development of our pharmaceutical programmes 
and the net cash used in operating activities was 
£9.00 million (2011: £6.42 million). We expect 
to continue utilising our cash resources to fund 
our ongoing programmes as planned.
We expect our cash outflow to continue as we 
continue the progression of our pharmaceutical 
programmes, primarily Cogane™ in the 
CONFIDENT-PD clinical trial which we expect 
will provide us with data in February 2013.
Outlook
Our CONFIDENT-PD clinical study is expected to 
generate clinical data in February 2013, which, 
if positive, will allow us to maximise shareholder 
value by seeking late-stage development and/or 
commercial partners as appropriate. We are also 
evaluating opportunities following the successful 
completion of our investigations into the effects of 
Cogane™ in ALS which may, funding dependent, 
allow us to investigate further efficacy-indicating 
clinical trials in this indication. We will continue 
to evaluate funding opportunities as they arise. 
We also expect to complete the current phase 
of the P61 programme.
In line with our virtual operational structure, 
we will continue to outsource the majority of 
our operations to specialist external organisations 
enabling us to operate with a low headcount 
and minimal infrastructure. This lean operational 
structure confers substantial cost and technical 
benefits. Efficiency and cost control continue 
to be a key focus. Our lean operational structure 
continues to provide substantial cost and 
technical benefits as the nature and range 
Our CONFIDENT-PD 
clinical study is expected 
to generate clinical data 
in February 2013, which, 
if positive, will allow us 
to maximise shareholder 
value by seeking late-stage 
development and/or 
commercial partners 
as appropriate.
Financial review (continued)
Balance sheet
Non-current assets
Non-current assets representing property, 
plant and equipment amounted to £0.06 million 
at 30 September 2012 (2011: £0.08 million).
Current assets
Current assets at 30 September 2012 amounted 
to £10.53 million compared to £18.51 million at 
the same time last year. The movement during 
the year principally comprised the increased 
research and development tax credit receivable 
for the year of £1.32 million (2011: £0.48 million) 
offset by a reduction in our cash balances 
representing the investment in our 
pharmaceutical programmes. 
Cash balances of £8.89 million (201 1 : £17 .57 million) 
comprise money market investments and cash 
and cash equivalents. Money market investments 
represent fixed-rate, short-term deposits placed 
with a range of financial institutions at fixed 
terms with a maturity date of more than three 
months. Cash and cash equivalents are invested 
with a similar range of financial institutions for 
a period of 90 days or less.
Current liabilities
Our current liabilities principally comprise 
trade and other payables of £2.22 million 
at 30 September 2012, a slight decrease 
from £2.63 million last year.
Equity
Share capital and share premium amounted 
to £3.47 million and £77.29 million respectively 
at the year end and have increased slightly during 
the year due to the exercise of share options 
under which the Group issued 99,777 new 
ordinary shares for cash. Annual Report and Accounts 2012 Phytopharm plc Business Review
13
of our activities evolve in tandem with our 
programmes’ progress through the various 
stages of development.
At 30 September 2012, the Group had cash 
resources (being cash and cash equivalents 
and money market investments) of £8,887,220 
(2011: £17,574,476). These cash resources 
are sufficient for the Group to complete the 
CONFIDENT-PD trial and any other ongoing 
research and development studies and to fund, 
entirely from its own existing resources, the 
Group’s ongoing activities until at least the end 
of Q1 2014. Thus, after making enquiries and 
taking into account management’s estimate 
of future expenditure, the directors have a 
reasonable expectation that the Group will 
have adequate financial resources to continue 
in operation for the foreseeable future.
Forward-looking statements
Certain information included in these 
statements is forward-looking and involves 
risk and uncertainties that could cause results 
to differ materially from those expressed or 
implied by the forward-looking statements.
Forward-looking statements include, without 
limitation, projections relating to results of 
operations and financial conditions, market 
estimates, the Group’s plans and objectives 
for future operations, including future revenues, 
financial plans and expected expenditures and 
divestments. All forward-looking statements 
in this report are based on information known 
to the Group on the date of this release. 
The Group undertakes no obligation to publicly 
update or revise any forward-looking statement, 
whether as a result of new information, future 
events or otherwise.
It is not reasonably possible to itemise all of the 
many factors and specific events that could cause 
the Group’s forward-looking statements to be 
incorrect or that could otherwise have a material 
adverse effect on the future operations or results 
of the Group.
We are also evaluating 
opportunities following 
the successful completion 
of our investigations into 
the effects of Cogane™ 
in ALS which may, funding 
dependent, allow us to 
investigate further  
efficacy-indicating clinical 
trials in this indication. Principal risks and uncertainties
14
The nature of pharmaceutical development is such that there are significant inherent 
risks due to the long and complex development process.
Below are those principal risks and uncertainties that the Board considers could have a material impact on 
the Group’s operational results, financial condition and prospects. These risks are not in any particular order 
of priority and there may be other risks that are either currently unknown or not considered material which 
could have a similar impact on the Group’s business in the future.
The Board reviews each area of the business at least annually to identify material risks and the controls in place 
to manage these risks where possible. This comprehensive review is undertaken as part of the review of internal 
controls as set out on pages 32 and 33.
Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
The Group’s success depends on acceptance of the Group’s products 
by the markets, including physicians and third party payers, and 
consequently the Group’s progress may be adversely affected if it is 
unable to achieve market acceptance of its products. Factors which 
may affect the rate and level of market acceptance of any of the Group’s 
products include the existence or entry on to the market of superior 
competing products or therapies and the price of the Group’s products 
compared to competing products and overall cost effectiveness of the 
product. The Group works closely with its legal advisors and obtains, 
where necessary, opinions on the intellectual property landscape 
relevant to the Group’s product development programmes.
Competition risk
Successful commercialisation of the Group’s products is likely to 
depend on successful progress through clinical studies and registration. 
Development of product candidates involves a lengthy and complex 
process and products may not meet the necessary requirements in 
terms of toxicity, efficacy or safety, or the relevant regulators may not 
agree with the conclusions of the Group’s research and may require 
further testing or withhold approval altogether. The Group manages its 
clinical and regulatory risk by working closely with its expert regulatory 
advisors and, where appropriate, seeking advice from regulatory 
authorities on the design of key development plans for its preclinical 
and clinical programmes.
Clinical and regulatory risk
The Group relies on third party organisations to conduct its clinical trials 
and to manufacture its products. If the relationship with, or performance of, 
any of these partners is adversely affected, the Group’s results or operations 
may be adversely impacted. The Group also may derive revenue or financial 
support from collaborators and from partnering with certain charitable 
organisations. If these relationships are adversely affected, or if the products 
involved fail to continue to make satisfactory progress, the Group’s 
results or operations may be adversely impacted. Where appropriate 
the Group will assess third party organisations to establish that such 
organisations have the required capability, expertise and financial 
stability to perform relevant services for the Group.
Counterparty risk
In common with other research and development stage businesses, 
Phytopharm’s business risks relate principally to the success of its 
development programmes and to the need to fund its operations 
through these. The success of the Group’s programmes depends upon 
the quality of the design and the implementation of each programme. 
The Group utilises a range of external scientific and clinical experts 
to help guide its development programmes. 
The progress of the development programmes therefore represents 
the best indicator of the Group’s performance. A full review of the 
programmes is given in the Business Review on pages 6 to 10.
Industry risk 15
Phytopharm plc Annual Report and Accounts 2012 Corporate Governance
The Group has a history of operating losses which are anticipated to 
continue until the Group is able to generate sufficient revenues from 
its development programmes. However, the Group may need to seek 
further capital through equity or debt financings in the future and if this 
is not successful, the financial condition of the Group may be adversely 
affected. As at 30 September 2012, the Group had cash resources 
of £8,887,220 which the Group considers sufficient to finance its 
operational activities until at least the end of Q1 2014.
Financial risk
Cash flow
The drug development process is inherently risky and is conducted over 
several years and consequently is extremely costly. Many drug candidates 
fail in development due to the clinical and regulatory risks, and even in 
those circumstances where drugs are approved, sales levels can be 
disappointing due to competition, healthcare regulation and/or intellectual 
property challenges. As a result the returns achieved may be insufficient 
to cover the costs incurred. The Group looks to mitigate the development 
and commercial risk of its development programmes’ by partnering drug 
candidates for late-stage development and commercialisation. By partnering 
in this way, part of the programmes’ value can be realised whilst retaining 
a potential upside through future milestones and royalty payments from 
commercial sales.
Return on investment
The Group records its transactions and prepares its financial statements 
in sterling. Where possible the Group maintains natural hedges by 
matching foreign currency income with foreign currency expenditure. 
The Group incurs expenditure in foreign currency relating principally 
to clinical trials which may exceed any revenues in foreign currencies. 
To the extent that income and expenditure in foreign currencies are 
not matched, fluctuations in exchange rates between sterling and 
foreign currencies, principally US dollar and euro, may result in realised 
or unrealised foreign exchange gains and losses. Where there is certainty 
of the amount and timing of expenditure of foreign currencies, the 
Group may purchase financial instruments to minimise any foreign 
exchange gains or losses. Where the timing and/or the amount to be 
received is uncertain, risk management is more difficult and the Group 
will use financial instruments wherever possible. To the extent that 
financial instruments are not utilised, any fluctuations in foreign 
exchange movements may have a material adverse impact on 
the results from operating activities.
Foreign exchange risk
The Group is exposed to credit-related losses on cash deposits in the 
event of non-performance by counterparties. 
With the current economic uncertainty, counterparty risk is a key 
consideration when placing cash funds on deposit. The Group’s policy 
is to minimise the risks associated with cash deposits by placing them 
with institutions with a recognised high rating (typically A or above 
assigned by international credit-rating agencies) or with one of the 
major clearing banks. If any counterparty were to experience financial 
difficulties, this may impact on the Group’s liquidity in the future.
Counterparty credit risk
The Group’s success depends, in part, on its ability to obtain and 
maintain protection for its intellectual and proprietary information, 
so that it can stop others from making, using or selling its inventions 
or proprietary rights. The Group’s patent applications may not be granted 
and its existing patent rights may be successfully challenged and revoked. 
The Group invests in maintaining and protecting this intellectual property 
to reduce risks over the enforceability and validity of the Group’s patents. 
The Group works closely with its legal advisors and obtains where necessary 
opinions on the intellectual property landscape relevant to the Group’s 
programmes and activities.
Intellectual property risk Annual Report and Accounts 2012 Phytopharm plc
16
Corporate Governance
Board of Directors
Mr Alistair Taylor
Non-executive Chairman
Mr Taylor is formerly executive Chairman of UK listed Lombard Medical 
Technologies plc and has 50 years’ experience in the healthcare industry: 
twelve years in pharmaceuticals and over 38 years in medical devices. 
He was Chief Executive Officer of Biocompatibles International plc from 
1994 to 1998 and during this period the company progressed from a 
technology-based start-up company, through flotation to a FTSE 250 
company. Prior to this, Mr Taylor was Chief Executive Officer of Schneider Inc, 
a Swiss interventional cardiology/radiology device company and during 
this time the company’s turnover grew to $100 million. Schneider 
was subsequently sold by Pfizer Inc., its parent, for over $2 billion. 
Mr Taylor’s early career included the position of Financial Controller, 
Pfizer Hospital Products Inc. New York. He is also executive Chairman 
of ORProductivity plc and Arterius Limited, as well as being non-executive 
Chairman of Intelligent Orthopaedics Limited, Anaxsys Limited and 
Nightingale-EOS Limited. He is a chartered accountant.
Mr Tim Sharpington
Chief Executive
Mr Sharpington has more than 20 years’ experience in the life sciences sector 
with various pharmaceutical, biotechnology and pharmaceutical service 
companies in Europe and the US. He has broad experience across drug 
development, in-licensing, mergers and acquisitions as well as fundraisings. 
After a period of time at Pfizer, Mr Sharpington led product development 
at US-based Sequus Inc. in the late 1990’s. In 2002, Mr Sharpington was 
appointed as Development Director at Arakis Ltd, a UK-based VC-backed 
biotechnology company sold to Sosei in 2005 for £107 million. After leaving 
Arakis Mr Sharpington founded and became Chief Executive Officer of 
Serentis Limited in 2006. He joined Phytopharm as Chief Executive Officer 
in 2010.
Mr Roger Hickling
Research and Development Director
Mr Hickling has a BSc in Chemistry from Kings College, University of London 
and over 30 years’ experience in pharmaceutical research and development. 
This includes management of development portfolios and projects from 
preclinical through to Phase IV covering a range of disease areas. In addition, 
Mr Hickling has extensive experience in international regulatory affairs, 
including clinical trials and marketing applications. Between 1976 and 
1998 Mr Hickling worked at SmithKline Beecham where he oversaw both 
in-house and partnered early-stage neuroscience development projects. 
Mr Hickling held a variety of positions at several pharmaceutical companies 
between 1998 and 2009 including Alizyme Therapeutics plc. He was 
appointed to the Board of Alizyme Therapeutics as Research and 
Development Director in 2006 with responsibility for research and 
development strategy development, all research and development 
operations and staff.
Dr Peter Blower
Non-executive director
Dr Blower has over 40 years’ experience in medicinal research and 
development with a strong background in the field of neuroscience. 
He joined Beecham Research Laboratories in 1969 and rose to the 
position of Director of New Neuroscience products at SmithKline Beecham 
in 1996 before leaving in 2000 to form his own consultancy company. 
He has been elected to Fellowship of the Royal Society of Medicine and 
the Institute of Biology and has authored over 70 scientific publications. 
He has a M.I.Biol from the Institute of Biology (1972), a PhD in Pharmacology 
from the University of Aston (1977) and a DSc from the University of 
East London (1997).
Dr Ian Tulloch
Non-executive director
Dr Tulloch has over 30 years’ experience in the pharmaceutical industry, 
encompassing a broad range of senior roles in both research and 
development and commercial functions. He has a strong background in 
neuroscience, including both neurological and psychiatric disorders, and 
has been closely involved in the commercialisation of innovative products 
for the treatment of Parkinson’s disease, depression, epilepsy, multiple 
sclerosis and pain. From 2002 to 2010 he was Global Marketing Director 
in the Neuroscience & Ophthalmics Business Franchise at Novartis AG, 
based in Basel, Switzerland, where he supported both in-line products 
and Phase II/III development candidates and also worked closely with 
Business Development & Licensing on in-licensing opportunities. Prior 
to this he held global medical marketing positions at GlaxoSmithKline/
SmithKline Beecham, from 1990–2002, and was Drug Discovery Program 
Director at Reckitt Benckiser from 1978 to 1990. Dr Tulloch has a BSc 
(Hons) in Pharmacology and a PhD in Neuropharmacology, both from the 
University of Edinburgh. He has authored over 100 scientific publications 
in the neuroscience field. Annual Report and Accounts 2012 Phytopharm plc
17
Corporate Governance
Directors’ report
for the year ended 30 September 2012
The directors of Phytopharm plc (registered in England and Wales: 03131723) present their report together with the audited consolidated 
and Company financial statements for the year ended 30 September 2012.
The Remuneration Report can be found on pages 22 to 27 and the Corporate Governance Report, including the corporate social responsibility statement, 
can be found on pages 28 to 35.
Principal activities
The principal activity of the Group undertaken during the year was the ongoing research and development of novel treatments targeting diseases 
with high levels of unmet need. The Group’s lead series of compounds, the sapogenins (including Cogane™ and Myogane™), has the potential to 
be a new class of therapy for neurodegenerative diseases including Parkinson’s disease (“PD”), amyotrophic lateral sclerosis (“ALS”) and glaucoma. 
Phytopharm plc manages these activities which are carried out by its subsidiary, Phytotech Limited.
Research and development
Details of the Group’s research and development activities can be found in the Business Review on pages 6 to 10.
Business review
A review of the development and performance of the Group including important events, progress during the year, the financial performance during 
the year and likely future developments can be found in the Chairman and Chief Executive Officer’s Review, the Business Review and the Financial 
Review on pages 11 to 13 all of which are incorporated in this Directors’ Report by reference. The principal risks and uncertainties facing the Group 
can be found on pages 14 and 15.
The directors are satisfied with the progress made across the Group’s programmes and with the year-end position.
Key performance indicators
The principal key performance indicators (“KPIs”) of the Group are the progress of the Group’s development programmes through preclinical 
and clinical development, in particular its lead programme Cogane™ in Parkinson’s disease, whilst tightly controlling its cost base. The Group 
focuses its financial resources on its research and development activities whilst operating as a virtual Group keeping administrative costs to a 
minimum and ensuring cash resources are sufficient to fulfil its current strategy. While these KPIs demonstrate relevant factors by reference to 
which the development, performance and position of the Group can be measured effectively, due to the nature of Phytopharm’s business and 
the pharmaceutical industry in general these KPIs are not readily or meaningfully comparable on a year-on-year basis. The Group’s expenditure 
on its research and development programmes and on administrative expenses was in line with management’s expectations. Details of financial 
performance are given in the Financial Review on pages 11 to 13.
Key events
Key events during the past year include the following:
Operational 
 Recruitment into CONFIDENT-PD Phase II clinical trial of Cogane™ in untreated patients with early-stage Parkinson’s disease was completed in April 2012 
and the last patient completed the trial in early December 2012. Results from the trial remain on track to be available in February 2013.
 Cogane™ demonstrated efficacy in the “gold standard” preclinical model of amyotrophic lateral sclerosis (“ALS”), the most common form 
of motor neurone disease. Positive data have now been obtained in four models of ALS, providing a strong rationale for Cogane™ as a potential 
treatment for this devastating condition.
 Preparation for a Phase I clinical trial to evaluate Cogane™ solid dose oral formulations for up to 28 days has been initiated.
 A study of Myogane™ in a preclinical model of glaucoma was inconclusive due to an unexpectedly low neuronal cell loss in the control group 
which prevented evaluation of a neuroprotective effect of Myogane™.
Corporate
 Dr Ian Tulloch was appointed as a non-executive Board director in February 2012. As planned, Mr Sandy Morrison stepped down from the Board 
following the Company’s Annual General Meeting in March 2012. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
18
Key events (continued)
Important events since the year end
See note 22 to the financial statements.
Results and dividends
The Group’s results for the year ended 30 September 2012 are presented on page 39. The Group’s net loss after taxation was £7,766,309 
(2011: £7,658,330). The Group is not yet in a position to pay a dividend and the loss for the year has been added to the accumulated losses 
in equity.
Significant agreements
The Company is not a party to any significant agreement which takes effect, alters or terminates upon a change of control of the Company other 
than the directors’ service contracts, details of which are set out in the Remuneration Report.
Directors
The directors of the Company who served during the year and up to the date of this report, unless otherwise indicated, are as follows:
Capacity 
Mr T Sharpington Chief Executive Officer
Mr R I Hickling Research and Development Director
Mr A H Taylor Non-executive Chairman
Dr P R Blower Senior independent director
Dr I F Tulloch Non-executive director Appointed 2 February 2012
Mr A D Morrison Non-executive director Resigned 27 March 2012
Biographical details of the directors are shown on page 16.
Re-election of directors
At the 2013 Annual General Meeting (“AGM”), in accordance with the Company’s Articles of Association and the provisions of the UK Corporate 
Governance Code (“the Code”), Mr T Sharpington and Mr A H Taylor will retire. Being eligible, and with the Board’s recommendation, they will offer 
themselves for re-election.
Mr A H Taylor, Dr P R Blower and Dr I F Tulloch, as non-executive directors, have letters of appointment which provide for three months’ notice 
from either party.
The service contracts of the executive directors and the letters of appointment for the non-executive directors are available for inspection 
at the registered office of the Company and will be available at the 2013 AGM as specified in the notice of meeting.
In accordance with Section 992 of the Companies Act 2006, the directors disclose that the rules regarding the appointment and replacement 
of directors are contained in the Company’s Articles of Association, which may be amended with shareholder approval in accordance with 
relevant legislation. The powers of the directors are contained in the Company’s Articles of Association or in accordance with the provisions of the 
Companies Act 2006. The Companies Act 2006 provides that directors may issue and buy back the Company’s shares on behalf of the Company, 
subject to authority being given to the directors by shareholders in general meeting. No authority to buy back the Company’s ordinary shares 
of 1 pence has been sought. Purchases in shares of Phytopharm relate to the Phytopharm Share Incentive Plan whereby the Company issued one 
“Matching Share” for every one “Partnership Share” purchased by the employee. All shares are held by the scheme Trustees until the shares vest 
unconditionally with the employee.
Directors’ report (continued)
for the year ended 30 September 2012 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
19
Directors’ interests
Details of the directors’ interests in the ordinary share capital of the Company, as required to be disclosed in accordance with the Disclosure 
and Transparency Rules, are given in the Remuneration Report on page 26. During the financial year under review no directors purchased 
ordinary shares.
Directors’ indemnities
The Group has in place for the whole of the year, and at the date of signing the financial statements, qualifying third party indemnity insurance 
for all directors and officers.
Structure of the Company’s capital
The Company’s share capital traded on the London Stock Exchange comprises a single class of ordinary shares of 1 pence each, each carrying 
one voting right and all ranking equally with each other. At 30 September 2012, 346,901,749 shares were allotted and fully paid. See note 16 
to the financial statements for details of movements in the Company’s share capital during the year.
Holders of ordinary shares are entitled to receive all shareholder documents, to attend, speak and exercise voting rights, either in person or by proxy, 
on resolutions proposed at general meetings and participate in any distribution of income or capital. There are no restrictions on the transfer of 
shares in the Company or in respect of voting rights attached to the shares. None of the shares carry any special rights with regard to the control 
of the Company.
Details of employee share option schemes are set out in note 17 to the financial statements. Participants in employee share option schemes have 
no voting or other rights in respect of the shares subject to their awards until the options are exercised, at which time the shares rank pari passu 
in all respects with shares already in issue.
There are no restrictions on the transfer of securities in the Group.
Authority to issue shares
At the last AGM held on 27 March 2012, shareholders authorised the directors to allot relevant securities up to an aggregate nominal value of 
£1,156,007, representing one-third of the issued share capital, and to further allot equity securities up to an additional aggregate nominal value 
of £346,902 in connection with a fully pre-emptive rights issue, in accordance with ABI guidance, and to allot for cash equity securities having 
a nominal value not exceeding in aggregate £346,902 (being 10% of the issued share capital). The authority expires at the conclusion of the 2013 
AGM or, if earlier, the close of business on 27 March 2013. At the 2013 AGM similar authorities will be sought from shareholders.
Substantial shareholdings
At 30 November 2012, the Company had received notification from the following financial institutions of their and their clients’ interest in the 
following disclosable holdings, which represent 3% or more of the voting rights of the issued share capital of the Company, and are disclosed 
in accordance with the Disclosure and Transparency Rules of the Financial Services Authority.
Shareholder having a major interest
Number of
shares held
% of issued
shares
Invesco Asset Management Limited 195,527,147 56.36
Henderson Global Investors Limited 41,697,242 12.02
Mr Klaus Hebben 15,082,454 4.35
The shares held by Invesco Asset Management Limited (“Invesco”) are held in Invesco’s capacity as an institutional investor and an investment 
channel for others and not on its own behalf. A significant number of the shares are held by open-ended investment companies together with 
other shares held in investment portfolios managed by Invesco as nominee/bare Trustee. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
20
Substantial shareholdings (continued)
On 3 December 2009, Invesco and the Company entered into a relationship agreement under which Invesco has undertaken to ensure that whilst 
it holds an interest in the shares of the Company in excess of 30% it will exercise its voting rights insofar as it is able to do so that:
(a) the Company is capable of carrying on its business independently of Invesco;
(b) all transactions, agreements and arrangements with any member of the Group and Invesco are conducted on an arm’s length basis; and
(c)  any dealing or dispute between Invesco and any member of the Group is dealt with by a committee comprising only of independent directors.
Purchase of own shares
Purchases in shares of Phytopharm relate to the Phytopharm Share Incentive Plan whereby the Company issued one “Matching Share” for every one 
“Partnership Share” purchased by the employee. All shares are held by the scheme Trustees until the shares vest unconditionally with the employee.
During the year ended 30 September 2012, the Group purchased 55,251 ordinary shares of 1 pence (2011: 5,171) at a total cost of £4,172 (2011: £373).
Payment of creditors
The Company does not have a specific payment policy but pays its suppliers in accordance with the specific terms agreed with each supplier. 
Trade payables of the Company and the Group at 30 September 2012 were equivalent to 0.05 (2011: 47.01) and 23.95 (2011: 33.46) days’ 
purchases respectively based on the average daily amount invoiced by suppliers during the year.
Financial risk management
The financial risk management and objectives of the Group and the exposure of the Group to capital, liquidity, credit and interest rate risks are set 
out in note 21 to the financial statements.
Annual General Meeting
The notice convening and giving details of the 2013 AGM of the Company will be mailed to shareholders.
Corporate governance
The Company’s statement on corporate governance can be found in the Corporate Governance Report on pages 28 to 35 of these financial statements. 
The Corporate Governance Report forms part of this Directors’ Report and is incorporated into it by cross-reference.
Audit information
In the case of each of the persons who are directors of the Company at the date when this report is approved:
 so far as each of the directors is aware, there is no relevant audit information (as defined in the Companies Act 2006) of which the Company’s 
auditors are unaware; and
 each of the directors has taken all steps that he ought to have taken as a director to make himself aware of any relevant audit information 
and to establish that the Company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.
Directors’ report (continued)
for the year ended 30 September 2012 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
21
Going concern
Having completed patient recruitment into the CONFIDENT-PD clinical trial in patients with early-stage Parkinson’s disease during the financial year, 
the Group expects to receive the results from the trial in February 2013. Once the trial has been completed, the Group’s research and development 
expenditure is expected to fall substantially while the Group evaluates the results of this important milestone. Initial discussions have been held with 
potential partners and plans put in place for the next steps in the development of our pipeline assets, be that alone or in partnership with other 
companies, to ensure that the Group is well positioned to extract maximum value from its programmes. 
At 30 September 2012, the Group had cash resources (being cash and cash equivalents and money market investments) of £8,887,220 (201 1: £17,574,476). 
These cash resources are sufficient for the Group to complete the CONFIDENT-PD trial and any other ongoing research and development studies and to 
fund, entirely from its own existing resources, the Group’s ongoing activities until at least the end of Q1 2014. Thus, after making enquiries and taking 
into account management’s estimate of future expenditure, the directors have a reasonable expectation that the Group will have adequate financial 
resources to continue in operation for the foreseeable future. 
Independent auditors
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company and authorising the directors to set their remuneration will 
be proposed at the next AGM.
Mr T Sharpington
Chief Executive Officer
30 November 2012 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
22
Remuneration report
This report covers the year ended 30 September 2012 with comparative figures provided for the year ended 30 September 2011. It has been 
prepared in compliance with the UK Corporate Governance Code 2010, the Listing Rules of the FSA and the Companies Act 2006. It sets out the 
Group’s remuneration policy and details of directors’ remuneration. In accordance with the Companies Act 2006, a resolution to approve this report 
will be proposed to shareholders at the AGM in 2013. The vote will be advisory and will be considered carefully by the Remuneration Committee 
in the formulation and approval of the Group’s future remuneration policies.
The auditors are required to report to the Company’s members on certain parts of the Directors’ Remuneration Report and to state whether in 
their opinion those parts of the report have been properly prepared in accordance with the Companies Act 2006 (as amended by the Regulations). 
The report has therefore been divided into separate sections for audited and unaudited information.
The information below is unaudited unless specified otherwise.
Remuneration Committee
The Remuneration Committee (“the Committee”) is comprised exclusively of independent non-executive directors. The directors who have served 
on the Remuneration Committee are set out on page 30.
The Remuneration Committee decides the remuneration policy that applies to executive directors and all of the Group’s employees including other 
senior management. This comprises the setting of pay and benefits for the executive directors, the setting of pay and benefit scales for other employees, 
approving the format and range of all performance related arrangements (both annual and long-term equity incentive arrangements) and determining 
the extent to which the elements of variable pay vest. In determining remuneration, consideration will be given to reward levels throughout the 
organisation as well as in the external employment market. The Remuneration Committee aims to reward all individuals fairly based on their role, 
their performance and salary levels in the wider market.
The executive directors are invited to attend the Remuneration Committee meetings to make recommendations on compensation levels for employees.
Remuneration policy
The Committee aims to provide remuneration packages that are competitive and designed to attract, retain and motivate individuals including:
 having regard to experience and the nature and complexity of the individuals’ work, and regard to individuals’ remuneration in comparable companies, 
in order to pay a competitive salary, including a performance related cash bonus that attracts and retains individuals of the highest quality; 
 linking individual remuneration packages to the Group’s long-term performance through the award of share options; and
 providing post-retirement benefits through the Group’s pension schemes.
To achieve these objectives the Committee takes account of information from various sources on compensation packages primarily to ensure that 
remuneration generally at all levels is broadly aligned to comparable companies in the UK.
Remuneration package
The principal components of remuneration packages are base salary, short and long-term incentives and pension benefits. This report sets out the 
policy and details of:
 basic pay and benefits;
 performance related bonuses;
 share option incentive schemes;
 total shareholder return;
 directors’ remuneration;
 executive directors’ contracts;
 non-executive directors’ remuneration and letters of appointment;
 directors’ interests in shares; and
 directors’ interests in share options. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
23
Basic pay and benefits
The Committee sets the annual salaries for executive directors, having regard to personal performance and responsibilities of each executive director 
and their expected future contribution. The Committee also reviews the basic pay structure for all other employees.
All directors and employees are invited to participate in a money purchase group personal pension plan which has no defined benefits. During the 
period, the Group contributed to the scheme a maximum of 12.5% of base salary in relation to the executive directors, a maximum amount of 8% 
of base salary in relation to managers and senior managers and a maximum amount of 5% of base salary in relation to all other employees.
Performance related bonuses 
The Group may make bonus payments depending on the overall performance of the Group against objectives agreed with the Committee at the 
beginning of each year. These objectives relate to the development and progression of the Group’s product portfolio together with operational 
and corporate effectiveness. The level of any bonus payments is based on the Group’s overall performance against these objectives together with 
the individual’s performance and contribution towards achieving overall objectives. Objectives typically include development of the Group’s programmes, 
licensing activities, corporate activities and are weighted towards objectives with the highest corporate significance. Bonus payments are not pensionable.
Share option incentive schemes
The total number of unissued ordinary shares in the capital of the Company which may be placed under option on any day under the Phytopharm 
share option schemes may not exceed, when added to the aggregate number of shares that have been or may be issued pursuant to rights granted 
for the past ten years, 10% of the issued ordinary share capital of the Company immediately prior to that day.
Share option plan
Share options are granted under the Phytopharm Share Option Plan 2007 which is open to all employees. The Phytopharm Share Option Plan 2007 
complies with the tax-favoured Enterprise Management Incentive Legislation. Where possible the Company will grant tax advantaged options. The 
Remuneration Committee determines the level of awards. To provide maximum flexibility, the Committee has discretion to make awards up to an annual 
limit of 400% of an individual’s salary although the Committee would only envisage making an award at such a level in very exceptional circumstances.
Performance share awards will normally vest three years after the date of grant subject to continued employment and the extent to which a performance 
target has been satisfied. The vesting of a share option under the scheme will depend on total shareholder return (“TSR”) performance conditions 
being met. The Committee considers TSR to be the most appropriate method of measuring performance at this stage of the Group’s development 
where income streams have not stabilised and the Group has not yet made a profit. 
The Company’s TSR will be compared to that of the companies making up the FTSE Small Cap Index measured over a period of three years. Awards vest 
in accordance with the following table:
Level of comparative performance during the performance period
Level of
award
released
%
Below median Nil
At or above median 100 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
24
Long-term incentive plan
The Group operates the Phytopharm Long Term Incentive Plan 2007 under which performance share awards can be made to selected senior managers 
of the Group and its subsidiaries. The Committee determines the level of awards to provide maximum flexibility. The Committee has discretion to make 
awards up to an annual limit of 400% of an individual’s salary although the Committee would only envisage making an award at such a level in very 
exceptional circumstances. Performance share awards will normally vest three years after the date of grant subject to continued employment and the 
extent to which a performance target has been satisfied. 
The Committee’s policy is that the same TSR performance condition as described above for share options will apply to the vesting of performance 
share awards. This is for the same reasons as given above. The vesting of a share award under the above scheme will depend on TSR performance 
conditions being met. The Company’s TSR will be compared to that of the companies making up the FTSE Small Cap Index measured over a period 
of three years. Awards vest in accordance with the following table:
Level of comparative performance during the performance period
Level of 
award 
released
%
Below median Nil
Between median and upper quartile (pro rata) 25 to 100
Upper quartile and above 100
Directors’ reward plan
The 2010 Directors’ Reward Plan enabled the Group to recognise the input of the non-executive directors to the success of the Group in 2009. 
The one-off grant of options in 2010 under the plan will vest at the end of three years and no performance conditions will apply. As a condition 
of exercise, the non-executive directors will be required to enter into an agreement under which they agree not to dispose of any shares acquired 
on exercise for a period of at least one year from the date of exercise. No further options have been granted under this scheme.
Share Incentive Plan
The Phytopharm Share Incentive Plan 2007 (“SIP”) is open to all employees, including executive directors, for the purpose of encouraging employees 
to become shareholders of the Group and to retain their shares over the medium to long term. Employees may purchase Partnership Shares up to 
the value of £125 each month and are awarded one Matching Share for each Partnership Share purchased. The shares are held in trust for a minimum 
of three years and are not subject to performance criteria. The SIP is an HMRC approved scheme through which benefits are provided in a tax 
efficient manner.
Total shareholder return (“TSR”) over the last five years
The chart below shows the Company’s TSR performance over the period 30 September 2007 to 30 September 2012 alongside the performance 
of the FTSE Small Cap Index and meets the requirements of Section 420 of the Companies Act 2006. TSR looks at the value at 30 September 2012 
of £100 invested in the Company on 30 September 2007 compared with the value of £100 invested in the FTSE Small Cap Index over the same period. 
This index has been selected for this comparison because, in the opinion of the directors, it is the most appropriate index against which the TSR 
of the Company should be measured.
Remuneration report (continued) Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
25
Executive directors’ service contracts
The Group’s policy in entering into service contracts with executive directors is to enable the recruitment of high-quality executives and to obtain 
protection from their sudden departure to competitor companies. In addition, service contracts are an important element in maintaining maximum 
protection for the Group’s intellectual property rights and other commercially sensitive information. It is the Group’s policy that executive directors 
have contracts with an indefinite term but which provide for a maximum period of six months’ notice to be served by the Company or by the director. 
However, if an executive director is guilty of serious misconduct, is in serious breach of contract or persistently fails to carry his out duties, then the 
Group (after due warning) is entitled to summarily terminate his service contract without notice or any compensation in respect of that termination.
Non-executive directors’ remuneration and letters of appointment
The non-executive directors each receive a fee for their services, which is agreed by the Board following recommendation by the Committee in respect 
of the Chairman and by the Chairman in respect of the other non-executive directors with the assistance of independent information regarding the 
level of fees within the sector, where necessary, concerning comparable organisations and appointments.
Neither the Chairman nor the other non-executive directors receive any pension or other benefits from the Group.
The terms of service for non-executive directors are specified in letters of appointment. Currently appointments are for a period of twelve months, 
which may be renewed, and are summarised in the table below:
Date of appointment Notice period
Mr A H Taylor 1 July 2012 3 months
Dr P R Blower 31 July 2012 3 months
Dr I F Tulloch 2 February 2012 3 months
Directors’ remuneration (audited)
2012 2011
Salary
and fees
£
Performance
related
bonus
£
Total
excluding
pensions
£
Pension
contributions
£
Total
excluding
pensions
£
Pension
contributions
£
Executive
Mr T Sharpington 203,444 37,443 240,887 24,000 205,687 22,469 
Mr R I Hickling 137,764 14,962 152,726 16,208 150,341 15,327 
341,208 52,405 393,613 40,208 356,028 37,796 
Non-executive
Mr A H Taylor 43,125 — 43,125 — 41,344 —
Mr A D Morrison
(i)
15,810 — 15,810 — 30,793 —
Dr P R Blower 31,990 — 31,990 — 30,758 — 
Dr I F Tulloch
(ii)
21,167 — 21,167 — — — 
112,092 — 112,092 — 102,895 — 
Total 453,300 52,405 505,705 40,208 458,923 37,796 
(i) To 27 March 2012. 
(ii) From 2 February 2012.
No directors waived emoluments in the financial year ended 30 September 2012 (2011: £nil). Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
26
Directors’ interests in shares 
The table below sets out the interests of directors and their connected persons in the Company’s shares:
Ordinary shares of 1 pence
2012
(i)
2011
Mr T Sharpington 120,000 120,000
Mr R I Hickling 120,000 120,000
Mr A H Taylor 330,043 330,043
Dr P R Blower 193,682 193,682
Dr I F Tulloch — —
Mr A D Morrison 246,544 246,544
(i) Or as at date of resignation if earlier.
All directors’ interests are beneficially held.
Apart from the interests disclosed above, and those set out in the share option table below, no directors had any interest in the year in the share 
capital of the Company or other Group companies. There have been no changes in the directors’ interests in the share capital of the Group since 
the year end.
Directors’ options (audited)
Details of options over shares of the Company held by directors, all of which have been granted at no cost to the Directors, are set out below:
Number of options
Note*
Exercise
price
Date from
which
exercisable
Expiry
date
At
1 October
2011
Granted 
during
the year
At
30 September
2012
(i)
Mr T Sharpington 1,566,186 — 1,566,186 1 £0.07630 21 July 2013 20 July 2020
750,791 — 750,791 1 £0.07350 17 December 2013 16 December 2020
1,900,588 — 1,900,588 2 £0.07630 21 July 2013 20 July 2020
—886,976 886,976 2 £0.06525 24 November 2014 23 November 2021
4,217,565 886,976 5,104,541  
Mr R I Hickling 1,566,186 — 1,566,186 1 £0.07630 21 July 2013 20 July 2020
512,305 — 512,305 1 £0.07350 17 December 2013 16 December 2020
167,201 — 167,201 2 £0.07630 21 July 2013 20 July 2020
— 613,026 613,026 2 £0.06525 24 November 2014 23 November 2021
2,245,692 613,026 2,858,718  
Mr A H Taylor 350,000 — 350,000 3 £0.11250 31 March 2013 30 March 2018
Dr P R Blower 256,667 — 256,667 3 £0.11250 31 March 2013 30 March 2018
Mr A D Morrison 256,667 — 256,667 3 £0.11250 31 March 2013 30 March 2018
Total 7,326,591 1,500,002 8,826,593 
(i) Or as at date of resignation if earlier.
* Further details of the terms of the share option schemes are contained in note 17 to the financial statements under the note referenced in the above table.
Remuneration report (continued) Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
27
Directors’ options (audited) (continued)
No price was paid for the grant of options, nor were any share options exercised by directors during the year (2011: none).
The market price of the Company’s shares on 28 September 2012, the last working day of the financial year, was 12.25 pence (30 September 2011: 
7.5 pence).
During the year, the daily closing market price of the Company’s shares ranged from 12.75 pence (20 September 2012) to 5.88 pence (19 June 2012) 
(2011: 9.75 pence to 6.88 pence).
Approved by the Board of directors
Dr I F Tulloch
Chairman of the Remuneration Committee
30 November 2012 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
28
Corporate governance report
The Board is committed to practising good corporate governance and recognises that it is accountable to shareholders for the Group’s standard 
of governance.
The principles set out in the Code cover five main areas: leadership, effectiveness, accountability, remuneration and relations with shareholders. 
With the exception of directors’ remuneration (which is dealt with separately in the Remuneration Report) the following section states how the 
Board has performed in relation to the remaining four areas of the Code.
Board
The Board comprises five directors, three of whom are non-executive. The biographies of all members of the Board are set out on page 16.
The Board is chaired by Mr A H Taylor who, together with the other non-executive directors, is considered to be independent of the executive 
directors and free from any relationship which could materially affect the exercise of their independent judgement.
The Board typically has six scheduled meetings during the year. In addition, further meetings are held when circumstances and urgent business 
dictate. All directors receive an agenda and Board papers in advance of the Board meetings to facilitate an effective contribution at the meetings. 
The executive directors maintain regular informal contact between the Board meetings with non-executive directors.
The Board is responsible for the overall direction and strategy of the Group and for securing the optimum performance from Group assets. At each 
meeting, the Board reviews strategy and progress of the Group towards its objectives, particularly in respect of research and development projects, 
and monitors financial progress against budget.
While the Board retains overall responsibility for, and control of, the Group, day-to-day management of the business is conducted by the 
executive directors.
The Board has agreed a schedule of items that are specifically reserved for its consideration, which is reviewed on an annual basis. This schedule includes:
 strategy and management;
 structure and capital;
 financial reporting and controls; 
 internal controls;
 approval of significant contracts;
 approval of shareholder communications; 
 board composition;
 corporate governance; and
 health and safety policy. 
The role of non-executive directors is to ensure that independent judgement is brought to Board deliberations and decisions. Dr P R Blower is the 
senior independent director. During 2010, shareholders approved the 2010 Directors’ Reward Plan to enable the Group to recognise the input of the 
non-executive directors to the success of the Group in the previous twelve months and the non-executive directors were awarded a one-off grant 
of share options. The Group does not intend to make any further grants of share options under this scheme. There are no performance conditions 
attached to the share options and given the level of the award, the Board considers the non-executive directors to be independent. 
All directors are required to retire and submit themselves for re-election at the first AGM after appointment and, thereafter, at least every three years. 
Subject to their re-election and Companies Act 2006 provisions, the non-executive directors are appointed for specified terms. See page 25. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
29
Board (continued)
There is clear separation of the roles of Chairman and Chief Executive Officer on terms which have been agreed and set out in writing by the 
Board and which are reviewed on an annual basis. The Chairman is responsible for overseeing the running of the Board, encouraging all directors 
to participate fully in discussions with the aim of reaching a consensus and ensuring that the non-executive directors are properly briefed on matters. 
The Chief Executive Officer has responsibility for implementing the Board’s strategy and managing day-to-day business activities of the Group with the 
executive directors and senior managers. The Company Secretary, through the Chairman, is responsible for advising the Board on all governance matters.
If directors believe that they require independent professional advice in the furtherance of their duties, the Board has agreed procedures for them 
to follow which allow the directors to take such advice at the Group’s expense. In addition, the directors have direct access to the advice and services 
of the Company Secretary who is accountable to the Board through the Chairman for governance matters. It is the responsibility of the Company 
Secretary to ensure that the Board follows its procedures and complies with all rules and regulations. 
Under the direction of the Chairman, the Company Secretary’s responsibilities include facilitating induction and professional development 
of the directors and ensuring the smooth flow of information within the Board and its Committees and between non-executive directors 
and senior management. 
New directors receive a comprehensive, formal and tailored induction to the Group’s operations and have the opportunity to meet major shareholders. 
Appropriate training is provided to new directors and is also available to other directors as required. The Group maintains directors’ and officers’ 
liability insurance.
Board diversity
Phytopharm recognises the importance of ensuring that its composition reflects the broad range of skills, expertise and experience required to enable 
it to meet its responsibilities and satisfy the demands of its stakeholders. The Board is committed to making Board appointments based on merit 
in the context of the skills and experience the Board as a whole requires to be effective.
The Board and the Nomination Committee will ensure that should any vacancies arise on the Board, the Nomination Committee will consider candidates 
on merit and overall suitability against objective criteria and with due regard for the benefits of diversity in the context of the size of the Group.
Board performance and appraisal
The Board has established a formal and rigorous process to annually evaluate its own performance and that of the Audit and Remuneration Committees, 
individual directors and Chairman. In line with the practice of previous years all directors have conducted a self-assessment of the performance of the 
Board during the year using a questionnaire circulated by the Company Secretary which included the following areas:
 setting and understanding of the Group’s strategy;
 composition, management and conduct of Board meetings;
 roles of the Chairman, Chief Executive Officer and non-executive directors;
 risk management and control; and
 corporate governance practices.
The results were collated by the Company Secretary and reported to the Board. Any items for improvement were considered by the Board. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
30
Board committees
The Board has established Audit, Remuneration and Nomination Committees, each with written terms of reference stating their authorities and duties. 
The full terms of reference of all the committees are reviewed annually and are published on the Group’s website www.phytopharm.com.
Committee membership and attendance at Board and committee meetings during the year under review was as follows:
Board
Total meetings: 6
Audit Committee
Total meetings: 2
Remuneration Committee
Total meetings: 6
Nomination Committee
Total meetings: 3
Director’s name Independent Position
Meetings
attended Position
Meetings
 attended Position
Meetings
 attended Position
Meetings
 attended
Mr T Sharpington No Chief Executive Officer 6/6 — — — — — —
Mr R I Hickling
No
Research and
 Development Director 6/6 — — — — — —
Mr A H Taylor Yes Non-executive Chairman 6/6 Member 2/2 Member 6/6 Member 3/3
Dr P R Blower Yes Non-executive 6/6 Chairman 2/2 Member 6/6 Chairman 3/3
Dr I F Tulloch
(i)
Yes Non-executive 4/4 Member 1/1 Chairman 3/3 Member —
Mr A D Morrison
(ii)
Yes Non-executive 2/2 Member 1/1 Chairman 3/3 Member 3/3
(i) Dr I F Tulloch was appointed on 2 February 2012 and became Chairman of the Remuneration Committee at the next meeting held on 27 March 2012. 
(ii) Mr A D Morrison stepped down from the Board on 27 March 2012.
Audit Committee
The Audit Committee members are all the independent non-executive directors and the Committee is chaired by Dr P R Blower. The Board considers 
that Mr A H Taylor has recent and relevant financial experience. The qualifications and experience of the members of the Audit Committee are disclosed 
on page 16.
The terms of reference of the Audit Committee include the following responsibilities:
 to monitor the integrity of the Group’s financial statements and make recommendations to the Board;
 to review annually the need for an internal audit function;
 to review the effectiveness of the Group’s internal control and risk management systems; and
 to consider and make recommendations to the Board regarding the appointment of the Group’s external auditors.
Financial reporting procedures and external audit
The Audit Committee assists the Board in ensuring that the Group’s published financial statements give a true and fair view and in securing reliable 
internal financial information for decision making. The Audit Committee reviews the findings of the external auditors and reviews key accounting 
policies and judgements. The Audit Committee is also responsible for monitoring the effectiveness of the external audit process and the independence 
of the external auditors, recommending audit fee proposals to the Board and considering the scale and nature of non-audit work. Non-audit services 
provided by the external auditors are discussed to ensure the Audit Committee is satisfied regarding the objectivity and independence of the external 
audit, including any relevant safeguards. Any material non-audit fees are approved by the Audit Committee before being committed. 
The Group’s tax compliance work is carried out by the auditors only in cases where they are best suited to perform the work in a cost efficient manner, 
given their familiarity with the Group’s business. A breakdown of fees paid to the auditors can be found in note 5 to the financial statements.
The Audit Committee assesses annually the qualifications, expertise and resources and independence of the external auditors and the effectiveness 
of the audit process. The assessment covers all aspects of the audit service provided by the audit firm. The Audit Committee considers that the relationship 
with the Group’s auditors is working well and it remains satisfied with their effectiveness. Accordingly, it has not been necessary to perform a tender. 
There are no contractual obligations restricting the Company’s choice of external auditors.
Corporate governance report (continued) Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
31
Board committees (continued)
Audit Committee (continued)
Protected disclosure
The Audit Committee reviews the Group’s protected disclosure (“whistleblowing”) policy and procedures on an annual basis to ensure that adequate 
arrangements are in place by which members of staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting 
or other areas. The Audit Committee considers that appropriate arrangements are in place for the proportionate and independent investigation 
of such matters and for appropriate follow-up action.
Internal audit
Due to its size and structure, the Group does not have an internal audit function although the Audit Committee keeps this under annual review.
Audit Committee performance and appraisal
The Audit Committee conducted a self-assessment of its performance during the year by reference to an evaluation checklist provided by the Group’s 
external auditors. The results were compiled and analysed by the Company Secretary. Areas for improvement identified by the assessment will be 
addressed accordingly.
Remuneration Committee
The Remuneration Committee members are all the independent non-executive directors, and has been chaired by Dr I F Tulloch since 27 March 2012. 
Prior to this date the Remuneration Committee was chaired by Mr A D Morrison.
The Remuneration Committee is responsible for making recommendations to the Board on remuneration policy for all members of staff and executive 
directors. The policy recommendations include setting salary scales and approving the format and range of incentive payments and share option 
grants to all staff. Remuneration of non-executive directors is under the control of the Chairman and the executive members of the Board.
The terms of reference of the Remuneration Committee include the following responsibilities:
 to determine and agree with the Board the framework and policy for the remuneration of the executive directors and other members 
of the executive team;
 to determine targets for any performance related pay scheme;
 to approve overall remuneration structure; and
 to review employee benefit structures.
Remuneration Committee performance and appraisal
The Remuneration Committee conducted a self-assessment of its performance during the year by reference to an evaluation checklist provided 
by the Group’s external auditors. The results were compiled and analysed by the Company Secretary. Areas for improvement identified by the 
assessment will be addressed accordingly. 
Nomination Committee
The Nomination Committee comprises the independent non-executive directors and is chaired by Dr P R Blower. 
The Nomination Committee is responsible to the Board for determining the qualities and experience required of the Company’s executive and 
non-executive directors and for identifying suitable candidates. In appropriate cases, recruitment consultants assist in the process. The Nomination 
Committee is also responsible for succession planning.
The terms of reference of the Nomination Committee include the following responsibilities:
 to identify and nominate candidates to fill Board positions as they arise;
 to prepare a description of the role and capabilities required for a particular appointment; and
 to give full consideration to succession planning. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
32
Internal controls and risk management
The Board acknowledges that it is ultimately responsible for the Group’s system of internal control and reviews its effectiveness at least annually and the 
Board confirms that this process has been in place up to the date of the approval of the financial statements. However, the Board acknowledges that 
such a system can only provide reasonable and not absolute assurance against material misstatement or loss, as it is designed to manage rather than 
eliminate the risk of failure to achieve business objectives.
The key procedures that the Board has established are designed to provide effective internal controls within the Group and comply with the 
Internal Control Guidance for Directors on the UK Corporate Governance Code (Turnbull Guidance 2005) issued by the Financial Reporting Council. 
There is an ongoing process for identifying, evaluating and managing significant risks faced by the Group and the effectiveness of all the Group’s 
internal controls in effect during the year has been reviewed by the Board. This process has been in place throughout the year under review and up 
to the date of signing the financial statements. The Board confirms that the necessary steps have been taken to rectify any significant failings 
or weaknesses identified through this process.
The Group has a quality assurance function but it does not have a formal internal audit function, which is considered appropriate by the Audit Committee 
given the size of the Group’s operations at this time. The executive directors’ active involvement in the activities of the Group allows the Board to 
continually monitor and assess significant business, operational, financial, compliance and other risks and to review the effectiveness of internal control. 
The executive directors provide regular management reports covering, inter alia, research and development activities, shareholder relations, financial 
management and commercial activities.
Following the implementation of the Bribery Act 2010, the Group reviewed, and where appropriate updated, its existing policies and procedures 
in this area. It will continue to monitor and review its policies and procedures to ensure compliance and effectiveness, both internally and externally.
The Group’s key internal control procedures include the following:
Control environment
The Group’s control environment is the responsibility of the Group’s directors and managers at all levels. The Group’s organisational structure has 
clear lines of reporting and responsibility. Regular research and development programme reviews are held to review progress against plans for 
each programme. The information from these meetings is reported on a regular basis to a management group comprising the executive directors 
and key senior managers to compare progress against plans for the business as a whole. Overall control of the business rests with the Board.
Risk identification and evaluation
Regular assessments of ongoing risks facing the business are undertaken as part of the operational reviews and regular management group meetings 
are held in key areas such as management of working capital, compliance, legal and operational issues.
Operational controls
Quality
Investigational medicinal products are manufactured on behalf of Phytopharm and are produced in accordance with Good Manufacturing Practice (“GMP”) 
to ensure that the products are manufactured consistently to the appropriate quality standards. 
Non-clinical studies
Key non-clinical studies to determine the safety and efficacy of new products are conducted in accordance with Good Laboratory Practice (“GLP”) 
by contractors who operate under those regulations. Each contractor is audited to assess compliance with GLP prior to initiation of studies.
Clinical studies
All clinical studies carried out by the Group are in accordance with Good Clinical Practice (“GCP”). This ensures that the health and well-being of the 
subjects is carefully monitored during the study and that the data gathered are complete and reliable. All studies are audited for compliance under 
the management of Phytopharm’s quality assurance group.
Corporate governance report (continued) Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
33
Financial controls
Financial reporting and consolidation
Budgets and long-term forecasts are normally prepared twice a year to allow management to monitor the key business and financial risks. Further, 
more frequent forecasts are prepared if circumstances require. The budgets are reviewed and approved by the Board prior to adoption by the Group. 
Consolidated management accounts are prepared on a monthly basis and performance against budget is analysed in detail and reported on a monthly 
basis and reviewed regularly by the Board.
The integrity of the Group’s public financial reporting process is supported by a number of processes and steps to provide assurance over the 
completeness and accuracy of the content, including:
 review by executive directors;
 review and recommendation by the Audit Committee; and
 review and approval by the Board.
Control procedures 
The Group has established detailed policies and accounting and administrative procedures are in place covering all significant areas and key systems. 
These include formal authorisation procedures for the transfer of funds, capital expenditure and recruitment. Any commitment of expenditure requires 
documentary approval which is subject to prescribed limits of authority. Any major expenditure or commitment including the appointment of senior 
members of staff requires Board approval.
Employees
Equal opportunities
The Group operates an equal opportunities policy. Full consideration is given to all job applicants, irrespective of gender, age, marital status, disability, 
sexual orientation, race, colour, religion, political belief, ethnic or national origin or any other conditions not relevant to the performance of the role, 
who can demonstrate that they have the necessary skills and abilities.
Disabled employees
With regard to existing employees and those who may become disabled, the Group’s policy is to examine ways and means to provide continuing 
employment under its existing terms and conditions and to provide training and career development, including promotion, wherever possible. 
Employee involvement
The Group believes that it is important that employees are aware of the Group’s business strategy and objectives and to assist them to work towards 
these goals. Regular meetings are held with all employees and managers, both to raise issues and provide a flow of information. 
Share option schemes
The directors remain committed to the principle that all employees should be able to participate in the Group’s progress through share ownership 
schemes. Details of the Group’s share option schemes are given on pages 23 and 24.
Relationships with shareholders
The Group is committed to maintaining good relations with its institutional and private shareholders and reports formally to shareholders four times 
a year through the provision of interim results (around May) and annual results (around November) and, as required under the Disclosure and Transparency 
Rules, releases interim management statements around February and August. In addition, the Group keeps shareholders informed of significant events 
for the Group during the year by issuing press releases which are immediately made available on the Group’s website (www.phytopharm.com). 
The Group’s website also provides an overview of the business, including its strategy, products and objectives. 
All major announcements are approved by the Board prior to issue. The Group also has internal procedures to guard against unauthorised release 
of information.
The Group also maintains communication by making presentations during the year to institutional shareholders on request and to all shareholders 
through the Group’s website. This contains information on all of the Group’s products and all financial reports and regulatory announcements issued 
by the Group. Details of the current share price and historic share price performance are also included. Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
34
Relationships with shareholders (continued)
The Chairman and senior independent director, Mr A H Taylor and Dr P R Blower, are each available, as appropriate, as a contact for shareholders.
The Board is kept up to date at its regular meetings with the views of shareholders and analysts by the Chairman and Chief Executive Officer.
The principal forum for discussion with both institutional and private shareholders is the AGM and their participation is encouraged. The Group 
endeavours to provide formal notification together with an explanation of each proposed resolution and to send these to shareholders at least 
20 working days in advance of the meeting. The Chairs of the Audit, Remuneration and Nomination Committees attend to answer questions.
In accordance with the Code recommendations, the Company counts all proxy votes. On each resolution which is voted on a show of hands, the 
Company indicates the level of proxies lodged, the number of proxy votes for and against each resolution and the number of abstentions. If applicable, 
after the AGM, the Company’s registrar will count and verify any poll votes. The results will be announced to the London Stock Exchange and will 
be published on the Company’s website.
The disclosure requirements of the Takeover Directive relating to the Company’s share capital are included in the Directors’ Report on pages 17 to 21.
Compliance statement
The directors are satisfied that the Group has complied throughout the year with the best practice provisions set out in the Code in effect for the 
financial year to 30 September 2012. This report, together with the Remuneration Report, sets out the manner in which the Group has applied the 
main principles contained in the Code. A copy of the Code is available at the FRC’s website: www.frc.org.
Corporate social responsibility
The Board recognises the importance of social, ethical and environmental matters and it endeavours to take into account the interests of the Group’s 
stakeholders, including its investors, employees and suppliers, when operating the business.
Social
The health, welfare and development of the Group’s employees are a priority. With the intent of attracting, recruiting, developing and retaining key 
employees, the Group has produced a number of employee handbooks which are made available to all employees and are reviewed on a regular basis. 
These handbooks include the Group’s policies and procedures on:
 health and safety;
 code of business conduct and ethics;
 equal opportunities;
 stress; and
 whistleblowing.
The Group places considerable value on keeping employees informed on the Group’s business strategy and objectives to assist them in working 
towards these goals. This is achieved through formal and informal meetings where employees have the opportunity to ask questions as well as 
receive information.
Employee training and development requirements are assessed as part of the performance appraisal process. Additional training is undertaken 
as required to provide staff with continual professional development.
The Group is committed to health and safety to safeguard all of its employees, partners, contractors and visitors. The Board is aware of its legal 
and moral obligations for health and safety at work and is committed to preventing accidents and minimising occupational ill health.
Corporate governance report (continued) Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
35
Ethical
The Group operates within a strict regulatory environment in the pharmaceutical industry and conducts its clinical development activities in 
accordance with internationally recognised regulatory and quality standards. A code of business conduct and ethics is in place to promote fair, 
honest and ethical conduct by all employees in their relationships with stakeholders. The Group has also implemented an anti-bribery and 
corruption policy following the introduction of the Bribery Act 2010.
The Group endeavours to appoint employees with appropriate skills, experience and knowledge for the roles they undertake. The Group has a range 
of polices which are aimed at retaining and incentivising key staff. Employees have clear objectives based on the Group’s business objectives which 
have been set by the Remuneration Committee.
Environment
The Group recognises that protecting the environment is a primary corporate responsibility and that environmental matters are not just the 
responsibility of the Board of directors but also an area in which each employee, sub-contractor and supplier has a contribution to make.
The Group therefore encourages all employees, partners and contractors to operate in an environmentally responsible manner. Where appropriate 
these requirements have been incorporated into the Group’s standard operating procedures and the environmental performance of contractors 
is reviewed as part of the audit process. It is the Group’s policy to undertake reasonable measures to assess the environmental impact of its operations, 
processes and products. Waste is minimised with paper and packaging recycled and confidential waste is shredded and recycled. Where possible 
other materials, including glass and plastics, are recycled. The Group aims to continually improve environmental performance and compliance 
within these areas.
Compliance
The Group has established policies and standard operating procedures (“SOPs”) together with Company handbooks that provide instruction on all aspects 
of the operation of the business. These SOPs and handbooks are designed to ensure compliance with the quality management requirements of the 
Group and external regulations where appropriate. All SOPs and company handbooks are reviewed on a regular basis and updated where necessary.
Insurance
The Group has reviewed its portfolio of insurance policies with its insurance broker to ensure that the policies are appropriate to the Group’s activities.
Announcements
All major announcements, including those relating to the Group’s research and development activities, are approved by the Board and, where appropriate, 
by senior management prior to issue. The Group also has internal and external checks to guard against unauthorised release of information.
On behalf of the Board
Mr A H Taylor
Non-executive Chairman
30 November 2012 Annual Report and Accounts 2012 Phytopharm plc Corporate Governance
36
Statement of Directors’ responsibilities 
The directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordance 
with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare 
the Group and parent company financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the 
European Union (“EU”). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true 
and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial 
statements, the directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and accounting estimates that are reasonable and prudent; and
 state whether applicable IFRS as adopted by the EU have been followed, subject to any material departures disclosed and explained in the 
financial statements.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose 
with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements 
and the Directors’ Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS 
Regulation. They are also responsible for safeguarding the assets of the Company and 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 Company’s website. Legislation in the United Kingdom governing the preparation 
and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the directors, whose names and functions are listed in the Board of directors on page 16, confirm that, to the best of their knowledge:
 the Group financial statements, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, 
liabilities, financial position and loss of the Group; and
 the information contained in the Business Highlights, Chairman’s Review, Chief Executive’s Review, Business Review, Financial Review, Principal Risks 
and Uncertainties and Directors’ Report includes a fair review of the development and performance of the business and the position of the Group, 
together with a description of the principal risks and uncertainties that it faces.
By order of the Board
Mrs Z McGowan
Company Secretary
30 November 2012 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
37
Independent auditors’ report
to the members of Phytopharm plc 
We have audited the financial statements of Phytopharm plc for the year ended 30 September 2012 which comprise the consolidated statement 
of comprehensive income, the consolidated and company balance sheets, the consolidated and company statements of changes in equity, the consolidated 
and company cash flow statements and the related notes. The financial reporting framework that has been applied in their preparation is applicable 
law and International Financial Reporting Standards (“IFRS”) as adopted by the European Union and, as regards the parent company financial statements, 
as applied in accordance with the provisions of the Companies Act 2006.
Respective responsibilities of directors and auditors 
As explained more fully in the Statement of Directors’ Responsibilities set out on page 36, the directors are responsible for the preparation of the 
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with 
the Auditing Practices Board’s Ethical Standards for Auditors. 
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 
of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose 
or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements 
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that 
the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the 
accounting policies are appropriate to the Group’s and the parent company’s circumstances and have been consistently applied and adequately 
disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. 
In addition, we read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the 
audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements 
In our opinion: 
 the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 30 September 2012 
and of the Group’s loss and Group’s and parent company’s cash flows for the year then ended;
 the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; 
 the parent company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union 
and as applied in accordance with the provisions of the Companies Act 2006; and
 the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the 
Group financial statements, Article 4 of the lAS Regulation.  Annual Report and Accounts 2012 Phytopharm plc Financial Statements
38
Opinion on other matters prescribed by the Companies Act 2006 
In our opinion: 
 the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
 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: 
Under the Companies Act 2006 we are required to report to you if, in our opinion: 
 adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from 
branches not visited by us; or 
 the parent company financial statements and the part of the Directors’ Remuneration Report to be audited 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.
Under the Listing Rules we are required to review: 
 the directors’ statement, set out on page 21, in relation to going concern;
 the parts of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK Corporate 
Governance Code specified for our review; and
 certain elements of the report to shareholders by the Board on Directors’ remuneration.
Simon Ormiston (Senior Statutory Auditor) 
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors 
Cambridge
30 November 2012
Independent auditors’ report (continued)
to the members of Phytopharm plc  Annual Report and Accounts 2012 Phytopharm plc Financial Statements
39
Consolidated statement of comprehensive income
for the year ended 30 September 2012
Note
2012
£
2011
£
Revenue 2 18,717 66,659
Cost of sales — —
Gross profit 18,717 66,659
Other income 2 77,400 —
Operating expenses 3 (9,392,016) (8,613,800)
Operating loss (9,295,899) (8,547,141)
Finance income 4 211,481 375,685 
Loss before taxation 5 (9,084,418) (8,171,456)
Taxation 6 1,318,109 513,126 
Loss and total comprehensive losses for the year (7,766,309) (7,658,330)
Basic and diluted loss per ordinary share (pence) 7 (2.2) (2.2)
The notes on pages 44 to 62 form part of these financial statements.
All of the loss is attributable to the owners of the parent. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
40
Consolidated and Company balance sheets
at 30 September 2012
Group Company
Note
2012
£
2011
£
2012
£
2011
£
Assets
Property, plant and equipment 8 62,284 83,646 — —
Investments 9 — — 1,815,219 1,639,136 
Amounts due from subsidiary undertaking 10 — — 29,935,991 21,870,207
Non-current assets 62,284 83,646 31,751,210 23,509,343
Trade and other receivables 11 321,562 459,954 77,983 198,675
Current tax receivable 6 1,318,109 479,229 — —
Money market investments 12 8,600,507 14,500,000 8,500,000 14,500,000
Cash and cash equivalents 13 286,713 3,074,476 127,668 2,677,736
Current assets 10,526,891 18,513,659 8,705,651 17,376,41 1 
Total assets 10,589,175 18,597,305 40,456,861 40,885,754 
Liabilities and equity
Trade and other payables 14 2,215,453 2,633,307 49,498 87,034 
Total current liabilities 2,215,453 2,633,307 49,498 87,034 
Equity attributable to owners of the parent 
Ordinary shares 16 3,469,017 3,468,019 3,469,017 3,468,019 
Share premium 16 77,286,854 77,283,731 76,791,447 76,788,324 
Merger reserve (204,211) (204,211) — — 
Accumulated losses (72,177,938) (64,583,541) (39,853,101) (39,457,623)
Total equity 8,373,722 15,963,998 40,407,363 40,798,720 
Total liabilities and equity 10,589,175 18,597,305 40,456,861 40,885,754
The notes on pages 44 to 62 form part of these financial statements.
The financial statements, comprising the consolidated statement of comprehensive income, the consolidated and Company balance sheets, 
the consolidated and Company statements of changes in equity, the consolidated and Company cash flow statements and the related notes, 
were approved by the Board and were signed on its behalf by:
Mr T Sharpington
Chief Executive Officer
30 November 2012
Phytopharm plc
Registered number: 3131723 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
41
Consolidated statement of changes in equity
for the year ended 30 September 2012
Group Note
 Ordinary
shares
£
 Share
premium
£
 Merger
reserve
£
Accumulated
losses
£
Total
£
Balance at 1 October 2010 3,466,774 77,278,113 (204,211) (57,062,371) 23,478,305
Comprehensive income
Loss attributable to owners of the parent — — — (7,658,330) (7,658,330)
— — — (7,658,330) (7,658,330)
Transactions with owners:
Issue of ordinary shares 16 1,245 5,618 — — 6,863 
Purchase of shares in Phytopharm plc 16 — — — (373) (373)
Credit in respect of share options — — — 137,533 137,533
Transactions with owners: 1,245 5,618 — 137,160 144,023
Balance at 30 September 2011 
and 1 October 2011 3,468,019 77,283,731 (204,211) (64,583,541) 15,963,998
Comprehensive income
Loss attributable to owners of the parent — — — (7,766,309) (7,766,309)
— — — (7,766,309) (7,766,309)
Transactions with owners:
Issue of ordinary shares 16 998 3,123 — — 4,121
Purchase of shares in Phytopharm plc 16 — — — (4,171) (4,171)
Credit in respect of share options — — — 176,083 176,083
Transactions with owners 998 3,123 — 171,912 176,033
Balance at 30 September 2012 3,469,017 77,286,854 (204,211) (72,177,938) 8,373,722
The notes on pages 44 to 62 form part of these financial statements. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
42
Company statement of changes in equity
for the year ended 30 September 2012
Company Note
 Ordinary 
shares 
£
 Share 
premium 
£
Accumulated 
losses
£
Total
£
Balance at 1 October 2010 3,466,774 76,782,706 (39,159,249) 41,090,231 
Comprehensive income
Loss for the year and total comprehensive losses — — (435,907) (435,907)
— — (435,907) (435,907)
Transactions with owners:
Issue of ordinary shares 16 1,245 5,618 — 6,863 
Credit in respect of share options — — 137,533 137,533 
Transactions with owners 1,245 5,618 137,533 144,396 
Balance at 30 September 2011 and 1 October 2011 3,468,019 76,788,324 (39,457,623) 40,798,720 
Comprehensive income
Loss for the year and total comprehensive losses — — (571,561) (571,561)
— — (571,561) (571,561)
Transactions with owners:
Issue of ordinary shares 16 998 3,123 — 4,121 
Credit in respect of share options — — 176,083 176,083 
Transactions with owners 998 3,123 176,083 180,204 
Balance at 30 September 2012 3,469,017 76,791,447 (39,853,101) 40,407,363 
The notes on pages 44 to 62 form part of these financial statements. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
43
Consolidated and Company cash flow statements
for the year ended 30 September 2012
Group Company
Note
2012
£
2011
£
2012
£
2011
£
Cash flows from operating activities
Loss for the year (7,766,309) (7,658,330) (571,561) (435,907)
Finance income 4 (211,481) (375,685) (210,355) (373,891)
Taxation (1,318,109) (513,126) — —
Depreciation 26,905 49,804 — — 
Loss/(gain) on disposal of property, plant and equipment 383 (24,743) — —
Share option charge 176,083 137,533 — —
(9,092,528) (8,384,547) (781,916) (809,798)
Changes in working capital
Decrease in trade and other receivables 35,778 17,052 18,345 6,632 
(Decrease)/increase in trade and other payables (417,854) 1,498,392 (37,536) 10,073 
Cash used in operations (9,474,604) (6,869,103) (801,107) (793,093)
Taxation received 479,229 445,068 — — 
Net cash used in operating activities (8,995,375) (6,424,035) (801,107) (793,093)
Cash flows from investing activities
Purchase of property, plant and equipment 8 (5,926) (20,800) — — 
Sale of property, plant and equipment — 24,997 — — 
Interest received 314,095 379,653 312,702 378,378 
Loan to subsidiary undertaking 10 — — (8,065,784) (5,398,881)
Net cash generated from/(used in) investing activities 308,169 383,850 (7,753,082) (5,020,503)
Cash flows from financing activities
Issue of shares 16 4,121 6,863 4,121 6,863 
Investment in shares of Phytopharm plc (4,171) (373) — — 
Movement in money market investments 16 5,899,493 8,000,000 6,000,000 8,000,000 
Net cash generated from financing activities 5,899,443 8,006,490 6,004,121 8,006,863 
Movements in cash and cash equivalents in the year (2,787,763) 1,966,305 (2,550,068) 2,193,267 
Cash and cash equivalents at the beginning of the year 3,074,476 1,108,171 2,677,736 484,469 
Cash and cash equivalents at the end of the year 286,713 3,074,476 127,668 2,677,736 
Money market investments at the end of the year 8,600,507 14,500,000 8,500,000 14,500,000 
Total cash, cash equivalents and money market investments 8,887,220  17,574,476 8,627,668 17,177,736 
The notes on pages 44 to 62 form part of these financial statements. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
44
Notes to the financial statements
for the year ended 30 September 2012
1. Accounting policies and basis of preparation
Phytopharm plc is a public limited company incorporated in England and Wales and domiciled in the UK with a listing on the London Stock Exchange 
under the symbol PYM. The address of its registered office is Lakeview House, 2 Lakeview Court, Ermine Business Park, Huntingdon, Cambridgeshire, 
England PE29 6UA.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently 
applied to both years presented, unless otherwise stated. 
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU, IFRIC 
interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been 
prepared on a historical cost basis.
Going concern
Having completed patient recruitment into the CONFIDENT-PD clinical trial in patients with early-stage Parkinson’s disease during the financial year, 
the Group expects to receive the results from the trial in February 2013. Once the trial has been completed, the Group’s research and development 
expenditure is expected to fall substantially while the Group evaluates the results of this important milestone. Initial discussions have been held 
with potential partners and plans put in place for the next steps in the development of our pipeline assets, be that alone or in partnership with 
other companies, to ensure that the Group is well positioned to extract maximum value from its programmes.
At 30 September 2012, the Group had cash resources (being cash and cash equivalents and money market investments) of £8,887,220 (201 1: £17,574,476). 
These cash resources are sufficient for the Group to complete the CONFIDENT-PD trial and any other ongoing research and development studies and 
to fund, entirely from its own existing resources, the Group’s ongoing activities until at least the end of Q1 2014. Thus, after making enquiries and 
taking into account management’s estimate of future expenditure, the directors have a reasonable expectation that the Group will have adequate 
financial resources to continue in operation for the foreseeable future. 
Basis of consolidation
The consolidated financial statements include the financial statements of Phytopharm plc (the “Company”) and all its subsidiary undertakings 
(together the “Group”), made up to 30 September 2012.
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 one-half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are 
deconsolidated from the date that control ceases.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting 
from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where 
necessary to ensure consistency with the policies adopted by the Group.
Accounting developments
Current financial year
There are no IFRS or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 October 2011 that would 
be expected to have a material impact on the Group. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
45
1. Accounting policies and basis of preparation (continued)
Accounting developments (continued)
Future financial years
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 October 2011, 
and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the 
consolidated financial statements of the Group. The following amendments to standards and new standards may impact the Group in the future:
 Amendment to IAS 1, ‘Financial statement presentation’ regarding other comprehensive income. The main change resulting from these 
amendments is a requirement for entities to group items presented in “other comprehensive income” (“OCI”) on the basis of whether they 
are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are 
presented in OCI. The Group is yet to assess the full impact of the amendment to IAS 1 and intends to adopt this no later than the accounting 
period beginning on or after 1 October 2013.
 IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was 
issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. 
IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised 
cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments 
and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. 
The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own 
credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group 
is yet to assess IFRS 9’s full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 October 2015, subject 
to endorsement by the EU. The Group will also consider the impact of the remaining phases of IFRS 9 when issued.
 IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single 
source of fair value measurement and disclosure requirements for use across IFRS. The requirements, which are largely aligned between IFRS 
and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required 
or permitted by other standards within IFRS or US GAAP. The Group is yet to assess IFRS 13’s full impact and intends to adopt IFRS 13 no later than 
the accounting period beginning on or after 1 October 2013.
There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
Critical accounting judgements
The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that affect the application of 
policies and reported amounts of assets and liabilities, income and expenses. The main accounting judgements relate to the determination of the 
carrying value of investments in, and loans to, subsidiaries, the period over which research and development costs are recognised and the share 
option charge and the underlying assumptions. 
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the 
circumstances, the results of which form the basis of making judgements about carrying value of assets and liabilities that are not readily apparent 
from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. 
Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year 
of revision and future years if the revision affects both current and future years.
The carrying value of investments in and loans to subsidiaries are reviewed at each balance date. In considering the value of these investments 
and loans, the Directors assess whether there is objective evidence that an investment or loan is impaired.
Research and development costs relating to clinical trials are recognised over the period of the clinical trial based on information provided by clinical 
research organisations. All other expenditure on research and development is recognised as the work is completed.
The estimation of share-based payment costs requires the selection of an appropriate valuation model, consideration as to the inputs necessary 
for the valuation model chosen and the estimation of the number of awards that will ultimately vest, inputs for which arise from judgements 
relating to the probability of meeting non-market conditions and the continuing participation of employees. Annual Report and Accounts 2012 Phytopharm plc
46
Financial Statements
1. Accounting policies and basis of preparation (continued)
Revenue
Revenue, which excludes value added tax, represents the invoiced value of services supplied.
Amounts received or receivable in respect of research and development contracts, collaborative research agreements, licence fees or milestone 
payments are recognised as revenue when the licence rights are granted or the specific conditions stipulated in the agreements have been satisfied 
and provided that there are no future obligations. These amounts are shown gross of any withholding tax. 
Other income
Other income, which excludes value added tax, represents amounts received or receivable from charitable organisations as grant income.
Operating expenses
Operating expenses represent selling, general and administrative expenses and research and development expenses.
Research and development expenditure
All research and development costs, whether funded by third parties under licence and development agreements or not, are included within operating 
expenses and classified as research and development costs. Research and development costs relating to clinical trials are recognised over the period 
of the clinical trial based on information provided by clinical research organisations. All other expenditure on research and development is recognised 
as the work is completed. 
All ongoing development expenditure is currently expensed in the year in which it is incurred. Due to the regulatory and other uncertainties inherent 
in the development of the Group’s programmes, the criteria for development costs to be recognised as an asset, as prescribed by IAS 38, ‘Intangible 
assets’, are not met until the product has been submitted for regulatory approval, such approval has been received and it is probable that future 
economic benefits will flow to the Group. The Group does not currently have any such internal development costs that qualify for capitalisation 
as intangible assets.
Share-based payments
The Group makes equity-settled share-based payments to its employees and Directors. Equity-settled share-based payments are measured at fair 
value at the date of grant and are expensed on a straight line basis over the vesting period of the award. At each balance sheet date, the Group 
revises its estimate of the number of options that are expected to become exercisable. The share-based payment charge is allocated to research 
and development expenses and administrative expenses on the basis of staff numbers, with a corresponding adjustment to equity.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact 
of any non-market vesting conditions. Non-market vesting conditions are included in the assumptions about the number of options that are expected 
to vest.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital 
contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period 
as an increase to investment in subsidiary undertakings with a corresponding credit to equity.
Employee benefits
All employee benefit costs, notably holiday pay and contributions to Group or personal defined contribution plans, are charged to the statement 
of comprehensive income on an accruals basis. The Group operates a defined contribution pension scheme. The assets of this scheme are held 
separately from those of the Group in independently administered funds. The Group does not offer any other post-retirement benefits.
Operating leases
Costs in respect of operating leases are charged to the statement of comprehensive income on a straight line basis over the lease term. 
Notes to the financial statements (continued)
for the year ended 30 September 2012 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
47
1. Accounting policies and basis of preparation (continued)
Property, plant and equipment
Property, plant and equipment are stated at historic purchase cost less accumulated depreciation. The cost of property, plant and equipment 
is its purchase cost, together with any incidental expenses of acquisition. Depreciation is calculated so as to write off the cost of property, plant 
and equipment, less its estimated residual value, on a straight line basis over the expected useful economic lives of the assets concerned.
The principal rates used for this purpose are:
Plant and machinery   20% 
Computer equipment  33% 
Fixtures and fittings   20% 
Motor vehicles   25%
Leasehold improvements are depreciated over the shorter of the lease term and the asset’s useful economic life.
The assets’ residual values and useful lives are reviewed, and adjusted if necessary, at each balance sheet date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the statement 
of comprehensive income.
Impairment of assets
Non-current assets are reviewed for impairment both annually and when there is an indication that an asset may be impaired (when events or changes 
in circumstances indicate that carrying value may not be recoverable). An impairment loss is recognised in the statement of comprehensive income 
for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less 
cost to sell and value in use. Non-financial assets, other than goodwill, which have suffered an impairment are reviewed for possible reversal of the 
impairment at each reporting date.
Investments in subsidiary
Investments in subsidiary undertakings are carried at cost less any impairment provision. Such investments are subject to an annual impairment 
review and any impairment is charged to the statement of comprehensive income. 
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision 
for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect 
all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter 
bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the 
trade receivable is impaired. 
The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted 
at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the 
loss is recognised in the statement of comprehensive income within “administrative expenses”. When a trade receivable is uncollectible, it is written 
off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against “administrative 
expenses” in the statement of comprehensive income.
Current tax
Current tax represents UK tax recoverable and is provided at amounts expected to be recovered using the tax rates and laws that have been 
enacted at the balance sheet date. Annual Report and Accounts 2012 Phytopharm plc
48
Financial Statements
1. Accounting policies and basis of preparation (continued)
Money market investments
Money market investments have fixed maturities that the Company’s management intend to hold to maturity or a notice period exceeding 
three months. These investments include short-term investments with an original maturity date of more than three months.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits repayable on demand and other short-term highly liquid investments with original 
maturities at inception of 90 days or less.
Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment 
in which the entity operates (the functional currency). The consolidated financial statements are presented in sterling (£), which is the Company’s 
functional and presentation currency.
Transactions denominated in foreign currencies are translated into sterling at actual rates of exchange ruling at the date of transaction. Monetary assets 
and liabilities expressed in foreign currencies are translated into sterling at rates of exchange ruling at the end of the financial year. All foreign currency 
exchange differences are taken to the statement of comprehensive income in the year in which they arise.
Trade and other payables
Trade payables are non-interest bearing and are initially stated at their fair value and subsequently held at amortised cost.
Ordinary shares and share premium
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Employee share trust
The Company recognises the assets and liabilities of the trust in its own accounts and shares held by the trust are recorded at cost as a deduction 
at arriving at total equity until such time as the shares vest unconditionally to employees. The trust is a separately administered trust, funded by 
contributions from employees and Phytotech Limited, whose assets comprise shares in the Company.
Segmental information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. 
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities 
and their carrying amounts in the consolidated financial statements in accordance with IAS 12, ‘Income taxes’. Deferred tax is not accounted for 
if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects 
neither the accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively 
enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability 
is settled. A deferred tax asset is recognised only to the extent that it is probable that sufficient taxable profit will be available in future years to utilise 
the temporary difference.
Company statement of comprehensive income
In accordance with the provisions of Section 408 of the Companies Act 2006, no separate statement of comprehensive income has been presented 
for the Company. The results for the Company are also prepared under IFRS.
The loss attributable to shareholders which is dealt with in the financial statements of the Company was £571,561 (2011: £435,907).
Notes to the financial statements (continued)
for the year ended 30 September 2012 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
49
2. Segmental information
The Group’s development and other functions operating across all the Group’s research programmes are managed centrally and are reported 
internally as a single business. This also applies to the Group’s marketed products. The chief operating decision maker has been identified as the 
executive directors of Phytopharm plc. The executive directors review the Group’s internal reporting in order to assess performance and allocate 
resources. Management has determined the operating segment based on these reports. Accordingly, the Directors consider that there is only one 
reporting segment, being the research and development of pharmaceutical products. 
The Group is domiciled in the UK. The revenue and other income from external customers in the UK is £77,400 (2011: £4,761) and the total revenue 
and other income from external customers in other countries is £18,717 (2011: £61,898). All non-current assets are located in the United Kingdom.
Revenue analysis
The revenue analysis in the table below is based on the country of registration of the fee paying party:
2012
£
2011
£
Revenue
Europe 17,474 4,761 
Asia 1,243 — 
South Africa — 61,898
18,717 66,659 
Other income
United Kingdom
(i)
77,400 —
96,117 66,659 
(i) Represents grant income recognised.
An analysis of revenue and other income by customer is set out in the table below:
2012
£
2011
£
Customer A 77,400 — 
Customer B 17,474 4,761 
Customer C 1,243 — 
Customer D — 61,898 
96,117 66,659 
3. Operating expenses
2012
£
2011
£
Research and development 8,290,976 7,461,246 
Administrative expenses 1,101,040 1,152,554 
9,392,016 8,613,800 
4. Finance income
2012
£
2011
£
Interest on cash and cash equivalents 11,196 59,262 
Interest on money market deposits 200,285 316,423 
211,481 375,685  Annual Report and Accounts 2012 Phytopharm plc
50
Financial Statements
5. Operating loss
Operating loss is the result for the Group before interest and taxation and is stated after charging/(crediting):
2012
£
2011
£
Depreciation charge for the year 26,905 49,804
Loss/(gain) on disposal of property, plant and equipment 383 (24,743)
Fees payable to the Company’s auditor for the audit of the Company’s annual financial statements 25,340 24,255
Audit of the Company’s subsidiaries 10,860 10,395
Audit-related assurance services 10,995 10,640
Tax compliance services 6,600 14,350
Non-audit services — 6,400
Foreign exchange (gain)/loss (84,609) 19,186
Operating lease charges 81,224 83,318
6. Taxation
2012
£
2011
£
Current tax:
UK corporation tax
Current UK corporation tax credit on loss for the year 1,318,109 479,229
Adjustment in respect of prior year — 33,897
Current UK corporation tax credit on loss for the year 1,318,109 513,126
No liability to UK corporation tax arose during the year due to the loss incurred (2011: £nil). At 30 September 2012, there were tax losses available 
for carry forward in excess of £55,024,000 (2011: £51,476,000) subject to approval by HM Revenue and Customs.
The Company has taken advantage of the research and development corporation tax credits introduced in the Finance Act 2000 whereby a company 
may surrender corporation tax losses incurred on research and development expenditure for a corporation tax refund at the rate of 12.5% to 
31 March 2012 and 11% from 1 April 2012. See note 15 for factors affecting current and future tax. 
The tax credit for the year is higher (201 1: lower) than the standard rate for research and development tax credits and the differences are reconciled below:
2012
£
2011
£
Loss before taxation (9,084,418) (8,171,456)
Loss before taxation multiplied by the standard rate for  
research and development tax credits at 11.75% (2011: 13.25%) (1,067,419) (1,082,718)
Effect of:
Difference between depreciation and capital allowances 2,510 (1,524)
Expenses not deductible for tax purposes 725 407 
Effect of share option charge 19,738 18,223 
Enhanced research and development expenditure (687,994) (511,373)
Adjustment in respect of prior year — (33,897)
Carried forward losses 414,331 1,097,756
Tax credit for the year (1,318,109) (513,126)
Notes to the financial statements (continued)
for the year ended 30 September 2012 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
51
7. Loss per ordinary share
2012 2011
Attributable loss (£) (7,766,309) (7,658,330)
Weighted average number of shares in issue 346,654,352  346,619,213 
Basic and diluted loss per ordinary share (pence) (2.2) (2.2)
The loss per share is based on the weighted average number of shares in issue during the period. IAS 33, ‘Earnings per share’, requires presentation 
of diluted earnings per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. 
No adjustment has been made to the basic loss per share, as the exercise of share options would have the effect of reducing the loss per ordinary 
share, and therefore is not dilutive.
8. Property, plant and equipment
Group 
 Leasehold
improvements
£
 Computer
equipment
£ 
 Motor
vehicles
£ 
 Plant and
machinery
£
 Fixtures
and fittings
£
Total
 £
Cost 
At 1 October 2011 37,072 234,212 — 12,780 84,666 368,730 
Additions — 5,543 —383— 5,926 
Disposals — (3,904) —(871) — (4,775) 
At 30 September 2012 37,072 235,851 — 12,292 84,666 369,881 
Accumulated depreciation 
At 1 October 2011 9,129 207,817 — 7,847 60,291 285,084 
Charge for year 7,414 10,570 — 1,233 7,688 26,905 
Disposals — (3,777) —(615) — (4,392) 
At 30 September 2012 16,543 214,610 — 8,465 67,979 307,597 
Net book value 
At 30 September 2012 20,529 21,241 — 3,827 16,687 62,284 
At 30 September 2011 27,943 26,395 — 4,933 24,375 83,646 
Group 
 Leasehold 
improvements
£
 Computer 
equipment 
 £ 
 Motor 
vehicles 
 £ 
 Plant and 
machinery 
 £ 
 Fixtures 
and fittings 
 £ 
Total
 £ 
Cost 
At 1 October 2010 32,637 233,257 61,304 19,049 130,054 476,301
Additions 4,43511,309—4,44361320,800
Disposals — (10,354)(61,304)(10,712)(46,001) (128,371)
At 30 September 2011 37,072 234,212 — 12,780 84,666 368,730
Accumulated depreciation 
At 1 October 2010 2,011 187,644 60,111 17,281 96,350 363,397
Charge for year 7,118 30,465 1,193 1,086 9,942 49,084
Disposals — (10,292)(61,304)(10,520)(46,001) (128,117)
At 30 September 2011 9,129 207,817 — 7,847 60,291 285,084
Net book value 
At 30 September 2011 27,943 26,395 — 4,933 24,375 83,646
At 30 September 2010 30,626 45,613 1,193 1,768 33,704 112,904
Company
The Company has no property, plant and equipment (2011: none). Annual Report and Accounts 2012 Phytopharm plc
52
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
9. Investments
Group Company
Investment in Group undertakings
2012
£
2011
£
2012
£
2011
£
At 1 September — — 1,639,136 1,501,603 
Increase in capital contribution relating to share option charge — — 176,083 137,533
At 30 September — — 1,815,219 1,639,136 
The capital contribution relating to share-based payments relates to share options granted by the Company to employees of subsidiary undertakings 
in the Group. Refer to note 17 for further details on the Group’s share option schemes.
Interests in Group undertakings
Proportion of voting rights and nominal  
value of issued shares held by
Name of undertaking Nature of business Description of shares held Group% Company%
Phytotech Limited Research and development Ordinary 10 pence shares 100 100
Phytodevelopments Limited Dormant Ordinary £1 shares 100 —
Both the above companies have been consolidated in these financial statements and are incorporated in England and Wales.
10. Amounts due from subsidiary undertaking
Group Company
2012
£
2011
£
2012
£
2011
£
Amounts due from subsidiary undertaking — — 29,935,991 21,870,207 
No provision was made against the amount due to the Company from its subsidiary undertaking during the year (2011: £nil).
There are no fixed terms in respect of amounts owed by subsidiary undertakings. These are non-interest bearing, unsecured and not payable on demand.
11. Trade and other receivables
The fair value of trade and other receivables are their current book values.
Group Company
2012
£
2011
£
2012
£
2011
£
Trade receivables — 5,581 — — 
Other receivables 103,227 86,395 2,106 5,696 
Prepayments and accrued income 218,335 367,978 75,877 192,979
321,562 459,954 77,983 198,675 
As of 30 September 2011, all trade receivables were fully performing and aged less than six months from their due date. These related to independent 
customers for whom there was no recent history of default. 
The carrying amounts of the Group’s trade receivables are denominated in sterling. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
53
12. Money market investments
Group Company
2012
£
2011
£
2012
£
2011
£
Money market investments 8,600,507 14,500,000 8,500,000 14,500,000
These represent fixed-rate short-term deposits placed with a range of banks at fixed terms or with notice periods exceeding three months. The fair 
value of money market investments approximates their carrying value.
13. Cash and cash equivalents
Group Company
2012
£
2011
£
2012
£
2011
£
Cash and cash equivalents 286,713 3,074,476 127,668 2,677,736 
The Company holds its excess cash and cash equivalents in a combination of fixed interest accounts and fixed-term money market deposits. 
At 30 September 2012 and 30 September 2011 these did not exceed three months in duration. The fair value of cash and cash equivalents 
approximates their carrying value.
14. Trade and other payables
The fair value of trade and other payables approximates their current book values.
Group Company
2012
£
2011
£
2012
£
2011
£
Trade payables 523,968 665,109 35 33,699 
Other taxation and social security 38,921 37,945 — —
Other payables 11,541 10,662 — — 
Accrued expenses 1,641,023 1,919,591 49,463 53,335
2,215,453 2,633,307 49,498 87,034
15. Deferred taxation (unrecognised)
The Group and Company have the potential deferred tax assets shown below, which are not recognised due to uncertainty as to the timing of their utilisation.
Group Company
2012
£
2011
£
2012
£
2011
£
Tax effect of timing differences:
Depreciation in excess of tax allowances 260,697 302,472 6,731 7,317
Accumulated losses 12,394,711 12,655,313 1,057,616 1,115,669 
12,655,408 12,957,785 1,064,347 1,122,986 
A number of changes to the UK corporation tax system were announced in the March 2012 Budget Statement. Certain of these tax changes were 
substantively enacted in the Finance Act 2012 in July 2012. The impact of this has been reflected in the unrecognised potential deferred tax asset.
Certain other changes are expected to be enacted in future Finance Acts, including a reduction in the main rate of corporation tax to 22% 
from 1 April 2014. As at 30 September 2012, there is an unrecognised deferred tax asset of £12,655,408. If these changes were applied to this, 
the impact would be to reduce the potential deferred tax asset by £551,000.
Company
The Company has a potential (unrecognised) deferred taxation asset of £1,064,347 at 30 September 2012 (30 September 2011: £1,122,986). Annual Report and Accounts 2012 Phytopharm plc
54
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
16. Share capital and share premium
Company share premium
Ordinary shares of 1 pence each
Share premium
£ Number £
At 1 October 2010 346,677,433 3,466,774 76,782,706
Issued under share option scheme 124,539 1,245 5,618
At 30 September 2011 and 1 October 2011 346,801,972 3,468,019 76,788,324
Issued under share option scheme 99,777 998 3,123
At 30 September 2012 346,901,749 3,469,017 76,791,447
Issue of shares
In the year ended 30 September 2012, the Company issued 99,777 new ordinary shares of 1 pence each for a total cash consideration of £4,121 
following the exercise of share options. The nominal value of these shares was £998.
In the year ended 30 September 2011, the Company issued 124,539 new ordinary shares of 1 pence each for a total cash consideration of £6,863 
following the exercise of share options. The nominal value of these shares was £1,245.
Phytopharm Share Incentive Plan 2007
Netted against the accumulated loss are purchases of shares in Phytopharm plc, which relate to the Phytopharm Share Incentive Plan 2007, under 
which the Company issued one “Matching Share” for every one “Partnership Share” purchased by the employee. All shares are held by the scheme 
Trustees until the shares vest unconditionally with the employee. During the year ended 30 September 2012, the Group purchased 55,251 (2011: 5,171) 
ordinary shares of 1 pence at a total cost of £4,171 (2011: £373). As at 30 September 2012, 176,851 (2011: 121,600) ordinary shares of 1 pence were 
held by the scheme Trustees.
Group share premium
Ordinary shares of 1 pence each
Share premium
£ Number £
At 1 October 2010 346,677,433 3,466,774 77,278,113
Issued under share option scheme 124,539 1,245 5,618
At 30 September 2011 and 1 October 2011 346,801,972 3,468,019 77,283,731
Issued under share option scheme 99,777 998 3,123
At 30 September 2012 346,901,749 3,469,017 77,286,854 Annual Report and Accounts 2012 Phytopharm plc Financial Statements
55
17. Share-based payments
Potential issues of ordinary shares
At 30 September 2012, certain directors of the Company and certain employees across the Group held options to subscribe for shares in the 
Company under share option schemes approved by the shareholders and outlined in the Remuneration Report. The number of shares subject 
to options at 30 September 2012, the periods in which they were granted and the period in which they may be exercised are given below. 
All of the awards were granted for nil consideration.
Date
granted
Exercise
price
Exercisable
from
Exercisable
to
Currently
vested
2012
Currently
exercisable
2012 Note
Number
outstanding
2012
Number
outstanding
2011
Phytopharm Share Option Plan 2007 
11/03/2009 £0.04130 11/03/2012 10/03/2019 115,982 115,982 1 115,982 235,189 
20/01/2010 £0.11000 20/01/2013 19/01/2020 — — 1 945,453 980,562 
21/07/2010 £0.07630 21/07/2013 20/07/2020 — — 1 3,132,372 3,132,372 
17/12/2010 £0.07350 17/12/2013 16/12/2020 — — 1 1,749,149 1,868,030 
24/11/2011 £0.06525 24/11/2014 23/11/2021 — — 1 3,599,152 — 
17/12/2010 £0.07350 17/12/2013 16/12/2020 — — 2 1,355,841 1,355,841 
21/07/2010 £0.07630 21/07/2013 20/07/2020 — — 2 2,067,789 2,067,789 
24/11/2011 £0.06525 24/11/2014 23/11/2021 — — 2 1,602,878 — 
115,982 115,982 14,568,616 9,639,783 
Phytopharm Directors’ Reward Plan 2010 
31/03/2010 £0.11250 31/03/2013 30/03/2018 — — 3 863,334 863,334 
— —  863,334 863,334 
Note
1  These options vest on the third anniversary of the date of grant and have been granted under the Phytopharm Share Option Plan 2007: Enterprise Management Incentive Scheme. 
The number of options exercisable will be determined by the Company’s TSR compared to the constituents of the FTSE Small Cap Index. The value of options (at date of grant) will 
be exercisable if the Company’s TSR in the relevant ranking group is above the median.
2  These options vest on the third anniversary of the date of grant and have been granted under the Phytopharm Share Option Plan 2007: Unapproved Scheme. The number of options 
exercisable will be determined by the Company’s TSR compared to the constituents of the FTSE Small Cap Index. The value of options (at date of grant) will be exercisable if the Company’s 
TSR in the relevant ranking group is above the median.
3  These options vest on the third anniversary of the grant date and have been granted under the Phytopharm Directors’ Reward Plan 2010. There are no performance conditions attached 
to the exercise of these options.
Exercise of an option
Exercise of an option is subject to continued employment or being a good leaver. Options were valued using a stochastic model (also known 
as a Monte Carlo model).
Option valuations
The fair value per option granted and the assumptions used in the calculation for options granted since 11 March 2009 are set out in the table 
below. Options were valued using a stochastic model (also known as a Monte Carlo model).
Award
Grant
date
Exercise
price
Number of shares
outstanding
2012
Number of shares
outstanding
2011
Fair value
per option
at grant date
Share Option Plan 2007 11/03/2009 £0.04130 115,982 235,189 £0.0223
Share Option Plan 2007 20/01/2010 £0.11000 945,453 980,562 £0.0574
Share Option Plan 2007 21/07/2010 £0.07630 3,132,372 3,132,372 £0.0404
Share Option Plan 2007 21/07/2010 £0.07630 2,067,789 2,067,789 £0.0404
Share Option Plan 2007 17/12/2010 £0.07350 1,749,149 1,868,030 £0.0402
Share Option Plan 2007 17/12/2010 £0.07350 1,355,841 1,355,841 £0.0402
Share Option Plan 2007 24/11/2011 £0.06525 5,202,030 —£0.2990
Directors’ Reward Plan 2010 31/03/2010 £0.11250 863,334 863,334 £0.0666
15,431,950 10,503,117  Annual Report and Accounts 2012 Phytopharm plc
56
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
17. Share-based payments (continued)
Option valuations (continued)
The fair values of the share options granted but not vested as at 30 September 2012 were calculated using the following assumptions:
Award
Grant
date
Expected 
term 
(note(a))
Expected 
dividend yield 
(note(b))
%
Risk-free 
rate
(note (c))
%
Expected 
volatility 
(note (d))
%
Performance 
condition 
(note)
Share Option Plan 2007 11/03/2009 6.00 years — 2.3 72.4 1
Share Option Plan 2007 20/01/2010 5.90 years — 3.2 70.5 1
Share Option Plan 2007 21/07/2010 6.77 years — 2.3 70.4 1
Share Option Plan 2007 17/12/2010 5.00 years — 2.5 74.7 1
Share Option Plan 2007 24/11/2011 5.00 years — 1.2 63.4 1
Share Option Plan 2007 21/07/2010 6.77 years — 2.3 70.4 2
Share Option Plan 2007 17/12/2010 5.00 years — 2.5 74.7 2
Share Option Plan 2007 24/11/2011 5.00 years — 1.2 63.4 2
Directors’ Reward Plan 2010 31/03/2010 5.91 years — 2.7 73.7 3
Notes to assumptions 
(a) Expected term
For options granted up to 21 July 2010
i)  40% of participants exercise after three years if a gain of 40% is available. If this gain is not available, these individuals hold on to their shares 
until such a gain can be made;
ii)  25% of the remainder exercise from the third anniversary onwards using a reducing balance methodology, providing that a gain of 20% is available. 
If this gain is not available, these individuals refrain from exercising until such a gain can be made;
iii)  15% of the total participants are “good leavers”. A good leaver is an employee who ceases to be an employee due to redundancy or other 
circumstances outside their control;
iv)  5% of the participants exercise per annum on a reducing balance methodology, providing that the options are “in the money” (irrespective of the 
level of gain) to allow for leavers in these years; 
v)  any remaining options are exercised at maturity providing that they are “in the money” (i.e. the share option price is less than the market price). 
Any awards that are “underwater” (i.e. the share option price is greater than the market price) therefore lapse at maturity; and
vi)  all exercises are dependent on the performance condition being met.
For options granted after 21 July 2010
A fixed term of five years (being almost halfway through the exercise window). The exercise profile has been simplified as calculations indicated that 
the difference in values is small and this alternative approach allows better modelling of the actual TSR performance condition and to use actual 
company data rather than assuming a hypothetical company performance.
(b) Expected dividend yield
The dividend yield of 0% reflects the absence of a history of paying dividends and a clear dividend policy statement at the relevant grant dates.
(c) Risk-free interest rate
UK Gilt rates prevalent on the date of grant with a period commensurate with the term of the award.
(d) Expected volatility
Expected volatility is the measurement of the amount by which a share price is expected to fluctuate during a period. The expected volatility has 
been calculated using the standard approach of calculating the standard deviation of the natural logarithm of historical share price movements. 
Certain periods where there has been inactivity followed by substantial increases in price and volume have been excluded from this calculation 
due to specific events creating a volatility that would not be representative of the potential future volatility. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
57
17. Share-based payments (continued)
Notes to assumptions (continued)
A reconciliation of share option scheme movements for the years ended 30 September 2012 and 30 September 2011 is set out below:
2012 2011
Number
Weighted
average
exercise price Number
Weighted
average
exercise price
At 1 October 10,503,117 £0.06 8,339,476 £0.09
Granted 5,202,030 £0.07 3,466,774 £0.07
Exercised (99,777) £0.04 (124,539) £0.06
Lapsed (173,420) £0.08 (1,178,594) £0.13
At 30 September 15,431,950 £0.08 10,503,117 £0.06
The weighted average mid-market share price for options exercised during the year was £0.12 per share (2011: £0.08). 
The following tables summarise the information about the range of exercise prices for share options outstanding at 30 September 2012 
and 30 September 2011:
2012 2011
Weighted
average
exercise price
Number
of shares
Weighted
average remaining
contractual years
Weighted
average
exercise price
Number
of shares
Weighted
average remaining
contractual years
£0.04 to £0.08 £0.0713,623,163 8.37 £0.07 8,659,221 8.97
£0.11 to £0.12 £0.11 1,808,787 5.61 £0.11 1,843,896 6.66
The total charge for the year relating to employee share-based payment plans for continuing operations is disclosed in note 18 (employees 
and directors), all of which related to the above equity-based transactions.
18. Employees and directors
The average monthly number of persons, including executive directors, employed by the Group during the year was:
2012
Number
2011
Number
Research and development 10 10
Administration 4 4
14 14
As at 30 September 2012, the Group employed a total of 13 permanent staff (30 September 2011: 14) in continuing operations.
Staff costs in respect of these employees were:
2012
£
2011
£
Wages and salaries 1,020,210 1,022,420
Social security costs 127,789 117 ,542
Other pension costs 81,275 81,096
Share based payments 176,083 137,533
1,405,357 1,358,591
The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group 
in independently administered funds. The pension cost represents contributions paid and payable by the Group to the funds and amounted to 
£81,275 (2011: £81,096). The amounts outstanding in respect of pensions are £11,541 (2011: £10,662). Annual Report and Accounts 2012 Phytopharm plc
58
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
18. Employees and directors (continued)
In respect of directors’ remuneration, the Company has taken advantage of the permission in paragraph 6(2) of Schedule 5 part 2 of the Large 
and Medium Size Companies and Groups (Accounts and Reports) Regulations to omit aggregate information that is capable of being ascertained 
from the detailed disclosures in the Remuneration Report which forms part of these financial statements.
Key management compensation
2012
£
2011
£
Short-term employee benefits 846,869 769,840 
Post-employment benefits 54,713 51,483 
Share based payments 108,406 104,734 
1,009,988 926,057
The key management includes executive directors, non-executive directors and senior management who have the responsibility for planning, 
directing and controlling, directly or indirectly, the activities of the Group.
19. Financial commitments
At 30 September 2012 there were the following commitments under non-cancellable operating leases:
2012
Land and
buildings
£
2011
Land and
buildings
£
Within one year 82,107 81,224
Between two and five years inclusive 151,854 233,961
233,961 315,185 
The Group has purchase obligations of £3,010,855 in respect of its sub-contracted research and development activities as at 30 September 2012 
(2011: £8,290,230). 
20. Related party transactions
Identity of related parties
The Group consists of a parent, Phytopharm plc, a wholly-owned trading subsidiary, Phytotech Limited, and a dormant subsidiary, 
Phytodevelopments Limited.
The parent company is responsible for financing and setting Group strategy. Phytotech Limited carries out the Group’s research and development 
strategy, employs all the staff including the executive directors and manages the Group’s intellectual property. The proceeds of the issue of shares 
by the parent are passed from Phytopharm plc to Phytotech Limited as a loan and Phytotech Limited manages the Group’s funds and makes payments, 
including managing the payments of the parent company.
Group
Under IAS 24, ‘Related Party Disclosures’ the Group is not required to disclose intra-group transactions which are eliminated on consolidation.
Key management compensation is disclosed in note 18.
Company
The Company has been charged £529,771 (2011: £548,148) for corporate services provided by subsidiary undertakings. The Company provides 
financing to its subsidiary undertakings. Details of the inter-company balances can be found in note 10.
21. Financial risk management
The main risks arising from the Group’s financial instruments are cash flow and liquidity, interest rate, foreign currency and credit risk.
The Group’s financial instruments comprise primarily cash and liquid resources and various items such as trade receivables and trade payables, 
which arise directly from its operations.  Annual Report and Accounts 2012 Phytopharm plc Financial Statements
59
21. Financial risk management (continued)
The Group’s ongoing objectives in using financial instruments are to maximise the returns on funds held on deposit, while investing only with 
institutions with high credit ratings, to minimise exchange rate risk where appropriate, and to generate additional cash resources through the issue 
of shares when market conditions are appropriate. In addition, the Group has from time to time conserved cash resources by entering into financing 
arrangements for the acquisition of major capital assets.
The balance sheet positions at 30 September 2012 and 30 September 2011 are not representative of the positions throughout the years as cash 
and money market investments fluctuate considerably depending on the timing of cash loaned to subsidiaries to fund the Group’s research and 
development programmes. Cash and cash equivalents are invested with a range of financial institutions for a period of 90 days or less. Money market 
investments represent fixed-rate, short-term deposits placed with similar institutions with a maturity date of more than three months.
Cash flow and liquidity risk
The Group is a research and development based pharmaceutical company which is not yet a sustainable business. It expects to incur further losses 
as current planned expenditure exceeds its anticipated receipts in the near term. 
The Group still may need to seek further capital through equity or debt in the future and if this is not successful, the financial condition of the Group 
may be adversely affected.
The table below analyses the Group’s financial assets and liabilities:
2012
Loans and
receivables
£
2011
Loan and 
receivables
£
Group
Assets as per balance sheet
Trade and other receivables excluding prepayments 144,438 257,087
Money market investments 8,600,507 14,500,000 
Cash and cash equivalents 286,713 3,074,476 
9,031,658 17,831,563 
2012
Loans and
receivables
£
2011
Loan and 
receivables
£
Company
Assets as per balance sheet
Trade and other receivables excluding prepayments 61,932 169,976
Money market investments 8,500,000 14,500,000 
Cash and cash equivalents 127,668 2,677,736 
Amounts due from subsidiary undertaking 29,935,991 21,870,207
38,625,591 39,217,919
 2012 
 Financial 
liabilities at 
amortised cost 
 £ 
2011
 Financial 
liabilities at 
amortised cost 
 £ 
Group
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 2,176,532 2,595,362 Annual Report and Accounts 2012 Phytopharm plc
60
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
21. Financial risk management (continued)
Cash flow and liquidity risk (continued)
 2012 
 Financial 
liabilities at 
amortised cost 
 £ 
2011
 Financial 
liabilities at 
amortised cost 
 £ 
Company
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 49,498 87,034
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date 
to the contractual maturity value. The amounts disclosed in the table are the contractual undiscounted total cash flows. 
As at 30 September 2012
 Less than 
3 months 
 £ 
 Between 
3 and 6 months 
 £ 
Group
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 2,176,531 —
As at 30 September 2012
 Less than 
3 months 
 £ 
 Between 
3 and 6 months 
 £ 
Company
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 49,498 —
As at 30 September 2011
 Less than 
3 months 
 £ 
 Between 
3 and 6 months 
 £ 
Group
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 2,595,362 —
As at 30 September 2011
 Less than 
3 months 
 £ 
 Between 
3 and 6 months 
 £ 
Company
Liabilities as per balance sheet
Trade and other payables excluding statutory liabilities 87,034 —
Interest rate risk 
The Group holds all cash and cash equivalents in sterling, US dollar, euro, Canadian dollar, Hungarian forint, Czech koruna, Chinese yuan and Polish zloty 
accounts. Interest rates on current accounts are floating and are based on London Interbank Bid Rate (“LIBID”), while interest rates on term deposits 
are fixed for the duration of the deposit.
The Group monitors future potential cash outflows on a regular basis and where possible places cash resources in money market investments 
with fixed interest rates for the term of the deposit. The remaining cash resources are held in accounts with floating interest rates based on LIBID. 
Changes in interest rates for fixed and floating deposits may increase or decrease the Group’s finance income. The Group does not have any 
committed borrowing facilities. Consequently, there is no material exposure to interest rate risk in respect of financial liabilities.
Interest rate sensitivity analysis
If interest rates had been 1% higher or lower in 2012 the increase/decrease in finance income arising from money market investments would have 
been £103,000 (2011: £168,000). A 1% increase or decrease represents management’s assessment of the reasonably possible change in interest 
rates when evaluating interest rate risk. Annual Report and Accounts 2012 Phytopharm plc Financial Statements
61
21. Financial risk management (continued)
Interest rate sensitivity analysis (continued)
The interest rate profile of the Group’s financial assets is:
2012 2011
Group
Fixed
£
Floating
£
Fixed
£
Floating
£
Sterling cash and cash equivalents —260,463 —2,785,205
US dollar cash and cash equivalents —13,717 —271,811
Euro cash and cash equivalents —12,303 —17,416
Canadian dollar cash and cash equivalents —6 —40
Hungarian forint cash and cash equivalents —— —4
Czech koruna cash and cash equivalents —3 ——
Chinese yuan renminbi cash and cash equivalents —215 ——
Polish zloty cash and cash equivalents —6 ——
Sterling money market investments 8,600,507 — 14,500,000 —
8,600,507 286,713 14,500,000 3,074,476 
The weighted average interest rate of the Group’s cash and cash equivalents at 30 September 2012 was 0.39% (2011: 1.09%). 
The weighted average interest rate of the Group’s money market investments at 30 September 2012 was 1.74% (2011: 2.06%).
2012 2011
Company
Fixed
£
Floating
£
Fixed
£
Floating
£
Sterling cash and cash equivalents —127,668 —2,677,736 
Sterling money market investments 8,500,000 — 14,500,000 — 
8,500,000 127,668 14,500,000 2,677,736 
The weighted average interest rate of the Company’s cash and cash equivalents at 30 September 2012 was 0.25% (2011: 1.27%). 
The weighted average interest rate of the Company’s money market investments at 30 September 2012 was 1.79% (2011: 1.81%).
Foreign currency risk 
The Company’s functional currency is sterling. Where possible the Group maintains natural hedges by matching foreign currency income with 
foreign currency expenditure. The Group incurs expenditure in foreign currency relating principally to clinical trials which may exceed any revenues 
in foreign currencies. To the extent that income and expenditure in foreign currencies are not matched, fluctuations in exchange rates between 
sterling and foreign currencies, principally euro and US dollar, may result in realised or unrealised foreign exchange gains and losses.
Where there is certainty of the amount and timing of expenditure of foreign currencies, the Group may purchase financial instruments to minimise 
any foreign exchange gains or losses. Where the timing and/or the amount to be received is uncertain, risk management is more difficult and the 
Group will use financial instruments wherever possible. To the extent that financial instruments are not utilised, any fluctuations in foreign exchange 
movements may have a material adverse impact on the results from operating activities. 
Foreign currency sensitivity analysis
The Group had an exposure to the sterling/euro and sterling/US dollar exchange rates due to the need to fund expenditure denominated in euros and 
US dollars. Had sterling been 10% weaker in relation to the euro, the loss in 2012 would have been increased by £136,000 (2011: £79,000) and had 
sterling been 10% weaker in relation to the US dollar, the loss in 2012 would have increased by £52,000 (2011: £48,000). 10% represents management’s 
assessment of a reasonably possible change in foreign exchange rates.
Fair value of financial assets and liabilities
There is no material difference between the fair value and the carrying values of the financial instruments referred to on pages 59 and 60 because 
of the short maturity period of these financial instruments or their intrinsic size and risk. Annual Report and Accounts 2012 Phytopharm plc
62
Financial Statements
Notes to the financial statements (continued)
for the year ended 30 September 2012
21. Financial risk management (continued)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group does not 
believe it is exposed to major concentrations of credit risk on classes of financial instruments. 
Trade and other receivables represent amounts due in respect of accrued interest on cash and cash equivalents and money market investments 
together with receivables relating to VAT. The Group is not exposed to risks relating to trade receivables arising from sales to customers as it is not 
currently generating significant revenues. 
Other than trade and other receivables, the financial instruments that subject the Group to a potential credit risk comprise principally cash and cash 
equivalents and money market investments. The Group’s policy is to minimise the risks associated with cash and cash equivalents by placing these 
deposits with institutions with a recognised high rating (typically A or above assigned by international credit-rating agencies) or with one of the major 
clearing banks.
The table below shows the rating of the financial institutions that the Group’s cash and cash equivalents and money market investments are held with:
Group Rating
2012
£
2011
£
Institution A A 4,664,626 8,241,585 
Institution B A 4,221,902 9,323,881 
Institution C A — 8,410 
8,886,528 17,573,876 
Company Rating
2012
£
2011
£
Institution A A 4,561,094 8,083,089 
Institution B A 4,066,574 9,090,442 
Institution C A — 4,205 
8,627,668 17,177,736 
The Group disclosure above does not include cash in hand amounting to £692 (2011: £600).
Capital risk management
The Group consider capital to be “shareholders’ equity” as shown in the consolidated balance sheet on page 40, as the Group is only funded by 
equity finance. The Group has no external debt and no material externally imposed capital requirements. The Group is not yet in a position to pay 
a dividend and the loss for the year has been added to the accumulated losses in equity.
The objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders 
and benefits for other stakeholders. In order to maintain or adjust the capital structure, the Group may return capital to shareholders and issue 
new shares. 
22. Post balance sheet events
A number of changes to the UK corporation tax system were announced in the March 2012 Budget Statement. Certain of these tax changes were 
substantively enacted in the Finance Act 2012 in July 2012. The impact of this has been reflected in the unrecognised potential deferred tax asset.
Certain other changes are expected to be enacted in future Finance Acts, including a reduction in the main rate of corporation tax to 22% from 
1 April 2014. As at 30 September 2012, there is an unrecognised deferred tax asset of £12,655,409. If these changes were applied to this, the impact 
would be to reduce the potential deferred tax asset by £551,000. Annual Report and Accounts 2012 Phytopharm plc
63
Shareholder Information
Analysis of shareholdings at 30 September 2012
Shareholding range
Number of
shareholders
Percentage
of total
shareholders
Number of
ordinary 
shares
Percentage 
of ordinary
issued share
capital
1 – 1,000 1,379 54.5275% 584,512 0.1685%
1,001 – 5,000 639 25.2669% 1,536,956 0.4431%
5,001 – 10,000 181 7.1570% 1,327,951 0.3828%
10,001 – 500,000 285 11.2693% 18,141,779 5.2297%
500,001 – 1,000,000 15 0.5931% 11,392,483 3.2841%
1,000,000 and over 30 1.1862% 313,918,068 90.4919%
2,529 346,901,749  
Registrar
Administrative enquiries regarding shareholdings in Phytopharm on such matters as a lost share certificate should be made to Equiniti Registrars 
who can be contacted directly on 0871 384 2030* or you may wish to write to them at Equiniti, Aspect House, Spencer Road, Lancing, West Sussex 
BN99 6DA. For security reasons, Equiniti cannot accept address changes over the telephone or by email.
Share dealing
If you wish to buy or sell shares in Phytopharm, this must be done through a stockbroker. The London Stock Exchange provides a “Guide to Investment 
Services” which gives a number of companies offering share dealing services.
Equiniti offers share dealing services by post, telephone and online. If you would like more details about the share dealing services available, please write 
to the address above, telephone 0871 384 2030* or visit Equiniti’s website, www.equiniti.com.
Amalgamation of shareholdings
If a shareholder receives one or more copies of the report and accounts, it may indicate multiple accounts in the shareholder’s name are appearing 
on the share register. Shareholders can write to Equiniti Registrars, or ADR holders should contact the Bank of New York Mellon, at the address on the 
next page stating the accounts concerned and giving instructions on how they should be amalgamated.
Share price information
Phytopharm is listed in the Official List of the Financial Services Authority and traded on the London Stock Exchange’s (“LSE”) main market for listed 
securities. The stock symbol for Phytopharm on the LSE is PYM.
American Depositary Receipts
Phytopharm’s shares are represented in the US in the form of American Depositary Shares (“ADSs”) represented by American Depositary Receipts 
(”ADRs”). The ADRs are issued by the Bank of New York Mellon. Each ADR is equivalent to two ordinary shares and trades on the over-the-counter 
(“OTC”) market in the US under the symbol PHYOY, identified by the CUSIP number 41942W101. 
* Calls to this number are charged at 8 pence per minute from a BT landline. Call charges may vary if using other telephone providers. Lines are open 8.30am to 5.30pm Monday to Friday.
Additional shareholder information Annual Report and Accounts 2012 Phytopharm plc
64
Shareholder Information
Unsolicited telephone calls – boiler room scams
Over the last year, some of our shareholders have received unsolicited telephone calls from organisations or persons claiming or implying that they 
have some connection with the Company and wishing to discuss investments.
These calls are typically from overseas “brokers” who target UK shareholders offering to buy their shares at a premium or sell them what often turn 
out to be worthless high risk shares in UK or overseas investments. The operations are commonly known as “boiler rooms”. Shareholders should be 
very wary of any unsolicited advice, offers to buy/sell shares at a premium/discount or offers of free reports into the Company. If you receive any 
such unsolicited calls, you should:
 obtain the contact name of the person and organisation calling you;
 check that the organisation is on the Financial Services Authority (“FSA”) Register and is authorised to give financial advice before getting involved 
by visiting www.fsa.gov.uk/pages/register;
 report the incident to the FSA Consumer Helpline (0845 606 1234) or complete the share fraud and boiler room scams reporting form  
at www.fsa.gov.uk/pages/doing/regulated/law/alerts/form.shtml; and
 if the calls persist, hang up.
If you deal with an unauthorised firm, you will not be able to use the financial ombudsman service or benefit from the financial services 
compensation scheme if you would otherwise be able to do so.
Additional shareholder information (continued) Addresses and advisors
Phytopharm plc
Registered office
Lakeview House 
2 Lakeview Court 
Ermine Business Park 
Huntingdon 
Cambridgeshire 
PE29 6UA
Tel: +44 (0)1480 437697 
Fax: +44 (0)1480 417090
Registered number: 03131723 
Domiciled in the United Kingdom 
Registered in England and Wales
Information about the Company may be found on the internet at  
www.phytopharm.com
Registrar
Equiniti Registrars Limited
Aspect House 
Spencer Road 
Lancing 
West Sussex 
BN99 6DA
Tel: +44 (0)871 384 2030
Calls to this number are charged at 8 pence per minute from a BT 
landline. Call charges may vary if using other telephone providers. 
Lines are open 8.30am to 5.30pm Monday to Friday.
ADR depositary bank
The depositary bank for the Phytopharm ADR programme is:
The Bank of New York Mellon 
PO Box 359516 
Pittsburgh, PA 15252-8516 
USA
Toll free number for domestic calls: (00)1-888-BNY-ADRS 
Number for international calls: +(00)1-201-680-6825 
(There is no IVR on this number. Calls will go directly to CSRs.)
Email: shareholderrelations@bnymellon.com
Website: www.bnymellon.com/shareowners
Solicitors 
White & Case
5 Old Broad Street 
London 
EC2N 1DW
Tel: + 44 (0)20 7532 1000 
Fax: + 44 (0)20 7532 1001
Website: www.whitecase.com
Brokers
Peel Hunt LLP
Moor House 
120 London Wall 
London 
EC2Y 5ET
Tel: +44 (0)20 7418 8900 
Fax: +44 (0)20 7418 8848
Website: www.peelhunt.com
Chartered Accountants and Statutory Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors 
Abacus House 
Castle Park 
Cambridge 
CB3 0AN
Tel: +44 (0) 1223 460 055 
Fax: +44 (0) 1223 552 336
Website: www.pwc.co.uk
Financial public relations
FTI Consulting LLP
Holborn Gate 
26 Southampton Buildings 
London 
WC2A 1PB
Tel: +44 (0) 20 7269 7100
Website: www.fticonsulting.co.uk
Financial advisors
N M Rothschild & Sons Limited
New Court 
St Swithins Lane 
London 
EC4N 8AL Phytopharm plc
Lakeview House
2 Lakeview Court
Ermine Business Park
Huntingdon
Cambridgeshire
PE29 6UA
United Kingdom
Tel: +44 (0)1480 437697
Fax: +44 (0)1480 417090
Email: info@phytopharm.com Phytopharm plc  Annual Report and Accounts 2012